SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB-A1
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934
NETPARTS.COM, INC.
Nevada Optional
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
3131 Southwest Freeway #46, Houston TX 77098
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 521-9395
The following Securities are to be registered pursuant to Section 12(g) of the
Act:
Class-A Common Voting Equity Stock
7,135,000
June 15, 2000
The EXHIBIT INDEX is located at page 35 of this Registration Statement
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PART I
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UNNUMBERED ITEM: INTRODUCTION
This filling is to amend the 10-SB-12G-A1 Auditors notes, Note 1.
This registration statement is voluntarily filed pursuant to Section 12(g)
of the Securities Exchange Act of 1934, in order to comply with the requirements
of National Association of Securities Dealers for submission for quotation on
the Over the Counter Bulletin Board, often called "OTCBB". This Issuer's common
stock is not presently quoted on the OTCBB. Its common stock is not listed on
the NQB Pink Sheets and has not traded in brokerage transactions. The
requirements of the OTCBB are that the financial statements and information
about the Issuer be reported periodically to the Commission and be and become
information that the public can access easily. We wish to report and provide
disclosure voluntarily, and will file periodic reports in the event that its
obligation to file such reports is suspended under the Exchange Act. If and when
this 1934 Act Registration is effective and clear of comments by the staff, we
will be eligible for consideration for the OTCBB upon submission of one or more
NASD members for permission to publish quotes for the purchase and sale of the
shares of the common stock of the issuer.
This Registering Corporation does not anticipate any contingency upon which
it would voluntarily cease filing reports with the SEC, even though it may cease
to be required to do so. It is in our compelling interest to report our affairs
quarterly, annually and currently, as the case may be, generally to provide
accessible public information to interested parties, and also specifically to
maintain our qualification for the OTCBB, if and when ours intended application
for submission may become effective.
ITEM 1. DESCRIPTION OF BUSINESS.
(A) BUSINESS DEVELOPMENT.
(1) FORM AND YEAR OF ORGANIZATION. This Corporation NETPARTS.COM, INC.
(formally, "the Registrant", more commonly "we", "us" or "our") was duly
incorporated in Nevada on April 21, 1999, with the intention of creating a
series of 16 specialized auto salvage yards.
(2) SECURITY ORGANIZATION. We have issued 7,135,000 shares of common
stock to seven founders and twelve investors. The founders share were issued on
or about April 22, 1999. The private placement among our sophisticated investors
was conducted from April 22 to June 9, 1999. The two aspects of the issuance are
summarized as follows:
On April 22, 1999, we issued 5,135,000 shares of common stock, pursuant to
section 4(2), to seven affiliate founders at par value $0.001, for
organizational services valued at $5,135.00.
During the period from April 22, 1999 to June 6, 1999, we privately placed
and sold 2,000,000 shares of common stock, pursuant to section 4(2), at $0.05,
per share to twelve non-affiliate Founders with pre-existing relationships to
management, known to management to be sophisticated investors, each afforded
full access to information about us and our affairs, of the kind and nature
which registration would have provided.
(3) BANKRUPTCY, RECEIVERSHIP OR SIMILAR PROCEEDING. None from inception
to date.
(B) BUSINESS OF THE ISSUER. We were incorporated in Nevada on April 21, 1999,
for the purpose of creating a series of 16 specialized auto salvage yards, each
one handling only one make of vehicle. Salvageable components of incoming
wrecked or abandoned vehicles will be inventoried on computer and listed on the
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Internet. The entire auto will be dismantled, with all parts being bar coded for
sales and inventory control and then stored in the appropriate section of the
specialized facility. If purchase is effected via the Internet, shipment will be
overnight at the option of the purchaser and a mechanic will be available for
telephone or on-line installation consultation. If purchase is effected on site,
a mechanic will be on duty and available to install or assist in the
installation of components for those customers desiring assistance.
Our objective is to create a centrally located, interconnected group of
self sufficient used auto parts outlets specializing in customer convenience and
having a large combined stock from which to operate. The first auto parts
"supermart", which is to be located in Houston, Texas, will be large enough and
efficient enough to become, in management's opinion, the leading supplier of
used and remanufactured auto parts in Texas. It is our intention to duplicate
the concept in other metropolitan markets.
We intend to conduct our business, internally, externally, and at all
levels, with the utmost professionalism. We will be aggressive in its
purchasing, and marketing, practical in its fiscal policy making and execution,
and forthright in our management and operations. Management believes that the
existence of an organization of this quality will attract the highest caliber
individuals in the industry, and it is precisely only those management, staff,
administration and sales persons who are of the highest character, greatest
experience, and with records of success in all of their endeavors that we intend
to employ.
THE INDUSTRY
The strength of the auto salvage industry is a natural outgrowth of the
automobile manufacturers pricing policies which favor the new car buyer and
penalize the owner requiring replacement parts. As an example, a 1989 Toyota
Corolla Deluxe Sedan costs approximately $9,453 when purchased new from the
showroom floor. To build that same automobile, piece by piece, would require
approximately $42,200 of individual parts, if purchased one by one from the
Toyota dealer's parts department, and the vehicle would still not be assembled.
The high cost of the new replacement part affects both consumers and
dealers, by causing the dealers to stock less inventory, or none of the slow
moving items, creating back-orders, and further exacerbating the supply problem
and causing the consumer to seek alternative sources. These higher prices and
problems of availability have led to higher profits for the auto salvage
industry on salvaged parts which are resold "as is", are rebuilt and resold or
are recycled.
OUR CONCEPT
Salvaged and recyclable automotive parts have a low acquisition cost due to
the reduced value of the wrecked or abandoned vehicles which comprise the
industry's principal source of inventory. The traditional salvage operation, in
order to have what the customer requires, must maintain extremely large
inventories. The normal procedure in the industry is to purchase the car,
dismantle it, stock only the fastest selling components and recycle or resell
the remainder for additional capital thereby incurring the risk of not having
the part that the customer requires.
Under Our concept, the dealer will be able to retain all of the salable
parts while still maintaining inventory costs at a manageable level, and by
grouping 16 of these specialized dealers together giving them all the
opportunity to take advantage of:
Centralized Web Page and sub pages for each make of automobile
Hourly up-date of inventory on the Web Pages
Optimum utilization of facilities due to Efficiency of Layout
Centralized, computerized accounting
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Centralized purchasing, dismantling, bar coding and inventorying
Hot lines and long lines to local and national data banks
Centralized, shipping facilities
Co-operative advertising
PROPOSED OPERATIONS
DESCRIPTION OF FACILITIES
We propose to develop sixteen interconnected, fenced, one acre tracts, each
containing a modern, attractive 3,000 square foot metal building equipped with
sales counters, showcases, offices and appropriate shelving in the warehousing
area. Each tract or "yard" will be leased out to an operator for the operation
of an automotive salvage yard dedicated to the sale of parts for one make of
automobile. The operator, or "franchisee", of each individual yard will be an
independent owner/operator. There will be one central receiving area where
vehicles will be purchased, received, assessed and dismantled. All parts of the
vehicles will be identified, bar coded and entered into the computer system.
Parts which are ready for resale will be forwarded to the appropriate yard,
parts requiring overhaul will be forwarded to the rebuild area or outside
rebuilding contractor and unsalvageable parts will be crushed and baled for sale
to a recycler.
PROPOSED LEASING PROGRAM. Each individual yard would be leased as a
"specialized" auto parts store at the rate of $1,650 per week for the facility
rental plus a franchise fee of 4% of its gross dollar volume. Management
estimates that each unit would average $100,000 in sales per month. This
estimate, however, was made based on our founder's experience with a stand
alone, specialized, one vehicle line salvage operation and does not take into
account the advantages of the economies of scale to be afforded by the
NetParts.com "mall" concept.
SERVICES OFFERED TO LESSEES. By establishing a centralized location, with
independent auto part specialty stores, in a mall concept, NetParts.com can
offer its individual lessees the following:
Provide, on a "turn key" basis, properly selected and installed equipment
for office, sales counter, warehousing and yard
Provide on a "turn key" basis properly selected and installed computer
equipment and software for proper control of sales, inventory and working
capital
Provide all permits and licenses required for the operation of a salvage
business and assure compliance with all city, county, state and federal
environmental and other regulations
THE MARKET
POTENTIAL CUSTOMERS. NetParts.com's potential customer base includes
individuals who drive or repair automotive vehicles, automobile dealers, repair
facilities, body shops, parts houses and other salvage operations.
POTENTIAL MARKET. NetParts.com's potential geographical market area
includes the entire continental United States from "shipping sales" obtained
through the utilization of satellite "Long Line" service and the Internet.
Businesses in the United States transact 300 Billion dollars annually over the
Internet, an amount larger than the gross national product of the Republic of
Argentina and it is growing at the rate of 60% per year. We intend to
aggressively target that large and lucrative market. Our "walk-in" trade will
be drawn from an area described as a circle with a 75 mile radius whose center
is Houston, the country s fourth largest city with a population of over
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4,000,000. Our advertising campaigns will be divided between its geographical
market area and the Internet.
COMPETITION Within our "walk-in" market area., there are approximately 150
salvage yards which range in degree of sophistication from computerized
automotive parts and recycling yards to "junk yards". There are approximately
five specialty yards, two of which were established by our founder to serve as
prototypes to test and prove the NetParts.com concept.
COMPANY'S ADVANTAGES OVER COMPETITION. NetParts.com, Inc. will have
competitive advantage over the normal salvage operation as a result of the
pooling of resources which is the basis of Our concept. Management feels that
We will have a competitive edge due in part to:
APPEAL TO THE CUSTOMER. Our facilities will be better organized, well
stocked and most of all cleaner than the traditional salvage yard due to the
location of the tear down area being away from the retail sales area.
CO-OPERATIVE ADVERTISING. Our advertising program will have sixteen times
more concentration than that of the average full-line salvage yard, and, due in
part to its larger budget, it will be capable of targeting a wider market.
CO-OPERATIVE ENVIRONMENT. All of the yards within the NetParts.com complex
will work together due to the fact that they are not competing against each
other.
REDUCED INVENTORY COSTS. Due to the centralized purchasing and disassembly,
the members of the NetParts.com complex will be able to take advantage of "power
buying", and more efficient assessment, tear down and insertion into their
inventory.
REDUCED OVERHEAD COSTS. NetParts.com brings greater efficiency to its
member yards through centralized services such as: computer system, bar coded
inventory, pooled labor, co-op long lines and hot lines, shipping services and
many other cost saving services.
INTERNET SALES. NetParts.com brings greater efficiency to its member yards
through centralized Websites and real-time up-dating of parts inventory.
"HOT LINE" SALES. There are approximately 150 salvage yards in the greater
Houston area. These salvage yards work together through the use of a hot line,
which is a continuously open circuit connecting each participant to all of the
others. When a hot line subscriber needs a specific part for one of his
customers, he announces his requirement over the hot line network. If the
desired part is in stock at one of the participating dealers, a simple phone
call from that dealer completes the sale. We feel that due to its specialized
yards, bar coded and computerized parts inventory, real-time Internet inventory
up-dates and superior buying power that it will quickly become the area's
primary hot line source.
ANTICIPATED MARKET PENETRATION. The total market potential for a well
organized, well advertised, well run combined salvage complex, of the type
contemplated, in management's opinion, easily be two to five percent of the
local market which would translate to a monthly sales volume of approximately
$1,600,000.
SPECIAL FACTORS AFFECTING COMPANY SUCCESS
EMPLOYEE RELATIONS. Management has observed, and industry statistics will
testify, that there is a very high turn-over rate among the employees of the
salvage yards in the Houston area. We intend to be conscientious in its concern
for its employees, and to develop a worker environment which will produce a
productive and loyal employee who will wish to remain within our work force.
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WORK PLACE ENVIRONMENT. Management intends to create a work environment
conducive to productivity, a place where the employee has the most advanced
tools and information at his or her fingertips, and the training to take maximum
advantage of them. Utilizing this concept, management feels that it can overcome
many of the failings of its competitors who are less organized and less
concerned about the welfare of their employees.
