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U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
General form for registration of securities of small business issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Capital One Ventures Corp.
(Name of Small Business Issuer in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
98-0212763
(I.R.S. Employer Identification No.)
Suite 1650, Waterfront Centre, 200 Burrard Street,
Vancouver, British Columbia, Canada V6C 3L6
(Address of principal executive offices) (Zip Code)
(604) 689-3355
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act: _
Securities to be registered under Section 12(g) of the Act: X
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Title of each class to be so registered: Common Stock
Name of each exchange on which each class is to be registered:
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To simplify the language in this Registration Statement, Capital One Ventures
Corp. is referred to herein as "We," the "Company," or the "Corporation."
Item 1. Description of Business.
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Business Development.
We were incorporated in the State of Delaware on August 25, 1997.
On September 16, 1997, we entered into an agreement and plan of merger with
SEIG, Inc. ("SEIG") for the purpose of changing the corporate domicile of SEIG
from the State of Colorado to the State of Delaware. SEIG was incorporated on
August 19, 1997 in the State of Colorado. SEIG was merged into us, and we were
the surviving company (the "Plan of Merger"). All outstanding shares of SEIG
were canceled pursuant to the Plan of Merger. We issued one share of our common
stock to each shareholder of SEIG's common stock providing for a total issuance
of 5,175,456 shares of our common stock to SEIG's former shareholders.
SEIG had no business prior to their merger with us. SEIG's initial plan of
business was to acquire Sierra Madre Gold de Mexico S.A. de C.V., a Mexican
corporation ("Sierra Mexico") which owned several mineral properties located in
the State of Chihuahua, Mexico. We entered into an agreement to acquire Sierra
Mexico in October 1997 in exchange for 500,000 shares of our common stock. This
transaction did not close and in January 1998, by mutual agreement, the
agreement was cancelled. We never issued any of our shares in connection with
this transaction and we never acquired title to Sierra Mexico. The reason that
the acquisition was cancelled was that our board of directors was unable to
secure financing for an exploration program on the mineral properties owned by
Sierra Mexico.
During the period from incorporation to January 31, 1998 we advanced a total of
$73,000 to Sierra Mexico by way of non-secured demand loans without interest or
specific terms of repayment. In addition, we incurred approximately $16,000 in
expenses directly related to the proposed acquisition, approximately $5,025 of
which were travel expenses and approximately $3,000 of which were legal
expenses. During this period our operations were funded by non-secured
shareholder advances without interest or specific terms of repayment. In
conjunction with the cancellation of our proposed acquisition of Sierra Mexico,
we agreed to assign to the owner of Sierra Mexico the debt of $73,000 owed to us
by Sierra Mexico in full and final settlement of $60,000 which had been advanced
to us by way of non-secured loan. This transaction resulted in a loss on
settlement of debt of $13,000. In addition, our former president advanced to us
by way of non-secured loan $16,048 during the year ended September 30, 1999.
This former officer forgave this loan effective September 30, 1999, resulting in
a gain in forgiveness of debt of $16,048.
We have not been involved in any bankruptcy, receivership or similar proceeding.
We have not been involved in any material reclassification, merger
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
Business of Issuer.
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Other than the attempt to acquire Sierra Mexico we have not commenced any
operational activities other than initial corporate formation and
capitalization.
We can be defined as a "shell" company whose sole purpose at this time is to
locate and consummate a merger or acquisition with an unidentified private
entity (hereinafter referred to as the "business opportunity").
We have no obligation to file a registration statement pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). We are
registering a class of our securities on this Form 10-SB registration statement
on a voluntary basis. We believe that by filing such Form 10-SB and being
obligated to file reports subject to Section 13 of the Exchange Act, we can
attract a business opportunity candidate. We believe a business opportunity will
involve a transaction with a corporation not requiring cash or assets but which
desires to establish both a public market for their common stock and the
perceived advantages of status as an Exchange Act registered corporation. There
is no assurance that our assumption is correct.
Competition.
We will be at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business opportunity. A large number
of established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be desirable target
candidates for us. These entities have significantly greater experience and
financial resources, technical expertise and managerial capabilities.
We have no patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts.
Government Regulation.
The proposed business activities described herein classify us as a "blank check"
company. Many states have enacted statutes, rules and regulations limiting the
sale of securities of "blank check" companies in their states. We do not intend
to undertake any offering of our securities, either debt or equity, until such
time as we have successfully implemented our business plan described herein.
Transferability of the shares of our common stock is very limited because a
significant number of states have enacted regulations or "blue sky" laws
restricting or, in many instances, prohibiting, the initial sale and subsequent
resale of securities of "blank check" companies, such as ours, within that
state. In addition, many states, while not specifically prohibiting or
restricting securities of "blank check" companies, would not register our
securities for sale or resale in their states. Because of these regulations, we
currently have no plan to register any of our securities in any state. To ensure
that state laws are not violated through the resale of our securities, we will
refuse to register the transfer of any of our securities to residents of any
state which prohibits such resale if no exemption is available for such resale.
We do not anticipate that a secondary trading market for our securities will
develop in any state until subsequent to consummation of a business opportunity,
if at all.
Although we will be subject to regulation under the Exchange Act, we believe
that we will not be subject to regulation under the Investment Company Act of
1940, as we will not be engaged in the business of investing or trading in
securities.
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Federal and state tax consequences will likely be major considerations in any
business opportunity that we may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both parties to the
transaction, pursuant to various federal and state tax provisions. We intend to
structure any business opportunity so as to minimize the federal and state tax
consequences to both ourselves and the target entity; however, there can be no
assurance that a business opportunity will meet the statutory requirements of a
tax-free reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non- qualifying reorganization
could result in the imposition of both federal and state taxes, which may have
an adverse effect on both parties to the transaction.
Sections 13 and 15(d) of the Exchange Act require companies subject thereto to
provide certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two or three years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by some target entities to prepare such statements may
preclude our consummation of a business opportunity. Acquisition prospects that
do not have or are unable to obtain the required audited financial statements
may not be available for a business opportunity as long as the reporting
requirements of the Exchange Act are applicable.
Market Research.
We have not conducted, nor have others made available to us, results of market
research indicating that market demand exists for the transactions contemplated
by us. Moreover, we do not have, and do not plan to have, and do not plan to
establish, a marketing organization. Even in the event demand is identified for
a business opportunity contemplated by us, there is no assurance that we will be
successful in completing any such business opportunity.
Employees.
We currently have no full-time employees. We have no collective bargaining
agreements or employment agreements in existence. Andrew Hromyk is our sole
officer and director. Mr. Hromyk is involved in other full-time business
activities. Mr. Hromyk participates in the running of the Company on a part-time
basis as needed without compensation. We do not plan to make any change in the
number of our employees in order to evaluate business opportunities. The need
for employees and their availability will be addressed in connection with the
decision whether or not to pursue a business opportunity.
Item 2. Plan of Operation.
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Other than the attempt to acquire Sierra Mexico we have never had operations. In
the next twelve months, we plan to seek out business opportunity candidates. To
date, we have undertaken no efforts to seek out a business opportunity for the
Company. We believe that this plan of operations will be conducted through the
efforts of our current management and will not require any additional funds or
personnel. We anticipate that business opportunities will be available to us
through the contacts of our management. Other than through the contacts of our
management, we do not have other plans to locate business opportunity
candidates. We anticipate that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will be done by our
management or under their direction. Management will investigate, to the extent
they believe reasonable, such potential business opportunities. Due to
management's limited experience in business analysis, they may not discover
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or adequately evaluate adverse facts about the business opportunity to be
acquired.
