UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
McCarthy Grenache, Inc.
(Name of Small Business Issuer in its charter)
Nevada 88-0381949
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification
number)
3651 Lindell Road, First Floor
Suite A, Las Vegas, Nevada 89103
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (702) 873-7404
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered: n/a
Name of exchange on which each class is to be registered: n/a
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
<PAGE> 1
TABLE OF CONTENTS
Page No.
Part I
Item 1. Description of Business 3
Item 2. Management's Discussion and Analysis 5
Item 3. Description of Property 10
Item 4. Security Ownership of Certain
Beneficial Owners and Management 10
Item 5. Directors, Executive Officers,
Promoters and Control Persons 10
Item 6. Executive Compensation 11
Item 7. Certain Relationships and Related
Transactions 11
Item 8. Description of Securities 11
Part II
Item 1. Market for Common Equity and Related
Stockholder Matters 11
Item 2. Legal Proceedings 12
Item 3. Changes In and Disagreements with
Accountants 12
Item 4. Recent Sales of Unregistered
Securities 13
Item 5. Indemnification of Directors and
Officers 13
Part F/S 14
Part III
Item 1. Index to Exhibits 40
Item 2. Description of Exhibits 40
Signatures 40
<PAGE> 2
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
- -------
McCarthy Grenache, Inc., (the "Issuer" or "Company") was
incorporated under the laws of the State of Nevada on December
19, 1997, as McCarthy Grenache, Inc. McCarthy Grenache, Inc., was
initially wholly owned by Gregorian Surgical Instruments, Inc.
("Gregorian"). Gregorian, a corporation formed under the laws of
the Province of British Columbia, Canada in November of 1995, was
the predecessor parent company. In December of 1997, the
shareholders of Gregorian exchanged all the shares of Gregorian
on a one for one basis for shares of Common Stock of the Company
and the resulting successor corporation is McCarthy Grenache,
Inc. The Company has no subsidiaries and no affiliated companies.
Business of Issuer
- ------------------
The Company is engaged in the development of a principally
wholesale medical supplies, surgical instruments, and equipment
supply service. Since its inception, the Company's main activity
has been organizational.
The Company will lease a suitable office warehouse and will
wholesale products directly to retailers, medical and nursing
home facilities through mail order, Internet order and
advertising in the press and various other media. The Company
anticipates being able to broker orders through utilizing
attainable contacts within the medical supplies industry and
matching vendors with end-users via wholesaling.
The Company's competition varies among its business lines.
Competition in these products and services is primarily centered
on styling, quality, price, brand recognition and service with an
emphasis on the latter. In order for the Company to be
competitive in these marketplaces, the Company must effectively
maintain and promote the quality of its services and its products
among consumers and establish strong marketing relationships with
manufacturers and distributors of products which enhance that
quality image. While the Company believes that it will compete
effectively, the Company competes with a number of manufacturers
and marketers of medical supplies and equipment which have
substantially greater resources than the Company and many of
which have well-recognized brand name contracts and broader and
more established distribution networks. The Company anticipates
being able to utilize its smaller size to attract those seeking
<PAGE> 3
more personalized service and to maintain its ability to adapt
with technological changes over the Internet and in the
marketplace. Further, the Company expects to utilize the Internet
to further attract customers via various search engines upon
completion of various web pages.
Planned Business
- ----------------
The Company plans to market and promote its wholesale
medical supplies starting in Nevada. The Company's slated start
date for its Internet site is November 1999. Since public
interest in health is at an all time high and growing, our
presence on the Internet, along with increased information on the
Internet, and the aging of the baby boom generation, should
result in the development of a vastly improved medical supply
industry. Many items such as wheelchairs, walkers, and mobility
equipment for the aged and infirm are automatically approved by
most medical insurance programs. There is a shortage of
ambulatory equipment in the United States today due to the
increasing age of the population.
Website and E-Commerce
- ----------------------
The Company is in the process of developing an Internet
Website located on the World Wide Web at www.mccarthymedical.com.
The Website is in the process of being constructed. The Company
anticipates that the Website, once it is constructed, will
promote the Company's medical supplies and equipment.
Marketing
- ---------
The Company intends to acquire and market the best in
medical supplies and equipment for the aged direct to the
retailers from the manufacturers. The Company intends to rely on
a marketing team and for the prospects of e-commerce to implement
the Company's marketing objectives. The Company also intends to
utilize direct mailing, and e-mail to solicit manufacturers and
retailers.
The Company's marketing and licensing strategy is to (i)
establish and expand the sales of the Company's products; (ii)
selectively establish licensed product lines to be marketed and
promoted on the Company's offline developed website; (iii) expand
the number of representatives; and, (iv) acquire or establish
relationships with major manufacturers businesses, companies,
properties or technologies.