BENEFITS PACKAGE. Employees will be able to take advantage of our
"cafeteria" style hospitalization packages, which will include company
contribution and employee contribution ranging from partial care with
deductibles to full care with no deductibles. In addition to hospitalization
packages, life plans, retirement plans, and investment plans will be available
with Company participation.
PROFIT SHARING. It is management's intent to include our employees in the
economic successes which it believes we will enjoy. In conjunction with its
outside auditors, we intend to develop profit sharing plans to reward our
employees with cash incentives and/or favorable stock purchase plans.
OTHER ITEMS
(1) ESTIMATE OF AMOUNT SPENT ON RESEARCH AND DEVELOPMENT IN EACH OF LAST
TWO YEARS. None.
(2) COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS. Minimal
expenses will be incurred to have licensed personal haul away tires and other
materials which might create hazard or nuisance if left stacked or stored. We
will not engage in changing or draining oil or gasoline or depositing hazardous
materials in sewers or drains.
(3) NUMBER OF TOTAL EMPLOYEES AND FULL-TIME EMPLOYEES. We have three
Officers and Directors.
(4) YEAR 2000 COMPLIANCE, EFFECT ON CUSTOMERS AND SUPPLIERS. We have
encountered no year 2000 compliance problems or issues.
REPORTING UNDER THE 1934 ACT. Following the effectiveness of this 1934 Act
Registration of the common stock of this Registrant, certain periodic reporting
requirements will be applicable. First and foremost, a 1934 Registrant is
required to file an Annual Report on Form 10-K or 10-KSB, 90 days following the
end of its fiscal year. The key element of such annual filing is Audited
Financial Statement prepared in accordance with standards established by the
Commission. A 1934 Act Registrant also reports on the share ownership of
affiliates and 5% owners, initially, currently and annually. In addition to the
annual reporting, a Registrant is required to file quarterly reports on Form
10-Q or 10-QSB, containing audited or un-audited financial statements, and
reporting other material events. Some events are deemed material enough to
require the filing of a Current Report on Form 8-K. Any events may be reported
currently, but some events, like changes or disagreements with auditors,
resignation of directors, major acquisitions and other changes require
aggressive current reporting. All reports are filed and become public
information.
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
(A) PLAN OF OPERATION NEXT TWELVE MONTHS.
(1) CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS.
We are a development stage company as defined in Financial Accounting Standards
Board Statement No. 7. We are concentrating substantially all of our efforts in
raising capital and developing our business in order to generate significant
revenues. While we have no immediate need for funding to maintain ourselves in
our pre-launch developmental stage, we will require additional capital to launch
our business operations and to maintain them until profitability is achieved.
This Company has a considerable need for additional funding during the next
twelve months.
Our objective is to create a centrally located, interconnected group of
self sufficient used auto parts outlets specializing in customer convenience and
having a large combined stock from which to operate. The first auto parts
"supermart", which is to be located in Houston, Texas, will be large enough and
efficient enough to become, in management's opinion, the leading supplier of
used and remanufactured auto parts in Texas. It is our intention to duplicate
the concept in other metropolitan markets. To proceed with this plan, we expect
to require $500,000, during the next twelve months, to establish our initial
site in Houston. We expect to require $250,000 for initial purchasing and
marketing expenses, including inventory, advertising, web-site establishment,
maintenance and advertising. We expect to require an additional $250,000 in
unspecified working capital to see us through our first year of aggressive
operations, until we achieve significant revenues.
Accordingly, upon the effectiveness of our 1934 Act Registration, clear of
Staff review, and our acceptance for quotation on the OTCBB, we would expect to
engage in one or more private or public offerings, with aim of raising a minimum
of $1,000,000 to a maximum of $1,125,000.
We are not required to Register our common stock under the 1934 Act. We are
filing this registration statement voluntarily. We do not anticipate any
contingency upon which we would voluntarily cease filing reports with the SEC,
even though we may cease to be required to do so. It is in the compelling
interest of this Issuer to report its affairs quarterly, annually and currently,
as the case may be, generally to provide accessible public information to
interested parties, and also specifically to maintain its qualification for the
OTCBB, if and when the Issuer's intended application for submission be
effective.
(2) SUMMARY OF PRODUCT RESEARCH AND DEVELOPMENT. None.
(3) EXPECTED PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT. We
intend to create a series of 16 specialized auto salvage yards, each one
handling only one make of vehicle. We would begin with our master site in
Houston.
(4) EXPECTED SIGNIFICANT CHANGE IN THE NUMBER OF EMPLOYEES. None
immediately. As we launch, additional employees are expected to be required.
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
(1) OPERATIONS AND RESULTS FOR THE PAST TWO FISCAL YEARS. We have not
launched operations. We are a development stage company. We have had no revenues
to date. Our activities to date have involved our corporate organization,
business plan development, initial funding, auditing and preparation of this
1934 Registration of our common stock for tradeability on the OTCBB.
The Remainder of this Page is Intentionally left Blank
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(2) SELECTED FINANCIAL INFORMATION.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Un- Audited Un-Audited
Audited 12/31/99 Inception to
5/31/00 5/31/00
------------------------------------------------------------
Total Assets $ 1,200 $ 8,200
Total Liabilities $ 3,405 $ 0
============================================================
Revenues 0 0 0
Operating Expenses 10,405 96,935 107,340
Net Earnings or (10,405) (96,935) (107,340)
(Loss)
Per Share Earnings (0.00146) (0.014) (0.01568)
or (Loss)
Average Common 7,135,000 6,796,200 6,846,4750
------------------- ----------- ----------- -------------
Shares Outstanding
============================================================
</TABLE>
We had raised $100,000 in 1999 and have expended virtually all of it during
that year, on our organizational expenses, business plan development, legal,
professional and auditing. Our expenses for the first five months of 2000 have
been related to accounting, and preparation of this 1934 Act Registration
Statement.
(3) FUTURE PROSPECTS. We do not expect to launch our operations until
late in year 2000. We have yet to establish our specialized auto salvage yards.
If we are able to achieve our funding goals, we believe our prospects for
success are good. There is, however, no present guaranty that we can attract the
funding we need. There is no guaranty that, even if we achieve our funding
goals, our program will enjoy public and business acceptance, and prove
profitable.
(C) REVERSE ACQUISITION CANDIDATE. We are committed to the realization of our
business plan. We are not a candidate for a reverse acquisition transaction.
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ITEM 3. DESCRIPTION OF PROPERTY.
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We have no property of our own at this time. Non-exclusive use of offices
and telephone of our attorneys and principal consultant is provided to us. The
costs of doing business are believed to be adequately reflected in our financial
statements, and are reflected in the billings to us, by our consultant. Please
refer to Item 7 of this Part I, for more information and disclosure about our
principal consultant. Our agreement with our principal consultant is provided as
Exhibit 10.1 hereto.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
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(A) SECURITY OWNERSHIP OF MANAGEMENT. To the best of Registrant's knowledge
and belief the following disclosure presents the total beneficial security
ownership of all Directors and Nominees, naming them, and by all Officers and
Directors as a group, without naming them, of Registrant, known to or
discoverable by Registrant. More than one person, entity or group could be
beneficially interested in the same securities, so that the total of all
percentages may accordingly exceed one hundred percent of some or any classes.
Please refer to explanatory notes if any, for clarification or additional
information.
(B) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. To the best of
Registrant's knowledge and belief the following disclosure presents the total
security ownership of all persons, entities and groups, known to or discoverable
by Registrant, to be the beneficial owner or owners of more than five percent of
any voting class of Registrant's stock. More than one person, entity or group
could be beneficially interested in the same securities, so that the total of
all percentages may accordingly exceed one hundred percent of some or any
classes. Please refer to explanatory notes if any, for clarification or
additional information.
COMMON STOCK
OFFICERS AND DIRECTORS AND OWNERS OF 5% OR MORE
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Address of Beneficial Owner Actual %
Ownership
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Donald Jackson Wells 100,000 0.14
3131 S.W. Freeway #46
Houston TX 77098 President/Director
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Joseph Kane 100,000 0.14
3131 S.W. Freeway #46
Houston TX 77098 Secretary/Director
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Larry Wayne Zientec 100,000 0.14
3131 S.W. Freeway #46
Houston TX 77098 Treasurer/Director
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All Officers and Directors as a Group 300,000 0.42
==========================================================
Intrepid International (1) 4,700,000 65.87
P.O. Box 8807
Panama 5, Republic de Panama
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Carol Jean Gehlke, Trustee 500,000 7.01
Carol Jean Gehlke Living Trust, dtd
2/11/93
210 Lille Lane #317
Newport Beach CA 92663
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Total Other 5% Owners 5,200,000 72.88
----------------------------------------------------------
TOTAL Affiliates and 5% owners 5,500,000 77.09
----------------------------------------------------------
Total Shares Issued and Outstanding 7,135,000 100.00
==========================================================
</TABLE>
(1) Please see Item 7, Relationships and Transactions, for more information and
disclosure about the principal shareholder, Intrepid International, S.A. Kirt W.
James and J. Dan Sifford are the persons with dispositive control of the
4,700,000 shares. Intrepid is also our principal consultant. Our consulting
agreement with Intrepid is found as Exhibit 10.1 hereto.
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(C) CHANGES IN CONTROL. There are no arrangements known to Registrant,
including any pledge by any persons, of securities of Registrant, which may at a
subsequent date result in a change of control of our Corporation. Specifically,
we are not a candidate for any direct or reverse acquisition transactions, but
are devoted to bringing our business plan to actualization.
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
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The following persons are the Directors of Registrant, having taken office
from the inception of the issuer, to serve until their successors might be
elected or appointed. The time of the next meeting of shareholders has not been
determined.
Donald Jackson Wells, age 58, is the President and Director of
NetParts.com, Inc. He has also served as the President of ACX Industries, Inc.
since 1988, and is the President for Colonial Industries, Inc. He has over
twenty five years experience in all phases of the automobile industry, including
nine years as the owner-operator of one of Houston's largest recycling
operations, and six years as an independent automobile broker. He has served, on
many occasions, as an automotive consultant to banks and financial institutions
and as an expert automobile industry witness in court cases. In addition to his
affiliation with this corporation, he the owner of Wells Investments, which,
through its subsidiaries, is a State of Texas licensed dealer of motorized
vehicles. He attended South Texas University and the University of Houston, is a
member of the National Automobile Dealers association (NADA), the Houston
Automobile Dealers Association, and the Harris County Used Auto and Truck Parts
Association.
Joseph A. Kane, age 60, is the Secretary and Director of NetParts.com, Inc.
He has held the position of Secretary and Treasurer with ACX Industries, Inc.
since 1990, is also secretary and treasurer of Colonial Industries, Inc. He is
an attorney admitted to practice in both State and Federal Courts, and a member
of the bar of the Supreme Court of the United States. He is currently serving as
chief auditor for a division of a large hotel chain. From 1988 to 1990, he was
employed as Director of Operations for a Texas based Life Insurance Company.
Previously he was engaged in private practice of law and small business
consulting for 14 years. He earned his Bachelor of Science, Business and
Economics, from the Illinois Institute of Technology, a Master of Business
Administration from Michigan State University, and his Juris Doctor from Loyola
University School of Law.
Larry Wayne Zientek, age 48, is the Treasurer and Director of NetParts,
Inc. Mr. Zientek has over twenty years experience in the automobile industry,
all of it in the auto salvage business. Since 1989 he has been an independent
consultant in the auto salvage business. Mr. Zientek has worked directly with
Mr. Wells on automotive consulting projects for the past twelve years. He has
worked his way through every job type from his entry-level position to his
present position in management. He is a native of Houston, a member of the
National Automobile Dealers Association, and the Harris County Used Auto and
Truck Parts Association.
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ITEM 6. EXECUTIVE COMPENSATION.