Since we will have no funds available to us in our search for business
opportunities, we will not be able to expend significant funds on a complete
investigation of a business opportunity. We anticipate that we will incur
nominal expenses in the implementation of our business plan described herein.
Because we have no capital with which to pay these expenses, our present
management will pay any charges with their personal funds, as interest free
demand loans without specific repayment terms to the Company. The only
opportunity that we will have to repay these loans is from a prospective
business opportunity. Our management has agreed that the repayment of any loans
made on our behalf will not impede, or be made conditional in any manner, to
consummation of a proposed transaction.
Management, however, has no commitment to loan funds to the Company. Such loans
will be made at the sole discretion of management. In the event management
ceases to provide loans to the Company, we will be unable to continue our search
for business opportunity candidates. The Company has not and does not plan to
consider alternate sources of funding.
We have no particular business opportunity in mind and have not entered into any
negotiations regarding any business opportunity. None of our management,
affiliates or any promoters have engaged in any preliminary contact or
discussions with any representative of any other company regarding the
possibility of a business opportunity between us and such other company as of
the date of this registration statement.
We will not restrict our search to any specific business, industry, or
geographical location, and we may participate in a business opportunity of
virtually any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of our virtually
unlimited discretion to search for and enter into potential business
opportunities. We anticipate that we may be able to participate in only one
potential business opportunity because we have no assets and limited financial
resources.
To date, we have not developed any criteria for the selection of business
opportunities. We do not plan to develop specific criteria for the selection of
business opportunities as this would have the effect of limiting the discretion
of our management in selecting a business opportunity. We will be relying on the
judgment of our Board of Directors to ensure that a business opportunity is
fair, reasonable and in the best interest of the Company.
We will seek to expand through consummation of business opportunities entailing
risks which are not currently identified, and which you will not have a basis to
evaluate. We may seek to expand our operations by acquiring companies in
businesses that we believe will complement or enhance our company. We cannot
assure you that we will be able to ultimately effect any acquisition,
successfully integrate any acquired business in our operations or otherwise
successfully develop our operations. We have not established any minimum
criteria for any acquisition and our management may have complete discretion in
determining the terms of any acquisition. Consequently, there is no basis for
you to evaluate the specific merits or risks of any potential acquisition that
we may undertake. We anticipate that our management will investigate, to the
extent believed necessary, the business opportunity.
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Due to general economic conditions, rapid technological advances being made in
some industries and shortages of available capital, our management believes that
there are numerous firms seeking the perceived benefits of a fully reporting
public company. Such perceived benefits may include facilitating or improving
the terms on which additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to key employees,
providing liquidity (subject to restrictions of applicable statutes) for all
shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex. We do not have and will not have capital to provide the
owners of business opportunities with any significant cash or other assets.
However, we believe we can offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a publicly registered
company without incurring the cost and time required to become a fully reporting
company. The owners of the business opportunities will, however, incur
significant legal and accounting costs in connection with acquisition of a
business opportunity, including the costs of preparing Form 8-Ks, 10-Ks or
10-KSBs, agreements and related reports and documents. The Exchange Act
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying with
the Exchange Act. Nevertheless, our management has not conducted market research
and is not aware of statistical data which would support the perceived benefits
for the owners of a business opportunity.
We believe that there is a demand by non-public corporations for shell
corporations that have a public distribution of securities, such as our Company.
We believe that demand for shells has increased dramatically since the
Securities and Exchange Commission imposed burdensome requirements on "blank
check" companies pursuant to Regulation 419 of the Securities Act of 1933 (the
"Act"). The foregoing regulation has substantially decreased the number of
"blank check" offerings filed with the Commission and, as a result, has
stimulated an increased demand for "shell" corporations. We have made the
foregoing assumption, but there is no assurance that the same is accurate or
correct and accordingly, no assurance can be made that we will be successful in
locating a business opportunity.
Prior to making a decision to recommend a business opportunity, we plan to
request that we be provided with written materials regarding the business
opportunity containing such items as a description of products, services and
company history; management resumes; financial information; available
projections with related assumptions upon which they are based; evidence of
existing patents, trademarks or services marks or rights thereto; present and
proposed forms of compensation to management; a description of transactions
between the prospective entity and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risk and
competitive conditions; and other information deemed relevant.
Upon the consummation of a transaction, we anticipate that our present
management and shareholders will no longer be in control of the Company. In
addition, our director may, as part of the terms of the business opportunity,
resign and be replaced by new directors without a vote of our shareholders.
We do not plan to raise any capital at the present time, by private placement,
public offerings, pursuant to Regulation S promulgated under the Act, as
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amended, or by any means whatsoever. Further, we have no plans, proposals,
arrangements or understandings with respect to the sale or issuance of
additional securities prior to the location of a business opportunity.
We anticipate that any securities issued in any such business opportunity would
be issued in reliance upon exemptions from registration under applicable federal
and state securities laws. In some circumstances, however, as a negotiated
element of our transaction, we may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after we have
successfully consummated a business opportunity, and we are no longer considered
a "shell" company. Until such time as this occurs, we will not attempt to
register any additional securities. The issuance of a substantial amount of
additional securities and their potential sale into any trading market which may
develop for our securities, may have a depressive effect on the value of our
securities in the future, if such a market develops, of which there is no
assurance. The completion of any business opportunity may result in a
significant issuance of shares and substantial dilution to our present
stockholders.
We do not plan to make any changes in the number of our employees.
We are aware of the issues associated with the programming code in existing
computer systems as the year 2000 approaches ("Y2K problem"). The Y2K problem is
the result of computer programs being written using two digits rather that four
to define the applicable year. As a result, computer programs that have time
sensitive software may recognize a date using "00" to designate the year as 1900
rather than 2000. This could result in systems failure or miscalculation causing
disruption of operations. We do not currently have any business operations and,
as such, do not directly face any Y2K compliance issues. We do not and may not
know the Y2K compliance status of any potential business opportunities, but we
believe that there will be no material adverse impact upon us if a business
opportunity is not Y2K compliant. It is not possible to be certain that all
aspects of the Y2K problem affecting us, including those related to the efforts
of any future customers, suppliers, or other third parties, will be fully
resolved.
Item 3. Description of Property.
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We have no material assets and, as such, we neither own nor lease any real or
personal property. We currently operate out of space without charge located at
Suite 1650, Waterfront Centre, 200 Burrard Street, Vancouver, British Columbia,
Canada which is leased by a company controlled by our management. The leased
space is a total of 2900 square feet of space, of which a small portion is used
by us when needed. We believe that this space is sufficient at this time.
We have no preliminary agreements or understandings with respect to the office
facility subsequent to the completion of a business opportunity. Upon closure of
a business opportunity, we plan to relocate our office to that of the business
opportunity candidate.
We have no policy with respect to investments in real estate or interests in
real estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.