<PAGE> 4
The Company will purchase most of its inventory from
existing manufacturers principally in North America and Asia. To
date, no contracts have been executed and the Company does not
anticipate entering into any contracts due to lack of funding.
Upon funding, letters of credit may be sought.
The need for medical supplies increases with the increase in
the population and the age of the population. The Company does
not anticipate being dependent on one major or a few major
customers. The business will supply to large nursing facilities
and hospitals as well as to major drug store chains and emergency
clinics. Also, the proliferation of the web pages throughout
various search engines should advance the Company throughout the
Internet to numerous sales.
As of the date of this Registration Statement, the Company
has two part time employees, neither of whom have entered into an
employment arrangement with the Company. The Company has no
collective bargaining agreements covering any of its employees,
has not experienced any material labor disruption and is unaware
of any efforts or plans to organize its employees. The Company
considers relations with its employees to be good.
Other than the development of its website, the Company has
no intellectual property rights.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward Looking Statements
- --------------------------
This Registration Statement on Form 10-SB contains forward-
looking statements made pursuant to the safe harbor provisions of
the Securities Litigation Reform Act of 1995, which safe harbor
does not apply to statements made in connection with an initial
public offering. Such statements consist of any statement other
than a recitation of historical facts and can be identified by
words such as "may," "expect," "anticipate," "estimate," "hopes,"
"believes," "continue," "intends," "seeks," "contemplates,"
"suggests," "envisions" or the negative thereof or other
variations thereon or comparable terminology. These forward-
looking statements are based largely on the Company's
expectations and are subject to a number of risks and
uncertainties, including but not limited to: those risks
associated with economic conditions generally and the economy in
those areas where the Company has or expects to have assets and
<PAGE> 5
operations, including, but not restricted to Nevada and
eventually other jurisdictions; competitive and other factors
affecting the Company's operations, markets, products and
services; those risks associated with the ability to obtain
medical supply contracts and the funding of the Company and other
costs associated with the Company's marketing strategies; those
risks associated with the Company's ability to successfully
negotiate with certain business owners; those risks relating to
estimated contract costs, estimated losses on uncompleted
contracts and estimates regarding the percentage of completion of
contracts, risks relating to the ability of Company, to raise the
funds necessary to operate, and develop, business, and risks
relating to changes in interest rates and in the availability,
cost and terms of financing; risks related to the performance of
financial markets; risks related to chances in domestic and
foreign laws, regulations and taxes; risks related to changes in
business strategy or development plans; risks related to any
possible future lawsuits against the Company and the associated
costs, and risks associated with future profitability. Many of
these factors are beyond the Company's control. Actual results
could differ materially from these forward-looking statements.
In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this
registration statement on Form 10-SB will, in fact, occur. The
Company does not undertake any obligation to revise these
forward-looking statements to reflect future events or
circumstances and other factors discussed elsewhere in this
report and the documents filed by the Company with the Securities
and Exchange Commission. The Company's actual results may differ
materially as a result of certain factors, including those set
forth in this Form 10-SB. Potential investors should
consider carefully the previously stated factors, as well as the
more detailed information contained elsewhere in this Form 10-SB,
before making a decision to invest in the common stock of the
Company.
The following is a discussion of the financial condition and
results of operations of the Company as of the date of this
Registration Statement. This discussion and analysis should be
read in conjunction with the accompanying audited Financial
Statements of the Company including the Notes thereto which are
included elsewhere in this Form 10-SB and the notice regarding
forward-looking statements.
<PAGE> 6
PLAN OF OPERATION
The Company is organizing to wholesale medical supplies,
surgical instruments and equipment specializing in ambulatory
aids for the aged. Additional funding through private placement
will be necessary to enable the Company to lease a suitable
office warehouse facility in Las Vegas and to enable the Company
to complete its Web Page and to secure contracts with suppliers
and users.
Revenue
- -------
The Company has not received revenues from operations during
the two-year period preceding the filing of this form. The
Company has not yet achieved any revenue from operations to date.
Since the Company is still in the development stage its expenses
were nominal.
Liquidity
- ---------
The Company will have to raise additional capital in the
next twelve months. As of December 31, 1998, the Company had
nominal working capital and results. In order to satisfy the
liquidity needs of the Company for the following twelve months,
the Company will be primarily dependent upon proceeds from the
sale of the Company's common and/or preferred stock and possible
cash flow from operations. Historically, revenues from existing
operations have not been adequate to fund the operations of the
Company. If the Company is unable to obtain adequate funds from
the sale of its stock in public offerings, private placements, or
alternative financing arrangements, it may be necessary to
postpone any additional acquisitions or the Company's ability to
obtain Letters of Credit. The Company, under such circumstances,
would resort to using cash flow for internal growth.