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Management has devoted only an insubstantial amount of time to date, on the
affairs of this corporation. No compensation has been accrued or paid to date,
nor has any plan of compensation been adopted as of this time. The costs of
doing business are believed to be adequately reflected in our financial
statements, and are reflected in the billings to us, by our consultant. Please
refer to Item 7 of this Part I, for more information and disclosure about our
principal consultant. Our agreement with our principal consultant is provided as
Exhibit 10.1 hereto. During 1999, Intrepid International, our principal
consultant and major shareholder, was paid $52,000, pursuant to its billings.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
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Our principal shareholder, Intrepid International, S.A., is a provider of
corporate services to us and bills us regularly on a time-fee basis.
Intrepid International, S. A. ( Intrepid Panama ) was incorporated in the
Republic of Panama in 1984 to offer financial services to natural resource
companies, primarily those engaged in the production of oil and gas. Following
the world wide collapse of oil prices in the mid-eighties, the Company broadened
the focus of its universe of support services to include a wider range of
companies, with an emphasis on public companies and private companies, companies
engaged in the transition from privately held to publicly held, and development
stage companies, whether public or private, requiring professional business and
corporate guidance. In August of 1997 the Company sought a United States
Representative and entered into a relationship with a group of corporate and
business specialists who, after contracting with the Company, incorporated as
Intrepid International, Ltd. ( Intrepid US ) to provide the required
representation and agency of and for the Intrepid Panama in North America and
Europe. Intrepid US is incorporated in the State of Nevada.
Intrepid provides its services on a negotiated time/fee basis no less
favorable to us that could be obtained commercially from unrelated third
parties. Intrepid does not provide services for commissions based upon the
success or failure of any corporate program, and Intrepid is not a fund-raiser
or a source of capital financing. The principal focus and benefit of the
services offered by Intrepid are not its client's capital formation nor fund
raising activities, but the refinement of client's business plan, analysis of
its corporate structure, evaluation of its current filing status and filing
responsibilities, currency and accuracy of financial information and
auditability or status of current and past audits and audit procedures, to
assist managers in making the conceptual and procedural transitions imposed upon
Officers and Directors, with respect to shareholders, shareholder rights, and
maintenance of the kinds current public information necessary to position a
company to consider public trading of its existing securities, and to maintain
its impeccability as a publicly trading company if and when its securities are
exposed to the public markets. Accordingly, the mission of Intrepid is to assist
us in avoiding costly mistakes and pitfalls in corporate management, going
public, being public, and in handling the various different relationships with
professionals and the public which are appropriate, practical, efficient and
cost-effective in managing ourself as a public corporation.
The following disclosure is provided about Intrepid and its personnel.
A. INTREPID INTERNATIONAL, S.A. The officers and directors of Intrepid
International, S. A. (Panama) are comprised of three individuals; Laurencio Jaen
O., Teodoro F. Franco L. and Leopoldo Kennion G. All three of these individuals
are Panamanian citizens and each serves as an officer and a director of Intrepid
International, S. A. (Panama).
Laurencio Jaen O., an original incorporator who has served as President and
Director of Intrepid Panama since its inception in 1984, resides in Panama City,
Republic of Panama. He is, and has been for the past twenty five years, Vice
President of Indiasa Corporation ("Indiasa"), a Panamanian corporation, which,
through one of its subsidiaries, Robmar International, is involved in the
manufacture and distribution of chemical products in Argentina and Brazil and
which, through its former subsidiary Indiasa Aviation Corporation, was, for
eight years ending in 1981, engaged in aviation consulting, the leasing,
purchase and sale of aircraft, and the operation of a cargo airline, primarily
in Latin America. Mr. Jaen was a founder of PAISA, Panama's international
airline, served as president of the Colon Free Zone (the world s largest free
trade zone), and as Director of Panama's Social Security Administration. He has
also served as the President of the Panamanian Chamber of Commerce, and as a
member of the Board of Presidential Advisors of the Republic of Panama.
11
<PAGE>
Teodoro F. Franco L., Secretary and a Director of Intrepid Panama, has, for
thirty years, been a specialist in maritime and aviation law. Mr. Franco is a
partner in Franco and Franco, with offices around the world. In addition to his
law practice he has served as Panamanian Consul to Liverpool, England and for
the past five years as Ambassador to Great Britain. The firm practices maritime,
aviation and commercial law and currently is the legal firm for: IBERIA (the
Spanish national airline), KLM (the Dutch national airline), VIASA (the
Venezuelan national airline), Aeroflot (the Russian national airline) and
various smaller Latin American national airlines as well as being the registered
agents for thousands of ocean going ships around the world flying the Panamanian
flag. Mr. Franco brings to Intrepid Panama a wealth of international legal,
commercial and diplomatic experience.
Leopoldo Kennion G., Treasurer and a Director of Intrepid Panama, is, and
has for twenty years, been a Certified Public Accountant specializing in
international accounting and is an associate in the law firm of Franco and
Franco. Mr. Kennion practices maritime, aviation and commercial accounting
serving the specialized needs of the transnational clients of Franco and Franco
by providing an interface between them and their auditors.
J. Dan Sifford, Jr., is the United States Managing Director for Intrepid
International, S.A. (Panama). He is fluent in the Spanish Language. His
biographical information is found below.
B. INTREPID INTERNATIONAL, LTD. The officers and directors of Intrepid
International, Ltd. (Intrepid US) are comprised of two individuals; Kirt W.
James, and J. Dan Sifford, Jr.
Kirt W. James, President and Director, has a lifelong background in
marketing and sales. From 1972 to 1987, Mr. James was responsible for sales and
business administrative matters for Glade N. James Sales Co., Inc.; and from
1987 to 1990 Mr. James built retail markets for American International Medical
Supply Co., a Public Company. In 1990 he formed and become President of HJS
Financial Services, Inc., and is responsible for day to day business of the firm
and consults Client's business and Product Development. During the past five
years Mr. James has been involved in the valuation, sale and acquisition of
numerous private businesses and planning for the entry of private corporations
into the public market place for their securities. Mr. James is not and has
never been a broker-dealer. He has acted primarily as consultant, and in some
cases has served as an interim officer and director of public companies in their
development stage. The following disclosure identifies those public companies
with which he has been involved during the past five years: Earth Industries,
Inc., EditWorks, Ltd., Market Formulation & Research, Inc., Mex Trans Seafood
Consulting, Inc., BBB-Huntor Associates, Inc., eWorld Travel Corp., Knowledge
Networks, Inc., Last Company Clothing, Inc. and North American Security & Fire.
He is also an Officer and Director of Oasis 4th Movie Project, an operating
non-trading company, and DP Charters, Inc. a public company currently quoted on
the "Pink Sheets".
J. Dan Sifford, Jr., Executive Vice President, Secretary/Treasurer and
Director, brings to Intrepid an extensive experience in Corporate management and
familiarity with transnational business, particularly in Latin America. From
1970 to 1982, he was President and sole shareholder of Overseas Aviation
Corporation, an all cargo airline, with operations throughout South America and
Africa. He was founder, President and Chief Executive Officer of Airline of the
Virgin Islands from 1982 until 1993. He served for many years as President of
Indiasa Corporation which, through one of its subsidiaries, was involved in the
manufacture and distribution of chemical products in Argentina and Brazil, and
which, through another subsidiary, was for eight years engaged in aviation
consulting, the leasing, purchase and sale of aircraft, and the operation of a
cargo airline, primarily in Latin America. In recent years he has been engaged
continuously in a wide variety of business activities, including the development
of new business ventures. Mr. Sifford is not and has never been a broker-dealer.
He has acted primarily as consultant, and in some cases has served as an interim
officer and director of public companies in their development stage. The
following disclosure identifies those public companies: Air Epicurean, Inc., All
American Aircraft, Earth Industries, Ecklan Corporation, EditWorks, Ltd.,
Market., Market Formulation & Research, Inc., NetAir.com, Inc., NSJ Mortgage
Capital Corporation, Inc., North American Security & Fire, Oasis 4th Movie
12
<PAGE>
Project, Professional Recovery Systems, Inc., Richmond Services, Inc.,
Telecommunications Technologies, Ltd., and World Staffing II, Inc. Of these last
mentioned companies, he is currently serving in Ecklan Corporation, in Oasis
Entertainment's 4th Movie Project, NetAir.com, Inc. and in Editworks Ltd.
--------------------------------------------------------------------------------
ITEM 8. DESCRIPTION OF SECURITIES.
--------------------------------------------------------------------------------
THE REGISTRANT'S CAPITAL AUTHORIZED AND ISSUED. The Registrant is authorized to
issue 100,000,000 shares of a single class of Common Voting Stock, of par value
$0.001, of which 7,135,000 are issued and outstanding.
COMMON STOCK. All shares of Common Stock when issued were fully paid for and
nonassessable. Each holder of Common Stock is entitled to one vote per share on
all matters submitted for action by the stockholders. All shares of Common Stock
are equal to each other with respect to the election of directors and cumulative
voting is not permitted; therefore, the holders of more than 50% of the
outstanding Common Stock can, if they choose to do so, elect all of the
directors. The terms of the directors are not staggered. Directors are elected
annually to serve until the next annual meeting of shareholders and until their
successor is elected and qualified. There are no preemptive rights to purchase
any additional Common Stock or other securities of the Registrant. The owners of
a majority of the common stock may also take any action without prior notice or
meeting which a majority of shareholders could have taken at a regularly called
shareholders meeting, giving notice to all shareholders thereafter of the action
taken. In the event of liquidation or dissolution, holders of Common Stock are
entitled to receive, pro rata, the assets remaining, after creditors, and
holders of any class of stock having liquidation rights senior to holders of
shares of Common Stock, have been paid in full. All shares of Common Stock enjoy
equal dividend rights. There are no provisions in the Articles of Incorporation
or By-Laws which would delay, defer or prevent a change of control.
SECONDARY TRADING refers to the marketability to resell the securities of this
Registrant in brokerage transactions, and that marketability is generally
governed by Rule 144, promulgated by the Securities and Exchange Commission
pursuant to Section 3 of the Securities Act of 1933. Securities which have not
been registered pursuant to the Securities Act of 1933, but were exempt from
such registration when issued, are generally "Restricted Securities" as defined
by Rule 144(a). The impact of the restrictions of Rule 144 are (a) a basic one
year holding period from purchase; and (b) a limitation of the amount any
shareholder may sell during the second year, as to non-affiliates of the
Registrant; however, as to shares owned by affiliates of the Registrant, the
second-year limitation of amounts attaches and continues indefinitely, at least
until such person has ceased to be an affiliate for 90 days or more. The
limitation of amounts is generally 1% of the total issued and outstanding in any
90 day period.
UNRESTRICTED SHARES OF COMMON STOCK. 7,135,000 are issued and outstanding. All
shares were issued as Restricted Securities, as defined by Rule 144(a).
5,000,000 shares are held by affiliates and issued April 22, 1999. These shares
are more than one year old and might be resold in brokerage transaction pursuant
to Rule 144(e)(1) only in limited amounts in any 90 day period; however, it is
the advice of our Special Securities Counsel, that these affiliate shares may
not be entitled to reliance on Rule 144(e)(1), during our development stage.
There are 2,135,000 shares issued to and held continuously by persons who are
non-affiliates and have not been affiliates for more than 90 days, if ever.
These shares were issued between April 22, 1999 and June 6, 1999. These
non-affiliate shares are now more than one year old, and might be resold in
brokerage transactions pursuant to Rule 144(e)(2) only in limited amounts in any
90 day period.
OPTIONS AND DERIVATIVE SECURITIES. There are no outstanding options or
derivative securities of this Registrant. There are no shares issued or reserved
which are subject to options or warrants to purchase, or securities convertible
into common stock of this Registrant.
