U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
General Form For Registration of Securities
of Small Business Issuers Under Section 12(b)
or 12(g) of the Securities Act of 1934
ACCESS TRADEONE.COM, INC.
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(Name of Small Business Issuer in its Charter)
Nevada, U.S.A. 31-1496564
(State or other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
3753 Howard Hughes Parkway, Suite 200, Las Vegas, Nevada 89109
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number (702) 892-3751
Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered: Each Class is to be Registered:
Securities to be registered under Section 12(g) of the Act:
Common Stock
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(Title of Class)
<PAGE>
FORWARD LOOKING STATEMENTS
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
Access TradeOne.com, Inc., a new e-Commerce company ("TradeOne" or the
"Company" or the "Registrant") cautions readers that certain important
factors may affect the Company's actual results and could cause such
results to differ materially from any forward-looking statements that may
be deemed to have been made in this Document or that are otherwise made by
or on behalf of the Company. For this purpose, any statements contained in
the Document that are not statements of historical fact may be deemed to be
forward-looking statements. This Registration contains statements that
constitute "forward-looking statements". These forward-looking statements
can be identified by the use of predictive, future-tense or forward-looking
terminology, such as "believes," "anticipates," "expects," "estimates,"
"plans," "may," "will," or similar terms. These statements appear in a
number of places in this Registration and include statements regarding the
intent, belief or current expectations of the Company, its directors or its
officers with respect to, among other things: (i) trends affecting the
Company's financial condition or results of operations for its limited
history; (ii) the Company's business and growth strategies; (iii) the
Internet and Internet commerce; and, (iv) the Company's financing plans.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve significant risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors.
Factors that could adversely affect actual results and performance include,
among others, the Company's limited operating history, dependence on
continued growth in the use of the Internet for brokerage and other
financial transactions, the Company's inexperience with the Internet,
potential fluctuations in quarterly operating results and expenses,
security risks of transmitting information over the Internet, government
regulation, technological change and competition.
The accompanying information contained in this Registration,
including, without limitation, the information set forth under the heading
"Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" identifies important
additional factors that could materially adversely affect actual results
and performance. All of these factors should be carefully considered and
evaluated. All forward-looking statements attributable to the Company are
expressly qualified in their entirety by the foregoing cautionary
statement. Any forward-looking statements in this report should be
evaluated in light of these important risk factors. The Company is also
subject to other risks detailed herein or set forth from time to time in
the Company's filings with the Securities and Exchange Commission.
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Part I
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Item 1. Description of Business
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Description of Property
Item 4. Security Ownership of Certain Beneficial Owners and Management
Item 5. Directors, Executive Officers, Promoters and Control Persons
Item 6. Executive Compensation
Item 7. Certain Relationships and Related Transactions
Item 8. Description of Securities
Part II
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Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters
Item 2. Legal Proceedings
Item 3. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
Item 4. Recent Sales of Unregistered Securities
Item 5. Indemnification of Directors and Officers
Part F/S
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Item 1. Financial Statements
Part III
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Index to Exhibits
Signatures
Exhibits
Except where the context otherwise requires, all references in this
Registration to (a) the "Registrant" or the "Company" or "TradeOne" refer
to Access TradeOne.com, Inc., a Nevada corporation, (b) the "Web" refer to
the World Wide Web and (c) the "site" refer to the Company's website at
"www.AccessTradeOne.com".
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
(a) Business Development. Access TradeOne.com, Inc. ("TradeOne" or
the "Company"), was incorporated in the State of Nevada on August 22, 1995,
as A.I.N. Leasing Corp. ("A.I.N.") In September of 1996, A.I.N. issued
4,000,000 shares of common stock to acquire all of the issued and
outstanding shares of Let's Dance D.J., Inc. Upon completion of the
acquisition, A.I.N. changed its name to Metropolitan Asset Management Corp.
("Metropolitan"), and implemented a 1-for-10 reverse stock split of its
outstanding common stock, resulting in a total of 430,012 shares issued and
outstanding. On October 31, 1996, Metropolitan issued 7,560,000 shares of
its common stock as consideration for the acquisition of CJ Laser, Inc., an
Ohio corporation with interests in and rights to certain technologies. On
November 7, 1996, Metropolitan completed a merger whereby Diamond Laser
International, Ltd. was merged into Metropolitan, with Metropolitan
remaining as the surviving entity and changing its name to Diamond Laser
International, Ltd. ("Diamond"). In August, 1997, Diamond entered into a
share exchange agreement with CJ Laser, Inc. and Big Sky Laser
Technologies, Inc. ("BSLT") whereby BSLT acquired 100% of CJ Laser, Inc.
On June 22, 1998, the Board of Directors of Diamond resolved to transfer
certain interests to Quantel SA, a French corporation, in exchange for a
combination of cash, promissory notes and stock. In March of 1999, Diamond
entered into merger negotiations with Access TradeOne Capital Markets,
Inc., a Washington corporation. In May and June of 1999, and in
anticipation of consummating the merger, Diamond changed its name to Access
TradeOne.com, Inc. and instituted a 1-for-100 reverse stock split of its
issued and outstanding shares of common stock. On September 28, 1999, the
Company completed the merger.
Access TradeOne.com is now focusing its efforts on and specializing in
Internet information technology, and in particular, the collection,
aggregation and delivery of delayed and real-time worldwide financial data
via the World Wide Web. The Company will use existing browser-based
technology to seamlessly deliver information to its users' desktops.
TradeOne intends to rapidly expand through a unique subscriber aggregation
strategy which involves the private labeling of its software technologies
to individual brokerage firms and financial institutions that are not
online or are under-utilizing their online systems. Access TradeOne.com's
technology will allow brokerage firms and financial institutions to offer
premium investment news, information and quotes to their clients via the
Internet. The private labeling allows Access TradeOne.com to take
advantage of existing customer loyalties already in the brokerage firm and
financial institution marketplace.
The Company has a limited operating history, as relates to the
Internet technology arena, upon which an evaluation of the Company, its
current business and its prospects can be based, each of which must be
assessed in light of the risks, expenses and problems frequently
encountered by all companies in the early stages of development, and
particularly by such companies entering new and rapidly developing markets
like the Internet.
Such risks include, without limitation, the lack of broad acceptance
of the Company's products and services on the Internet, the possibility
that the Internet will fail to achieve broad acceptance, the inability of
the Company to generate significant e-Commerce-based revenues from Internet
customers, the Company's inability to anticipate and adapt to a developing
market, the failure of the Company's network infrastructure (including its
server, hardware and software) to efficiently handle its Internet traffic,
changes in laws that adversely affect the Company's business, the ability
of the Company to manage its operations, including the amount and timing of
capital expenditures and other costs relating to the expansion of the
Company's operations, the introduction and development of different, unique
or more extensive Internet financial resource technologies by direct and
indirect competitors of the Company, including those with greater
financial, technical and marketing resources, the inability of the Company
to maintain and increase levels of traffic on its website, the inability of
the Company to attract, retain and motivate qualified personnel and general
economic conditions.
(b) Business of Issuer.
Industry Background
Global commerce and the online exchange of information is new and
evolving, and it is difficult to predict with any assurance whether the Web
will prove to be a viable commercial marketplace in the long term. The Web
has experienced, and is expected to continue to experience, significant
growth in the numbers of users and amount of traffic. To the extent that
the Web continues to experience increased numbers of users, frequency of
use or increased bandwidth requirements of users, there can be no assurance
that the Web infrastructure will continue to be able to support the demands
placed on it by this continued growth or that the performance or
reliability of the Web will not be adversely affected.
Industry estimates indicate, according to a Myers Group study, that
spending on Internet advertising in the United States will grow from $2
billion in 1999 to $32 billion in 2005. According to a report by Forrester
Research, money spent worldwide for Internet advertising will reach $33
billion. The Internet has become a compelling advertising vehicle that
provides advertisers with targeting tools not available from traditional
advertising media. Research by Jupiter Communications predicts that by
2003, the amount of money spent on online advertising will exceed that
spent in some traditional media. The interactive nature of the Internet
and the development of "click-through" advertising banners and other
feedback tools enable advertisers to measure impression levels, establish a
dialogue with users and receive "real-time" direct feedback from their
target markets.
Such feedback provides advertisers with an effective means to measure
the attractiveness of their offerings among targeted audiences and make
modifications to their advertising campaigns on short notice. Community
and financial sites are generally able to provide advertisers significantly
more information regarding consumers than other websites because they
collect detailed demographic data and facilitate the development of
user-created affinity groups. The ability to target advertisements to
broad audiences, specific regional populations, income sectors, affinity
groups or individuals makes community website advertising a highly
versatile and effective tool for delivering customized and cost-effective
messages. One indicator of the Internet's popularity as an advertising
medium is the growing number and diversity of Internet advertisers.
Most early Internet advertisers were technology and Internet-related
companies. Today, a growing number of Internet advertisers consist of
traditional, consumer product and service companies. The diverse audience
of users accessing community sites has made such sites especially
attractive to consumer product and service companies advertising on the
Internet. The Company believes that this trend should continue, and that a
wide variety of companies outside the technology and Internet industries,
such as financial services, consumer goods, automotive and pharmaceutical
companies, are or will be increasingly using the Internet, and Internet
financial sites in particular, to advertise.
The Internet allows marketers to collect meaningful demographic
information and feedback from consumers, and to rapidly respond to this
information with new messages. This offers a significant new opportunity
for businesses to increase the effectiveness of their direct marketing
campaigns. In traditional media, a significant portion of all advertising
budgets is spent on direct marketing because of its effectiveness.
However, the effectiveness of direct marketing campaigns is dependent upon
the quality of consumer data used to develop and place complementary
products or services. If and as facilities are developed and the Web
becomes a viable commercial marketplace in the long term, the Company might
be required to incur substantial expenditures in order to adapt its
services to changing Web technologies, which could have a material adverse
effect on the Company's business, results of operations and financial
condition.
AccessTradeOne.com
There are nearly 6,000 brokerage firms located in the United States
alone, yet less than 100 of these are presently offering online trading
services. This is primarily because most brokerage firms are unable to
afford "main line" solutions for establishing an online presence, which can
range from $2 million to $5 million for installation of a platform
comparable to Access TradeOne.com's, as well as monthly fees which could
range from $150,000 to $250,000 per month. Exclusive of the major
independent web portals, most firms have been slow in their offering of
online services to their customers due to these high costs. However, the
explosive demand created by investors wanting to trade online has mandated
that brokerage firms develop online capabilities in order to remain viable
contenders. Access TradeOne.com intends to offer its users the ability to
conduct investment research by providing an aggregation of comprehensive
financial content, advisory content from independent sources, discussion
forums and virtual communities in conjunction with trading interfaces to
their existing on-line brokerages in the United States and corresponding
brokerages worldwide. This business model allows the Company to take
advantage of existing brand recognition and loyalties already established
between a firm and its clients, capitalizing on the repurposement of
content across multiple mediums.
Access Tradeone.com is an Internet technology-based company which
specializes in the collection, aggregation and delivery of "delayed" and
"real-time" worldwide financial data and news content via the Internet.
The Company uses existing browser-based technology as well as unique and
proprietary Java-based analytic tools and components to deliver information
seamlessly to individual users' desktop computers. The Company intends to
enter the online financial services marketplace through a unique subscriber
aggregation strategy. The strategy focuses on private labeling the
Company's turnkey Internet products to establish web portals for brokerage
and other financial services firms which currently have inadequate or no
online financial information and trading tools available to their clients.
Access TradeOne.com's system allows existing financial web portals and
Brokerage Firms the ability to offer premium investment information and
services to their clients via the Internet. Using the system, Investors
can monitor their investments through the Company's customizable portfolio
tracker, research investment opportunities, watch live video feeds of the
Company's Internet show or execute trades, all within the confines of their
desktop browser.
The Company's business model of providing turnkey, cost effective,
solutions to firms on a private label basis is unique and timely. The
private label model allows Access TradeOne.com to take advantage of
existing brand recognition and loyalties already established between the
firms and their clients. Access TradeOne.com does not need to go to the
marketplace and cultivate multiple clients; instead, the Company will seek
out "single host" companies that already have multiple clients. This
unique subscriber aggregation platform gives Access TradeOne.com the
ability to expand within a particular sector rapidly and more cost-
effectively.
Government Regulation.
The Company is not currently subject to direct governmental
regulation, other than the securities laws and the regulations thereunder
applicable to all publicly owned companies, and laws and regulations
applicable to businesses generally, and the law relating to the liability
of online companies is currently unsettled. Notwithstanding the foregoing,
the Company does not presently anticipate the need for governmental
approval for its products or services. It is possible that claims could be
made against online e-Commerce companies under both United States and
foreign laws for defamation, libel, invasion of privacy, negligence,
copyright or trademark infringement, or other theories based on the nature
and content of the materials disseminated through their website. If
government regulation becomes a factor and approval of the Company's
products and/or services becomes necessary at some point in the future, the
Company will seek such approval at the appropriate time.
Employees.