While the Company has raised capital to meet its working
capital and financing needs, additional financing is required in
order to complete the planned improvements necessary to
the Company's acquisitions. The Company is seeking financing, in
the form of equity and debt in order to make the necessary
improvements and provide working capital. There are no
assurances the Company will be successful in raising the funds
required.
<PAGE> 7
The Company has issued shares of its Common Stock from time
to time in the past to satisfy certain obligations and expects in
the future to also acquire certain services, satisfy indebtedness
and/or make acquisitions utilizing authorized shares of the
capital stock of the Company. If operations and cash flow can be
improved through these efforts, management believes that the
Company's liquidity problems will be resolved and that the
Company can continue to operate. However, no assurance can be
given that management's actions will result in profitable
operations.
The plan of the Company is to raise more financing as soon
as the Company's shares are approved for trading to enable the
Company to enter into purchase and supply contracts. An overall
budget of $750,000 for the first year should achieve the
Company's goals. The Company does not anticipate that there will
be a need to increase the number of employees over the next
twelve months.
Potential Uncertainties
- -----------------------
Although substantially all of the Company's retailer supply
contracts, when negotiated and executed, will be denominated in
United States dollars, fluctuations in the value of foreign
currencies relative to the United States dollar could impact the
Company's results of operations if products are imported from
foreign manufacturers of equipment.
As the Company expects eventually to obtain equipment from
overseas manufacturers and such expenditures are generated in
foreign currencies, fluctuations in the value of currencies
relative to the United States dollar could adversely affect the
Company's profitability. Royalty payments paid by the Company
relating to foreign licensing arrangements will be converted to
U.S. dollars based on the exchange rate at the time of payment.
Year 2000 Compliance
- --------------------
BACKGROUND. Some computers, software and other equipment
include programming code in which calendar year data is
abbreviated to only two digits. As a result of this design
decision, some of these systems could fail to operate or fail to
produce correct results if "00" is interpreted to mean 1900,
rather then 2000. These problems are widely expected to increase
in frequency and severity as the year "2000" approaches and are
commonly referred to as the "Millennium Bug," or "Year 2000
Problem."
<PAGE> 8
ASSESSMENT. The Year 2000 Problem could affect computers,
software and other equipment used, operated or maintained by the
Company. Accordingly, the Company is reviewing its internal
computer programs and systems to ensure that the programs and
systems will be Year 2000 compliant. The Company presently
believes that its computer systems will be Year 2000 complaint in
a timely manner. However, while the estimated cost of these
efforts is not expected to be material to the Company's financial
position or any year's results of operations, there can be no
assurance as to this effect.
INTERNAL INFRASTRUCTURE. The Company believes that it has
reviewed and assessed all of the major computers, software
applications, and related equipment used in connection with its
internal operations that would potentially require modification,
upgrade, or replacement to minimize the possibility of a material
disruption to its business. The Company's internal review of
such systems did not identify any material Year 2000 Problem. If
the Company had identified an exposure to the "Year 2000
Problem," Management currently estimates the total cost of
internal reprogramming of its software products and the upgrading
of purchased hardware and software would not be material. While
this is management's best current estimate, items outside
management's control relating to the "Year 2000 Problem" may
impact the Company. The Company estimates the total cost to the
Company of completing any required modifications, upgrades, or
replacements of these internal systems would not have a material
adverse effect on the Company's business or results of
operations.
SYSTEMS OTHER THAN INFORMATION TECHNOLOGY SYSTEMS. In
addition to computers and related systems, the operations of
office and facilities equipment such as fax machines,
photocopiers, telephone switches, security systems, and other
common devices may be affected by the Year 2000 Problem.
DISCLAIMER. The discussion of the Company's efforts, and
management's expectations, relating to Year 2000 compliance are
forward-looking statements. The Company's Y2K compliance status
and the level of incremental costs associated therewith, if any,
could be adversely impacted by, among other things, the
availability and cost of programming, testing resources, vendors'
abilities to modify proprietary software, and unanticipated
problems identified in ongoing internal compliance reviews.
<PAGE> 9
ITEM 3. DESCRIPTION OF PROPERTY
The Company's principal executive and administrative offices
are located in Nevada at 3651 Lindell Road, Suite A, Las Vegas NV
89103 in leased premises under an agreement for a term scheduled
to expire June 1, 2000. The Company is obligated to pay $1,200 in
rent per year on a shared office basis for economic reasons until
the Company has adequate financing to develop its business. The
Company considers its executive and administrative offices to be
adequate and suitable for its current needs. The Company does not
own or lease any other real estate.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of September 30, 1999, the Company's sole officer and
director did not own any securities or the right to acquire any
securities of the Company. Further, as of September 30, 1999,
management of the Company is not aware of any person or group who
owns 5% or more of the securities of the Company.