13
<PAGE>
RISKS OF "PENNY STOCK." Our common stock may be deemed to be "penny stock" as
that term is defined in Reg.Section 240.3a51-1 of the Securities and Exchange
Commission. Penny stock shares (i) with a price of less than five dollars per
share; (ii) that are not traded on a "recognized" national exchange; (iii) whose
prices are not quoted on the NASDAQ automated quotation system (NASDAQ) listed
stocks must still meet requirement (i) above); or (iv) in issuers with net
tangible assets less than $2,000,000 (if the issuer has been in continuous
operation for at least three years) or $5,000,000 (if in continuous operation
for less than three years), or with average revenues of less than $6,000,000 for
the last three years.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Reg.
Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in Our common stock
are urged to obtain and read such disclosure carefully before purchasing any
shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires broker dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker -dealer
made the determination in (ii) above; and (iv) receive a signed and dated copy
of such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
Our common stock to resell their shares to third parties or to otherwise dispose
of them.
RISKS OF STATE BLUE SKY LAWS. In addition to other risks, restrictions and
limitations which may affect the resale of the existing shares of the common
stock of this Registrant, consideration must be given to the Blue Sky laws and
regulations of each State or jurisdiction in which a shareholder wishing to
re-sell may reside. Some States may distinguish between companies with active
businesses and companies whose only business is to seek to secure business
opportunities, and may restrict or limit resales of otherwise free-trading and
unrestricted securities. This Registrant has taken no action to register or
qualify its common stock for resale pursuant to the Blue Sky laws or
regulations of any State or jurisdiction. Accordingly offers to buy or sell the
existing securities of this Registrant may be unlawful in certain States
14
<PAGE>
--------------------------------------------------------------------------------
PART II
--------------------------------------------------------------------------------
ITEM 1.
MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY
AND SHAREHOLDER MATTERS.
(A) MARKET INFORMATION. The Common Stock of this Issuer is not quoted Over the
Counter on the Bulletin Board ("OTCBB") or the NQB Pink Sheets and has never
traded in brokerage transactions.
(B) HOLDERS. There are presently 19 shareholders of the common stock of this
Registrant.
(C) DIVIDENDS. No cash dividends have been paid by Us on the Common Stock or
other Stock and no such payment is anticipated in the foreseeable future.
--------------------------------------------------------------------------------
ITEM 2. LEGAL PROCEEDINGS.
--------------------------------------------------------------------------------
There are no proceedings, legal, enforcement or administrative, pending,
threatened or anticipated involving or affecting this Registrant.
--------------------------------------------------------------------------------
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
--------------------------------------------------------------------------------
There have been no disagreements of any sort or kind with Auditors or
Accountants respecting any matter or item reflected in the financial statements
of this Registrant.
--------------------------------------------------------------------------------
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
--------------------------------------------------------------------------------
We have issued 7,135,000 shares of common stock to seven founders and
twelve investors. The founders share were issued on or about April 22, 1999. The
private placement among our sophisticated investors was conducted from April 22
to June 9, 1999. The two aspects of the issuance are summarized as follows:
On April 22, 1999, we issued 5,135,000 shares of common stock, pursuant to
section 4(2), to seven affiliate founders at par value $0.001, for
organizational services valued at $5,135.00.
During the period from April 22, 1999 to June 6, 1999, we privately placed
and sold 2,000,000 shares of common stock, pursuant to section 4(2), at $0.05,
per share to twelve non-affiliate Founders with pre-existing relationships to
management, known to management to be sophisticated investors, each afforded
full access to information about us and our affairs, of the kind and nature
which registration would have provided.
There were no underwriters or underwritings, and no discounts or commissions.
No securities sold are convertible or exchangeable into equity securities, nor
are there currently any warrants or options representing equity securities.
15
<PAGE>
--------------------------------------------------------------------------------
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
--------------------------------------------------------------------------------
There is no provision in our Articles of Incorporation nor the By-Laws, nor
any Resolution of the Board of Directors, providing for indemnification of
Officers or Directors. We are aware of certain provision of the Nevada Corporate
Law which affects indemnity of Officers or Directors.
NRS 78.7502 provides for mandatory indemnification of officers,
directors, employees and agents, substantially as follows: the corporation shall
indemnify a director, officer, employee or agent of a corporation; to the extent
that he or she has been successful on the merits or otherwise in defense of any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (except an action by or in the right of the corporation) by reason
of the fact that he or she is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise; 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, in which he or she had no reasonable cause to believe his or her
conduct was unlawful.
The remainder of this page left intentionally blank
16
<PAGE>
--------------------------------------------------------------------------------
PART F/S
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FINANCIAL STATEMENTS PAGE
F-1 Audited Financial Statements December 31, 1999 18
F-2 UnAudited Financial Statements for the period ending May 31, 2000 28
================================================================================
17
<PAGE>
--------------------------------------------------------------------------------
F-1
AUDITED FINANCIAL STATEMENTS
OF
NETPARTS.COM, INC
FOR THE YEAR ENDED DECEMBER 31, 1999, AND FROM INCEPTION.
--------------------------------------------------------------------------------
18
<PAGE>
--------------------------------------------------------------------------------
NETPARTS.COM, INC.
(A Development Stage Company)
Financial Statements
December 31, 1999
--------------------------------------------------------------------------------
19
<PAGE>
CONTENTS
Independent Auditors' Report 21
Balance Sheet 22
Statements of Operations 23
Statements of Stockholders' Equity 24
Statements of Cash Flows 25
Notes to the Financial Statements 26
20
<PAGE>
Independent Auditors' Report
To the Board of Directors
and Stockholders of
NetParts.Com, Inc.
We have audited the accompanying balance sheet of NetParts.Com, Inc. (a
development stage company) (a Nevada corporation) as of December 31, 1999 and
the related statements of operations, stockholders' equity and cash flows from
inception on April 21, 1999 through December 31, 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 NetParts.Com, Inc. as of
December 31, 1999 and the results of its operations and cash flows from
inception on April 21, 1999 through December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has little operating capital, no revenues and
is dependent on financing to continue operations. These factors raise
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in the Note 2.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Crouch, Bierwolf & Chisholm
Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
January 26, 2000
21
<PAGE>
NETPARTS.COM, INC.
(A Development Stage Company)
Balance Sheet
December 31,
1999
--------------------------------------------------------------------------------
ASSETS
Current Assets
Cash $ 8,200
Total Current Assets $ 8,200
--------------------------------------------------------------------------------
Total Assets $ 8,200
================================================================================
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities $ 0
Total Liabilities $ 0
Stockholders' Equity
Common stock, par value $.001; 100,000,000
shares authorized, 7,135,000 shares issued
and outstanding 7,135
Additional paid-in capital 98,000
Deficit accumulated during the development stage (96,935)
Total Stockholders' Equity 8,200
Total Liabilities and Stockholders' Equity $ 8,200
The accompanying notes are an integral part of these Financial Statements
22
<PAGE>
NETPARTS.COM, INC.
(A Development Stage Company)
Statements of Operations
From
Inception
From April (April 21,
21, 1999 to 1999 to
December 31, December 31,
1999 1999)
--------------------------------------------------------------------------------
Revenue $ 0 $ 0
Expenses 96,935 96,935
Net income (loss) $ (96,935) $ (96,935)
Net income (loss) per share $ (.014) $(.014)
Weighted average
outstanding shares 6,796,200 6,796,200
The accompanying notes are an integral part of these Financial Statements
23
<PAGE>
NETPARTS.COM, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
For the Period April 21, 1999 (Inception)
through December 31, 1999
Deficit
Accumulated
Additional During the
Common Stock paid-in Development
Shares Amount capital Stage
--------------------------------------------------------------------------------
Balance at inception
April 21, 1999 0 $ 0 $ 0 $ 0
Shares issued for
services during 1999 5,135,000 5,135 0 0
Shares issued for
cash during 1999 2,000,000 2,000 98,000 0
Net Loss for the period ended
December 31, 1999 0 0 0 (96,935)
Balance
December 31, 1999 7,135,000 $7,135 $ 98,000 $ (96,935)
The accompanying notes are an integral part of these Financial Statements
24
<PAGE>
NETPARTS.COM, INC.
(A Development Stage Company)
Statements of Cash Flows
For the Period Ended
From
Inception
From April (April 21,
21, 1999 to 1999) to
December 31, December31,
1999 1999
---- ------
Cash Flow Used By Operations:
Net Loss $ (96,935) $ (96,935)
Adjustment to reconcile net loss to
net cash used by Operations:
Stock issued for services 5,135 5,135
--------------------------------------------------------------------------------
Net Cash Flows Used in
Operating Activities (91,800) (91,800)
--------------------------------------------------------------------------------
Cash Flow Used For Investing Activities 0 0
0 0
Cash Flow From Financing Activities
Shares issued for cash 100,000 100,000
Increase (Decrease) in Cash 8,200 8,200
Cash-Beginning of Period 0 0
0 0
Cash-End of Period $ 8,200 $ 8,200
================================================================================
Supplemental Cash Flow Information:
Cash Paid for:
Interest $ 0 $ 0
Taxes $ 0 $ 0
Non-Cash Financing Activities
The Company issued 5,135,000 shares of common stock for organization costs.
These costs were valued at $5,135 and expensed in 1999.
The accompanying notes are an integral part of these Financial Statements
25
<PAGE>
NETPARTS.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
a. Organization
NetParts.Com, Inc. ("the Company") was incorporated under the laws of the
State of Nevada on April 21, 1999. The Company is organized to create a series
of 16 specialized auto salvage yards whereby the salvageable components will be
inventoried on a computer and listed on the internet.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating loss
carryforwards totaling approximately $96,935 that will be offset against future
taxable income. These NOL carryforwards begin to expire in the year 2014. No
tax benefit has been reported in the financial statements because the Company
believes there is a 50% or greater change the carryforward will expire unused.
Deferred tax assets and the valuation account is as follows at December 31,
1999.
Deferred tax asset:
NOL carrryforward $ 21,208
Valuation allowance (21,208)
-------
Total $ 0
f. Organization Cost
The Company incurred $5,135 of organization costs in 1999. These costs,
which were paid by shareholders of the Company were exchanged for 5,135,000
shares of common stock. These costs were expensed in 1999 and will be recovered
only if, the Company is able to generate positive cash flow from operations.
The accompanying notes are an integral part of these Financial Statements
26
<PAGE>
NETPARTS.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is dependent upon raising
capital to continue operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. It is
management's plan to find an operating company to merge with, thus creating
necessary operating revenue.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating substantially
all of its efforts in raising capital and developing its business operations in
order to generate significant revenues.
NOTE 4- RELATED PARTY
During 1999, Intrepid International, a major shareholder, was paid $52,500
for professional services rendered to the Company.
27
<PAGE>
--------------------------------------------------------------------------------
F-2
UNAUDITED FINANCIAL STATEMENTS
OF
NETPARTS.COM, INC.
FOR THE FIVE MONTHS ENDED MAY 31, 2000
--------------------------------------------------------------------------------
28
<PAGE>
NETPARTS.COM, INC.