As of the date of this filing, the Company has no employees, and uses
independent contractors to perform all necessary work. TradeOne's officers
and directors serve in a consultancy capacity. During the third quarter of
1999, the Company entered into an agreement with Hollywood Cybermill, on a
cost plus contract, to complete the programming of Access TradeOne.com's
website and proprietary Internet technology. As and if the Company's
volume of business increases, the Company will hire employees and/or secure
the services of additional contractors sufficient to perform any work
necessary.
(i) The Company's performance is dependent on the performance of its
officers and directors, namely its President and Chairman, Joseph Pittera,
its directors Lloyd Leavitt and Bill Smart, its corporate Treasurer, John
Tobey and its corporate Secretary, Eve Roberts-Tobey. In particular, the
Company's success depends upon their ability to develop, design and market
the Company's technologies and website.
(ii) The Company does not carry key person life insurance on any of
its personnel. The loss of the services of any of its executive officers
or other key employees could have a material adverse effect on the
business, results of operations and financial condition of the Company.
The Company's future success also depends on its ability to retain and
attract highly qualified technical and managerial personnel, if and when
the need for such personnel arises.
(iii) There can be no assurance that the Company will be able to
retain its key managerial and technical personnel or that it will be able
to attract and retain additional highly qualified technical and managerial
personnel in the future. The inability to attract and retain the technical
and managerial personnel necessary to support the growth of the Company's
business, due to, among other things, a large increase in the wages
demanded by such personnel, could have a material adverse effect upon the
Company's business, results of operations and financial condition.
(c) Risk Factors.
In any business venture, there are substantial risks specific to the
particular enterprise which cannot be ascertained in total until the
business is underway. However, at a minimum, the Company's present and
proposed business operations will be highly speculative and be subject to
the same types of risks inherent in any new or unproven venture, and will
include those types of risk factors outlined below:
Anticipated Losses for the Foreseeable Future.
Although the Company has been profitable for the past two and one-half
years, it has not yet achieved profitability in its present Internet
technology, and the Company anticipates that it may incur net losses for
the foreseeable future. The extent of these losses will depend, in part,
on the amount of growth in the Company's revenues from sales and licensing
of its products and services, and the possibility of advertising revenues
on its website. The Company expects that its operating expenses will
increase significantly during the next several years, especially in the
areas of sales and marketing, and brand promotion. Thus, the Company will
need to generate increased revenues to achieve profitability. To the
extent that increases in its operating expenses precede or are not
subsequently followed by commensurate increases in revenues, or that the
Company is unable to adjust operating expense levels accordingly, the
Company's business, results of operations and financial condition would be
materially and adversely affected. There can be no assurances that the
Company can achieve or sustain profitability or that the Company's
operating losses will not increase in the future.
Limited Funds Available for Operating Expenses.
The Company currently has sufficient operating capital, based upon its
present monthly expenditures, for approximately least 16 months of
operations. Any additional funding necessary to meet the Company's
extraordinary or unexpected operating expenses during the next 16 months
will likely be advanced by management or principal stockholders as loans to
the Company; or will be raised through debt or equity financing with non-
affiliated parties. The Company's ability to raise debt or equity funding
from non-affiliated sources may be severely impaired by reason of its
limited positive historical operations, limited assets and the limited
public market for its common stock. See the "Management's Discussion and
Analysis or Plan of Operation," Item 2, respecting the Company's current
and intended operations; and "Market Price of and Dividends on the
Company's Common Equity and Other Stockholder Matters," Part II, Item 1,
respecting the limited market for the Company's common stock.
Dependence on Continued Growth and Viability of the Internet, the
Internet Economy and the Market for e-Commerce Solutions.
The Company's future success is substantially dependent upon continued
growth in the use of the Internet. A substantial portion of the Company's
revenue is expected to be derived from services that depend upon the
adoption of Internet financial solutions by companies and individuals to
improve their business positioning and processes, and the continued
development of the World Wide Web, the Internet and e-Commerce, and, as
such, the Company's future success is substantially dependent upon
continued growth in the use of the Internet. None of these can be assured,
however, and the Internet may not prove to be a viable commercial
marketplace because of inadequate development of necessary infrastructure,
lack of development of complementary products, implementation of competing
technology, delays in the development or adoption of new standards and
protocols required to handle increased levels of Internet activity,
government regulation or other reasons. The Internet has experienced, and
is expected to continue to experience, significant growth in the number of
users and volume of traffic. There can be no assurance that the Internet
infrastructure will continue to be able to support the demands placed on it
by this continuous growth. Moreover, critical issues concerning the use of
Internet and e-Commerce solutions (including security, reliability, cost
ease of deployment and administration and quality of service) remain
unresolved and may affect the growth of the use of such technologies to
maintain and manage financial affairs and information, operate a business,
expand product marketing, improve corporate communications and increase
business efficiencies. The adoption of Internet solutions for these
purposes, particularly by those individuals and enterprises that have
historically relied on traditional means, can be capital intensive and
generally require the acceptance of a new way of conducting business and
exchanging information. If critical issues concerning the ability of
Internet solutions to improve business positioning and processes are not
resolved or, if the infrastructure is not developed, the Company's
business, financial condition, results of operations and prospects will be
materially adversely affected.
Rapid Technological Change.
The market for Internet financial and informational solutions and
marketing services is characterized by rapid technological change, changes
in user and client requirements and preferences, frequent new product and
service introductions embodying new processes and technologies and evolving
industry standards and practices that could render the Company's intended
service practices and methodologies obsolete. The Company's success will
depend, in part, on its ability to improve its existing services, develop
new services and solutions that address the increasingly sophisticated and
varied needs of any current and prospective clients, and respond to
technological advances, emerging industry standards and practices and
competitive service offerings. Failure to do so could result in the loss
of customers or the inability to attract and retain customers, either of
which developments could have a material adverse effect on the Company's
business, financial condition, results of operations and prospects. There
can be no assurance that the Company will be successful in responding
quickly, cost-effectively and sufficiently to these developments. If the
Company is unable, for technical, financial or other reasons, to adapt in a
timely manner in response to change in market conditions or client
requirements, its business, financial condition, result of operations and
prospects would be materially adversely affected.
Potential Liability to Clients.
Many of the Company's intended operations involve the development,
implementation and maintenance of applications that are critical to the
operations of their clients' businesses. Its failure or inability to meet
a client's expectations in the performance of its services could injure the
Company's business reputation or result in a claim for substantial damages,
regardless of its responsibility for such failure. In addition, the
Company possesses technologies and content that may include confidential or
proprietary client information. Although the Company will implement
policies to prevent such client information from being disclosed to
unauthorized parties or used inappropriately, any such unauthorized
disclosure or use could result in a claim for substantial damages. The
Company will attempt to limit contractually its damages arising from
negligent acts, errors, mistakes or omissions in rendering professional
services; however, there can be no assurance that any contractual
protections will be enforceable in all instances or would otherwise protect
the Company from liability for damages. The successful assertion of one or
more large claims against the Company that are uninsured, exceed available
insurance coverage, if any, or result in changes to any insurance policies
the Company may obtain, including premium increases or the imposition of a
large deductible or co-insurance requirements, could adversely affect the
Company's business, results of operations and financial condition.
Dependence on Third-Party Relationships.
The Company will be significantly dependent on a number of third-party
relationships to increase traffic to AccessTradeOne.com's website and to
the website of its brokerage and financial service provider clientele. The
Company and its clients are generally dependent upon other website
operators that provide links to their websites.
The Company does not presently have any agreements in place with any
website operators that provide links to AccessTradeOne.com, and, even if
the Company can establish such links the other website operators may
terminate the links at any time without notice to the Company. There can
be no assurance that third parties will regard their relationship with the
Company as important to their own respective businesses and operations.
There can be no assurance that the Company will ever develop
relationships with third parties that supply the Company with links to
their website. In particular, the elimination of a pre-installed bookmark
on a Web browser that directs traffic to the Company's website could
significantly reduce traffic on the Company's website, which would have a
material adverse effect on the Company's business, results of operations
and financial condition.
Risk of System Failures.
The Company's ability to facilitate trade and information exchange
successfully and provide high quality customer service, depends on the
efficient and uninterrupted operation of its computer and communications
through its designated Internet Service Provider (ISP). These systems and
operations are vulnerable to damage or interruption from earthquakes,
floods, fires, power loss, telecommunication failures, break-ins, sabotage,
intentional acts of vandalism and similar events. The Company does not
have fully redundant systems, a formal disaster recovery plan or
alternative providers of hosting services and does not carry business
interruption insurance to compensate it for losses that may occur. Despite
any precautions taken by, and planned to be taken by the Company, the
occurrence of a natural disaster or other unanticipated problems with its
ISP could result in interruptions in the services provided by the Company.
In addition, the failure by the ISP to provide the data communications
capacity required by the Company, as a result of human error, natural
disasters other operational disruption, could result in interruptions in
the Company's service. Any damage to or failure of the systems of the
Company could result in reductions in, or terminations of, the Company's
service, which could have a material adverse effect on the Company's
business, results of operations and financial condition. In the case of
frequent or persistent system failures, the Company's reputation and name
brand could be adversely affected. Although the Company has implemented
certain network security measures, the Company and its ISP are also
vulnerable to computer viruses, physical or electronic break-ins and
similar disruptions, which could lead to interruptions, delays, loss of
data or the inability to complete customer postings and transactions. In
addition, although the Company works to prevent unauthorized access to
Company data, it is impossible to eliminate this risk completely. The
occurrence of any or all of these events could have a material adverse
effect on the Company's business, results of operations and financial
condition.
No "Established Trading Market" for Common Stock.
Although the Company's common stock is quoted on the National
Association of Securities Dealers' ("NASD") OTC Bulletin Board under the
ticker symbol "GMKT", there is currently no "established trading market"
for its common stock; and there can be no assurance that any such market
will ever develop or be maintained. Any market price for shares of common
stock of the Company is likely to be very volatile, and numerous factors
beyond the control of the Company may have a significant adverse effect.
In addition, the stock markets generally have experienced, and continue to
experience, extreme price and volume fluctuations which have affected the
market price of many small capital companies and which have often been
unrelated to the operating performance of these companies. These broad
market fluctuations, as well as general economic and political conditions,
may adversely affect the market price of the Company's common stock in any
market that may develop. Sales of "restricted securities" under Rule 144
may also have an adverse effect on any market that may develop in the
Company's common stock. See the caption "Recent Sales of Unregistered
Securities".
Further, effective January 4, 1999, the NASD adopted rules and
regulations requiring that prior to any issuer having its securities quoted
on the OTC Bulletin Board of the NASD that such issuer must be a "reporting
issuer" which is required to file reports under Section 13 or 15(d) of the
Securities and Exchange Act of the 1934, as amended (the "1934 Act"). The
Company is not currently a "reporting issuer," and this Registration
Statement, upon its approval by the Securities and Exchange Commission,
will bring the Company into compliance with these listing provision of the
OTC Bulletin Board and should prevent the NASD from delisting any future
quotations of the Company's common stock.
Competition; Low Barriers to Entry.
The market for Internet financial information and trading services is
relatively new, intensely competitive, rapidly evolving and subject to
rapid technological change. The Company expects competition to persist,
intensify and increase in the future. The Company's potential competitors
can be divided into three main groups: traditional brokerage firms that
have or will offer online trading capability, such as Charles Schwab,
Merrill Lynch, Smith Barney, Prudential and Waterhouse; Internet-based
brokerage firms, such as E-Trade, Ameritrade, Datek, DLJ Direct and
Discover Brokerage; and established online information providers such as
Yahoo! Finance, Microsoft MoneyCentral, the Motley Fool and Raging Bull.
Almost all of the Company's current and potential competitors have longer
operating histories, larger installed customer bases, longer relationships
with clients and significantly greater financial, technical, marketing and
public relation resources than the Company and could decide at any time to
increase their resource commitments to the Company's target market. In
addition, the market for online financial services is relatively new and
subject to continuing definition, and, as a result, may better position the
Company's competitors to compete in this market as it matures. As a
strategic response to changes in the competitive environment, the Company
may from time to time make certain pricing, service technology or marketing
decisions or business or technology acquisitions that could have a material
adverse effect on the Company's business, financial condition, results of
operations and prospects. Competition of the type described above could
materially adversely affect the Company's business, results of operations,
financial condition and prospects.
In addition, the Company's ability to generate clients will depend to
a significant degree on the quality of its services and its reputation
among its clients and potential clients, compared with the quality of its
services provided by, and the reputations of, the Company's competitors.
To the extent the Company loses clients to its competitors because of
dissatisfaction with the Company's services or its reputation is adversely
affected for any other reason, the Company's business, result of
operations, financial condition and prospects could be materially adversely
affected.
There are relatively low barriers to entry into the Company's
business. Because firms such as the Company rely on the skill of their
personnel and the quality of their client service, they have no patented
technology that would preclude or inhibit competitors from entering their
markets. The Company is likely to face additional competition from new
entrants into the market in the future. There can be no assurance that
existing or future competitors will not develop or offer services that
provide significant performance, price, creative or other advantages over
those offered by the Company, which could have a material adverse effect on
its business, financial condition, results of operations and prospects.