CHANGES IN CONTROL
The Company has no arrangements which might result in a
change in control of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
The following table sets forth the sole director and
executive officer of the Company, his age, and all positions held
with the Company.
Name Age Positions
- ---------------------------------------------------------------
Sean McCarthy 46 President, Secretary,
Treasurer and Sole Director
Mr. McCarthy has been the President, Sole Officer and
Director of the Company since its inception in December 1997. Mr.
McCarthy has been involved in the medical supplies and
equipment business for the past eleven years. He has worked
supplying and servicing medical equipment to principal hospitals
and nursing homes in Toronto, Vancouver, and later in Nevada.
Mr. McCarthy realizes the service need for good ambulatory
equipment and the profit potential in this rapidly growing
business. From March of 1993 to December of 1997, Mr. McCarthy
was the sole proprietor of SM Medical Company in Toronto,
Ontario and then later in Vancouver, British Columbia.
<PAGE> 10
ITEM 6. EXECUTIVE COMPENSATION
There has been no executive compensation in any form to date
due to the lack of working capital in the company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no material transactions in the past two
years or proposed transactions to which the Company has been or
is proposed to be a party in which any officer, director, nominee
for officer or director, or security holder of more than 5% of
the Company's outstanding securities is involved.
The Company has no promoters other than its sole executive
officer and director. There have been no transactions which
have benefitted or will benefit its sole executive officer and
director either directly or indirectly.
ITEM 8. DESCRIPTION OF SECURITIES
Common Stock
The Company has 25,000,000 authorized shares of Common
Stock, $.001 par value per share, of which 5,122,000 shares were
issued and outstanding as of September 30, 1999. Holders of the
Common Stock are entitled to one vote per share with respect to
all matters that are required by law to be submitted to a vote of
shareholders. Holders of the Common Stock are not entitled to
cumulative voting. The Common Stock has no redemption, preemptive
or sinking fund rights.
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company is voluntarily filing this Registration
Statement on Form 10-SB to obtain listing on the OTC Bulletin
Board, which requires all listed companies to be registered with
the SEC under Section 13 or 15(d) of the Securities Exchange Act
of 1934 and to be current in its required filings once so
registered.
The Company has no public trading market for its common
stock. Although the Company intends to seek a quotation for its
common shares on the Over-the-Counter Bulletin Board in the
future, there is no assurance the Company will do so, nor is
there any assurance that should the Company succeed in obtaining
<PAGE> 11
a listing for its securities on the OTC Bulletin Board or on some
other exchange, that a trading market for the Company's stock
will develop. There are no outstanding options, warrants to
purchase, or securities convertible into common equity of the
Company outstanding. The Company has not agreed to register any
shares of its common stock for any shareholder. There are
presently 4,982,000 shares of common stock which were issued in
December of 1997, 60,000 shares of common stock which were issued
in February of 1998 and 80,000 shares of common stock which were
issued in September of 1999 which may be sold in reliance upon
Rule 144 of the Securities Act of 1933.
STOCKHOLDERS
The are approximately 49 shareholders of record for the
Company's common stock.
DIVIDENDS
To date, the Company has not paid any dividends on its
common stock. The payment of dividends, if any, in the future is
within the discretion of the Board of Directors and will depend
upon the Company's earnings, its capital requirements and
financial condition, and other relevant factors. There are no
provisions in the Company's articles of incorporation or by-laws
that prevent or restrict the payment of dividends. Dividend
payments, if any, would be subject to the provisions of the
Nevada Revised Statutes as well.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened. None of the Company's
officers, directors, or beneficial owners of 5% or more of the
Company's outstanding securities is a party adverse to the
Company nor do any of the foregoing individuals have a material
interest adverse to the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in accountants or disagreements
on accounting and financial disclosure matters.
<PAGE> 12
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
In December 1997, the Company issued 4,942,000 shares of
Common Stock in connection with the reorganization and exchange
of shares only with the shareholders of Gregorian, the
predecessor company, on a share for share basis with no cash or
other consideration, pursuant to an exemption from registration
under Section 4(2) of the Securities Act of 1933.
In December 1997, the Company issued 40,000 shares of Common
Stock for cash proceeds of $4,000 in a private transaction,
pursuant to an exemption from registration under Section 4(2) of
the Securities Act of 1933.