BALANCE SHEETS (UNAUDITED)
May 31, 1999 and 2000
<TABLE>
<CAPTION>
<S> <C> <C>
May 31, December 31,
2000 1999
---------- --------------
Assets
CURRENT ASSETS
Cash $ 1,200 $ 8,200
TOTAL CURRENT ASSETS 1,200 8,200
---------- --------------
TOTAL ASSETS $ 1,200 $ 8,200
========== ==============
Liabilities and Stockholders Equity
LIABILITIES
Accounts payable $ 3,405 $ 0
Total accounts payable
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; authorized 100,000,000
shares; issued and outstanding, 7,135,000 shares 7,135 7,135
Additional paid-in capital 98,000 98,000
Accumulated equity (deficit) (107,340) (96,935)
Total Stockholders' Equity (2,205) 8,200
---------- --------------
Total Liabilities and Stockholders' Equity $ 1,200 $ 8,200
========== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
NETPARTS.COM, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
May 31, 1999 and 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C>
From
Inception
From January From April (April
1, 2000 to 21, 1999 to 21, 1999) to
May 31, May 31, May 31,
2000 1999 2000
------------- ------------ -------------
Revenues $ 0 $ 0 $ 0
------------- ------------ -------------
Net Loss from Operations 10,405 5,135 107,340
Net Income (Loss) $ 10,405 $ 5,135 $ 107,340
============= ============ =============
Loss per Share $ 0.00146 $ 0.00100 $ 0.01568
============= ============ =============
Weighted Average
Shares Outstanding 7,135,000 5,135,000 6,846,475
============= ============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
NETPARTS.COM, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)(UNAUDITED)
From inception (April 21, 1999) through December 31, 1999
And for the five month period ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Additional Accumulated Total Stock-
Common Par Paid-In Equity holders' Equity
Stock Value Capital (Deficit) (Deficit)
--------- ------ ----------- ------------- -----------------
Common Stock issued at inception 5,135,000 $5,135 $ 0 $ 0 $ 5,135
Sale of Common Stock for
$0.05 per share 2,000,000 2,000 98,000 0 0
Net loss during period 0 0 0 (96,935) 0
Balance at December 31, 1999 7,135,000 $7,135 $ 98,000 ($96,935) $ 8,200
Net loss during period 0 0 0 (10,405) 0
Balance at May 31, 2000 7,135,000 $7,135 $ 98,000 ($107,340) ($2,205)
</TABLE>
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
NETPARTS.COM, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
May 31, 1999 and 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C>
From
Inception
From January From April (April
1, 2000 to 21, 1999 to 21, 1999) to
May 31, May 31, December 31,
2000 1999 1999
-------------- ------------- --------------
Operating Activities
Net Income (Loss) $ 10,405 $ 5,135 $ 107,340
Items not affecting cash:
Stock issued for services 0 (5,135) (5,135)
-------------- ------------- --------------
Net Cash from Operations (10,405) -0- (102,205)
Cash from financing activities
Increase in accounts payable 3,405 0 3,405
Sale of Common Stock 0 0 100,000
-------------- ------------- --------------
Cash Increase (Decrease) (7,000) -0- 1,200
Beginning Cash 8,200 0 0
Cash as of Statement Date $ 1,200 $ 0 $ 1,200
============== ============= ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
NETPARTS.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
May 31, 2000
NOTE I - SIGNIFICANT ACCOUNTING POLICIES
a. Organization
NetParts.Com, Inc. ("the Company") was incorporated under the laws of the State
of Nevada on April 21, 1999. The Company is organized to create a series of 16
specialized auto salvage yards whereby the salvageable components will be
inventoried on a computer and listed on the internet. The Company is currently
inactive and searching for a merger candidate.
b. Accounting Method
The Company recognizes income and expenses on the accrual basis of accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three
months or
less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating loss
carryforwards totaling approximately $96,935 that will be offset against future
taxable income. These NOL carryforwards begin to expire in the year 2014. No
tax benefit has been reported in the financial statements because the Company
believes there is a 50% or greater change the carryforward will expire unused.
Deferred tax assets and the valuation account is as follows at December 31, 1999
and May 31, 2000.
May 31, December 31,
2000 1999
----------------------------------------------------
Deferred tax asset:
NOL carrryforward $ 20,897 $ 20,897
Valuation allowance (20,897) (20,897)
====================================================
Total 0 0
f. Organization Cost
The Company incurred $5,135 of organization costs in 1999. These costs, which
were paid by shareholders of the Company were exchanged for 5,135,000 shares of
common stock. These costs were expensed in 1999 and will be recovered only if,
the Company is able to generate positive cash flow from operations.
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NETPARTS.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
May 31, 2000
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is dependent upon raising
capital to continue operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. It is
management's plan to find an operating company to merge with, thus creating
necessary operating revenue.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined in Financial Accounting
Standards Board Statement No. 7. It is concentrating substantially all of its
efforts in raising capital and developing its business operations in order to
generate significant revenues.
NOTE 4- RELATED PARTY
During 1999, Intrepid International, a major shareholder, was paid $52,500 for
professional services rendered to the Company.
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PART III
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ITEM 1. INDEX TO EXHIBITS.
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Exhibit Index
Exhibit Table Category / Description of Exhibit Page Number
Table
#
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[3] ARTICLES/CERTIFICATES OF INCORPORATION, AND BY-LAWS
3.1 Articles of Incorporation of the Registrant 37
3.2 By-Laws of this Registrant 40
[10] MATERIAL CONTRACTS
10.1 Intrepid International Financial Services Consulting Agreement 49
================================================================================
35
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to signed on its behalf by the undersigned, thereunto
authorized.
NETPARTS.COM, INC.
by
/s/Donald Jackson Wells /s/Larry Wayne Zientek /s/Joseph A. Kane
Donald Jackson Wells Larry Wayne Zientek Joseph A. Kane
President/Director Treasurer/Director Secretary/Director
36
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EXHIBIT 3.1
ARTICLES OF INCORPORATION: OF THIS REGISTRANT
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37
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ARTICLES OF INCORPORATION
OF
NETPARTS.COM, INC.
ARTICLE I. The name of the Corporation is NETPARTS.COM, INC.
ARTICLE II. Its principal office in the State of Nevada is 774 Mays Blvd.
#10, Incline Village NV 89452. The initial resident agent for services of
process at that address is N&R Ltd. Group, Inc
ARTICLE III. The purposes for which the corporation is organized are to
engage in any activity or business not in conflict with the laws of the State of
Nevada or of the United States of America. The period of existence of the
corporation shall be perpetual.
ARTICLE IV. The corporation shall have authority to issue an aggregate of
100,000,000 shares of common voting equity stock of par value one mil ($0.001)
per share, and no other class or classes of stock, for a total capitalization of
$100,000. The corporation's capital stock may be sold from time to time for such
consideration as may be fixed by the Board of Directors, provided that no
consideration so fixed shall be less than par value.
ARTICLE V. No shareholder shall be entitled to any preemptive or
preferential rights to subscribe to any unissued stock or any other securities
which the corporation may now or hereafter be authorized to issue, nor shall any
shareholder possess cumulative voting rights at any shareholders meeting, for
the purpose of electing Directors, or otherwise.
ARTICLE VI. The name and address of the Incorporator of the corporation is
William Stocker, Attorney at Law, 34700 Pacific Coast Highway, Suite 303,
Capistrano Beach CA 92624, phone (949) 248-9561, fax (949) 248-1688. The
affairs of the corporation shall be governed by a Board of Directors of not less
than one (1) nor more than (7) persons. The Incorporator shall act as Sole
Initial Director.
ARTICLE VII. The Capital Stock, after the amount of the subscription price
or par value, shall not be subject to assessment to pay the debts of the
corporation, and no stock issued, as paid up, shall ever be assessable or
assessed.
ARTICLE VIII. The initial By-laws of the corporation shall be adopted by
its Board of Directors. The power to alter, amend or repeal the By-laws, or
adopt new By-laws, shall be vested in the Board of Directors, except as
otherwise may be specifically provided in the By-laws.
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I THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a corporation pursuant the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have set my hand hereunto this Day,
April 20, 1999.
/s/ William Stocker
William Stocker
Attorney at Law
Incorporator
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--------------------------------------------------------------------------------
EXHIBIT 3.2
BY-LAWS:
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40
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BY-LAWS
OF
NETPARTS.COM, INC.
A NEVADA CORPORATION
ARTICLE I
CORPORATE OFFICES
The principal office of the corporation in the State of Nevada shall be
located at 774 Mays Blvd. Suite 10, Incline Village NV 89451. The corporation
may have such other offices, either within or without the State of incorporation
as the board of directors may designate or as the business of the corporation
may from time to time require.
ARTICLE II
SHAREHOLDERS' MEETINGS
SECTION 1. PLACE OF MEETINGS
The directors may designate any place, either within or without the State
unless otherwise prescribed by statute, as the place of meeting for any annual
meeting or for any special meeting called by the directors. A waiver of notice
signed by all stockholders entitled to vote at a meeting may designate any
place, either within or without the State unless otherwise prescribed by
statute, as the place for holding such meeting. If no designation is made, or if
a special meeting be otherwise called, the place of meeting shall be the
principal office of the corporation.
SECTION 2. ANNUAL MEETINGS
The time and date for the annual meeting of the shareholders shall be set
by the Board of Directors of the Corporation, at which time the shareholders
shall elect a Board of Directors and transact any other proper business. Unless
the Board of Directors shall determine otherwise, the annual meeting of the
shareholders shall be held on the second Monday of June in each year, if not a
holiday, at Ten o'clock A.M., at which time the shareholders shall elect a Board
of Directors and transact any other proper business. If this date falls on a
holiday, then the meeting shall be held on the following business day at the
same hour.
SECTION 3. SPECIAL MEETINGS
Special meetings of the shareholders may be called by the President, the
Board of Directors, by the holders of at least ten percent of all the shares
entitled to vote at the proposed special meeting, or such other person or
persons as may be authorized in the Articles of Incorporation.
SECTION 4. NOTICES OF MEETINGS
Written or printed notice stating the place, day and hour of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) days nor more than
sixty (60) days before the date of the meeting, either personally or by mail, by
the direction of the president, or secretary, or the officer or persons calling
the meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the stockholder at his address
as it appears on the stock transfer books of the corporation, with postage
thereon prepaid.
Closing of Transfer Books or Fixing Record Date.
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(a) For the purpose of determining stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or stockholders
entitled to receive payment of any dividend, or in order to make a determination
of stockholders for any other proper purpose, the directors of the corporation
may provide that the stock transfer books shall be closed for a stated period
but not to exceed, in any case twenty (20) days. If the stock transfer books be
closed for the purpose of determining stockholders entitled to notice or to vote
at a meeting of stockholders, such books shall be closed for at least twenty
(20) days immediately preceding such meeting.
(b) In lieu of closing the stock transfer books, the directors may
prescribe a day not more than sixty (60) days before the holding of any such
meeting as the day as of which stockholders entitled to notice of the and to
vote at such meeting must be determined. Only stockholders of record on that day
are entitled to notice or to vote at such meeting
(c) The directors may adopt a resolution prescribing a date upon which the
stockholders of record are entitled to give written consent to actions in lieu
of meeting. The date prescribed by the directors may not precede nor be more
than ten (10) days after the date the resolution is adopted by directors.
SECTION 5. VOTING LIST.
The officer or agent having charge of the stock transfer books for the
shares of the corporation shall make, at least ten (10) days before each meeting
of stockholders, a complete list of stockholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and 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. The original stock
transfer book shall be prima facie evidence as to who are the stockholders
entitled to examine such list or transfer books or to vote at the meeting of
stockholders.
SECTION 6. QUORUM.
At any meeting of stockholders, a majority of fifty percent plus one vote,
of the outstanding shares of the corporation entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders. If
less than said number of the outstanding shares are represented at a meeting, a
majority of the outstanding shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting originally notified. 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.
SECTION 7. PROXIES.
At all meetings of the stockholders, a stockholder may vote by proxy
executed in writing by the stockholder or by his duly authorized attorney in
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fact. Such proxy shall be filed with the secretary of the corporation before or
at the time of the meeting. Such proxies may be deposited by electronic
transmission.
SECTION 8. VOTING.
Each stockholder entitled to vote in accordance with the terms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by proxy, for each share of stock entitled to
vote held by such shareholder. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by ballot. All
elections for directors shall be decided by plurality vote; all other questions
shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of Nevada.
SECTION 9. ORDER OF BUSINESS.
The order of business at all meetings of the stockholders, shall be as
follows:
a. Roll Call.
b. Proof of notice of meeting or waiver of notice.
c. Reading of minutes of preceding meeting.
d. Reports of Officers.
e. Reports of Committees.
f. Election of Directors.
g. Unfinished Business.
h. New Business.
SECTION 10. INFORMAL ACTION BY STOCKHOLDERS.