Management believes its proprietary software and new browser-based
technology is sufficiently unique to enable it to effectively compete in
its current and intended business operations.
Potential Fluctuations in Operating Results; Quarterly Fluctuations.
The Company's operating results may fluctuate significantly in the
future as a result of a variety of factors, many of which are outside the
Company's control. As a strategic response to changes in the competitive
environment, the Company may from time to time make certain pricing,
marketing decisions or acquisitions that could have a material short-term
or long-term adverse effect on the Company's business, results of
operations and financial condition. In particular, in order to accelerate
the promotion of AccessTradeOne.com, the Company intends to market it
website and services. The Company does not believe that it will experience
seasonality in its business.
There can be no assurance that such patterns will not have a material
adverse effect on the Company's business, results of operations and
financial condition. In addition to licensing, promoting and selling its
technologies, it is the Company's strategy to generate additional revenues
through e-Commerce arrangements including allowing other companies to
advertise on the Company's website. There can be no assurance that the
Company will receive any material amount of revenue under these agreements
in the future. The foregoing factors, in some future quarters, may lead
the Company's operating results to fall below the expectations.
Risk Of Capacity Constraints And Systems Failures.
A key element of the Company's strategy is to generate a volume of
user traffic to its website. The Company's ability to attract customers
and to achieve market acceptance of its products depends significantly upon
the performance of the Company and its network infrastructure (including
its server, hardware and software). Any system failure that causes
interruption or slower response time of the Company's products and services
could result in less traffic to the Company's website and, if sustained or
repeated, could reduce the attractiveness of the Company's products. An
increase in the volume of user traffic could strain the capacity of the
Company's technical infrastructure, which could lead to slower response
time or system failures, and could adversely affect the delivery of the
number of impressions that are owed to advertisers and thus the Company's
advertising revenues. In addition, as the number of Web pages on and users
of AccessTradeOne.com increases, there can be no assurance that the Company
and its technical infrastructure will be able to grow accordingly, and the
Company faces risks related to its ability to scale up to its expected
customer levels while maintaining superior performance. Any failure of the
Company's server and networking systems to handle current or higher volumes
of traffic would have a material adverse effect on the Company's business,
results of operations and financial condition. The Company is also
dependent upon third parties to provide potential users with Web browsers
and Internet and online services necessary for access to the site. In the
past, users have occasionally experienced difficulties with Internet and
online services due to system failures, including failures unrelated to the
Company's systems. Any disruption in Internet access provided by third
parties could have a material adverse effect on the Company's business,
results of operations and financial condition. Furthermore, the Company is
dependent on hardware suppliers for prompt delivery, installation and
service of equipment used to deliver the Company's products and services.
The Company's operations are dependent in part upon its ability to protect
its operating systems against damage from human error, fire, floods, power
loss, telecommunications failures, break-ins and similar events. The
Company does not presently have redundant, multiple-site capacity in the
event of any such occurrence. The Company's servers are also vulnerable to
computer viruses, break-ins and similar disruptions from unauthorized
tampering with the Company's computer systems. The occurrence of any of
these events could result in interruption, which could have a material
adverse effect on the Company's business, results of operations and
financial condition. In addition, the Company's reputation could be
materially and adversely affected.
Risks Associated With New Services, Features and Functions.
There can be no assurance that the Company would be able to expand its
operations in a cost-effective or timely manner or that any such efforts
would maintain or increase overall market acceptance. Expansion of the
Company's operations in this manner would also entail additional
development, operational training for the Company's management, as well as
financial and operational resources. Furthermore, any new business
launched by the Company that is not favorably received by consumers could
damage the Company's reputation and diminish the value of its brand name.
The lack of market acceptance of the Company's products would result in the
Company's inability to generate satisfactory revenues and its inability to
offset their costs could have a material adverse effect on the Company's
business, results of operations and financial condition.
Online Commerce Security Risks.
A significant barrier to online commerce and communications is the
secure transmission of confidential information over public networks. The
Company will rely on encryption and authentication technology licensed from
third parties to provide the security and authentication technology to
effect secure transmission of confidential information, including customer
credit card numbers. There can be no assurance that advances in computer
capabilities, new discoveries in the field of cryptography, or other events
or developments will not result in a compromise or breach of the technology
used by the Company to protect customer transaction data.
If any such compromise of the Company's security were to occur, it
could have a material adverse effect on the Company's reputation and,
therefore, on its business, results of operations and financial condition.
Furthermore, a party who is able to circumvent the Company's security
measures could misappropriate proprietary information or cause
interruptions in the Company's operations. The Company may be required to
expend significant capital and other resources to protect against such
security breaches or to alleviate problems caused by such breaches.
Concerns over the security of transactions conducted on the Internet and
other online services and the privacy of users may also inhibit the growth
of the Internet and other online services generally, and the Web in
particular, especially as a means of conducting commercial transactions.
To the extent that activities of the Company involve the storage and
transmission of proprietary information, such as credit card numbers,
security breaches could damage the Company's reputation and expose the
Company to a risk of loss or litigation and possible liability. There can
be no assurance that the Company's security measures will prevent security
breaches or that failure to prevent such security breaches will not have a
material adverse effect on the Company's business, results of operations
and financial condition.
Effect of Existing or Probable Government Regulations.
Government legislation has been proposed that imposes liability for or
prohibits the transmission over the Internet of certain types of
information. The imposition upon the Company and other online providers of
potential liability for information carried on or disseminated through
their services could require the Company to implement measures to reduce
its exposure to such liability, which may require the Company to expend
substantial resources and/or to discontinue certain service offerings. In
addition, the increased attention focused upon liability issues as a result
of these lawsuits and legislative proposals could impact the growth of
Internet use.
The Company does not believe that such regulations, which were adopted
prior to the advent of the Internet, govern the operations of the Company's
business. There can be no assurance, however, that additional regulations
will not be imposed upon the Company in the future or that such imposition
will not have a material adverse effect on the Company's business, results
of operations and financial condition. Changes to existing laws or the
passage of new legislation, could create uncertainty in the marketplace
that could reduce demand for the services of the Company or increase the
cost of doing business as a result of litigation costs or increased service
delivery costs, or could in some other manner have a material adverse
effect on the Company's business, results of operations and financial
condition. In addition, because the Company's services are accessible
worldwide, and the Company may facilitate transactions between users
worldwide, other jurisdictions may claim that the Company is required to
qualify to do business as a foreign corporation in particular states or
foreign countries.
Due to the increasing popularity and use of the Internet and other
online services, it is possible that a number of laws and regulations may
be adopted with respect to the Internet or other online services covering
issues such as user privacy, freedom of expression, pricing, content and
quality of products and services, taxation, advertising, intellectual
property rights and information security. There can be no assurance that
such laws will not be proposed and adopted in the future. The adoption of
new laws or the application of existing laws may decrease the growth in the
use of the Internet, which could in turn decrease the demand for the
Company's services, increase the Company's cost of doing business or
otherwise have a material adverse effect on the Company's business, results
of operations and financial condition.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
All statements, trend analysis and other information contained in this
Registration relative to markets for the Company's products and trends in
revenues, gross margin and anticipated expense levels, as well as other
statements including words such as "believe," "anticipate," "expect,"
"estimate," "plan" and "intend" and other similar expressions, constitute
forward-looking statements. Those forward-looking statements are subject
to business and economic risks, and the Company's actual results of
operations may differ from those contained in the forward-looking
statements. The following discussion of the financial condition and
results of operations of the Company should also be read in conjunction
with the Financial Statements and Notes related thereto included elsewhere
in this Registration.
(a) Plan of Operation.
Access Tradeone.com offers a multifaceted revenue model comprised of
the following revenue streams:
1) License/Installation Fees
2) Monthly Service Fees
3) Advertising Revenue
4) Delivery of Real Time Information.
5) Delivery of Research Content and Tools.
6) Direct Advertising to the brokerage's individual clients.
License/Installation Fees Access TradeOne.com will license and
install turnkey websites and online trading systems for brokerage firms and
financial service companies. The fee structure will vary based upon the
individual brokerage's current Internet status and the size of its client
base.
Monthly Service Fees Access Tradeone.com will charge each private
labeled firm a monthly fee based on the number of active accounts they
currently house. This number can be offset by the "soft dollars" generated
from noncompetitive advertising. For example, if a certain mutual fund
wishes to advertise its product line via a "laser marketing" approach
(advertising to a sector who is 100% active in a complementary or exact
product line), Access TradeOne.com would provide a direct e-mail marketing
campaign, Internet television ads on its "Intermarket FNN" network and the
placement of a paid advertising show which would feature the mutual fund
company and its product lines. For this campaign the mutual fund would pay
Access TradeOne.com who will in turn pay a percentage of the revenue to the
brokerage firms whose clients have been advertised to. The fee is first
used to offset the brokerages monthly service fee with the balance paid to
the brokerage as their portion of the placement ad.
Advertising Revenue Access TradeOne.com will advertise to private
labeled brokerage clients via direct screen advertising, e-mail placements
(Laser Marketing) and on its program Intermarket FNN. The private labeled
brokerage will participate in the revenue stream by first offsetting their
monthly service fee (soft dollars) against the percentage of advertising
revenue to be realized monthly. Any excess revenue would be paid to the
brokerage during that monthly period. (See example above).
Delivery of Real Time Information The Company intends to offer Real
Time streaming information from exchanges around the world in the form of
streaming quotes, dynamic real time quotes and closing market quotes as
available from lesser developed market exchanges throughout the world.
Delivery of Research Content and Tools The Company will offer users
the ability to purchase on-line research reports from top analysis firms at
discounted prices. The Company will barter advertising dollars from these
firms in exchange for free research information which can then be sold
discounted to users in order to convert the advertising barter dollars to
hard dollars.
Direct Advertising to the brokerage's individual clients Access
TradeOne.com will market via direct screen advertising, e-mail and its
financial network, Intermarket FNN non-competing financial products to the
brokerage's client base.
Financial Condition
The Company currently has no payroll, limited overhead of
approximately $10,000 per month, $238,000.00 in cash and cash equivalents
on hand and short term investments of $2,800,000.00. All leaseholds are
prepaid, all equipment is owned and paid for and most contractors are paid
in advance.
Access TradeOne.com's directors, consisting of Joseph Pittera (also
the Company's President), Bill Smart and Lloyd Leavitt, received 164,000
shares, 146,000 shares and 100,000 shares, respectively, of the Company's
common stock as compensation in lieu of payroll for the next three years.
The Company's Treasurer and Secretary, John Tobey and Eve Dixon-Tobey,
respectively, each received 25,000 shares of stock in lieu of compensation
for the next three years.
Competitive Business Conditions
The Company's goal is to synergistically combine the characteristics
and strengths of a financial entertainment company with those of a
financial advertising company. TradeOne is aware of several potential
competitors that are attempting to private label products to brokerages and
financial institutions for payment of order flow or on a fee-per-trade
basis. However, the Company does not believe that these competitors will
succeed due to regulatory restrictions with respect to participation of
unregistered brokers in commission payments and the mere fact that
brokerages and/or other financial institutions are unlikely to split their
already-low commission structures with outside parties. Access
TradeOne.com's business model is to virtually give away its software
technology in order to capturing existing and documented client bases which
in turn will drive advertising revenues.
Year 2000 Disclosure.
The Year 2000 issue is the potential for system and processing
failures of date-related data and the result of computer-controlled systems
using two digits rather than four to define the applicable year. For
example, computer programs that have time-sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000. This could
result in system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions. The Company may be affected by Year 2000 issues related to
non-compliant information technology ("IT") systems or non-IT systems
operated by the Company or by third parties.
Based upon a recent assessment, the Company has determined that any
hardware and software presently in use or intended to be utilized by the
Company in connection with its intended business operations is believed by
management to be Year 2000 compliant. The Company's equipment is new, and
the architecture and design of its software was taken into account in all
equipment purchases. Purchases have and will be limited to equipment from
well-known companies like IBM, Cisco and other reputable hardware
manufacturers.
The Company has not yet completed its assessment of external
(third-party) IT systems and non-IT systems, and can give no assurance that
third parties with whom it intends to do business (e.g., banks, financial
institutions, businesses and utilities) will ensure Year 2000 compliance in
a timely manner or that, if they do not, their computer systems will not
have an adverse effect on the Company. At this point, the Company is not
currently aware of any Year 2000 problems relating to systems operated by
the Company or by third parties that would have a material effect on the
Company's business, results of operations or financial condition, without
taking into account the Company's efforts to avoid such problems. However,
based on its assessment to date, the Company does not anticipate that costs
associated with remediating the Company's non-compliant IT systems or
non-IT systems, if any, would be material, although there can be no
assurance to such effect. Such a failure could prevent the Company from
operating its business and/or prevent users from accessing the Company's
website.