In February 1998, the Company issued 60,000 shares of Common
Stock for cash proceeds of $6,000 in a private transaction,
pursuant to an exemption from registration under Section 4(2) of
the Securities Act of 1933.
In September 1999, the Company issued 80,000 shares of
Common Stock for cash proceeds of $20,000 in a private
transaction, pursuant to an exemption from registration under
Section 4(2) of the Securities Act of 1933.
ITEM 5. INDEMNIFICATION 0F DIRECTORS AND OFFICERS
The Company's Bylaws provide that the Company will indemnify
its directors and executive officers and may indemnify its other
officers, employees and agents to the fullest extent permitted by
Nevada law. The Company is also empowered under its Bylaws to
enter into indemnification agreements with its directors and
officers and to purchase insurance on behalf of any person it is
required or permitted to indemnify.
In addition, the Company's Articles provide that the
Company's directors will not be personally liable to the Company
or any of its stockholders for damages for breach of the
director's fiduciary duty as a director or officer involving any
act or omission of any such director or officer. Each director
will continue to be subject to liability for breach of the
director's fiduciary duties to the Company for acts or omissions
that involve intentional misconduct, fraud or a knowing violation
of law, or the payment of dividends in violation of Nevada
corporate law. This provision also does not affect a director's
responsibilities under any other laws, such as the federal
securities laws.
<PAGE> 13
PART F/S
Financial Statements
- --------------------
The following financial statements are filed in this Part F/S of
this Form 10-SB:
1. Audited Financial Statements for the nine-months ended
September 30, 1999.
2. Audited Financial Statements for the year ended
December 31, 1998.
3. Audited Financial Statements for the year ended
December 31, 1997.
<PAGE> 14
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
September 30, 1999
<PAGE> 15
TABLE OF CONTENTS
Page Number
ACCOUNTANT'S REPORT........................................ 1
FINANCIAL STATEMENT:
Balance Sheet........................................ 2
Statement of Operations and Deficit
Accumulated During the Development Stage............. 3
Statement of Change in Stockholders' Equity.......... 4
Statement of cash Flows.............................. 5
Notes to the Financial Statements.................... 6-7
<PAGE> 16
DAVID E. COFFEY 3651 Lindell Rd. - Suite A Las Vegas. NV 89103
CERTIFIED PUBLIC ACCOUNTANT (702) 871-3979
To the Board of Directors and Stockholders
of McCarthy Grenache, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of McCarthy
Grenache, Inc. (a development stage company) as of September 30,
1999 and December 31, 1998 and the related statement of
operations, cash flows and changes in stockholders' equity for
the period from December 19, 1997 (date of inception) to
September 30, 1999. These financial statements are the
responsibility of McCarthy Grenache, Inc.'s management. My
responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. 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. I believe that my
audit of the financial statements provide a reasonable basis for
my opinion.
In my opinion, the accompanying financial statement present
fairly, in all material respects, the financial position of
McCarthy Grenache, Inc. as of September 30, 1999 and the results
of operations, cash flows and changes in stockholders' equity for
the period then ended as well as the cumulative period from
December 19, 1997 in conformity with generally accepted
accounting principles.
/s/ DAVID E. COFFEY
David E. Coffey, C.P. A.
October 22, 1999
<PAGE> 17
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
Sept 30, Dec. 31,
1999 1998
------- ---------
Cash $ 20,065 $ 1,417
Organizational costs less accumulated
amortization 260 320
---------- ---------
Total Assets $ 20,325 $ 1,737
========== =========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 400 $ 400
---------- ---------
Total Liabilities 400 400
Stockholders' Equity
Common stock, authorized 25,000,000 shares
at $.001 par value, issued and outstanding
5,122,000 shares and 5,042,000 respectfully 5,122 5,042
Paid-in capital 26,820 6,900
Deficit accumulated during
the development stage (12,017) (10,605)
---------- ---------
Total Stockholders' Equity 19,925 1,337
Total Liabilities and Stockholders' Equity $ 20,325 $ 1,737
========== =========
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE> 18
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
FOR THE PERIOD ENDED September 30, 1999
(With Cumulative Figures From Inception)
Inception
Period ended Dec. 19, 1997
Sept. 30, 1999 To Date
------------------ -----------------
Sales $ 0 $ 0
Expenses
Amortization 60 140
Office expenses 852 1,335
Rent 500 5,600
Loss on liquidation of subsidiary 0 4,942
----------- -----------
Total expenses 1,412 12,017
Net loss (1,412) $ (12,017)