Unless otherwise provided by law, any action required to be taken, or any
other action which may be taken, at a meeting of the stockholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the stockholders entitled to vote with respect to the
subject matter thereof. Unless otherwise provided by law, any action required to
be taken, or any other action which may be taken, at a meeting of the
stockholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by a Majority of all of the
stockholders entitled to vote with respect to the subject matter thereof at any
regular meeting called on notice, and if written notice to all shareholders is
promptly given of all action so taken.
SECTION 11. BOOKS AND RECORDS.
The Books, Accounts, and Records of the corporation, except as may be
otherwise required by the laws of the State of Nevada, may be kept outside of
the State of Nevada, at such place or places as the Board of Directors may from
time to time appoint. The Board of Directors shall determine whether and to what
extent the accounts and the books of the corporation, or any of them, other than
the stock ledgers, shall be open to the inspection of the stockholders, and no
stockholder shall have any right to inspect any account or book or document of
this Corporation, except as conferred by law or by resolution of the
stockholders or directors. In the event such right of inspection is granted to
the Stockholder(s) all fees associated with such inspection shall be the sole
expense of the Stockholder(s) demanding the inspection. No book, account, or
record of the Corporation may be inspected without the legal counsel and the
accountants of the Corporation being present. The fees charged by legal counsel
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and accountants to attend such inspections shall be paid for by the Stockholder
demanding the inspection.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS.
The business and affairs of the corporation shall be managed by its board
of directors. The directors 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 this State.
SECTION 2. NUMBER, TENURE, AND QUALIFICATIONS.
The number of directors of the corporation shall be a minimum of one (l)
and a maximum of nine (7), or such other number as may be provided in the
Articles of Incorporation, or amendment thereof. Each director shall hold office
until the next annual meeting of stockholders and until his successor shall have
been elected and qualified.
SECTION 3. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without other notice than
this by-law immediately after, and at the same place as, the annual meeting of
stockholders. The directors may provide, by resolution, the time and place for
holding of additional regular meetings without other notice than such
resolution.
SECTION 4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request of the
president or any two directors. The person or persons authorized to call special
meetings of the directors may fix the place for holding any special meeting of
the directors called by them.
SECTION 5. NOTICE.
Notice of any special meeting shall be given at least one day previously
thereto by written notice delivered personally, or by telegram or mailed to each
director at his business address. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
SECTION 6. QUORUM.
At any meeting of the directors fifty (50) percent shall constitute a
quorum for the transaction of business, but if less than said number is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice.
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SECTION 7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the directors.
SECTION 8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of the majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled by
vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpired
term of his predecessor.
SECTION 9. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
stockholders or by action of the board. Directors may be removed without cause
only by vote of the stockholders.
SECTION 10. RESIGNATION.
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.
SECTION 11. COMPENSATION.
No compensation shall be paid to directors, as such, for their services,
but by resolution of the board a fixed sum and expenses for actual attendance at
each regular or special meeting of the board may be authorized. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 12. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution, may designate from among its members an executive
committee and other committees, each consisting of one (l) or more directors.
Each such committee shall serve at the pleasure of the board.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER.
The officers of the corporation shall be the president, a secretary and a
treasurer, each of whom shall be elected by the directors. Such other officers
and assistant officers as may be deemed necessary may be elected or appointed by
the directors.
SECTION 2. ELECTION AND TERM OF OFFICE.
The officers of the corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each annual
meeting of the stockholders. Each officer shall hold office until his successor
45
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shall have been duly elected and shall have qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided. In the event that no election of officers be held by the directors at
that time, the existing officers shall be deemed to have been confirmed in
office by the directors.
SECTION 3. REMOVAL.
Any officer or agent elected or appointed by the directors may be removed
by the directors whenever in their judgement the best interest of the
corporation would be served thereby, but such removal shall be without prejudice
to contract rights, if any, of the person so removed.
SECTION 4. VACANCIES.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.
SECTION 5. PRESIDENT.
The president shall be the principal executive officer of the corporation
and, subject to the control of the directors, shall in general supervise and
control all of the business and affairs of the corporation. He shall, when
present, preside at all meetings of the stockholders and of the directors. He
may sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the directors have authorized to be executed, except in cases where the
directors or by these by-laws to some other officer or agent of the corporation,
or shall be required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the office of president and such other
duties as may be prescribed by the directors from time to time.
SECTION 6. CHAIRMAN OF THE BOARD.
In the absence of the president or in the event of his death, inability or
refusal to act, the chairman of the board of directors shall perform the duties
of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The chairman of the board of
directors shall perform such other duties as from time to time may be assigned
to him by the directors.
SECTION 7. SECRETARY.
The secretary shall keep the minutes of the stockholders' and of the
directors' meetings in one or more books provided for that purpose, see that all
notices are duly given in accordance with the provisions of these by-laws or as
required, be custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder, have general
charge of the stock transfer books of the corporation and in general perform all
the duties incident to the office of secretary and such other duties as from
time to time may be assigned to him by the president or by the directors.
SECTION 8. TREASURER.
If required by the directors, the treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the directors shall determine. He shall have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
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receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with these by-laws and in general perform all of the duties incident to the
office of treasurer and such other duties as from time to time may be assigned
to him by the president or by the directors.
SECTION 9. SALARIES.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by reason
of fact that he is also a director of the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 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.
SECTION 2. LOANS.
No loans shall be contracted on behalf of the corporation and no evidences
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.
SECTION 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.
SECTION 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
FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of January in
each year, or on such other day as the Board of Directors shall fix.
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ARTICLE VII
DIVIDENDS
The directors may from time to time declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE VIII
SEAL
The directors may provide a corporate seal which shall have inscribed
thereon the name of the corporation, the state of incorporation, year of
incorporation and the words, "Corporate Seal".
ARTICLE IX
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 X
AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be
adopted in the same manner as their adoption, by the Board of Directors if so
adopted; by a vote of the stockholders representing a majority of all the shares
issued and outstanding, if so adopted or adopted by the Board of Directors; or,
in any case, at any annual stockholders' meeting or at any special stockholders'
meeting when the proposed amendment has been set out in the notice of such
meeting.
CERTIFICATION
THE SECRETARY of the Corporation hereby certifies that the foregoing is a
true and correct copy of the By-Laws of the Corporation named in the title
thereto and that such By-Laws were duly adopted by the Board of Directors of
said Corporation on the date set forth below.
EXECUTED, AND CORPORATE SEAL AFFIXED, this day of April 21, 1999.
/s/ Joseph A. Kane
Joseph A. Kane
Secretary
48
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EXHIBIT 10.1
INTREPID INTERNATIONAL
FINANCIAL SERVICES CONSULTING AGREEMENT
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49
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INTREPID INTERNATIONAL
FINANCIAL SERVICES
CONSULTING AGREEMENT
THIS AGREEMENT is made by and between Intrepid International, Ltd., a Nevada
Corporation, (hereafter IIL ), and NetParts.com, Inc. a Nevada Corporation,
(hereafter Client ) and dated April 21, 1999. In consideration of the mutual
promises contained herein, and on the terms and conditions herein set forth, the
parties agree as follows:
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1. RETAINER AGREEMENT.
Intrepid International, Ltd. is hereby retained as financial services
consultants for the Client, consistent with that certain Description of Mission
and Services Offered, a copy of which is Attachment 1 to this Consulting
Agreement, and incorporated herein by this reference as though fully set forth
herein. Among the services to be provided and contemplated by this arrangement
are the services of its President, Kirt W. James (billable at $150.00/hr), its
prime consultant, J. Dan Sifford Jr. (billable at $240.00/hr), and such
incidental secretarial services (billable at $100.00/hr) as may be reasonably
and necessarily performed by its secretary. Additional services may be performed
by subcontractors of IIL, subject to arrangements approved by Client in advance.
2. SERVICES
IIL agrees to provide, as requested, the widest possible range of and
Financial Consulting services, to Management of Client, subject to, limited by
and consistent with that certain Description of Mission and Services Offered, a
copy of which is Attachment 1 to this Consulting Agreement, and incorporated
herein by this reference as though fully set forth herein. Such services
include, as requested by Client, coordination of public relations, shareholder
relations, audit coordination, certificate and transfer coordination,
coordination of relationships with market-makers and broker dealers in the
securities of Client and consulting services, incidental analysis and, where
appropriate, and subject to the accompanying Attorney Disclosure Agreement,
written legal opinions by IIL Counsel acting, as requested by Client, as Special
Securities Counsel with Limited Authority, and the preparation and coordination
of annual, quarterly and current filings as may be required of the Client
pursuant to the Securities and Exchange Act of 1934 and Regulations of the
Securities and Exchange Commission promulgated pursuant to the 1934 Act.
3. COMPENSATION
In consideration for such services, Client agrees to pay IIL pursuant to
fee schedule set forth in paragraph 1 above. Billings for services shall be
invoiced by IIL and paid upon receipt.
4. PAYMENT OF EXPENSES
IIL must secure in writing approval in advance for any expense that may be
contracted on behalf of Client in excess of $400 in the aggregate. Expenses, if
approved, are to be invoiced by IIL and paid upon receipt. In addition to
charges for services, Client will be billed for all normal and incidental
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identifiable costs such as copying charges, telephone expenses, delivery fees,
filing fees, and transcription fees; however, travel expenses, expert witness
fees and other extraordinary charges will not be incurred without prior
approval.
5. UNPAID CHARGES
It is agreed that if at any time any invoice rendered by this Firm to
Client for investment banking, appropriate legal services and expenses remains
unpaid for any reason for longer than 30 days, we shall have the right to
discontinue performance of further services and to withdraw as your attorneys,
regardless of the status of any matter in which we will be involved and
regardless of any event or proceeding which may then be pending, unless we have
reached a subsequent written agreement with respect thereto.
6. LATE CHARGES
An amount past due will incur a late charge, after 30 days, of 1.5% per
month (18% per annum) of the total unpaid balance. Late charges will continue to
accrue at the same rate on any unpaid balance during any collection efforts and
until the entire bill is paid in full, unless a subsequent agreement with
respect to such charges is made and reduced to writing. Should it become
necessary to seek collection of any past due statement, you agree to pay all
reasonable costs of collection including reasonable attorneys' fees and all
interest incurred.
7. ARBITRATION OF ANY DISPUTES
It is agreed that any dispute arising our of this Agreement, or the Firm's
representation of you, shall be resolved by binding arbitration in Las Vegas,
Nevada, by the American Arbitration Association.
8. LIABILITY OF IIL
In furnishing Client with advice and other services as requested, neither
IIL nor any owner, employee or agent of IIL, shall be liable to Client or its
creditors for ordinary errors of judgment or for anything except gross
negligence, wilful malfeasance, or bad faith, in the performance of its duties
or reckless disregard of its obligations and duties under the terms of this
agreement. It is further understood and agreed that IIL may rely upon
information furnished to it reasonably believed to be accurate and reliable and
that, except as herein provided, IIL shall not be accountable for any loss
suffered by Client by reason of Client's action or non-action on the basis of
advice, recommendation or approval of IIL, its owners, employees or agents.
9. GOOD FAITH AND FAIR DEALING
All parties to this agreement hereby covenant expressly to deal with each
other honestly, fairly and in good faith in all respects, and to provide each
other with reasonable further assurances in furtherance of their mutual
performances with respect to this Agreement.
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10. INDEPENDENT CONTRACTOR
IIL is and shall at all times be understood and deemed to be an independent
contractor without authority to act or represent Client or its clients, except
as provided or authorized in this agreement.
11. NON-EXCLUSIVITY
Client recognizes and acknowledges that this agreement is non-exclusive,
and that accordingly IIL now renders and may in the future render services to
other clients, some of which may be of a nature similar to those agreed to be
performed herein, or to clients with similar businesses, needing similar advice.
IIL is and shall be free to render any such service or advice and shall not be
required to devote full-time and attention to its obligations under this
agreement, but only such amount as is reasonably necessary.
12. CONTROL
Nothing contained herein shall be deemed to require any action by any
Corporation contrary to law or its constituent documents or to relieve the board
of directors thereof from responsibility for control of the affairs of such
corporation.