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We do not intend to have any materially important properties. We are not subject
to any competitive conditions for property and currently have no property to
insure.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
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As of November 16, 1999 there were 5,175,456 shares of our common stock, $0.0001
par value outstanding. The following tabulates holdings of shares of the Company
by each person who, as of November 16, 1999, holds of record or is known by us
to own beneficially more than 5.0% of our common shares and, in addition, by all
of our directors and officers individually and as a group. Each named beneficial
owner has sole voting and investment power with respect to the shares set forth
opposite his name.
Security Ownership of Beneficial Owners(1):
Title of Class Name & Address Amount Nature Percent
Common Stock Andrew Hromyk 1,005,000 Direct 19%
Suite 1650 - 200 Burrard Street
Vancouver, BC V6C 3L6
Security Ownership of Management: 1,005,000 19%
(1) This table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above table and subject to community
property laws where applicable, we believe that each shareholder named in the
above table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
Change of Control.
There are currently no arrangements which would result in a change of control of
the Company. A business opportunity involving the issuance of our common shares
will, in all likelihood, result in shareholders of a private company obtaining a
controlling interest in our Company. Any such business opportunity may require
our existing shareholders to sell or transfer all or a portion of our common
shares held by them. Members of our Board of Directors may also have to resign.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
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Andrew Hromyk, 33 years of age, is our only director. Mr. Hromyk has served in
this capacity with the Company during the period August 26, 1997 through
September 30, 1997 and since October 7, 1999 and his term expires at the next
annual meeting declared by our Board of Directors when successors are elected
and qualified. Mr. Hromyk is also our sole officer, holding the positions of
President, Secretary and Treasurer since October 7,1999, and his terms expire
when successors are elected and qualified.
Mr. Hromyk has been an officer and director of Americlean, Inc. since March
1997. As President, Chief Executive Officer, Treasurer and Director, Mr. Hromyk
has been instrumental in the formation and expansion of Americlean, Inc. He
oversees the finances, strategic development and overall operations. Americlean,
Inc. sells laundry and dry cleaning supplies and equipment to customers in North
Carolina, South Carolina, Virginia, Tennessee, Georgia, and Florida. Mr. Hromyk
is also a director and officer of Paramount Services Corp. and Autoeye Inc.,
both of which companies are inactive.
Between July 1995 and March 1999, Mr. Hromyk was the President and a director of
American Western Canada Ltd., Americlean, Inc.'s predecessor. Since November
1993, Mr. Hromyk has been the President of Century Capital Management
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Ltd., a financial and business consulting firm located in Vancouver, British
Columbia. From September 1995 through March 1996, Mr. Hromyk was the Vice
President of Canadian Solvent Recovery Ltd.
In addition, Mr. Hromyk has held positions from time to time in various other
private companies over the past five years. These companies have been engaged in
a variety of industries including, telecommunications, software development,
environmental remediation, natural resource exploration and entertainment. Some
of Mr. Hromyk's positions were also in holding companies. In each of these
companies, Mr. Hromyk has served as director and provided financial direction
and strategic guidance. From 1984 through 1989, Mr. Hromyk studied Economics at
the University of Hawaii and the University of British Columbia.
We currently have no significant employees and none are anticipated. There are
no family relationships among our directors, executive officers, or nominees for
such positions. Our director and executive officer, promoters or control persons
have not been involved in any legal proceedings material to the evaluation of
the ability or integrity of any of the aforementioned persons.
Item 6. Executive Compensation.
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<TABLE>
<CAPTION>
Name Position Year Salary Bonus Other Stock Options L/TIP All Other
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Andrew Hromyk, President 1999 0 0 0 0 0 0 0
Pedro Villagran President 1999 0 0 0 0 0 0 0
Garcia
William F.
Hill, Jr. President 1998 0 0 0 0 0 0 0
Pedro Villagran
Garcia President 1998 0 0 0 0 0 0 0
</TABLE>
Item 7. Certain Relationships and Related Transactions.
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Century Capital Management Ltd., a company controlled by our director, Andrew
Hromyk, has made loan advancements in the amount of $35,435 to us. Such loans
are without interest or stated terms of repayment. Other than the
aforementioned, we have not entered into and do not intend to enter into any
transactions with our management or any nominees for such positions. We have not
entered into and do not intend to enter into any transactions with beneficial
owners of the Company. Since inception, we have not entered into any
transactions with promoters.
Our management is involved in other business activities and may, in the future,
become involved in other business opportunities. If a specific business
opportunity becomes available, our management may face a conflict in selecting
between the Company and their other business interests. We have not formulated a
policy for the resolution of such conflicts.
Item 8. Legal Proceedings.
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We are not a party to any pending legal proceeding. We are not aware of any
contemplated legal proceeding by a governmental authority involving the Company.
Item 9. Market Price of and Dividends on the Registrant's Common Equity and
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Other Shareholder Matters.
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There is no established public trading market for our securities. None of the
Company's common stock is subject to outstanding options or warrants to
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purchase shares of the Company.
There are 1,005,000 restricted shares of our common stock held by our President,
Andrew Hromyk, and the remaining 4,170,456 shares of common stock are held by
non-affiliates. The restricted securities as defined under Rule 144 of the
Securities Act may only be sold under Rule 144 or otherwise under an effective
registration statement or an exemption from registration, if available. Rule 144
generally provides that a person who has satisfied a one year holding period for
the restricted securities may sell, within any three month period subject to
certain manner of resale provisions, an amount of restricted securities which
does not exceed the greater of 1% of a company's outstanding common stock or the
average weekly trading volume in such securities during the four calendar weeks
prior to such sale. A sale of shares by such security holders, whether under
Rule 144 or otherwise, may have a depressing effect upon the price of our common
stock in any market that might develop.
Under Rule 144, Directors, Executive Officers and persons or entities they
control or who control them may sell shares of common stock in any three-month
period in an amount limited to the greater of 1% of our outstanding shares of
common stock or the average of the weekly trading volume in our common stock
during the four calendar weeks preceding a sale. Sales under Rule 144 must also
be made without violating the manner-of-sale provisions, notice requirements,
and the availability of public information about us.
Blue Sky Considerations.
The laws of some states prohibit the resale of securities issued by blank check
or shell corporations. We are considered a "blank check" or "shell" corporation
for the purpose of state securities laws. Accordingly, it is possible that
current shareholders may be unable to resell their securities in other states.
Additionally, because each state has a series of exempt securities predicated
upon the particular facts of each transaction, it is not possible to determine
if a proposed transaction by an existing shareholder would violate the
securities laws of any particular state. In the event an existing shareholder or
broker/dealer resells our securities in a state where such resale is prohibited,
we believe that the seller thereof may be liable criminally, or civilly under
that particular state's laws. Existing shareholders should exercise caution in
the resale of their shares of common stock in light of the foregoing.
Penny Stock Considerations.
Broker-dealer practices in connection with transactions in penny stocks are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. 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
risks in the penny stock market. The broker-dealer also must 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 make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
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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. Our shares will likely be subject to such penny stock rules
and our shareholders will in all likelihood find it difficult to sell their
securities.
No market exists for our securities and there is no assurance that a regular
trading market will develop, or if developed will be sustained. A shareholder in
all likelihood, therefore, will not be able to resell the securities referred to
herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept our securities as pledged collateral for loans
unless a regular trading market develops. There are no plans, proposals,
arrangements or understandings with any person with regard to the development of
a trading market in any of our securities.
As of the date of this registration, we had approximately 300 holders of record
of our Common Stock. We currently have one class of common stock outstanding and
no preferred shares outstanding.