===========
Deficit accumulated,
beginning of year (10,605)
-----------
Deficit accumulated during
the development stage $ (12,017)
===========
Earnings (loss) per share
assuming dilution:
Net loss per share $ (.00) $ (.00)
=========== ===========
Weighted average shares outstanding 5,050,888 5,040,182
=========== ===========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 19
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM December 19, 1997 (Date of Inception)
To September 30, 1999
Additional
Common Paid-in
Shares Amount Capital Total
------- ------ ------- -----
Balance,
December 19, 1997 --- $ -- $ -- $ ---
Issuance of common
stock for cash
December of 1997 40,000 40 3,960 4,000
Issuance of common
stock for stock 4,942,000 4,942 0 4,942
Less net loss 0 0 0 (4,942)
-------- ------- --------- -------
Balance,
December 31, 1997 4,982,000 4,982 3,960 4,000
Issuance of common
stock for cash
February of 1998 60,000 60 5,940 6,000
Less offering costs 0 0 (3,000) (3,000)
Less net loss 0 0 0 (5,663)
-------- ------- --------- -------
Balance,
December 31, 1998 5,042,000 5,042 6,900 1,337
Issuance of common
stock for cash
September of 1999 80,000 80 19,920 20,000
Less net loss 0 0 0 (1,412)
-------- ------- --------- -------
Balance,
September 30, 1999 5,122,000 $ 5,122 $ 26,820 $ 19,925
======== ======= ========= =======
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 20
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED September 30, 1999
(with Cumulative Figures from Inception)
<TABLE>
<CAPTION>
Inception
Period Ended Dec. 19, 1997
Sept. 30, 1999 To Date
----------------- ---------------------
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net loss $ (1,412) $ (12,017)
Non-cash expenses included in net loss
Amortization 60 140
Liquidation of subsidiary 0 4,942
Increase in accounts payable 0 400
----------- ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (1,352) (6,535)
CASH FLOWS USED BY INVESTING ACTIVITIES
Organizational costs 0 400
----------- ------------
NET CASH USED BY
INVESTING ACTIVITIES 0 400
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 80 180
Paid-in capital 19,920 29,820
Less offering costs 0 (3,000)
----------- ------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 20,000 27,000
----------- ------------
NET INCREASE IN CASH 18,648 $ 20,065
============
CASH AT BEGINNING OF PERIOD 1,417
-----------
CASH AT END OF PERIOD $ 20,065
===========
Supplemental disclosure of cash flow information:
Issuance of 4,942,000 shares of common stock in
exchange for common stock in the parent $ 4,942
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 21
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1999
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on December 19, 1997
under the laws of the state of Nevada. The business
purpose of the Company is to wholesale medical
supplies.
The Company will adopt accounting policies and
procedures based upon the nature of future
transactions.
NOTE B STOCK OFFERING
The Company completed in December of 1997 a stock
offering. The offering consisted of selling 40,000
shares of its common stock for $4,000 or $.10 per
share. In February of 1998 the Company sold an
additional 60,000 shares of its common stock for
$6,000 or $.10 per share and completed another stock
offering in September of 1999 in which the Company
sold 80,000 shares of its common stock for $20,000 or
$.25 per share.
NOTE C RELATED PARTY TRANSACTIONS - STOCK EXCHANGE
In December of 1997, the Company was formed by
Gregorian Surgical Instruments, Inc. Therefore,
McCarthy Grenache, Inc. was its wholly owned
subsidiary. On December 26, 1997, the stockholders of
Gregorian Surgical Instruments, Inc.. approved an
exchange of all of the outstanding stock in Gregorian
Surgical Instruments, Inc. for stock in McCarthy
Grenache, Inc. on a share for share basis. At the time
of the exchange there were 4,942,000 shares of stock
outstanding of Gregorian Surgical Instruments, Inc.
for which the stockholders received 4,942,000 shares
of stock in McCarthy Grenache, Inc. There were no
tangible assets of Gregorian Surgical Instruments,
Inc. The excess of the par value of the common stock
over the assets acquired of the Gregorian Surgical
Instruments, Inc. was $4,942. This transaction has
been accounted for as a reverse merger.
Upon completion of the stock exchange, Gregorian
Surgical Instruments, Inc. became a wholly owned
subsidiary of McCarthy Grenache, Inc. and the board of
directors of Gregorian Surgical Instruments, Inc.
approved the dissolution and liquidation of Gregorian
Surgical Instruments, Inc. in December of 1997.
-6-
<PAGE> 22
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1999
NOTE D EARNINGS (LOSS) PER SHARE
Basic EPS is determined using net income divided by
the weighted average shares outstanding during the
period. Diluted EPS is computed by dividing net income
by the weighted average shares outstanding, assuming
all dilitive potential common shares were issued.