In an effort to evaluate and reduce its exposure in this area, the
Company is making an inquiry of vendors and other business partners about
their progress in identifying and addressing problems that their computer
systems may face in correctly processing date information related to the
Year 2000. In particular, the Company is obtaining statements from a
substantial majority of its vendors that they are Year 2000 compliant or
are unaffected by "date sensitive" information. The Company estimates that
this process, including analysis of responses and follow-up interviews will
be complete on or before November 30, 1999.
Company management believes that the purchasing patterns of customers
and prospective customers might be affected by Year 2000 issues. Many
companies may need to modify or upgrade their information systems to
address the Year 2000 problem. The effects of this issue and of the
efforts by other companies to address it are unclear. Many companies are
expending significant resources to correct their current software systems
for Year 2000 compliance. These expenditures might result in reduced
funds available to purchase services and products such as those that the
Company offers.
The Company has no reason to believe that its exposure to the risks or
lack of supplier and/or customer Year 2000 readiness is any greater than
the exposure to such risks that affects its competitors generally.
However, if a significant number of the Company's key vendors, customers
and other business partners experience business disruptions as a result of
their lack of Year 2000 readiness, their problems could have a material
adverse effect on the Company's financial position and operations. In
addition, if all Year 2000 issues within the Company's business are not
properly identified there can be no assurance that the Year 2000 issue will
not have a material adverse effect on the Company's results of operations
or financial position.
Cost estimates and time frames will be influenced by the Company's
ability to identify Year 2000 problems, the nature of programming required
to fix any problems, and the compliance success of third parties. For
those reasons, no assurance can be given at this point that the Company's
computer system will be Year 2000 compliant in a timely manner or that the
Company will not incur significant additional expenses pursuing Year 2000
compliance.
The Company believes that the primary business risks, in the event of
such failure, would include, but not be limited to, loss of potential
revenues, increased operating costs, loss of customers or persons accessing
the Company's website or the websites of the Company's customers, or other
business interruptions of a material nature, as well as claims of
mismanagement, misrepresentation, or breach of contract, any of which could
have a material adverse effect on the Company's business, results of
operations and financial condition.
Forward Looking Information.
This report contains certain forward-looking statements and
information. The cautionary statements made in this report should be read
as being applicable to all related forward-looking statements wherever they
appear. Forward-looking statements, by their very nature, include risks
and uncertainties. Accordingly, the Company's actual results could differ
materially from those discussed herein. A wide variety of factors could
cause or contribute to such differences and could adversely impact
revenues, profitability, cash flows and capital needs. Such factors, many
of which are beyond the Company's control, include the following: our
success in obtaining new contracts; the volume and type of orders that are
received under such contracts; levels of, and ability to, collect
accounts receivable; availability of trained personnel and utilization of
the Company's capacity to complete work; competition and competitive
pressures on pricing; availability, cost and terms of debt or equity
financing; and economic conditions in the United States and in the regions
served.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company presently maintains offices at four locations. The office
in Nevada, at 3753 Howard Hughes Parkway, Suite 200, Las Vegas, Nevada
89109,is used primarily to establish a Nevada presence, for mail and for
service of process. The Nevada office is leased from Access TradeOne
Capital Markets, Inc., and is prepaid until August of 2000, at a monthly
rate of $175.
The Company's office at 1677 Eureka Road, Suite 201, Roseville,
California, is Access TradeOne.com's virtual trading center, and is used by
the Company to showcase its new technologies to prospective users. The
Roseville office is leased in the name of Access TradeOne Capital Markets,
Inc., and is prepaid until September 30, 2000, at a monthly rate of $3,630.
The Company's office at 1000 E. Tahquitz Canyon Way, Palm Springs,
California, inside the Palm Springs Television Studios, is the headquarters
for Access TradeOne.com's entertainment and financial news division.
The Company's office at 10905 Venice Boulevard, Suite 201, Los
Angeles, California, is Access TradeOne.com's technology programming
headquarters, where the Company's software is developed. The Los Angeles
office is prepaid until July 31, 2000, at a monthly rate of $500.
Management believes that these spaces are adequate for the Company's
needs for the next twenty-four months.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) Security ownership of certain beneficial owners. The table below
identifies any individual (including any "group") who is known to the
Company, as of the date of this filing, to be the beneficial owner of more
than five percent of any class of the small business issuer's voting
securities:
<TABLE>
<S> <C> <C> <C>
Title of Name and address Amount and nature Percentage
class of beneficial of beneficial of class
Owner ownership(1)
Common Joseph L. Pittera 164,000 5.7%
2214 Torrance Blvd. (affiliate)
Suite 101
Torrance, CA 90501
Common Lloyd R. Leavitt III 146,000 5.0%
2025 Santa Rena Dr. (affiliate)
Rancho Palos Verdes, CA 90275
Common Bill Smart 100,000 3.4%
Peachtree Lofts #804 (affiliate)
878 Peachtree St., N.E.
Atlanta, GA 30309
Preferred Griffith Gray + Assoc., Inc. 1,259,680 100%
Class A 322 Culver Blvd., Suite 171 (affiliate)
Playa Del Rey, CA 90293
Preferred Deak-Perera Capital Mkts., Ltd. 44,000(2) 68.8%
Class B 211-212 Piccadilly (affiliate)
London, England W1V 9LD
Preferred Signature Entertainment Corp. 10,000(3) 15.6%
Class B 3753 Howard Hughes Parkway (affiliate)
Las Vegas, NV 89109
Preferred Thomas J. Marchese III 10,000(4) 15.6%
Class B 68 Bella Drive (affiliate)
Penfield, NY 89109
(1) Unless otherwise indicated, the Company believes that all persons
named in the above table have sole voting and investment power
with respect to all shares of common stock beneficially owned by
them.
(2) Preferred Class B shares are convertible into Common Stock of the
Company at a ratio of 100 shares of Common Stock for 1 share of
Preferred Class B stock. If all Preferred Class B shares are
converted, these shares would represent 4,400,000 shares of
Common Stock, or approximately 47.3% of the Company's issued and
outstanding Common Stock.
(3) Preferred Class B shares are convertible into Common Stock of the
Company at a ratio of 100 shares of Common Stock for 1 share of
Preferred Class B stock. If all Preferred Class B shares are
converted, these shares would represent 1,000,000 shares of
Common Stock, or approximately 10.8% of the Company's issued and
outstanding Common Stock.
(4) Preferred Class B shares are convertible into Common Stock of the
Company at a ratio of 100 shares of Common Stock for 1 share of
Preferred Class B stock. If all Preferred Class B shares are
converted, these shares would represent 1,000,000 shares of
Common Stock, or approximately 10.8% of the Company's issued and
outstanding Common Stock.
</TABLE>
(b) Security ownership of management. The table below sets for the
ownership, as of the date of this filing, by all directors and nominees,
and each of the named executive officers of the Company, and directors and
executive officers of the registrant as a group.
<TABLE>
<S> <C> <C> <C>
Title of Name and address Amount and nature Percentage
class of beneficial of beneficial of class
Owner ownership
Common Joseph L. Pittera 164,000 5.7%
2214 Torrance Blvd. (affiliate)
Suite 101
Torrance, CA 90501
Common Lloyd R. Leavitt III 146,000 5.0%
2025 Santa Rena Dr. (affiliate)
Rancho Palos Verdes, CA 90275
Common Bill Smart 100,000 3.4%
Peachtree Lofts #804 (affiliate)
878 Peachtree St., N.E.
Atlanta, GA 30309
Common John D. Tobey 25,000 0.9%
6213 Hidden Meadow Ct. (affiliate)
San Jose, CA 95135
Common Eve D. Roberts-Tobey 25,000 0.9%
6213 Hidden Meadow Ct. (affiliate)
San Jose, CA 95135
Common All Officers and 460,000 15.9%
Directors as a
Group
(1) Unless otherwise indicated, the Company believes that all persons
named in the above table have sole voting and investment power
with respect to all shares of common stock beneficially owned by
them.
</TABLE>
There are no agreements between or among any of the shareholders which
would restrict the issuance of shares in a manner that would cause any
change of control of the Company. There are no voting trusts, pooling
arrangements or similar agreements in place between or among any of the
shareholders, nor do the shareholders anticipate the implementation of such
an agreement in the near term.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
(a) Directors and Executive Officers:
All directors are elected annually by the shareholders and hold office
until the next annual general meeting of shareholders or until their
successors are duly elected and qualified, unless they sooner resign or
cease to be directors in accordance with the Articles of Incorporation
of the Registrant. Executive officers are appointed and serve at the
pleasure of the Board of Directors.
The following persons are the current directors and executive officers
of the Company:
JOSEPH L. PITTERA: President & Chairman
Date Position Commenced: March, 1999
Term of Office: Annual
Address: 2214 Torrance Boulevard, Suite 101, Torrance, CA 90501
Age: 34
Fluent in five languages, Mr. Pittera maintains a law practice in Los
Angeles, specializing in bankruptcy and certain types of securities
transactions. His law firm is currently expanding into the international
legal marketplace. Mr. Pittera is a member, in good standing, of the State
Bar of California and the American Bar Association, and he is admitted to
practice before the United States Federal Court. Mr. Pittera took over the
duties of Chairman and CEO of Integrated Healthcare, Inc., in early 1998,
whereby he and others successfully guided the Company back from the brink
of bankruptcy. Mr. Pittera holds degrees from both The American University
Washington College of Law and the American University School of
International Services.
JOHN D. TOBEY: Treasurer & Director
Date Position Commenced: August, 1999
Term of Office: Annual
Address: 2214 Torrance Boulevard, Suite 101, Torrance, CA 90501
Age: 42
John Tobey has over eighteen years of experience in the software and
semiconductor industries and has been successful in the areas of software
development, information services within the customer support marketplace,
customer support management and MIS management systems. Mr. Tobey
currently works with a California-based software logic company as the
Director of Program Operations. Mr. Tobey received his Bachelor of Science
in Computer Science from Colorado State University and his Master of
Science in Computer Engineering from Santa Clara University.
EVE D. ROBERTS-TOBEY: Secretary & Director
Date Position Commenced: August, 1999
Term of Office: Annual
Address: 2214 Torrance Boulevard, Suite 101, Torrance, CA 90501
Age: 43
Eve Tobey has been active in the computer engineering industry for
over fifteen years. She worked for seven years as a Lead Design Engineer,
Active Thermal Transport, Space Station, for a leading aerospace company
where she was responsible for the design and buildup of its thermal
transport system. Prior to that, Ms. Tobey was a research engineer for a
defense contractor and was involved in solving three-dimensional modeling
problems for mechanical evaluation of structural integrity of various
missile systems. Ms. Tobey received both her Bachelor of Science and
Master of Science degrees from San Jose State University.
LLOYD R. LEAVITT III: Director
Date Position Commenced: March, 1999
Term of Office: Annual
Address: 2214 Torrance Boulevard, Suite 101, Torrance, CA 90501
Age: 44
Lloyd Leavitt is presently the Chief Financial Officer and a Vice
President of a manufacturing company with locations in Southern California,
Northern California and Kansas. Mr. Leavitt has directed the integration
of two new acquisitions which included the development and implementation
of a comprehensive plan aimed at standardizing manufacturing and financial
services among the acquired companies and the new parent company. Mr.
Leavitt previously spent time with the Walt Disney Company's Buena Vista
Home Video Division in a senior management capacity, as Director of
Finance, Sales and Marketing Systems. Mr. Leavitt is a graduate of the
University of Virginia with a Bachelor of Science in commerce and of
Creighton University with a Masters in Business Administration.
BILL SMART: Director
Date Position Commenced: March, 1999
Term of Office: Annual
Address: 2214 Torrance Boulevard, Suite 101, Torrance, CA 90501
Age: 53
Bill Smart is an independent consultant whose focus includes system
definition, design, project management and implementation in the related
areas of data warehouse, executive information systems and knowledge
discovery / data mining. Prior to this venture, Mr. Smart was Technical
Lead on a successful NCR Customer-Oriented Data Warehouse implementation
for BCP Telecomunicacoes, a Brazilian cellular telephone company. Prior to
that, Mr. Smart was Director of Knowledge Discovery for NCR's Human
Interface Technology Center which focused on Scalable Data Warehousing.
Prior to September of 1997, Mr. Smart was the Director of Research for
NCR's Financial Service Knowledge Lab in England. In October of 1994, Mr.
Smart was a representative to the Financial Services Technology Consortium
("FSTC") which is made up of leading U.S. banks, National Laboratories of
the U.S. Department of Energy, the U.S. Department of Treasury and a number
of leading universities. The emphasis of the FSTC is on the development of
the National Information Infrastructure and High Speed Computing and
Communication Initiative. Mr. Smart is extremely knowledgeable in the area
of Artificial Intelligence Engineering. He is also the former Advisory
Editor for Bank Technology News and is an active speaker at both domestic
and international conferences, colleges and universities. Mr. Smart holds
a Bachelor of Arts from Kemper College, a Bachelor of Science from the
University of Palmer Green and a Masters in Business Administration from
the University of Palmer Green.
(b) There are no significant employees who are not described as
executives above, and there are no family relationships among directors,
executive officers or any nominees to these positions.