13. OWNERSHIP OF FILES AND RECORDS
Except as to original records or any records or files which we accept upon
the understanding that they belong to you, it hereby is agreed that all files,
copies of documents, correspondence or other materials which we may accumulate
in connection with your representation, including copies of materials filed with
any regulatory agency, shall be the property of IIL. Upon the termination of the
engagement, IIL will return any property belonging to you upon your request.
Copies of our files and other materials which IIL may have accumulated during
our representation will be made available to Client at its expense; however, it
is specifically agreed that IIL shall have the right, in its discretion, to
dispose of these files at such times as it determines reasonably that such files
need not be retained any longer. After such destruction, such files will no
longer be available.
14. TERMINATION
The term of this agreement shall begin with the complete execution hereof,
and shall continue in effect for until terminated by either party in writing.
Upon termination, all accrued charges shall be promptly invoiced and paid.
15. MISCELLANEOUS
This agreement sets forth the entire agreement and understanding between
the parties and supersedes all prior discussions, agreements and understandings,
if any, of any and every kind and nature, between them. This agreement is made
and shall be construed and interpreted according to the laws of the Client's
place of Incorporation if that be Nevada or Texas, and if not, pursuant to the
laws of the State of Nevada.
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ACCORDINGLY the parties cause this agreement to be signed by their duly
authorized representative, as of the date written below.
Intrepid International, Ltd.
by
/s/Kirt W. James
Kirt W. James, President
THE ABOVE IS UNDERSTOOD AND AGREED TO and I state under the penalties of perjury
that I am authorized to execute this letter agreement:
NetParts.com, Inc.
Date: April 21, 1999 By:
/s/ Donald Jackson Wells
Donald Jackson Wells, President
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Attachment 1
DESCRIPTION OF MISSION AND SERVICES OFFERED
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Intrepid International, S. A.
DESCRIPTION OF MISSION AND SERVICES OFFERED
I. MISSION STATEMENT
INTREPID INTERNATIONAL, S. A. ( the Company ) was incorporated in the
Republic of Panam in 1984 to offer financial services to natural resource
companies, primarily those engaged in the production of oil and gas. Following
the world wide collapse of oil prices in the mid-eighties, the Company broadened
the focus of its universe of support services to include a wider range of
companies, with an emphasis on public companies and private companies, companies
engaged in the transition from privately held to publicly held, and development
stage companies, whether public or private, requiring professional business and
corporate guidance. In August of 1997 the Company sought a United States
Representative and entered into a relationship with a group of corporate and
business specialists who, after contracting with the Company, incorporated as
INTREPID INTERNATIONAL, LTD. ( Intrepid US ) to provide the required
representation and agency for the Company in North America and Europe. Intrepid
US is incorporated in the State of Nevada.
Intrepid enjoys a wide range of brokerage community and financial services
relationships which form the basis of its ability to introduce client companies
to consultants, professionals, broker dealers and others who may be of service
to client companies in pursuing the business plan and other objectives the
client may have.
Intrepid is not an investment banker, nor a broker or dealer in securities.
Intrepid is a provider of technical support services to client companies.
Intrepid does not practice law or supply legal services generally, however,
Intrepid's counsel may, under appropriate circumstances be available to client's
counsel, where such assistance is requested and appropriate.
Intrepid provides its services on a negotiated time/fee basis. Intrepid
does not provide services for commissions based upon the success or failure of
any corporate program, and Intrepid is not a fund-raiser or a source of capital
financing. However, sources of capital financing exist, and Intrepid is often
able to provide the introductions to suitable professionals, business brokers
and securities professionals who may be able to assist an issuer in developing
or executing such fund raising programs as the issuer may adopt.
The principal focus and benefit of the services offered by Intrepid are not
its client's capital formation nor fund raising activities, but the refinement
of client's business plan, analysis of its corporate structure, evaluation of
its current filing status and filing responsibilities, currency and accuracy of
financial information and auditability or status of current and past audits and
audit procedures, to assist managers in making the conceptual and procedural
transitions imposed upon Officers and Directors, with respect to shareholders,
shareholder rights, and maintenance of the kinds current public information
necessary to position a company to consider public trading of its existing
securities, and to maintain its impeccability as a publicly trading company if
and when its securities are exposed to the public markets.
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Accordingly, the mission of Intrepid is to assist client companies in
avoiding costly mistakes and pitfalls in corporate management, going public,
being public, and in handling the various different relationships with
professionals and the public which are appropriate, practical, efficient and
cost-effective in managing a public corporation.
II. SERVICES TO ISSUERS
Every Corporation and Issuer of Securities is unique. Its businesses,
structure, aspirations status and time horizons are particular to the interest
of its shareholders, and the policies of its Management. Intrepid's services may
address the full spectrum of corporate situations.
A. PUBLIC AND PRIVATE COMPANIES
1. CLOSELY HELD PRIVATE COMPANIES are corporations, limited partnerships
and limited liability companies, held by a relatively small group of
shareholders, often the founders, and usually not less than two nor more than 35
shareholders. Typically, the shareholders know each other and/or some or all of
the managers. Such a company may have determined to stay small and never go
public. Such a company may intend to grow, and keep open the vision of expanding
into public ownership at some future time. There are important considerations
for mangers of this latter group, chiefly the understanding that all public
companies must be auditable. This means not only that books and records be kept
in an orderly and consistent manner, but that some corporate understanding the
special accounting rules of Regulation SX (promulgated by the Securities and
Exchange Commission) be developed and considered in connection with the
acquisition of assets or the issuance of stock for property or other rights,
particularly. It is also important to develop an understanding, policy, format
and consistent procedure for meetings of Directors, Shareholders and maintaining
proper corporate minutes, from inception and thereafter.
2. MORE WIDELY HELD PRIVATE COMPANIES are companies whose securities do
not trade on any public market, but which have a growing shareholder base no
longer characterized by personal relationships between shareholders and
management. Such companies may wish to remain private; however, pressure to deal
with public company issues may arise, invited or not, as the shareholder base
expands, the business grows in profitability, size and extent of operations and
the passage of time, the passing of original shareholders and the inheritance of
ownership by a family group, the need to attract new investment, the desire of
original owners to retire and to develop an exist strategy for the sale of their
business or ownership thereof. Going public is a series of successive headaches,
best cured by knowledge of potential pitfalls and early preparation for
eventualities. The best policy is always to gather information early and
prepare.
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3. PUBLIC COMPANIES come in more than one distinctive status, with
different corporate responsibilities and opportunities. It is essential for all
issuers of any size and status to be mindful of anti-fraud and similar
provisions in connection with any transaction in securities.
(A) 15C2-11 COMPANIES are those which do not and are not required to file
reports directly to the Securities an Exchange Commission, but whose securities
trade over-the-counter, normally on the OTC Bulletin Board maintained by the
NASD. The OTC Bulletin board is not and must not be confused with NASDAQ. The
term the over the counter market was once used to refer to NASDAQ, but that
reference or the use of that terminology today is inappropriate and potentially
wrongful. A 15c2-11 company has not registered the issuance of its securities
under the Securities Act of 1933, nor has it registered any class of its
securities for trading under the Securities Exchange Act of 1934. Such a company
has acquired its shareholder base by one or more private placements or limited
public offerings, perhaps pursuant to Regulations A or D, or other exemption
available under the 1933 Securities Act or promulgated by the Commission
pursuant to the 1933 Act. 15c2-11 Companies, which do not report to SEC, must
report to current information to their market makers and others with respect to
a form commonly called their 15c2-11 Report . The company must be audited and
the audit must be brought current at least each fiscal year, and preferably more
often. Current unaudited financial statements are important between audit
cycles, and changes in the business and operations of the company, significant
share ownership information, and other material information must be available to
the public. Failure to do so may result in de-listing, stop trading, or even
liability in extreme cases.
The OTCBB is in transition to phase in the requirement that companies
be or become reporting companies.
(B) Section15(D) COMPANIES are those which have issued securities pursuant to an
effective Registration Statement, under the Securities Act of 1933. While the
securities of such companies do not trade on NASDAQ or any National or Regional
Exchange, such companies are required to furnish Annual Reports, Quarterly
Reports, and Current Reports, in the forms prescribed by the Commission. The
securities of such companies may trade on the OTC Bulletin Board, or not at all.
The reporting requirements are not contingent upon whether such a company is
active, trading, or not. It is vital that the financial and other information be
gathered at the end of each reporting cycle and that it be presented in its
appropriate form and properly and propitiously filed.
(C) Section 13 COMPANIES are those with securities that do trade on NASDAQ or an
Exchange, or even if not trading, which have a class of securities registered
under 12(b) or 12(g) of the Securities Exchange Act of 1934. Such Issuers
have extensive additional reporting requirement under 13 of the 1934 Act and
Regulations promulgated with respect thereto. These companies must be concerned
with reports of insider trading, and must observe special rules for calling
shareholder meetings whether or not proxies are solicited, among other specific
and detailed requirements.
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(D) THE MOST COMMON PITFALL of private companies which have become public
by submission through a broker/dealer (market maker) to the NASD for permission
to publish a quote on the OTC Bulletin Board is quite simply stated: once the
Company is up, and conditions change, or time passes, the public information
concerning the company grows stale. Companies must maintain a regular updating
process, chiefly of financial information, un-audited quarterly financial
statements, and an annual year-end audit. 15c2-11 Companies, which do not report
to SEC, must report to current information to their market makers and others
with respect to a form commonly called their 15c2-11 Report . Reporting
Companies use SEC forms and file quarterly, annually. Current significant events
must be disclosed promptly in any case. The company must be audited and the
audit must be brought current at least each fiscal year, and preferably more
often. Current unaudited financial statements are important between audit
cycles, and changes in the business and operations of the company, significant
share ownership information, and other material information must be available to
the public. Failure to do so may result in de-listing, stop trading, or even
liability in extreme cases.
B. INTREPID OFFERS technical, clerical, and professional support for
private and public issuers at each of the stages of corporate development. Its
particular services are those that the particular issuer requires and requests.
Intrepid has no fixed program. It can provide some or all of the appropriate
services, to complement and support the skills, knowledge, experience and
availabilities of corporate management.
1. AUDIT COORDINATION. The basic and fundamental focus of responsible
corporate management is the maintenance of proper financial information in
auditable form. A company which is not auditable cannot go public, and may find
itself unsalable even privately. A public company cannot acquire a private
company or its business unless the target of acquisition is capable of being
audited. Reg SX audits involve special considerations and must be conducted by
auditors professionally equipped, and preferably experienced, for doing audits
designed to meet the standards and possible review by NASD and/or SEC examiners.
The audit is the table on which the house of cards rests. Its importance cannot
be overstated. Many issuers find it useful to obtain audit coordination
services, to assist them in communicating effectively with their independent
auditor, and in identifying the information to be gathered for the auditor, and
submitting such information in the form must useful to the auditor for
efficiency and accuracy. Intrepid can provide references to any one or all of a
number of experienced auditors, with special expertise in various business
segments, or can assist the issuer in working with any qualified auditor of its
choice. Intrepid can evaluate the adequacy of audit procedures and alert the
issuer if something not considered should require attention. Intrepid does not
conduct audits or instruct or control auditors or the results of any audit.
Intrepid facilitates effective communication between auditor and issuer, if and
as desired by its clients. Intrepid's evaluation of auditors for its clients is
limited to whether the designated auditor is effectively conversant with
Regulation SX, and whether the auditors experience and qualifications appear
reasonably suitable for the size and scope of the audit required.
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2. BUSINESS PLANS AND MISSION STATEMENTS are important documents for any
corporation public or private. The Mission Statement sets for the goals of the
business. The Business Plan describes the business, its personnel, its
operations, earnings, facilities and perhaps its projections for future years of
operation based upon assumptions carefully considered. The effectiveness and
credibility of these documents, for any purpose, depends upon their meeting the
formal and contextual expectations of persons who read such plans regularly.