Since the Company has no common shares that are
potentially issuable, such as stock options,
convertible preferred stock, and warrants, basic and
diluted earnings per share are the same.
<PAGE> 23
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 31, 1998
<PAGE> 24
TABLE OF CONTENTS
Page Number
ACCOUNTANT'S REPORT........................................ 1
FINANCIAL STATEMENT:
Balance Sheet........................................ 2
Statement of Operations and Deficit
Accumulated During the Development Stage............. 3
Statement of Changes in Stockholders' Equity......... 4
Statement of cash Flows.............................. 5
Notes to the Financial Statements.................... 6
<PAGE> 25
DAVID E. COFFEY 3651 Lindell Rd. - Suite A Las Vegas. NV 89103
CERTIFIED PUBLIC ACCOUNTANT (702) 871-3979
To the Board of Directors and Stockholders
of McCarthy Grenache, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of McCarthy
Grenache, Inc. (a development stage company) as of December 31,
1998 and the related statements of operations, cash flows and
changes in stockholders' equity for the period from December 19,
1997 (date of inception) to December 31, 1998. These financial
statements are the responsibility of McCarthy Grenache, Inc.'s
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. 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. I believe that my
audit of the financial statements provide a reasonable basis for
my opinion.
In my opinion, the accompanying financial statements present
fairly, in all material respects, the financial position of
McCarthy Grenache, Inc. as of December 31, 1998 and the results
of operations, cash flows and changes in stockholders' equity for
the period then ended in conformity with generally accepted
accounting principles.
/s/ DAVID E. COFFEY
David E. Coffey, C.P. A.
February 11, 1999
<PAGE> 26
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Cash $ 1,417
Organizational costs less accumulated
amortization of $80 320
---------
Total Assets $ 1,737
=========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 400
---------
Total Liabilities 400
Stockholders' Equity
Common stock, authorized 25,000,000 shares
at $.001 par value, issued and outstanding
5,042,000 shares 5,042
Paid-in capital 6,900
Deficit accumulated during
the development stage (10,605)
---------
Total Stockholders' Equity 1,337
Total Liabilities and Stockholders' Equity $ 1,737
=========
The accompanying notes are an integral part of these financial
statements.
-2-
<PAGE> 27
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
FOR THE PERIOD ENDED December 31, 1998
(With Cumulative Figures From Inception)
Inception
Year ended Dec. 19, 1997
Dec. 31, 1998 To Date
------------------ -----------------
Sales $ 0 $ 0
Expenses
Amortization 80 80
Office expenses 483 483
Rent 5,100 5,100
Loss on liquidation of subsidiary 0 4,942
----------- -----------
Total expenses 5,663 10,605
Net loss 0 $ (10,605)
===========
Deficit accumulated,
beginning of year (4,942)
-----------
Deficit accumulated during
the development stage $ (10,605)
===========
The accompanying notes are an integral part of these financial
statements.
-3-
<PAGE> 28
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM December 19, 1997 (Date of Inception)
To December 31, 1998
Additional
Common Paid-in
Shares Amount Capital Total
------- ------ ------- -----
Balance,
December 19, 1997 --- $ -- $ -- $ ---
Issuance of common
stock for cash 40,000 40 3,960 4,000
Issuance of common
stock for stock 4,942,000 4,942 0 4,942
Less net loss 0 0 0 (4,942)
-------- ------- --------- -------
Balance,
December 31, 1997 4,982,000 4,982 3,960 4,000
Issuance of common
stock for cash 60,000 60 5,940 6,000
Less offering costs 0 0 (3,000) (3,000)
Less net loss 0 0 0 (5,663)
-------- ------- --------- -------
Balance,
December 31, 1998 5,042,000 $ 5,042 $ 6,900 $ 1,337
======== ======= ========= =======
The accompanying notes are an integral part of these financial
statements.
-4-
<PAGE> 29
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED December 31, 1998
(with Cumulative Figures from Inception)
<TABLE>
<CAPTION>
Inception
Year Ended Dec. 19, 1997
Dec. 31, 1998 To Date
----------------- ---------------------
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net loss $ (5,663) $ (10,605)
Non-cash expenses included in net loss
Amortization 80 80
Liquidation of subsidiary 0 4,942
Increase in accounts payable 0 400
----------- ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (5,583) (5,183)
CASH FLOWS USED BY INVESTING ACTIVITIES
Organizational costs 0 400
----------- ------------
NET CASH USED BY
INVESTING ACTIVITIES 0 400
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 60 100
Paid-in capital 5,940 9,900
Less offering costs (3,000) (3,000)
----------- ------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 3,000 7,000
----------- ------------
NET INCREASE IN CASH (2,583) $ 1,417
============
CASH AT BEGINNING OF PERIOD 4,000
-----------
CASH AT END OF PERIOD $ 1,417
===========
Supplemental disclosure of cash flow information:
Issuance of 4,942,000 shares of common stock in
exchange for common stock in the parent $ 4,942
============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
-5-
<PAGE> 30
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on December 19, 1997
under the laws of the state of Nevada. The business
purpose of the Company is to produce surgical
instruments.