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of
the Company:
(1) was a general partner or executive officer of any business
against which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses), except for Joseph Pittera, who was convicted under California
Penal Code Section 422, "making a terrorist threat," which incident
occurred while Mr. Pittera, in his own home, confronted his wife's
boyfriend with whom he had a physical altercation. Mr. Pittera is on
probation until June, 2000, at which time the conviction will be reduced to
a misdemeanor, and eventually expunged.
(3) was subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
ITEM 6. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
<TABLE>
Long Term Compensation
Annual Compensation Awards Payouts
------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Name and Year Salary($) Bonus($) Other Restricted Securities LTIP All other
Principal annual stock awards underlying payouts compen-
position compensation options/SARs ($) sation($)
(Medical) (#)
-----------------------------------------------------------------------------------------------------
Joseph L. 1999 0 0 0 100,000 0 0 0
Pittera
(President &
Chairman)
Lloyd R. 1999 0 0 0 100,000 0 0 0
Leavitt III
(Director)
Bill Smart 1999 0 0 0 100,000 0 0 0
(Director)
John D. 1999 0 0 0 25,000 0 0 0
Tobey
(Treasurer &
Director)
Eve D. 1999 0 0 0 25,000 0 0 0
Roberts-Tobey
(Secretary &
Director)
</TABLE>
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the period
ended June 30, 1999, except as set forth in the Summary Compensation Table.
Further, no member of the Company's management has been granted any option or
stock appreciation rights; accordingly, no tables relating to such items have
been included within this Item.
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any
director or executive officer of the Company which would in any way result
in payments to any such person because of his or her resignation, retirement
or other termination of employment with the Company or its subsidiaries, any
change in control of the Company, or a change in the person's responsibilities
following a change in control of the Company.
The existing directors and officers of the Company currently serve on
a deferred stock-compensation basis, whereby each of the Company's existing
directors and officers was given a restricted stock award in exchange for
three years of service. Notwithstanding the foregoing, there are no
standard arrangements pursuant to which the Company's directors and officers
are compensated for any services provided as a director. No additional
amounts are payable to the Company's directors for committee participation
or special assignments. The Restricted Stock Awards given to each of the
Company's directors and officers are subject to three-year lock-up
provisions, pursuant to which 50% of the stock award is restricted for
two years and the remaining 50% is restricted for three years.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company's President, Joseph Pittera, is a principal of Evans
Lambert and Associates, which was hired as the Company's public relations
representative as of September 1, 1999, and until March 1, 2001. Evans
Lambert was paid $30,000 for the 18 month period. Mr. Pittera's law firm
also handles certain of the Company's legal matters, including the legal
work for the Company's merger with Access TradeOne Capital Markets, Inc.,
the fees for which totaled approximately $35,000.
ITEM 8. DESCRIPTION OF SECURITIES.
There are authorized seventy million (70,000,000) shares of capital
stock of the Company, divided into two separate classes and consisting of
Common Stock and Preferred Stock.
Common Stock: There are authorized fifty million (50,000,000) shares
of the Company's Common Stock, par value of $0.001, with each share having
equal and identical rights to every other share of Common Stock for
purposes of dividends, liquidation preferences, voting rights and any other
attributes of the Company's Common Stock. No voting trusts or any other
arrangement for preferential voting exist among any of the shareholders,
and there are no restrictions in the Bylaws or Articles of Incorporation
precluding issuance of further Common Stock or requiring any liquidation
preferences, voting rights or dividend priorities with respect to this
class of stock. As of June 30, 1999, there were 97,775 shares of the
Company's Common Stock issued and outstanding. In the period since June
30, 1999, the Company has issued additional shares of Common Stock, and as
of the date of this filing, there are 2,897,775 shares of the Company's
Common Stock issued and outstanding.
Each share of Common Stock entitles the holder thereof to one vote,
either in person or by proxy, at a meeting of shareholders. The holders
are not entitled to vote their shares cumulatively. Accordingly, the
holders of more than 50% of the issued and outstanding shares of Common
Stock can elect all of the directors of the Company.
All shares of Common Stock are entitled to participate ratably in
dividends when and as declared by the Company's Board of Directors out of
the funds legally available therefor. Any such dividends may be paid in
cash, property or additional shares of Common Stock. The Company has not
paid any dividends since its inception and presently anticipates that no
dividends will be declared in the foreseeable future. Any future dividends
will be subject to the discretion of the Company's Board of Directors and
will depend upon, among other things, future earnings, the operating and
financial condition of the Company, its capital requirements, general
business conditions and other pertinent facts. Therefore, there can be no
assurance that any dividends on the Common Stock will be paid in the
future.
Holders of Common Stock have no preemptive rights or other
subscription rights, conversion rights, redemption or sinking fund
provisions. In the event of the dissolution, whether voluntary or
involuntary, of the Company, each share of Common Stock is entitled to
share ratably in any assets available for distribution to holders of the
Common Stock equity securities of the Company after satisfaction of all
liabilities.
Preferred Stock: There are authorized twenty million (20,000,000)
shares of the Company's Preferred Stock, divided into two classes, Class A
and Class B.
Class A Preferred Stock is designated as a non-voting, non-convertible
8.25% cumulative five-year callable security, par value $0.001 per share.
As of June 30, 1999, there were no shares of Preferred Class A Stock issued
and outstanding. In the period since June 30, 1999, the Company has issued
shares of Preferred Class A Stock, and as of the date of this filing, there
are 1,259,680 shares of the Company's Preferred Class A Stock issued and
outstanding.
Class B Preferred Stock, par value $0.50 per share, is convertible at
a ratio of one (1) share of Class B Preferred Stock into one hundred (100)
shares of the Company's Common Stock. As of June 30, 1999, there were no
shares of Preferred Class B Stock issued and outstanding. In the period
since June 30, 1999, the Company has issued shares of Preferred Class B
Stock, and as of the date of this filing, there are 64,000 shares of the
Company's Preferred Class B Stock issued and outstanding. In addition to
conversion rights, Preferred Class B shares carry the preferences set forth
below:
(1) Liquidation Rights. The Class B Preferred Stock shall have a
liquidation preference of $1.00 per share; after payment of such
liquidation preference, holders of Class B Preferred Stock shall be
entitled upon liquidation of the Company, to an amount, per issued and
outstanding share, equal to 100 times the amount distributed upon
liquidation with respect each issued and outstanding share of Common Stock.
(2) Conversion Rights. The holders of Class B Preferred Stock shall
be entitled, at any time upon written notice to the Company, to convert
each share of such stock into 100 share of Common Stock.
(3) Dividend Rights. Holders of Class B Preferred Stock shall be
entitled upon payment by the Company of any dividend, to an amount, per
issued and outstanding share, equal to 100 times the amount of any dividend
paid with respect each issued and outstanding share of Common Stock.
Dividend rights are not cumulative since there is otherwise no preference
on dividends.
(4) Voting Rights. Holders of Class B Preferred Stock shall be
entitled to a weighted vote per share equivalent to the voting power of 100
shares of Common Stock, unless otherwise required by applicable Nevada law.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND OTHER SHAREHOLDER MATTERS.
A. Market Information
The Company's common stock is presently quoted on the OTC Bulletin
Board of the NASD under the ticker symbol "GMKT". However, there is
currently no "established trading market" for the Company's common stock,
and no assurance can be given that any current market for the Company's
common stock will develop or be maintained. For any market that develops
for the Company's common stock, the sale of "restricted securities" (common
stock) pursuant to Rule 144 of the Securities and Exchange Commission by
members of management, or any other person to whom any such securities may
be issued in the future may have a substantial adverse impact on any such
public market. A minimum holding period of one year is required for
resales under Rule 144, along with other pertinent provisions, including
publicly available information concerning the Company (this requirement
will be satisfied by the filing and effectiveness of this Registration
Statement, the passage of 90 days and the continued timely filing by the
Company of all reports required to be filed by it with the Securities and
Exchange Commission; limitations on the volume of "restricted securities"
which can be sold in any 90 day period; the requirement of unsolicited
broker's transactions; and the filing of a Notice of Sale of Form 144.
There are no restricted shares of the Company eligible for trading prior to
May, 2000.
The following quotations were provided by the National Quotation
Bureau, LLC, and do not represent actual transactions; these quotations do
not reflect dealer markups, markdowns or commissions.
STOCK QUOTATIONS*
<TABLE>
<S> <C> <C>
CLOSING BID
-----------------------
Quarter ended: High Low
- -------------- ---- ---
September 30, 1999 18 11
June 30, 1999 (1) 12.50 .06
March 31, 1999 .08 .05
December 31, 1998 .04 .04
September 30, 1998 .0625 .05
June 30, 1998 .07 .05
March 31, 1998 .0625 .02
December 31, 1997 .25 .04
September 30, 1997 .15 .15
June 30, 1997 .25 .02
(1) In June of 1999, and in anticipation of its acquisition of Access
TradeOne Capital Markets, Inc., the Company instituted a 1-for-100
reverse stock split of its common stock.
</TABLE>
(i) There is currently no Common Stock which is subject to outstanding
options or warrants to purchase. However, there are 64,000 shares of the
Company's Preferred Class B securities issued and outstanding, which are
convertible into Common Stock. Upon conversion of the Preferred Class B
shares, assuming all 64,000 are converted, there would be an additional
6,400,000 shares of the Company's Common Stock issued and outstanding.
(ii) There is currently no common stock of the Company which is
eligible to be sold under Rule 144 of the Securities Act of 1933 as amended
or that the registrant has agreed to register for sale by security holders.
(iii) There is currently no common equity that is being or is proposed
to be publicly offered by the registrant, the offering of which could have
a material effect on the market price of the issuer's common equity.
B. Holders
As of June 30, 1999, the Company had approximately 186 shareholders of
record. As of the date of this filing, the Company has approximately 780
shareholders of record.
Applicability of Low-Priced Stock Risk Disclosure Requirements.
The securities of the Company will be considered low-priced or
"designated" securities under rules promulgated under the Exchange Act.
Penny Stock Regulation Broker-dealer practices in connection with
transactions in "Penny Stocks" are regulated by certain rules adopted by
the Securities and Exchange Commission. Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document that provides information
about penny stocks and the risk associated with the penny stock market.
The broker-dealer must also provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and
its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. In
addition, the penny stock rules generally require that prior to a
transaction in a penny stock, the broker-dealer must make a written
determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject
to the penny stock rules. When the Registration Statement becomes effective
and the Company's securities become registered, the stock will likely have
a trading price of less than $5.00 per share and will not be traded on any
national exchanges. Therefore, the Company's stock will become subject to
the penny stock rules and investors may find it more difficult to sell
their securities, should they desire to do so.
C. Dividend Policy
The Company has not paid any dividends to date. In addition, it does
not anticipate paying dividends in the immediate foreseeable future. The
Board of Directors of the Company will review its dividend policy from time
to time to determine the desirability and feasibility of paying dividends
after giving consideration to the Company's earnings, financial condition,
capital requirements and such other factors as the board may deem relevant.
D. Reports to Shareholders
The Company intends to furnish its shareholders with annual reports
containing audited financial statements and such other periodic reports as
the Company may determine to be appropriate or as may be required by law.
Upon the effectiveness of this Registration Statement, the Company will be
required to comply with periodic reporting, proxy solicitation and certain
other requirements by the Securities Exchange Act of 1934.
E. Transfer Agent and Registrar
The Company's Transfer Agent its shares of common voting stock is
Manhattan Transfer & Registrar, 58 Dorcester Road, Lake Ronkonkoma, New
York 11779.
ITEM 2. LEGAL PROCEEDINGS.
None.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
In October, 1996, Metropolitan authorized a Regulation D, Rule 504
offering whereby Metropolitan would offer 4,000,000 shares of its common
stock at $0.25 per share. The offering was subsequently canceled and
rescinded on June 17, 1997.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Eleventh of the Articles of Incorporation provides that no
director of the Company shall have personal liability to the corporation or
to its shareholders for damages for any breach of duty in such capacity,
provided, however, that the provisions shall not eliminate or limit:
(a) acts or omissions which involve intentional misconduct, fraud or
a knowing violation of law, or
(b) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes.
Section 78.751(1) of the Nevada Revised Statutes ("NRS") authorizes a
Nevada corporation to indemnify any director, officer, employee, or
corporate agent "who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, except an action by or in
the right of the corporation" due to his or her corporate role.
Section78.751(1) extends this protection "against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by him or her in connection with the action, suit
or proceeding if he or she acted in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his or her conduct was unlawful."
Section 78.751(2) of the NRS also authorizes indemnification of the
reasonable defense or settlement expenses of a corporate director, officer,
employee or agent who is sued, or is threatened with a suit, by or in the
right of the corporation. The party must have been acting in good faith and
with the reasonable belief that his or her actions were not opposed to the
corporation's best interests. Unless the court rules that the party is
reasonably entitled to indemnification, the party seeking indemnification
must not have been found liable to the corporation.