We have not paid any dividends since our inception. We have no restrictions that
limit our ability to pay dividends, but we do not anticipate paying dividends in
the near future.
Item 10. Recent Sales of Unregistered Securities.
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On August 25, 1997, we issued 100 shares of our common stock in exchange for
$10.00. On September 16, 1997, SEIG was merged into the Company on the basis of
one share of SEIG for one share of our common stock. Pursuant to this Plan of
Merger, 5,175,456 shares of our common stock were issued. The aforementioned
transactions were made in reliance upon exemptions provided in Regulation D of
the Securities Act of 1933, as amended. On August 26, 1997 the 100 shares issued
on August 25, 1997 were returned to our treasury in exchange for $10.00.
We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any securities.
Item 11. Description of Securities.
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Qualification.
The following statements constitute brief summaries of our Articles of
Incorporation and Bylaws, as amended. Such summaries do not purport to be
complete and are qualified in their entirety by reference to the full text of
the Articles of Incorporation and Bylaws.
Common Stock.
Our Articles of Incorporation authorize it to issue up to 30,000,000 common
shares, $0.0001 par value per common share. There are currently 5,175,456 shares
of common stock outstanding. All outstanding common shares are legally issued,
fully paid and non-assessable.
Preferred Stock.
Our Articles of Incorporation authorize us to issue up to 5,000,000 preferred
shares, $0.0001 par value per preferred share. There are currently no shares of
preferred stock outstanding. Our Articles of Incorporation provide that the
Board of Directors has the authority to divide the Preferred Stock into
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series and, within the limitations provided by the Delaware statutes, to fix by
resolution the voting power, designations, preferences and relative
participation, special rights and the qualifications, limitations or
restrictions of the shares of any series so established.
The provisions of our Articles of Incorporation relating to preferred stock
allow our directors to issue preferred stock with multiple votes per share and
dividend rights which would have priority over any dividends paid with respect
to our common stock. The issuance of preferred stock with such rights may make
the removal of management difficult even if such removal would be considered
beneficial to shareholders generally and will have the effect of limiting
shareholder participation in certain transactions such as mergers or tender
offers if such transactions are not favored by incumbent management.
Liquidation Rights.
Upon liquidation or dissolution, each outstanding common share will be entitled
to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
There are no limitations or restrictions upon the rights of our Board of
Directors to declare dividends, and we may pay dividends on our shares in cash,
property, or our own shares, except when we are insolvent or when the payment
thereof would render us insolvent subject to the provisions of the Delaware
Statutes. We have not paid dividends to date, and it is not anticipated that any
dividends will be paid in the foreseeable future.
Voting Rights.
Holders of our common shares are entitled to cast one vote for each share held
at all shareholders meetings for all purposes.
Other Rights.
Our common shares are not redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or purchase additional common shares
in the event of a subsequent offering.
There are no other material rights of the common or preferred shareholders not
included herein. There is no provision in our charter or by-laws that would
delay, defer or prevent a change in control of the Company.
We have not issued debt securities.
Item 12. Indemnification of Directors and Officers.
- ---------------------------------------------------
Our Articles of Incorporation provide that no director of the Corporation shall
have liability to the Corporation or our stockholders or to any other security
holders for monetary damages for breach of a fiduciary duty as a director;
provided, however, that such provisions shall not eliminate or limit the
liability of a director to the Corporation or to our shareholders or other
security holders for monetary damages for: (i) any breach of the director's duty
of loyalty to the Corporation or to our shareholders or other security holders;
(ii) acts or omissions of the director not in good faith or which involve
intentional misconduct or a knowing violation of the law by such director; (iii)
acts by such director as specified by the Delaware Corporation
Page 12
<PAGE>
Law; or (iv) any transaction from which such director derived an improper
personal benefit.
No officer or director shall be personally liable for any injury to any person
or property arising out of a tort committed by an employee of the Corporation
giving rise to the injury or unless such officer or director committed a
criminal offense. The protection afforded in the preceding sentence shall not
restrict other common law protections and rights that an officer or director may
have.
At this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of a controlling person,
director or officer of the Company which would affect his or her liability in
that capacity.
Item 13. Financial Statements
- ------------------------------
See Item 15(a) below.
Item 14. Changes in and Disagreements with Accountants.
- -------------------------------------------------------
During the two most recent fiscal years, we have had no disagreement,
resignation or dismissal of the principal independent accountant for the
Company. N.I. Cameron, Inc., Chartered Accountants, has audited our financial
statements for the periods ending September 30, 1998 and 1999.
Page 13
<PAGE>
Item 15(a) Financial Statements
-------------------------------
Sierra Madre Gold Corporation
(a development stage enterprise)
Financial Statements
September 30, 1999 and September 30, 1998
Page 14
<PAGE>
REPORT OF INDEPENDENT AUDITOR
To the Director of
Sierra Madre Gold Corporation
(currently Capital One Ventures Corp.)
We have audited the accompanying balance sheets of Sierra Madre Gold Corporation
(a development stage enterprise) as of September 30, 1999 and 1998 and the
related statements of operations, stockholders' equity and cash flows for the
years then ended. 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform an 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 audits provide 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 Sierra Madre Gold Corporation
at September 30, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended, in conformity with accounting principles
generally accepted in the United States.
/s/ N.I. Cameron Inc.