Intrepid can assist any company in development of such documents to any standard
the client may require. Such documents are not offering documents. They should
not be confused with offers of securities or solicitations of investment. While
they may be useful in connection with such activities, offering documents
require special attention and must never be casually constructed or
disseminated.
3. BUSINESS VALUATION AND APPRAISALS are often useful to owners and
managers of business. Intrepid can provide detailed professional evaluation and
appraisals of any going concern, which meet the highest professional standards.
Such appraisals may be useful for internal information, or in connection with
purchase or sale of a given business. Such Valuations and Appraisals of
businesses are not audits or financial statements respecting the issuer of
securities and should not be confused with offers of securities or solicitations
of investment. While they may be useful in connection with such activities,
offering documents require special attention and must never be casually
constructed or disseminated.
4. CERTIFICATE AND TRANSFER AGENCY. Intrepid is not a Transfer Agent nor
Agent for maintaining the Certificate and Transfer Records of its
issuer-clients. Many small or private issuers maintain their own records and
perform their own Certificate and Transfer function. When the securities of an
issuer are traded publicly, or when private transactions become other than
routine and rare, the company should retain the services of a bonded Certificate
and Transfer Agent, for its own protection and to insure the orderly and
professional handling of its Certificate and Transfer function. Intrepid can
recommend such agencies from a number of reputable choices, and, whatever
choice, can assist and coordinate the process by which the Agent is engaged, a
certified shareholder list prepared, and Intrepid can co-ordinate communication
between the issuer and its Transfer Agent, if desired by its client.
5. LEGAL OPINIONS. Many different corporate transactions require or are
facilitated by a legal opinion by an attorney. There is no reason why such
opinions could not or should not be prepared by the client's own counsel or
independent counsel of the client's choice. Some clients express the preference
that certain legal opinions be provided or secured by Intrepid as a part of the
services selected and requested by the client. Depending upon the nature of the
opinion required, Intrepid's counsel may be able to provide appropriate legal
opinions on the issuer's behalf of for the issuer's benefit; provided that at
all times material to such participation, and to any participation, by Intrepid
Counsel, it be clearly and expressly understood that Intrepid Counsel is counsel
to Intrepid, and not to the Issuer, and that should the Issuer request for its
own benefit that Intrepid Counsel be regarded or referred to as Special Counsel
to the Issuer, it be understood and intended that any such participation be
limited to the specific purposes for which Intrepid may have been retained, and
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limited to the specific tasks requested of Intrepid which are appropriately
referred to its Counsel. Intrepid Counsel shall not become or be construed to be
an advisor or confidant of any client outside the scope of activities requested
by the Client of Intrepid. Intrepid Counsel shall be available to consult with
Client's counsel in a normal and professional manner, in furtherance of the
responsibilities assigned to Intrepid by the client, or at arms length as
between Intrepid and its Client.
6. REPORTING DOCUMENTS. Intrepid, and its Counsel can assist any issuer in
preparing and causing the assembly and filing of reports required of public
companies, with information supplied by the issuer. Most common are Annual,
Quarterly and Current Reports, for reporting companies, and Issuer Information
Statements pursuant respect to form 15c2-11 with respect to non-reporting
companies.
7. OFFERINGS AND OFFERING DOCUMENTS. Any offering or solicitation of any
transactions in securities requires careful conformity to law and regulation of
the United States and possibly State or other local Jurisdictions. Intrepid can
assist any issuer-client in the preparation of offering documents, of several
varieties, and Intrepid, with the assistance of its counsel can provide
information as to the apparent availability or non-availability of any form of
offering, if requested by its clients. Intrepid does not conduct offering for
the issuer, but assists the management of the issuer in doing so. Intrepid does
not solicit investors or investment for its clients. Intrepid may provide
introductions which may result in negotiations between sophisticated persons,
but Intrepid does not take part in soliciting capital, other than its technical,
clerical, and other specific support for management activities. It is
appropriate and proper that most solicitations, if there are to by any, be
conducted for the issuer through registered broker/dealers. Any activity by
Intrepid in fund raising or capital formation activities by or for an
issuer-client shall be limited to ministerial performance and execution of
matters passed upon and directed by management.
8. MERGERS AND ACQUISITIONS. Intrepid has considerable experience in
assisting issuers engaged in merger, acquisitions or other forms of corporate
reorganizations. Intrepid does not broker mergers or acquisitions. Intrepid can
provide substantial assistance to issuers so engaged, with the participation of
its counsel, with respect to the formal and legal requirements of tendering,
calling shareholder meetings and conducting them properly, preparing minutes and
certifications of shareholder meetings, whether or not proxies be requested, and
executing filing requirements with respect to such transactions before and after
their consummation as may be appropriate. Intrepid does not search for merger
and acquisition candidates, but it is often contacted by such candidates (who
are not its clients). In the event that an introduction by Intrepid results in a
transaction, Intrepid will not claim or receive any finders fee or commission
for such introduction, but will continue in its invariable practice of billing
clients for time and effort expended at pre-agreed hourly rates.
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9. MARKET COORDINATION, SHAREHOLDER AND BROKER RELATIONS. It is the
function and responsibility of each issuer to deal with relationships arising
from public interest and access to its securities. The volume of calls and kinds
of technical information requested may become burdensome to managements of
limited size, resources or expertise. Intrepid can accept the ministerial
delegation of such management functions and can participate public relations,
shareholder relations, broker relations and market co-ordination; provided that
such delegation shall be confined to carrying out corporate policy, and provided
that information disseminated shall be authorized and directed by the issuer,
and shall not include any public or private offering, solicitation or
advertising, in connection with any offer or sale of securities.
10. STRUCTURING DEALS. Intrepid does not structure deals for its clients.
It does present to clients its knowledge and experience commended for
consideration by management in management's development of its own plans and
programs. Intrepid neither recommends nor discourages any company's going
public. It offers the following General Considerations for Companies Evaluating
Going Public, a copy of which is provided herewith.
III. MANAGEMENT OF INTREPID
A. INTREPID INTERNATIONAL, S.A. The officers and directors of Intrepid
International, S. A. (Panama) are comprised of three individuals; Laurencio Jaen
O., Teodoro F. Franco L. and Leopoldo Kennion G. All three of these individuals
are Panamanian citizens and each serves as an officer and a director of the
Company.
Laurencio Jaen O., an original incorporator who has served as President and
Director of the Company since its inception in 1984, resides in Panama City,
Republic of Panama. He is, and has been for the past twenty five years, Vice
President of Indiasa Corporation ("Indiasa"), a Panamanian corporation, which,
through one of its subsidiaries, Robmar International, is involved in the
manufacture and distribution of chemical products in Argentina and Brazil and
which, through its former subsidiary Indiasa Aviation Corporation, was, for
eight years ending in 1981, engaged in aviation consulting, the leasing,
purchase and sale of aircraft, and the operation of a cargo airline, primarily
in Latin America. Mr. Jaen was a founder of PAISA, Panama's international
airline, served as president of the Colon Free Zone (the world s largest free
trade zone), and as Director of Panama's Social Security Administration. He has
also served as the President of the Panamanian Chamber of Commerce, and as a
member of the Board of Presidential Advisors of the Republic of Panama.
Teodoro F. Franco L., Secretary and a Director of the Company, has, for
thirty years, been a specialist in maritime and aviation law. Mr. Franco is a
partner in Franco and Franco, one of the most prestigious law firms in Panama
with offices around the world. In addition to his law practice he has served as
Panamanian Consul to Liverpool, England and for the past five years as
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Ambassador to Great Britain. The firm of Franco and Franco is regarded with the
highest degree of integrity and professionalism in the business and political
community in Panama with its partners and several of its associates holding or
having held public office. Teodoro Franco s brother and partner, Dr. Juaquin F.
Franco, Jr., has held many public offices over the past four decades, most
recently as the Governor of Colon Province, the state containing the Atlantic
entrance to the Panama Canal and the Colon Free Zone. His nephew and associate
in the firm, Juaquin F. Franco, III, has served as the Minister of Commerce and
is currently a member of the House of Representatives and a candidate for
President of the Republic. The firm practices maritime, aviation and commercial
law and currently is the legal firm for: IBERIA (the Spanish national airline),
KLM (the Dutch national airline), VIASA (the Venezuelan national airline),
Aeroflot (the Russian national airline) and various smaller Latin American
national airlines as well as being the registered agents for thousands of ocean
going ships around the world flying the Panamanian flag. Mr. Franco brings to
the Company a wealth of international legal, commercial and diplomatic
experience.
Leopoldo Kennion G., Treasurer and a Director of the Company, is, and has
for twenty years, been a Certified Public Accountant specializing in
international accounting and is an associate in the law firm of Franco and
Franco. Mr. Kennion practices maritime, aviation and commercial accounting
serving the specialized needs of the transnational clients of Franco and Franco
by providing an interface between them and their auditors.
J. Dan Sifford, Jr., is the United States Managing Director for Intrepid
International, S.A. (Panama). He is fluent in the Spanish Language. His
biographical information is found below.
B. INTREPID INTERNATIONAL, LTD. The officers and directors of Intrepid
International, Ltd. (Nevada) are comprised of two individuals; Kirt W. James,
and J. Dan Sifford, Jr. In addition, William Stocker, Esq. serves as the United
States General Counsel. All three of these individuals are U. S. citizens.
Kirt W. James, President and Director, has a lifelong background in
marketing and sales. From 1972 to 1987, Mr. James was responsible for sales and
business administrative matters for Glade N. James Sales Co., Inc.; and from
1987 to 1990 Mr. James built retail markets for American International Medical
Supply Co., a Public Company. In 1990 he formed and become President of HJS
Financial Services, Inc., and is responsible for day to day business of the firm
and consults Client's business and Product Development. During the past five
years Mr. James has been involved in the valuation, sale and acquisition of
numerous private businesses and planning for the entry of private corporations
into the public market place for their securities.
J. Dan Sifford, Jr., Executive Vice President, Secretary/Treasurer and
Director, brings to the Company an extensive experience in Corporate management
and familiarity with transnational business, particularly in Latin America. From
1970 to 1982, he was President and sole shareholder of Overseas Aviation
Corporation, an all cargo airline, with operations throughout South America and
Africa. He was founder, President and Chief Executive Officer of Airline of the
Virgin Islands from 1982 until 1993. He served for many years as President of
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Indiasa Corporation which, through one of its subsidiaries, was involved in the
manufacture and distribution of chemical products in Argentina and Brazil, and
which, through another subsidiary, was for eight years engaged in aviation
consulting, the leasing, purchase and sale of aircraft, and the operation of a
cargo airline, primarily in Latin America. In recent years he has been engaged
continuously in a wide variety of business activities, including the development
of new business ventures.
William Stocker, U.S. Counsel, is an attorney with extensive experience in
real estate, business law and bankruptcy litigation. During the past five years,
he has restricted his practice to general corporate law and services to
corporate clients, dealing with acquisitions, reorganizations and mergers
involving young and emerging businesses. He was admitted to practice in
California on January 13, 1969, and has been a member in good standing
continuously since admission. He is also admitted to practice before the United
States Supreme Court, the United States Court of Claims, the United States Court
of Appeals for the Ninth Circuit, and the United States District Courts for
several of the Federal Districts.
From 1969 until 1980, Mr. Stocker was associated with Fadem, Kanner, Berger
and Stocker a real property litigation firm. Following which, from about 1980 to
1984, he was Chief of Litigation for Bear, Kotob, Ruby and Gross, a general
business, tax and bankruptcy firm. From 1984 through 1986, Mr. Stocker served as
Chief of Litigation for the business firm of Davis, Bolt and Lee. From 1987 to
the present, he has been in private corporate practice, involved in business
formation, and development stage corporate securities matters, and has served as
General or Special Securities Counsel to more than forty development stage
issuers. From 1991 to the present, Mr. Stocker has been Counsel to Mr. James,
and HJS Financial Services, Inc.
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