To the extent that a corporate director, officer, employee, or agent
is successful on the merits or otherwise in defending any action or
proceeding referred to in Section 78.751(1) or 78.751(2), Section 78.751(3)
of the NRS requires that he be indemnified "against expenses, including
attorneys' fees, actually and reasonably incurred by him or her in
connection with the defense."
Section 78.751 (4) of the NRS limits indemnification under Sections
78.751 (1) and 78.751(2) to situations in which either (1) the
stockholders, (2) the majority of a disinterested quorum of directors, or
(3) independent legal counsel determine that indemnification is proper
under the circumstances.
Pursuant to Section 78.751(5) of the NRS, the corporation may advance
an officer's or director's expenses incurred in defending any action or
proceeding upon receipt of an undertaking. Section 78.751(6)(a) provides
that the rights to indemnification and advancement of expenses shall not be
deemed exclusive of any other rights under any bylaw, agreement,
stockholder vote or vote of disinterested directors. Section 78.751(6)(b)
extends the rights to indemnification and advancement of expenses to former
directors, officers, employees and agents, as well as their heirs,
executors, and administrators.
Regardless of whether a director, officer, employee or agent has the
right to indemnity, Section 78.752 allows the corporation to purchase and
maintain insurance on his behalf against liability resulting from his or
her corporate role.
PART F/S FINANCIAL.
ACCESS TRADEONE.COM, INC.
FKA, DIAMOND LASER INTERNATIONAL, LTD.
FINANCIAL STATEMENTS
As of and for the Two Years and Six Months Ended June 30, 1999
(or Period January 1, 1997 Through June 30, 1999)
and Independent Auditors' Report
<PAGE>
Independent Auditors' Report
To the Board of Directors and Stockholders
ACCESS TRADEONE.COM, INC.
FKA, Diamond Laser International, LTD.
Torrance, California
We have audited the accompanying balance sheet of ACCESS TRADEONE.COM,
INC., FKA, Diamond Laser International, LTD. as of June 30, 1999, and the
related statements of income, stockholders' equity and cash flows for the
period January 1, 1997 through June 30, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of ACCESS TRADEONE.COM,
INC., FKA, Diamond Laser International, LTD. as of June 30, 1999, and the
results of its operations and its cash flows for the period January 1, 1997
through June 30, 1999 in conformity with generally accepted accounting
principles.
Vanderhorst & Manning CPAs, LLC
Dayton, Ohio
<PAGE>
ACCESS TRADEONE.COM, INC.
FKA DIAMOND LASER INTERNATIONAL, LTD.
BALANCE SHEET
JUNE 30, 1999
ASSETS
<TABLE>
<S> <C>
TOTAL ASSETS $ 0
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock 20,000,000 Shares
Authorized, Non-Voting, Non-
Convertible, 8.25% Cumulative,
Callable in Five Years,
$.001 Per Share Par Value $ 0
Common Stock, 50,000,000 Shares
Authorized, 97,775 Shares
Issued and Outstanding 98
Capital in Excess of Par 316,111
Retained Earnings (Deficit) (316,209)
----------
TOTAL STOCKHOLDERS' EQUITY $ 0
----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0
==========
The Accompanying Notes are an Integral Part of These Financial Statements.
</TABLE>
<PAGE>
ACCESS TRADEONE.COM, INC.
FKA DIAMOND LASER INTERNATIONAL, LTD.
STATEMENT OF INCOME
FOR THE PERIOD JANUARY 1, 1997 THROUGH JUNE 30, 1999
<TABLE>
<S> <C>
REVENUE
Gain on Sale of Investment $ 224,250
Interest 7,207
----------
$ 231,457
EXPENSES
Professional Fees $ 80,949
Directors' Fees 25,000
Rent 12,000
Transfer and Filing Fees 9,023
Travel 7,317
Interest 4,430
Insurance 2,535
Office and Other 2,311
Franchise Tax 1,124
----------
$ 144,689
----------
INCOME BEFORE TAXES $ 86,768
INCOME TAXES 0
----------
NET INCOME $ 86,768
==========
The Accompanying Notes are an Integral Part of These Financial Statements.
</TABLE>
<PAGE>
ACCESS TRADEONE.COM, INC.
FKA DIAMOND LASER INTERNATIONAL, LTD.
STATEMENT OF CASH FLOWS
FOR THE PERIOD JANUARY 1, 1997 THROUGH JUNE 30, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 86,768
Adjustments to Reconcile Net Income
to Net Cash Provided (Used) by Operations
Changes in Operating Assets
and Liabilities
Increase (Decrease) in:
Accounts Payable $ (44,911)
Tax Liability (60,000)
-----------
NET CASH (USED) BY OPERATIONS $ (18,143)
CASH FLOWS FROM INVESTING ACTIVITIES 0
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Stock Subscriptions
Receivable 18,000
-----------
NET DECREASE IN CASH $ (143)
CASH BEGINNING OF PERIOD 143
-----------
CASH END OF PERIOD $ 0
===========
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Note Payable Stockholders' Contributed
to Stockholders' Equity $ 150,000
Receipt of Promissory Note from Sale
of Investment Stock $ 225,000
Issuance of Dividend by Transfer of
Promissory Note to Stockholders $ 225,000
The Accompanying Notes are an Integral Part of These Financial Statements.
</TABLE>
<PAGE>
ACCESS TRADEONE.COM, INC.
FKA DIAMOND LASER INTERNATIONAL, LTD.
STATEMENT OF CHANGES IN STOCKHOLDER EQUITY
FOR THE PERIOD JANUARY 1, 1997 THROUGH JUNE 30, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK
------------------------------------------------ TOTAL
SHARES CAPITAL STOCK-
PREFERRED -------------------------- IN RETAINED HOLDERS'
STOCK ISSUED AND EXCESS EARNINGS EQUITY
AUTHORIZED AUTHORIZED OUTSTANDING AMOUNT OF PAR (DEFICIT) (Deficit)
($) ($) ($) ($)
---------- ---------- ----------- ------ ------- ------- -------
Balance
January 1, 1997 0 100,000,000 11,990,015 11,990 154,219 (177,977) (11,768)
Preferred Stock
Authorized 200,000 (200,000)
Note Payable
Stockholders'
Contributed To
Stockholders'
Equity 150,000 150,000
Common Stock
Returned (2,212,500) (2,212) 2,212
Dividend (225,000) (225,000)
Reverse Stock
Split
1 for 100 (198,000) (98,802,000) (9,679,740) (9,680) 9,680
Increase in
Authorized
Shares of
Stock 19,998,000 49,002,000
Net Income 86,768 86,768
---------- ---------- ----------- ------ ------- ------- -------
Balance
June 30, 1999 20,000,000 50,000,000 97,775 98 316,111 (316,209) 0
========== ========== =========== ====== ======= ======= =======
The Accompanying Notes are an Integral Part of These Financial Statements.
</TABLE>
<PAGE>
ACCESS TRADEONE.COM, INC.
FKA DIAMOND LASER INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of ACCESS
TRADEONE.COM, INC., FKA Diamond Laser International, LTD. (the Company) is
presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of the Company's
management, who is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles.
Name
Effective June 11, 1999, Diamond Laser International, LTD. (a Nevada
Corporation) amended its articles of incorporation to change its name to
ACCESS TRADEONE.COM, INC.
Business Activities
The Company disposed of its wholly owned operating subsidiary (CJ
Laser, Inc.) during September 1997. Since disposal, the Company has
continued the windup of its business affairs.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers
all highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
which requires the use of the "liability method" of accounting for income
taxes. Accordingly, deferred tax liabilities and assets are determined
based on the difference between the financial statement and tax basis of
assets and liabilities, using enacted tax rates in effect for the year in
which the differences are expected to reverse. Current income taxes are
based on the year's income taxable for federal and state income tax
reporting purposes.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
NOTE 2 - INCOME TAX MATTERS
As discussed in Note 1, the Company accounts for income taxes in
accordance with Statements of Financial Accounting Standards No. 109,
"Accounting for Income Taxes."
Income tax at the federal statutory rate is reconciled to the
Company's actual income tax expense for the period January 1, 1997 through
June 30, 1999, as follows:
PERCENT OF
PRE-TAX
AMOUNT INCOME
Federal Income Tax at Statutory Rate $29,500 34%
Utilization of Net Operating Loss
Carryforward 29,500 (34)
------- ----
$ 0 0%
======= ====
At June 30, 1999, the Company had a net operating loss carryforward of
approximately $28,000 which expires 2012.
NOTE 3 - SALE OF SUBSIDIARY
During September 1997, the Company sold its wholly owned subsidiary in
exchange for stock. On March 21, 1998, the Company sold the stock in
exchange for a promissory note in the amount of $225,000. The promissory
note was issued to the stockholders of record, May 31, 1998, as a dividend.
NOTE 4 - STOCKHOLDERS' EQUITY
The Company amended its articles of incorporation effective April 30,
1997 to provide for authority to issue a separate and single class of
shares known as preferred stock, which may be issued in one or more series.
200,000 shares of preferred stock was authorized being transferred from
common stock authorized. The Board of Directors adopted a resolution on
April 30, 1997 to provide these shares to be designated as "Series A
Preferred Stock" with the following terms:
(1) Liquidation Rights. The Series A Preferred Stock shall have a
liquidation preference of $1.00 per share; after payment of such
liquidation preference, holders of Series A Preferred Stock shall be
entitled upon liquidation of the Company, to an amount, per issued and
outstanding share, equal to 100 times the amount distributed upon
liquidation with respect each issued and outstanding share of Common Stock.
(2) Conversion Rights. The holders of Series A Preferred Stock shall
be entitled, at any time upon written notice to the Company, to convert
each share of such stock into 100 share of Common Stock.
(3) Dividend Rights. Holders of Series A Preferred Stock shall be
entitled upon payment by the Company of any dividend, to an amount, per
issued and outstanding share, equal to 100 times the amount of any dividend
paid with respect each issued and outstanding share of Common Stock.
Dividend rights are not cumulative since there is otherwise no preference
on dividends.
(4) Voting Rights. Holders of Series A Preferred Stock shall be
entitled to a weighted vote per share equivalent to the voting power of 100
shares of Common Stock, unless otherwise required by applicable Nevada law.
The Company during 1996, made an offering to sell up to 4,000,000
shares of its common stock at a selling price of $.25 per share. The
Company conducted this offering provided by Rule 504 of Regulation D under
the Securities Act of 1993. The Company received subscriptions for
4,000,000 shares of common stock under the offering, which were issued
based on promissory notes received from the subscribers. However, proceeds
for only 472,000 shares was received. On September 15, 1997, the Company
returned 2,215,000 shares, issued based on the promissory notes received
from the subscribers, to "authorized but unissued" status.
Effective June 11, 1999, the Company amended its articles of
incorporation to implement a 1-for-100 reverse stock split thereby,
decreasing the number of Series A Preferred Shares authorized to 2,000,
common shares authorized to 998,000, common stock issued and outstanding to
97,775 and the par value remained at $.001 per share.
Effective June 11, 1999, the Company amended its articles of
incorporation to provide for an increase in its capitalization to:
1. 50 million common shares at $.001 par value;
2. 20 million preferred non-voting, non-convertible 8.25% cumulative
5 year callable security at $.001 par value;
3. Convertible Class B Preferred share which converts 1 share of
Class B for 100 shares of common stock at $.50 par value.
NOTE 5 - CONTINGENCIES
In the ordinary course of conducting business, the Company may be
subjected to loss contingencies arising from environmental matters or
lawsuits. Management believes that the outcome of such matters, if any,
will not have a material impact on the Company's financial position or
results of future operations.
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS.
(a) List separately all financial statements filed as part of the
registration statement.
Audited Financial Statements for the Two Years and Six Months
ended June 30, 1999 and Independent Auditors' Report
PART III
EXHIBITS
No. Description
- ---- -----------
3.1 Articles of Incorporation, as restated, of Access TradeOne.com
3.2 Bylaws, adopted on November 6, 1996
27 Financial Data Schedule
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
ACCESS TRADEONE.COM, INC.
Date: October 29, 1999 By: /s/ Joseph L. Pittera
Joseph L. Pittera, President
and Chairman
Date: October 29, 1999 By: /s/ Lloyd R. Leavitt III
Lloyd R. Leavitt III, Director
Date: October 29, 1999 By: /s/ Bill Smart
Bill Smart, Director
Date: October 29, 1999 By: /s/ John D. Tobey
John D. Tobey, Treasurer
and Director
Date: October 29, 1999 By: /s/ Eve D. Roberts-Tobey
Eve D. Roberts-Tobey, Secretary
and Director
<PAGE>
Exhibit 3.1 Restated Articles of Incorporation
RESTATED ARTICLES OF INCORPORATION
OF
ACCESS TRADEONE.COM, INC.
FIRST: The name of this Corporation is:
ACCESS TRADEONE.COM, INC.
SECOND: Its principal office in the State of Nevada is located at
202 South Minnesota Street, Carson City, Nevada, 89703. The name and
address of its resident agent is United Corporate Services, Inc., at the
above address.