Vancouver, Canada, CHARTERED ACCOUNTANTS
October 29, 1999
Page 15
<PAGE>
Sierra Madre Gold Corporation
(a development stage enterprise)
Balance Sheet
September 30, 1999
<TABLE>
<CAPTION>
1999 1998
-----------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash $ 203 $ 3,455
Loan receivable (Note 4) - 73,000
-----------------------------
$ 203 $ 76,455
=============================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Due to stockholders (Note 4) $ - $ 69,905
Loan payable (Note 4) 35,435 35,435
-----------------------------
Total current liabilities 35,435 105,340
-----------------------------
STOCKHOLDERS' DEFICIT
Share capital (Note 3)
Common stock - $0.0001 par value
30,000,000 authorized; 5,175,456
issued and outstanding 518 518
Preferred stock - $0.0001 par value
5,000,000 authorized
Additional paid-in capital 4,657 4,657
Deficit accumulated in the development stage (40,407) (34,060)
-----------------------------
(35,232) (28,885)
-----------------------------
$ 203 $ 76,455
=============================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 16
<PAGE>
Sierra Madre Gold Corporation
(a development stage enterprise)
Statements of Operations
For the Years Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
-----------------------------
<S> <C> <C>
OPERATING EXPENSES
Professional fees $ - $ 14,688
Office and miscellaneous 9,395 6,379
Travel and entertainment - 5,025
Consulting - 2,793
-----------------------------
LOSS FROM OPERATIONS (9,395) (28,885)
-----------------------------
OTHER INCOME (EXPENSES)
Gain on forgiveness of debt by
a stockholder (Note 4) 16,048 -
Loss on settlement of debt (Note 4) (13,000) -
Organization expense - (5,000)
Loss on investment - (175)
-----------------------------
3,048 (5,175)
-----------------------------
NET LOSS FOR THE YEAR $ (6,347) $ (34,060)
=============================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 17
<PAGE>
Sierra Madre Gold Corporation
(a development stage enterprise)
Statements of Stockholders' Deficit
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional in the
Number of Paid-in development
Shares Amount Capital stage Total
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock 5,175,456 $518 $4,657 $ - $ 5,175
----------------------------------------------------------------------------------------
Balance September 30, 1997 5,175,456 518 4,657 - 5,175
Loss for the year - - - (34,060) (34,060)
----------------------------------------------------------------------------------------
Balance September 30, 1998 5,175,456 518 4,657 (34,060) (28,885)
Loss for the year - - - (6,347) (6,347)
----------------------------------------------------------------------------------------
Balance September 30, 1999 5,175,456 $518 $4,657 $ (40,407) $(35,232)
========================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 18
<PAGE>
Sierra Madre Gold Corporation
(a development stage enterprise)
Statements of Cash Flows
<TABLE>
<CAPTION>
Period from
August 25, 1997
Year Ended Year Ended (date of incorporation)
September 30, 1999 September 30, 1998 to September 30, 1999
------------------ ------------------ ---------------------
<S> <C> <C> <C>
Operating activities
Loss for the period $(6,347) $ (34,060) $ (40,407)
Net cash used in operating activities (6,347) (34,060) (40,407)
Investing activities
(Increase) decrease in loan receivable 73,000 (73,000) -
Net cash provided by (used in)
investing activities 73,000 (73,000) -
Financing activities
Advances from (to) stockholders (69,905) 69,905 -
Increase in loan payable - 35,435 35,435
Issuance of share capital - 5,175 5,175
Net cash provided by (used in)
financing activities (69,905) 110,515 40,610
Net change in cash during the period (3,252) 3,455 -
Cash at beginning of period 3,455 - -
Cash at end of period $ 203 $ 3,455 $ 203
</TABLE>
The accompanying notes are an integral part of these financial statements
Page 19
<PAGE>
Sierra Madre Gold Corporation
(a development stage enterprise)
Notes to Financial Statements
September 30, 1999
1. FORMATION AND BUSINESS OF THE COMPANY
Sierra Madre Gold Corporation (the "Company") was incorporated in Delaware
on August 25, 1997.
Prior to the merger (as defined below), the Company and SIEG Inc. were
companies under common control.
On September 16, 1997, SIEG Inc. ("SIEG") was merged into the Company on
the basis of one share of SIEG for one share of the Company's common stock.
The Company issued 5,175,456 shares of its common stock to the former
stockholders of SIEG in connection with this merger.
The merger has been accounted for in a manner similar to a pooling of
interests. SIEG had not conducted any operations prior to the merger with
the Company. The share capital of the Company has been presented giving
affect to the exchange of shares from incorporation.
The Company is a development stage company and its sole purpose at this
time is to locate and consummate a merger or acquisition with an as yet
unidentified private entity. Prior to the end of the six month period ended
March 31, 1998, the Company was engaged in the business of acquiring
mineral resource properties. The Company was unable to acquire any such
properties and this plan of business was abandoned.
Since incorporation, a related company (see note 4(a)) provided
administrative services and facilities to the Company for nil consideration
and paid for expenses on behalf of the Company. It is anticipated that the
Company will continue to receive non-interest bearing advances from this
related party to pay for future expenses as incurred.
2. SIGNIFICANT ACCOUNTING POLICIES
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to made estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from these estimates.
Page 20
<PAGE>
Sierra Madre Gold Corporation
(a development stage enterprise)
Notes to Financial Statements
September 30, 1999
2. SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Income taxes
The Company uses the liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on
the difference between financial statement and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that are
expected to be in effect when the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance in respect of
amounts considered by management to be less likely than not of realization
in future periods.
3. SHARE CAPITAL
Holders of the common stock are entitled to one vote per share and share
equally in any dividends declared and distributions on liquidation.
4. RELATED PARTY TRANSACTIONS
(a) A company controlled by a director of the Company has provided
administrative services and facilities to the Company for nil
consideration and pays expenses on behalf of the Company. The amount
due to this company is without interest or stated terms of repayment.
It is anticipated the Company will continue to receive non interest
bearing advances from this company to pay for future expenses as
incurred.
(b) During the year ended September 30, 1999, a stockholder forgave a
debt owing to him by the Company in the amount of $16,048.
(c) During the year ended September 30, 1999, a debt owing by the Company
to a stockholder amounting to $60,000 was settled by assignment to
that stockholder of a loan receivable by the Company from a foreign
company controlled by that stockholder.
Page 21
<PAGE>
Sierra Madre Gold Corporation
(a development stage enterprise)
Notes to Financial Statements
September 30, 1999
5. YEAR 2000
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the Year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure which could affect the
Company's ability to conduct normal business operations. It is not possible
to be certain that all aspects of the Year 2000 Issue affecting the
Company, including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
6. SUBSEQUENT EVENT
On October 4, 1999, the Company changed its name to Capital One Ventures
Corp.
Page 22
<PAGE>
Item 15(b) Exhibits
INDEX TO EXHIBITS PAGE
- ----------------- ----
Exhibit 1 Underwriting Agreement N/A
Exhibit 2 Plan of Acquisition, Reorganization, Arrangement,
Liquidation, Etc. N/A
Exhibit 3 Articles of Incorporation By-laws (as amended)
Exhibit 4 Instruments Defining the Rights of Security
Holders Above
Exhibit 5 Voting Trust Agreement N/A
Exhibit 6 Material Contracts N/A
Exhibit 7 Letter on Accountant Change N/A
Exhibit 8 Information on Subsidiaries N/A
Exhibit 9 Power of Attorney N/A
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
/s/ Andrew Hromyk
------------------------
By: Andrew Hromyk
Title: President
Date: 11/16/99
CERTIFICATE OF INCORPORATION
OF
SIERRA MADRE GOLD CORPORATION
The undersigned natural, adult person, acting as incorporator of a corporation
(hereinafter usually referred to as the "Corporation") pursuant to the
provisions of the Delaware Corporation Law, hereby adopts the following
Certificate of Incorporation for said Corporation:
ARTICLE I
Name
The name of the Corporation shall be Sierra Madre Gold Corporation
ARTICLE II
Duration
The period of duration of the Corporation shall be perpetual.
ARTICLE III
Purpose
The purpose for which the Corporation is organized is to transact any or all
lawful business for which corporations may be incorporated pursuant to the
Delaware Corporation Law.
ARTICLE IV
Capital Stock
The authorized capital stock of the Corporation shall consist of 30,000,000
shares of common stock, $0.0001 par value, and 5,000,000 shares of preferred
stock, $0.0001 par value.
ARTICLE V
Preferences, Limitations, and Relative Rights of Capital Stock
(a) No share of the common stock shall have any preference over or
limitation in respect to any other share of such common stock. All
shares of common stock shall have equal rights and privileges,
including the following:
1. All shares of common stock shall share equally in dividends. Subject
to the applicable provisions of the laws of this State, the Board of
Directors of the Corporation may, from time to time, declare and the
Corporation may pay dividends in cash, property, or its own shares,
except when the Corporation is insolvent or when the payment thereof
would render the Corporation insolvent or when the declaration or
payment thereof would be contrary to any restrictions contained in this
Certificate of Incorporation. When any dividend is paid or any other
distribution is made, in whole or in part, from sources other than
unreserved and unrestricted earned surplus, such dividend or
distribution shall be identified as such, and the source and amount per
share paid from each source shall be disclosed to the stockholder
receiving the same concurrently with the distribution thereof and to
all other stockholders not later than six months after the end of the
Corporation's fiscal year during which such distribution was made.
2. All shares of common stock shall share equally in distributions in
partial liquidation. Subject to the applicable provisions of the laws
of this State, the Board of Directors of the Corporation may
distribute, from time to time, to its stockholders in partial
liquidation, out of stated capital or capital surplus of the
Corporation, a portion of its assets in cash or property, except when
the Corporation is insolvent or
<PAGE>
when such distribution would render the Corporation insolvent. Each
such distribution, when made, shall be identified as a distribution in
partial liquidation, out of stated capital or capital surplus, and the
source and amount per share paid from each source shall be disclosed to
all stockholders of the Corporation concurrently with the distribution
thereof. Any such distribution may be made by the Board of Directors
from stated capital without the affirmative vote of any stockholders of
the Corporation.
3. Each outstanding share of common stock shall be entitled to one vote
at stockholders' meetings, either in person or by proxy.
(b) The designations, powers, rights, preferences, qualifications,
restrictions and limitations of the preferred stock shall be
established from time to time by the Corporation's Board of Directors,
in accordance with the Delaware Corporation Law.
(c) 1. Cumulative voting shall not be allowed in elections of directors or
for any purpose.
2. No holders of shares of capital stock of the Corporation shall be
entitled, as such, to any preemptive or preferential right to subscribe
to any unissued stock or any other securities which the Corporation may
now or hereafter be authorized to issue. The Board of Directors of the
Corporation, however, in its discretion by resolution, may determine
that any unissued securities of the Corporation shall be offered for
subscription solely to the holders of common stock of the Corporation,
or solely to the holders of any class or classes of such stock, which
the Corporation may now or hereafter be authorized to issue, in such
proportions based on stock ownership as said board in its discretion
may determine.
3. The Board of Directors may restrict the transfer of any of the
Corporation's stock issued by giving the Corporation or any stockholder
"first right of refusal to purchase" the stock, by making the stock
redeemable, or by restricting the transfer of the stock under such
terms and in such manner as the directors may deem necessary and as are
not inconsistent with the laws of this State. Any stock so restricted
must carry a conspicuous legend noting the restriction and the place
where such restriction may be found in the records of the Corporation.
4. The judgment of the Board of Directors as to the adequacy of any
consideration received or to be received for any shares, options, or
any other securities which the Corporation at any time may be
authorized to issue or sell or otherwise dispose of shall be conclusive
in the absence of fraud, subject to the provisions of these Articles of
incorporation and any applicable law.
ARTICLE VI
Registered Agent
The name and address of the Corporation's initial registered agent:
The Company Corporation
1313 North Market Street
New Castle County
Wilmington, Delaware 19801-1151
The Board of Directors, however, from time to time may establish such other
offices, branches, subsidiaries, or divisions which it may consider to be
advisable.
ARTICLE VII
Directors
The affairs of the Corporation shall be governed by a board of not less than
<PAGE>
one (1) director, who shall be elected in accordance with the Bylaws of the
Corporation. Subject to such limitation, the number of directors shall be fixed
by or in the manner provided in the Bylaws of the Corporation, as may be amended
from time to time. The organization and conduct of the board shall be in
accordance with the following:
1. The name and address of the initial Director, who shall hold office
until the first annual meeting of the stockholders of the Corporation or
until his successor shall have been elected and qualified, is:
Name Address
Pedro Villagran-Garcia 1177 West Hastings Street, Suite 1910
Vancouver, British Columbia Canada V6E 2K3
2. The directors of the Corporation need not be residents of Delaware and
shall not be required to hold shares of the Corporation's capital
stock.
3. Meetings of the Board of Directors, regular or special, may be held
within or without Delaware upon such notice as may be prescribed by the
Bylaws of the Corporation. Attendance of a director at a meeting shall
constitute a waiver by him of notice of such meeting unless he attends
only for the express purpose of objecting to the transaction of any
business thereat on the ground that the meeting is not lawfully called
or convened.
4. A majority of the number of directors at any time constituting the
Board of Directors shall constitute a quorum for the transaction of
business.
5. By resolution adopted by a majority of the Directors at any time
constituting the Board of Directors, the Board of Directors may
designate two or more directors to constitute an Executive Committee or
one or more other committees each of which shall have and may exercise,
to the extent permitted by law or in such resolution, all the authority
of the Board of Directors in the management of the Corporation; but the
designation of any such committee and the delegation of authority
thereto shall not operate to relieve the Board of Directors, or any
member thereof, of any responsibility imposed on it or him by law.
6. Any vacancy in the Board of Directors, however caused or created, may
be filled by the affirmative vote of a majority of the remaining
directors, though less than a quorum of the Board of Directors: A
director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office and until his successor is duly
elected and qualified.
ARTICLE VIII
Officers
The officers of the Corporation shall be prescribed by the Bylaws of this
Corporation.
ARTICLE IX
Meetings of Stockholders
Meetings of the stockholders of the Corporation shall be held at such place
within or without Delaware and at such times as may be prescribed in the Bylaws
of the Corporation. Special meetings of the stockholders of the Corporation may
be called by the President of the Corporation, the Board of Directors, or by the
record holder or holders of at least ten percent (10%) of all shares entitled to
vote at the meeting. At any meeting of the stockholders, except to the extent
otherwise provided by law, a quorum shall consist of a majority of the shares
entitled to vote at the meeting; and, if a quorum is present, the affirmative
vote of the majority of shares represented at the meeting and entitled to vote
thereat shall be the act of the
<PAGE>
stockholders unless the vote of a greater number is required by law.
ARTICLE X
Voting
When, with respect to any action to be taken by stockholders of this
Corporation, the laws of Delaware requires the affirmative vote of the holders
of more than a majority of the outstanding shares entitled to vote thereon, or
of any class or series, such action may be taken by the affirmative vote of the
holders of a majority of the outstanding shares entitled to vote on such action.
ARTICLE XI
Bylaws
The initial Bylaws of the Corporation shall be adopted by its Board of
Directors. Subject to repeal or change by action of the stockholders, the power
to alter, amend, or repeal the Bylaws or to adopt new Bylaws shall be vested in
the Board of Directors.
ARTICLE XII
Transactions with Directors and Other Interested Parties No contract or
other transaction between the Corporation and any other corporation, whether or
not a majority of the shares of the capital stock of such other corporation is
owned by the Corporation, and no act of the Corporation shall in any way be
affected or invalidated by the fact that any of the directors of the Corporation
are pecuniarily or otherwise interested in, or are directors or officers of,
such other corporation. Any director of the corporation, individually, or any
firm with which such director is affiliated may be a party to or may be
pecuniarily or otherwise interested in any contract or transaction of the
Corporation; provided, however, that the fact that he or such firm is so
interested shall be disclosed or shall have been known to the Board of Directors
of the Corporation, or a majority thereof, at or before the entering into such
contract or transaction; and any director of the Corporation who is also a
director or officer of such other corporation, or who is so interested, may be
counted in determining the existence of a quorum at any meeting of the Board of
Directors of the Corporation which shall authorize such contract or transaction,
with like force and effect as if he were not such director or officer of such
other corporation or not so interested.