THIRD: The nature of the business and the object and purposes to be
transacted, promoted and carried on by the corporation are and shall
continue to be:
To engage in any lawful business authorized and permitted by the laws
of the State of Nevada, United States, and any and all counties,
states or cities wherein this said corporation may undertake to engage
in business.
FOURTH: The amount of the total capital stock of the corporation, to
take effect June 11, 1999, is Seventy Thousand Dollars ($70,000.00)
consisting of Seventy Million (70,000,000) shares of stock of the pav value
of One Tenth of a Cent ($0.001) each.
Common Stock. Fifty Million (50,000,000) of the shares that the
Corporation has authority to issue constitute a separate and single class
of shares known as Common Stock, which shall be with par value of $0.001,
shall not be issued in series, and shall have the same preferences,
limitations, and relative rights.
Preferred Stock. Twenty Million (20,000,000) of the shares that the
Corporation has authority to issue constitute a separate and single class
of shares known as Preferred Stock which shall be designated non-voting,
non-convertible 8.25% cumulative Five (5) year callable securities at a par
value of $0.001 per share.
Class B Preferred Stock. The Corporation shall have the power to
issue a convertible Class B Preferred security which shall convert One (1)
share of Class B Preferred stock for One Hundred (100) shares of Common
Stock at a par value of $0.50 per share.
FIFTH: The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased
or decreased in such manner as shall be provided in the by-laws of this
corporation, provided that the number of directors shall not be reduced to
less than one unless there is less than one stockholder.
The Board of Directors shall consist of five (5) members whose names
and addresses are as follows:
NAME ADDRESS
Joseph L. Pittera 2214 Torrance Boulevard, Suite 101
Torrance, California 90501
Lloyd R. Leavitt III 2025 Santa Rena Drive
Rancho Palos Verdes, CA 90275
Bill Smart Peachtree Lofts #804
878 Peachtree St., N.E.
Atlanta, GA 30309
John D. Tobey 6213 Hidden Meadow Court
San Jose, California 95135
Eve D. Roberts-Tobey 6213 Hidden Meadow Court
San Jose, California 95135
SIXTH: The capital stock, after the amount of the subscription
price, or par value, has been paid in, shall not be subject to assessment
to pay the debts of the corporation.
SEVENTH: The name and post office address of each officer signing
these restated articles of incorporation is as follows:
NAME ADDRESS
Joseph L. Pittera 2214 Torrance Boulevard, Suite 101
(President) Torrance, California 90501
Eve D. Roberts-Tobey 6213 Hidden Meadow Court
(Secretary) San Jose, California 95135
EIGHTH: This corporation is to have perpetual existence.
NINTH: In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized, subject to the
by-laws, if any, adopted by the shareholders, to make, alter or amend the
by-laws of the corporation.
TENTH: Meetings of stockholders may be held outside of the State of
Nevada at such place or places as may be designated from time to time by
the board of directors or in the by-laws of the corporation.
ELEVENTH: To the fullest extent permitted by Chapter 78 of the Nevada
Revised Statutes, as the same exists or may hereafter be amended, an
officer or director of the corporation who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, including an action by or in the right of the corporation,
or is or was serving at the request of the corporation as an officer,
director, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified by the corporation
against expenses, including attorneys' fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding.
TWELFTH: This corporation reserves the right to amend, alter, change
or repeal any provision contained in the articles of incorporation, in the
manner now or hereafter prescribed, and all rights conferred upon
stockholders herein are granted subject to this reservation.
WE, THE UNDERSIGNED, being the officers herein before named for the
purpose of filing these restated articles of incorporation pursuant to the
General Corporation Law of the State of Nevada, do make and file these
restated articles of incorporation, hereby declaring and certifying that
the facts herein stated are true, and accordingly have hereunto set our
hands this twenty-ninth day of October, 1999.
_____________________________ _____________________________
Joseph L. Pittera, Eve D. Roberts-Tobey,
President Secretary
<PAGE>
Exhibit 3.2 Bylaws
BY-LAWS
of
DIAMOND LASER INTERNATIONAL, LTD.
f/k/a METROPOLITAN ASSET MANAGEMENT CORP.
f/k/a A.I.N. LEASING CORP.
ARTICLE I - OFFICES
The principal office of the Corporation shall be 3035 Dryden Road,
Dayton Ohio 45439, County of Montgomery, State of Ohio 45439. The
Corporation may also have offices at such other places within or without
the State of Nevada as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II - STOCKHOLDERS
1. ANNUAL MEETING
The annual meeting of the stockholders shall be held on the third
Wednesday of the month of May of each year, at a time and place to be
designated by the Board of Directors for business as may properly come
before the meeting. If the date fixed for the annual meeting shall be a
legal holiday, such meeting shall be held on the next succeeding business
day.
2. SPECIAL MEETINGS
Special meetings of the stockholders may be called by the Board of
Directors (hereinafter the "Board'), the Chairman of the Board or by the
President and shall be called by the President or the Secretary at the
request in writing of a majority of the Board, the Chairman of the Board or
at the request in writing by the stockholders owning a majority of the
shares issued and outstanding. Such request shall state the purpose or
purposes of the proposed meeting. Business transacted at a special meeting
shall be confined to the purposes stated in the notice.
3. PLACE OF MEETINGS
Meetings of stockholders shall be held at the principal office of the
Corporation or such place within or without the State of Nevada as the
Board shall authorize.
4. NOTICE OF MEETINGS OF STOCKHOLDERS
Written notice of each meeting of stockholders shall state the purpose
or purposes for which the meeting is called, the place, date and hour of
the meeting and unless it is the annual meeting, shall indicate that it is
being issued by or at the direction of the person or persons calling the
meeting. Notice shall be given either personally or by mail to each
stockholder entitled to vote at such meeting, not less than ten (10) nor
more than thirty (30) days before the date of the meeting. If action is
proposed to be taken that might entitle stockholders to payment for their
shares, the notice shall include a statement of that purpose and to that
effect. If mailed, the notice is given when deposited in the United States
mail, with postage thereon prepaid, directed to the stockholder at his
address as it appears on the record of stockholders.
5. FIXING RECORD DATE
For the purpose of determining the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a meeting, or for
the purpose of determining stockholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of any other
action the Board shall fix in advance, a date as the record date for any
such determination of stockholders. Such date shall not be more than thirty
(30) nor less than ten (10) days before the date of such meeting, nor more
than thirty (30) days prior to any other action. If no record date is fixed
it shall be determined in accordance with the provisions of law.
6. QUORUM OF STOCKHOLDERS
Unless otherwise stated in the Articles of Incorporation of the
Corporation, at any meeting of the stockholders, those shares represented
at the meeting, no matter what number that may be, shall constitute a
quorum of stockholders which shall allow voting to proceed. Subject to the
provisions of Section 10 of
these By-Laws, a vote of the plurality of the shares voting of a quorum on
any issue shall be dispositive.
The stockholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of
enough stockholders to leave less than a quorum. When a quorum is once
present to organize a meeting, it is not broken by the subsequent
withdrawal of any stockholders. The stockholders present may adjourn the
meeting despite the absence of a quorum.
7. PROXIES
(a) At any meeting of the stockholders of the Corporation any
stockholder may designate in writing, another person or persons to act as a
proxy or proxies. If any stockholder designates two or more persons to act
as proxies a majority of those persons present at the meeting, or, if only
one is present, then that one may exercise all of the powers conferred by
the stockholder upon all of the persons so designated unless the
stockholder in writing shall provide otherwise;
(b) Without limiting the manner in Mich a stockholder may authorize
another person or persons to act for him as proxy, the following constitute
valid means by which a stockholder may grant such authority;
(i) A stockholder may execute a writing authorizing another
person or persons to act for him as proxy. Execution may be accomplished by
signing of the writing by the stockholder or its authorized officer,
director, employee or agent or by causing the signature of the stockholder
to be affixed to the writing by any reasonable means, including, but not
limited to, a facsimile signature;
(ii) A stockholder may authorize another person or persons to act
for him as proxy by transmitting or authorizing the transmission of a
telegram, cablegram or other means of electronic transmission to the person
who will be the holder of the proxy or to a firm which solicits proxies or
like agent who is authorized by the person who will be the holder of the
proxy to receive the, transmission. Any such telegram, cablegram or other
means of electronic transmission must either set forth or be submitted with
information from which it can be determined that the telegram, cablegram or
other electronic transmission was authorized by the stockholder. If it is
determined that the telegram, cablegram or other electronic transmission is
valid, the persons appointed by the Corporation to count the votes of the
stockholders and determine the validity of proxies and ballots or other
persons making those determinations must specify the information upon which
they relied.
(c) Any copy, communication by telecopier, or other reliable
reproduction of the writing or transmission created, may be substituted for
the original writing or transmission for any purpose for which the original
writing or transmission could be used, if the copy, communication by
telecopier, or other reproduction of the entire writing or transmission;
(d) No such proxy is valid after the expiration of six (6) months from
the date of its creation, unless it is coupled with an interest, or unless
the stockholder specifies in it the length of time for which it is to
continue in force, which may not exceed seven (7) years from the date of
its creation. Subject to these restrictions, any proxy properly created is
not revoked and continues in full force and effect until another instrument
or transmission revoking it or a properly created proxy bearing a later
date is filed with or transmitted to the Secretary of the Corporation or
another person or persons appointed by the Corporation to count the votes
of stockholders and determine the validity of proxies and ballots.
8. VOTE OF STOCKHOLDERS
Except as otherwise required by statute or by the Articles of
Incorporation, Directors shall be elected by a plurality of votes cast at a
meeting of stockholders by the holders of shares entities to vote in the
election.
9. QUALIFICATION OF VOTERS
Every stockholder of record shall be entitled at every meeting of the
stockholders to one vote for every share held in his name on the record of
stockholders, unless otherwise provided in the Articles of Incorporation of
the Corporation.
10. WRITTEN CONSENT OF STOCKHOLDERS
Any action that may be taken by vote may be taken without a meeting on
written consent, setting forth the action so taken, signed by the holders
of a majority of the shares entitled to vote thereon or signed by such
lesser number of stockholders as may be provided for in the Articles of
Incorporation of the Corporation.
11. WAIVERS
Notice of meeting need not be given to any stockholder who signs a
waiver of notice, in person or by proxy, whether before or after the
meeting. The attendance of any stockholder at a meeting, in person or by
proxy, without protesting prior to the conclusion of the meeting the lack
of notice of such meeting, shall constitute a waiver of notice by him.
ARTICLE III - DIRECTORS
1. GENERAL POWERS
The business and affairs of the Corporation shall be managed by its
Board of Directors. The Directors, each of whom shall be at least eighteen
(18) years of age and may or may not be stockholders, shall in all cases
act as a Board and they may adopt such rules and regulations for the
conduct of their meetings and the management of the Corporation, as they
may deem proper, not inconsistent with these By-Laws and the laws of the
State of Nevada.
2. NUMBER OF DIRECTORS
Unless otherwise stated in the Articles of Incorporation of the
Corporation, the governing Board of the Corporation shall be known as
Directors. The number of Directors may from time to time be increased or
decreased in such manner as the. Board of Directors by resolution may
decide.
3. ELECTION AND TERM OF DIRECTORS
At the 1997 annual meeting of stockholders, the Directors shall be
divided into three classes, as nearly equal in number as possible, with
terms of office of the first class to expire at the 1998 annual meeting of
stockholders, and the term of office of the second class to expire at the
1999 annual meeting of stockholders and the term of office of the third
class to expire at the annual meeting of stockholders, and with each class
to hold office until its successors are elected and qualified. At each
annual meeting of stockholders following such initial classification and
election, Directors elected to succeed those directors whose terms expire
shall be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election.
4. REGULAR ANNUAL MEETING
A regular annual meeting of the Board shall be held immediately
following the annual meeting of the stockholders at the place of such
annual meeting of the stockholders.
5. NOTICE OF MEETINGS OF THE BOARD, ADJOURNMENT
(a) Regular meetings of the Board may be held without notice at such
time and place as it shall from time to time determine.
(b) Special meetings of the Board shall be held upon notice to the
Directors and may be called by the Chairman of the Board upon three (3)
days written notice to each Director either personally or by mail or by
facsimile. Special meetings shall also be called by the President or by the
Secretary in a like manner on written request of two (2) Directors. Notice
of a meeting need not be given to any Director who submits a waiver of
notice whether before or after the meeting or who attends the meeting
without protesting prior thereto or at its commencement, the lack of notice
to him.
(c) A majority of the Directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. Notice of the
adjournment shall be given all Directors who were absent at the time of the
adjournment and unless such time and place are announced at the meeting, to
the other Directors.
6. PLACE AND TIME OF MEETINGS
The Board may hold its meetings at the office of the Corporation or at
such other place, either within or without the State of Ohio or Nevada, as
it may from time to time determine.
7. QUORUM OF DIRECTORS
Unless otherwise provided in the Articles of Incorporation of the
Corporation, a majority of the voting power of the entire Board shall
constitute a quorum for the transaction of business or of any specified
item of business.