ARTICLE XIII
Limitation of Director Liability and Indemnification No director of the
Corporation shall have liability to the Corporation or to its stockholders or to
other security holders for monetary damages for breach of fiduciary duty as a
director; provided, however, that such provisions shall not eliminate or limit
the liability of a director to the Corporation or to its shareholders or other
security holders for monetary damages for: (i) any breach of the director's duty
of loyalty to the Corporation or to its shareholders or other security holders;
(ii) acts or omissions of the director not in good faith or which involve
intentional misconduct or a knowing violation of the law by such director; (iii)
acts by such director as specified by the Delaware Corporation Law; or (iv) any
transaction from which such director derived an improper personal benefit.
No officer or director shall be personally liable for any injury to person or
property arising out of a tort committed by an employee of the Corporation
unless such officer or director was personally involved in the situation giving
rise to the injury or unless such officer or director committed a criminal
offense. The protection afforded in the preceding sentence shall not
<PAGE>
restrict other common law protections and rights that an officer or director may
have.
The word "director" shall include at least the following, unless limited by
Delaware law: an individual who is or was a director of the Corporation and an
individual who, while a director of a Corporation is or was serving at the
Corporation's request as a director, officer, partner, trustee, employee or
agent of any other foreign or domestic corporation or of any partnership, joint
venture, trust, other enterprise or employee benefit plan. A director shall be
considered to be serving an employee benefit plan at the Corporation's request
if his duties to the Corporation also impose duties on or otherwise involve
services by him to the plan or to participants in or beneficiaries of the plan.
To the extent allowed by Delaware law, the word "director" shall also include
the heirs and personal representatives of all directors.
This Corporation shall be empowered to indemnify its officers and directors to
the fullest extent provided by law, including but not limited to the provisions
set forth in the Delaware Corporation Law, or any successor provision.
ARTICLE XIV
Incorporator
The name and address of the incorporator of the Corporation is as follows:
Name Address
William T. Hart 1624 Washington Street
Denver, CO 80203
IN WITNESS WHEREOF, the undersigned incorporator has hereunto affixed his
signature on the 20th day of August, 1997.
"William T. Hart"
---------------------------
BYLAWS
OF
SIERRA MADRE GOLD CORPORATION
ARTICLE I
OFFICES
Section 1. Offices:
The principal office of the Corporation shall be determined by the Board of
Directors, and the Corporation shall have other offices at such places as the
Board of Directors may from time to time determine.
ARTICLE II
STOCKHOLDER'S MEETINGS
Section 1. Place:
The place of stockholders' meetings shall be the principal office of the
Corporation unless some other place shall be determined and designated from time
to time by the Board of Directors.
Section 2. Annual Meeting:
The annual meeting of the stockholders of the Corporation for the election of
directors to succeed those whose terms expire, and for the transaction of such
other business as may properly come before the meeting, shall be held each year
on a date to be determined by the Board of Directors.
Section 3. Special Meetings:
Special meetings of the stockholders for any purpose or purposes may be called
by the President, the Board of Directors, or the holders of ten percent (10%) or
more of all the shares entitled to vote at such meeting, by the giving of notice
in writing as hereinafter described.
Section 4. Voting:
At all meetings of stockholders, voting may be viva voce; but any qualified
voter may demand a stock vote, whereupon such vote shall be taken by ballot and
the Secretary shall record the name of the stockholder voting, the number of
shares voted, and, if such vote shall be by proxy, the name of the proxy holder.
Voting may be in person or by proxy appointed in writing, manually signed by the
stockholder or his duly authorized attorney-in-fact. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided
therein.
Each stockholder shall have such rights to vote as the Articles of Incorporation
provide for each share of stock registered in his name on the books of the
Corporation, except where the transfer books of the Corporation shall have been
closed or a date shall have been fixed as a record date, not to exceed, in any
case, fifty (50) days preceding the meeting, for the determination of
stockholders entitled to vote. The Secretary of the Corporation shall make, at
least ten (10) days before each meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each, which list, for a period of ten (10) days prior to such meeting,
shall be kept on file at the principal office of the Corporation and shall be
subject to inspection by any stockholder at any time during usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any stockholder during the
whole time of the meeting.
<PAGE>
Section 5. Order of Business:
The order of business at any meeting of stockholders shall be as follows:
1. Calling the meeting to order.
2. Calling of roll.
3. Proof of notice of meeting.
4. Report of the Secretary of the stock represented at the meeting and the
existence or lack of a quorum.
5. Reading of minutes of last previous meeting and disposal of any
unapproved minutes.
6. Reports of officers.
7. Reports of committees.
8. Election of directors, if appropriate.
9. Unfinished business.
10. New business.
11. Adjournment.
12. To the extent that these Bylaws do not apply, Roberts' Rules of Order
shall prevail.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Organization and Powers:
The Board of Directors shall constitute the policy-making or legislative
authority of the Corporation. Management of the affairs, property, and business
of the Corporation shall be vested in the Board of Directors, which shall
consist of not less than one nor more than ten members, who shall be elected at
the annual meeting of stockholders by a plurality vote for a term of one (1)
year, and shall hold office until their successors are elected and qualify.
Directors need not be stockholders. Directors shall have all powers with respect
to the management, control, and determination of policies of the Corporation
that are not limited by these Bylaws, the Articles of Incorporation, or by
statute, and the enumeration of any power shall not be considered a limitation
thereof.
Section 2. Vacancies:
Any vacancy in the Board of Directors, however caused or created, shall be
filled by the affirmative vote of a majority of the remaining directors, though
less than a quorum of the Board, or at a special meeting of the stockholders
called for that purpose. The directors elected to fill vacancies shall hold
office for the unexpired term and until their successors are elected and
qualify.
Section 3. Regular Meetings:
A regular meeting of the Board of Directors shall be held, without other notice
than this Bylaw, immediately after and at the same place as the annual meeting
of stockholders or any special meeting of stockholders at which a director or
directors shall have been elected. The Board of Directors may provide by
resolution the time and place, either within or without the State of Delaware,
for the holding of additional regular meetings without other notice than such
resolution.
Section 4. Special Meetings:
Special meetings of the Board of Directors may be held at the principal office
of the Corporation, or such other place as may be fixed by resolution of the
Board of Directors for such purpose, at any time on call of the President or of
any member of the Board, or may be held at any time and place without notice, by
unanimous written consent of all the members, or with the presence and
participation of all members at such meeting. A resolution in writing signed by
all the directors shall be as valid and effectual as if it had been passed
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at a meeting of the directors duly called, constituted, and held.
Section 5. Notices:
Notices of both regular and special meetings, save when held by unanimous
consent or participation, shall be mailed by the Secretary to each member of the
board not less than three days before any such meeting and notices of special
meetings may state the purposes thereof. No failure or irregularity of notice of
any regular meeting shall invalidate such meeting or any proceeding thereat.
Section 6. Quorum and Manner of Acting:
A quorum for any meeting of the Board of Directors shall be a majority of the
Board of Directors as then constituted. Any act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors. Any action of such majority, although not at a regularly called
meeting, and the record thereof, if assented to in writing by all of the other
members of the Board, shall always be as valid and effective in all respects as
if otherwise duly taken by the Board of Directors.
Section 7. Executive Committee:
The Board of Directors may by resolution of a majority of the Board designate
two (2) or more directors to constitute an executive committee, which committee,
to the extent provided in such resolution, shall have and may exercise all of
the authority of the Board of Directors in the management of the Corporation;
but the designation of such committee and the delegation of authority thereto
shall not operate to relieve the Board of Directors, or any member thereof, of
any responsibility imposed on it or him by law.
Section 8. Order of Business:
The order of business at any regular or special meeting of the
Board of Directors, unless otherwise prescribed for any meeting
by the Board, shall be as follows:
1. Reading and disposal of any unapproved minutes.
2. Reports of officers and committees.
3. Unfinished business.
4. New business.
5. Adjournment.
6. To the extent that these Bylaws do not apply, Roberts' Rules of Order shall
prevail.
Section 9. Remuneration:
No stated salary shall be paid to directors for their services as such, but, by
resolution of the Board of Directors, a fixed sum and expenses of attendance, if
any, may be allowed for attendance at each regular or special meeting of the
Board. Members of special or standing committees may be allowed like
compensation for attending meetings. Nothing herein contained shall be construed
to preclude any director from receiving compensation for serving the Corporation
in any other capacity, subject to such resolutions of the Board of Directors is
may then govern receipt of such compensation.
ARTICLE IV
OFFICERS
Section 1. Titles:
The officers of the Corporation shall consist of a President, one or more Vice
Presidents, a Secretary, and a Treasurer, who shall be elected by the directors
at their first meeting following the annual meeting of stockholders. Such
officers shall hold office until removed by the Board of Directors or until
their successors are elected and qualify. The Board of Directors may
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appoint from time to time such other officers as it deems desirable who shall
serve during such terms as may be fixed by the Board at a duly held meeting. The
Board, by resolution, shall specify the titles, duties and responsibilities of
such officers.
Section 2. President:
The President shall preside at all meetings of stockholders and, in the absence
of a, or the, Chairman of the Board of Directors, at all meetings of the
directors. He shall be generally vested with the power of the chief executive
officer of the Corporation and shall countersign all certificates, contracts,
and other instruments of the Corporation as authorized by the Board of Directors
or required by law. He shall make reports to the Board of Directors and
stockholders and shall perform such other duties and services as may be required
of him from time to time by the Board of Directors.
Section 3. Vice President:
The Vice President shall perform all the duties of the President if the
President is absent or for any other reason is unable to perform his duties and
shall have such other duties as the Board of Directors shall authorize or
direct.
Section 4. Secretary:
The Secretary shall issue notices of all meetings of stockholders and directors,
shall keep minutes of all such meetings, and shall record all proceedings. He
shall have custody and control of the corporate records and books, excluding the
books of account, together with the corporate seal. He shall make such reports
and perform such other duties as may be consistent with his office or as may be
required of him from time to time by the Board of Directors.
Section 5. Treasurer:
The Treasurer shall have custody of all moneys and securities of the Corporation
and shall have supervision over the regular books of account. He shall deposit
all moneys, securities, and other valuable effects of the Corporation in such
banks and depositories as the Board of Directors may designate and shall
disburse the funds of the Corporation in payment of just debts and demands
against the Corporation, or as they may be ordered by the Board of Directors,
shall render such account of his transactions as may be required of him by the
President or the Board of Directors from time to time and shall otherwise
perform such duties as may be required of him by the Board of Directors.
The Board of Directors may require the Treasurer to give a bond indemnifying the
Corporation against larceny, theft, embezzlement, forgery, misappropriation, or
any other act of fraud or dishonesty resulting from his duties as Treasurer of
the Corporation, which bond shall be in such amount as appropriate resolution or
resolutions of the Board of Directors may require.
Section 6. Vacancies or Absences:
If a vacancy in any office arises in any manner, the directors then in office
may choose, by a majority vote, a successor to hold office for the unexpired
term of the officer. If any officer shall be absent or unable for any reason to
perform his duties, the Board of Directors, to the extent not otherwise
inconsistent with these Bylaws, may direct that the duties of such officer
during such absence or inability shall be performed by such other officer or
subordinate officer as seems advisable to the Board.
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Section 7. Compensation:
No officer shall receive any salary or compensation for his services unless and
until the Board of Directors authorizes and fixes the amount and terms of such
salary or compensation.
ARTICLE V
STOCK
Section 1. Regulations:
The Board of Directors shall have power and authority to take all such rules and
regulations as they deem expedient concerning the issue, transfer, and
registration of certificates for shares of the capital stock of the Corporation.
The Board of Directors may appoint a Transfer Agent and/or a Registrar and may
require all stock certificates to bear the signature of such Transfer Agent
and/or Registrar.
Section 2. Restrictions on Stock:
The Board of Directors may restrict any stock issued by giving the Corporation
or any stockholder "first right of refusal to purchase" the stock, by making the
stock redeemable or by restricting the transfer of the stock, under such terms
and in such manner as the directors may deem necessary and as are not
inconsistent with the Articles of Incorporation or by statute. Any stock so
restricted must carry a stamped legend setting out the restriction or
conspicuously noting the restriction and stating where it may be found in the
records of the Corporation.
ARTICLE VI
DIVIDENDS AND FINANCES
Section 1. Dividends:
Dividends may be declared by the directors and paid out of any funds legally
available therefor under the laws of Delaware, as may be deemed advisable from
time to time by the Board of Directors of the Corporation. Before declaring any
dividends, the Board of Directors may set aside out of net profits or earned or
other surplus such sums as the Board may think proper as a reserve fund to meet
contingencies or for other purposes deemed proper and to the best interests of
the Corporation.
Section 2. Monies:
The monies, securities, and other valuable effects of the Corporation shall be
deposited in the name of the Corporation in such banks or trust companies as the
Board of Directors shall designate and shall be drawn out or removed only as may
be authorized by the Board of Directors from time to time.
Section 3. Fiscal Year:
Unless and until the Board of Directors by resolution shall determine the fiscal
year of the Corporation.
ARTICLE VII
AMENDMENTS
These Bylaws may be altered, amended, or repealed by the Board of Directors by
resolution of a majority of the Board.
ARTICLE VIII
INDEMNIFICATION
The Corporation shall indemnify any and all of its directors or officers, or
former directors or officers, or any person who may have served at its request
as a director or officer of another corporation in which this Corporation owns
shares of capital stock or of which it is a creditor and the personal
representatives of all such persons, against expenses actually and necessarily
<PAGE>
incurred in connection with the defense of any action, suit, or proceeding in
which they, or any of them, were made parties, or a party, by reason of being or
having been directors or officers or a director or officer of the Corporation,
or of such other corporation, except in relation to matters as to which any such
director or officer or person shall have been adjudged in such action, suit, or
proceeding to be liable for negligence or misconduct in the performance of any
duty owed to the Corporation. Such indemnification shall not be deemed exclusive
of any other rights to which those indemnified may be entitled, independently of
this Article, by law, under any Bylaw agreement, vote of stockholders, or
otherwise.
ARTICLE IX
CONFLICTS OF INTEREST
No contract or other transaction of the Corporation with any other persons,
firms or corporations, or in which the Corporation is interested, shall be
affected or invalidated by the fact that any one or more of the directors or
officers of the Corporation is interested in or is a director or officer of such
other firm or corporation; or by the fact that any director or officer of the
Corporation, individually or jointly with others, may be a party to or may be
interested in any such contract or transaction.