8. ACTION OF THE BOARD
Unless otherwise required by law, the vote of the majority of the
Directors present at the time of the vote, if a quorum is present at such
time, shall be the act of the Board. Each Director shall have one (1) vote.
9. NEWLY CREATED DIRECTORSHIPS AND VACANCIES
Newly created directorships resulting from an increase in the number
of Directors occurring in the Board for any reason may be filled by a vote
of a majority of the Directors then in office or by the Chairman of the
Board, although less than a quorum exists, unless otherwise provided in the
Articles of Incorporation of the Corporation.
Vacancies occurring by reason of removal of Directors shall be filled
by vote of the stockholders or by appointment by the Chairman of the Board.
A Director elected or appointed to fill a vacancy caused by resignation,
death or removal shall be elected or appointed to hold office for the
unexpired term of his predecessor.
10. REMOVAL OF DIRECTORS
Any and all Directors may be removed by vote of the stockholders
representing not less than two thirds of the voting power of the issued and
outstanding shares.
11. RESIGNATION OF DIRECTOR
A Director may resign at any time by giving written notice to the
Board, the President or the Secretary of the Corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt
thereof by the Board or such Officer and the acceptance of the resignation
shall not be necessary to make it effective.
12. COMPENSATION
Unless otherwise provided in the Articles of Incorporation, the Board
of Directors may fix the compensation of Directors of the Corporation or
directors of subsidiary corporations for services in any capacity,
including and not limited to stock option plans and Director benefit
programs.
13. PRESUMPTION OF ASSENT
A Director of the Corporation who is present at a meeting of the
Directors at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent shall be
entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the Secretary of the
meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
14. EXECUTIVE AND OTHER COMMITTEES
The Board, by resolution adopted by a majority of the entire Board,
may designate from among its members an executive committee and other
committees, each consisting of three (3) or more Directors. Each such
committee shall serve at the pleasure of the Board.
15. CHAIRMAN
At all meetings of the Board, the Chairman, or in his absence, the
Vice Chairman shall preside.
16. RESTRICTIONS ON TRANSFERS INVOLVING INTERESTED
DIRECTORS OR OFFICERS
No contract or other transaction between the Corporation and one or
more or its Directors or Officers, or between the Corporation and any
corporation, firm or association in which one or more of its Directors or
Officers are Directors or Officers or are financially interested, is void
or voidable solely for this reason or solely because any such Director or
Officer is present at the meeting of the Board of Directors or a committee
thereof which authorizes or approves the contract or transaction or because
the vote or votes of common or interested Directors are counted for that
purpose, if the circumstances specified in any of the following exist:
(a) The fact of common directorship, office or financial interest is
disclosed or known to the Board of Directors or committee and noted in the
minutes, and the Board or committee authorizes, approves or ratifies the
contract or transaction in good faith by a vote sufficient for the purpose
without counting the vote or votes of the common or interested Director or
Directors;
(b) The fact of common directorship, office or financial interest is
disclosed or known to the stockholders, and approved or ratified by the
contract or transaction in good faith by a majority vote of stockholders
holding a majority of voting power. The votes of the common or interested
Directors or Officers must be counted in any such vote of stockholders;
(c) The fact of common directorship, office or financial interest is
not disclosed or known to the Director or Officer at the time the
transaction is brought before the Board of Directors of the Corporation for
action;
(d) The contract or transaction is fair as to the Corporation at the
time it is authorized or approved.
Common or interested Directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies a contract or transaction,
and if the votes of the common or interested Directors are not counted at
the meeting, then a majority of the disinterested Directors may authorize,
approve or ratify a contract or transaction.
17. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation shall indemnify any person for liability, including
but not limited to reasonable attorney's fees and other expenses incurred
in connection with a claim of liability arising from having been an Officer
or Director of the Corporation for any action alleged to have taken or
omitted by such person acting as an Officer or Director, not involving
gross negligence or willful misconduct.
ARTICLE IV - OFFICERS
1. OFFICES, ELECTION, TERM
(a) Unless otherwise provided for in the Articles of Incorporation of
the Corporation, the Board may elect or appoint a President, one or more
Vice-Presidents, a Secretary and a Treasurer, and such other Officers as it
may determine, who shall have such duties, powers and functions as
hereinafter provided;
(b) All Officers shall be elected or appointed to hold office until
the meeting of the Board following the annual meeting of the stockholders;
(c) Each Officer shall hold office for the term for which he is
elected or appointed and until his successor has been elected or appointed
and qualified.
2. REMOVAL, RESIGNATION, SALARY, ETC.
(a) Any Officer elected or appointed by the Board may be removed by
the Board with or without cause;
(b) In the event of the death, resignation or removal of an Officer,
the Board in its discretion may elect or appoint a successor to fill the
unexpired term;
(c) Any two or more offices may be held by the same person, except the
offices of President and Secretary. When all of the issued and outstanding
stock of the Corporation is owned by one person, such person may hold all
or any combination of offices;
(d) The salaries of all Officers shall be fixed by the Board;
(e) The Directors may require any Officer to give security for the
performance of his duties.
3. PRESIDENT
The President shall be the chief executive Officer of the Corporation;
he shall preside at all meetings of the stockholders; he shall the
management of the business of the Corporation and shall see all orders and
resolutions of the Board are carried into effect.
4. VICE-PRESIDENTS
During the absence or disability of the President, the Vice-President,
or if there are more than one, the Executive Vice-President, shall have all
the powers and functions of the President. Each Vice-President shall
perform such other duties as the Board shall prescribe.
5. SECRETARY
The Secretary shall:
(a) attend all meetings of the Board and of the stockholders;
(b) record all votes and minutes of all proceedings in a book to be
kept for that purpose;
(c) give or cause to be given notice of all meetings of stockholders
and of special meetings of the Board;
(d) keep in a safe custody the seal of the Corporation and affix it to
any instrument when authorized by the Board;
(e) Men required, prepare or cause to be prepared and available at the
meeting of stockholders a certified list in alphabetical order of the names
of stockholders entitled to vote thereat, indicating the number of shares
of each respective class held by each;
(f) keep all the documents and records of the Corporation as required
by law or otherwise in a proper and safe manner;
(g) perform such other duties as may be prescribed by the Board.
6. ASSISTANT-SECRETARIES
During the absence or disability of the Secretary, the Assistant-
Secretary, or if there are more than one, the one so designated by the
Secretary or by the Board, shall have all the powers and functions of the
Secretary.
7. TREASURER
The Treasurer shall:
(a) have custody of the corporate funds and securities;
(b) keep full and accurate accounts of receipts and disbursements in
the corporate books;
(c) deposit all money and other valuables in the name and to the
credit of the Corporation in such depositories as may be designated by the
Board;
(d) disburse the funds of the Corporation as- may be ordered or
authorized by the Board and preserve proper vouchers for such
disbursements;
(e) render to the President and the Board at the regular meetings of
the Board, or whenever they require it, an account of all his transactions;
(f) render a full financial report at the annual meeting of the
stockholders if so requested;
(g) be furnished by all corporate Officers and agents at his request,
with such reports and statements as he may require as to all financial
transactions of the Corporation;
(h) perform such other duties as are given to him by these By-Laws or
as from time to time are assigned to him by the Board or the President.
8. ASSISTANT-TREASURER
During the absence or disability of the Treasurer, the Assistant-
Treasurer, or if there are more than one, the one so designated by the
Treasurer or by the Board, shall have all the powers and functions of the
Treasurer.
9. SURETIES AND BONDS
In case the Board shall so require, any Officer or agent of the
Corporation shall execute to the Corporation a bond in such sum and with
such surety or sureties as the Board may direct, conditioned upon the
faithful performance of his duties to the Corporation and including
responsibility for negligence and for the accounting for all property,
funds or securities of the Corporation which may come into the hands.
10. COMPENSATION
Unless otherwise provided in the Articles of Incorporation, the Board
of Directors may fix the compensation of Officers of the Corporation or of
subsidiary corporations for services in any capacity, including but not
limited to employment contracts, stock option plans and officer benefit
programs.
ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS
The Directors may authorize any Officer or Officers, agent or agents,
to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the Corporation, and such authority may be general
or confined to specific instances.
2. LOANS
No loans shall be contracted on behalf of the Corporation and no
evidence of indebtedness shall be issued in its name unless authorized by a
resolution of the Directors. Such authority may be general or confined to
specific instances.
3. CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the Corporation,
shall be signed by such Officer or Officers, agent or agents of the
Corporation and in such manner as shall from time to time be determined by
resolution of the Directors.
4. DEPOSITS
All funds of the Corporation not otherwise employed shall be deposited
from time to time to the credit of the Corporation in such banks, trust
companies or other depositories as the Directors may select.
ARTICLE VI - CERTIFICATES FOR SHARES
1. CERTIFICATES
The shares of the Corporation shall be represented by certificates.
They shall be numbered and entered in the books of the Corporation as they
are issued. They shall exhibit the holders name and the number of shares
and shall be signed by the President or a Vice-President and the Treasurer
or the Secretary and shall bear the corporate seal.
2. LOST OR DESTROYED CERTIFICATES
The Board may direct a new certificate or certificates to be issued in
place of any certificate or certificates therefore issued by the
Corporation, alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing such issue of a new certificate or
certificates, the Board may, in its discretion and as a condition precedent
to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the
same in such manner as it shall require and/or give the Corporation a bond
in such sum and with such surety or sureties as it may direct as indemnity
against any claim that may be made against the Corporation with respect to
the certificate alleged to have been destroyed.
3. TRANSFERS OF SHARES
(a) Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it
shall be the duty of the Corporation to issue a new certificate to the
person entitled thereto and cancel the old certificate. Every such transfer
shall be entered on the transfer book of the Corporation which shall be
kept at its principal office or the office of the transfer agent. No
transfer shall be made within ten (10) days next preceding the annual
meeting of stockholders.
(b) The Corporation shall be entitled to treat the holder of record of
any share as the holder in fact thereof and accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share on
the part of any other person whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of Nevada.
4. CLOSING TRANSFER BOOKS
The Board shall have the power to close the share transfer books of
the Corporation for a period of not more than ten (10) days during the
thirty (30) period immediately preceding (1) any stockholder's meeting or
(2) any date upon which stockholder's shall be called upon to or have a
right to take action without a meeting or (3) any date fixed for payment of
a dividend or any other form of distribution and only those stockholders of
record at the time the transfer books are closed, shall be recognized as
such for the purpose of (1) receiving notice of or voting at such meeting
or (2) allowing them to take appropriate action or (3) entitling them to
receive any dividend or other form of distribution.
ARTICLE VII - FISCAL YEAR
The Fiscal year shall begin the first day of January in each year.
ARTICLE VIII - DIVIDENDS
Subject to the provisions of the Articles of Incorporation of the
Corporation and to applicable law, dividends on the outstanding shares of
the Corporation may be declared in such amounts and at such time or times
as the Board may determine. Before payment of any dividend, there may be
set aside out of the net profits of the Corporation available for dividends
such sum or sums as the Board from time to time in its absolute discretion
deems proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation,
or for such other purpose as the Board shall think conducive to the
interests of the Corporations and the Board may modify or abolish any such
reserve.
ARTICLE IX - CORPORATE SEAL
The seal of the Corporation shall be circular in form and bear the
name of the Corporation, the year of its organization and the words
"Corporate Seal, Nevada". The seal may be used by causing it to be
impressed directly on the instrument to be sealed, or upon adhesive
substance affixed thereto. The seal on the certificates for shares or on
any corporate obligation for the payment of money may be a facsimile,
engraved or printed.
ARTICLE X - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to
be given to any stockholder or Director of the Corporation under the
provisions of these By-Laws or under the provisions of the Articles of
Incorporation, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice.
ARTICLE XI - BY-LAW CHANGES
1. AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS
(a) Except as otherwise provided in the Articles of Incorporation of
the Corporation the By-Laws may be amended, repealed or adopted by vote of
the holders of the shares at the time entitled to vote in the election of
any Directors. By-Laws may also be amended, repealed or adopted by the
Board but any bylaw adopted by the Board may be amended by the stockholders
entitled to vote thereon as herein above provided;
(b) If any by-law regulating an impending election of Directors is
adopted, amended or repealed by the Board, there shall set forth in the
notice of the next meeting of stockholders for the election of Directors
the by-law so adopted, amended or repealed, together with a concise
statement of the changes made.
ARTICLE XII - EXECUTION OF INSTRUMENTS
All corporate instruments and documents shall be signed or
countersigned, executed, verified or acknowledged by such Officer or
Officers or other person or persons as the Board may from time to time
designate.
ARTICLE XIII - REFERENCES TO ARTICLES OF
INCORPORATION
Reference to the Articles of Incorporation of the Corporation in these
By-Laws shall include all amendments thereto or changes thereof unless
specifically excepted.
AFFIX
CORPORATE
SEAL
HERE
DATED: November 6, 1996
/s/ Kenneth R. Wiseman
ATTEST: Kenneth R. Wiseman, Secretary
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