The Company will adopt accounting policies and
procedures based upon the nature of future
transactions.
NOTE B STOCK OFFERING
The Company completed in February of 1998 a stock
offering. The offering consisted of selling 60,000
shares of its common stock at $.10 per share. The net
proceeds of this offering will be used for the purpose
of producing surgical instruments.
NOTE C RELATED PARTY TRANSACTIONS - STOCK EXCHANGE
In December of 1997, the Company was formed by
Gregorian Surgical Instruments, Inc. Therefore,
McCarthy Grenache, Inc. was its wholly owned
subsidiary. On December 26, 1997, the stockholders of
Gregorian Surgical Instruments, Inc.. approved an
exchange of all of the outstanding stock in Gregorian
Surgical Instruments, Inc. for stock in McCarthy
Grenache, Inc. on a share for share basis. At the time
of the exchange there were 4,942,000 shares of stock
outstanding of Gregorian Surgical Instruments, Inc.
for which the stockholders received 4,942,000 shares
of stock in McCarthy Grenache, Inc. There were no
tangible assets of Gregorian Surgical Instruments,
Inc. The excess of the par value of the common stock
over the assets acquired of the Gregorian Surgical
Instruments, Inc. was $4,942. This transaction has
been accounted for as a reverse merger.
Upon completion of the stock exchange, Gregorian
Surgical Instruments, Inc. became a wholly owned
subsidiary of McCarthy Grenache, Inc. and the board of
directors of Gregorian Surgical Instruments, Inc.
approved the dissolution and liquidation of Gregorian
Surgical Instruments, Inc. in December of 1997.
-6-
<PAGE> 31
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 31, 1997
<PAGE> 32
TABLE OF CONTENTS
Page Number
ACCOUNTANT'S REPORT........................................ 1
FINANCIAL STATEMENT:
Balance Sheet........................................ 2
Statement of Operations and Deficit
Accumulated During the Development Stage............. 3
Statement of Changes in Stockholders' Equity......... 4
Statement of cash Flows.............................. 5
Notes to the Financial Statements.................... 6
<PAGE> 33
DAVID E. COFFEY 3651 Lindell Rd. - Suite A Las Vegas. NV 89103
CERTIFIED PUBLIC ACCOUNTANT (702) 871-3979
To the Board of Directors and Stockholders
of McCarthy Grenache, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of McCarthy
Grenache, Inc. (a development stage company) as of December 31,
1997 and the related statements of operations, cash flows and
changes in stockholders' equity for the period from December 19,
1997 (date of inception) to December 31, 1997. These financial
statements are the responsibility of McCarthy Grenache, Inc.'s
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. 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. I believe that my
audit of the financial statements provide a reasonable basis for
my opinion.
In my opinion, the accompanying financial statements present
fairly, in all material respects, the financial position of
McCarthy Grenache, Inc. as of December 31, 1997 and the results
of operations, cash flows and changes in stockholders' equity for
the period then ended in conformity with generally accepted
accounting principles.
/s/ DAVID E. COFFEY
David E. Coffey, C.P. A.
November 16, 1998
<PAGE> 34
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1997
ASSETS
Cash $ 4,000
Organizational costs 400
---------
Total Assets $ 4,400
=========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 400
---------
Total Liabilities 400
Stockholders' Equity
Common stock, authorized 25,000,000 shares
at $.001 par value, issued and outstanding
4,982,000 shares 4,982
Additional paid-in capital 3,960
Deficit accumulated during
the development stage (4,942)
---------
Total Stockholders' Equity 4,000
Total Liabilities and Stockholders' Equity $ 4,400
=========
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE> 35
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
FOR THE PERIOD ENDED FROM December 19, 1997
to December 31, 1997
Sales $ 0
Expenses 0
-----------
Net income before extraordinary item 0
Extraordinary item - Liquidation and
dissolution of wholly owned subsidiary (4,942)
-----------
Net loss (4,942)
Retained earnings, beginning of period ---
-----------
Deficit accumulated during
the development stage $ (4,942)
===========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 36
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM December 19, 1997 (Date of Inception)
To December 31, 1997
Additional
Common Paid-in
Shares Amount Capital Total
------- ------ ------- -----
Balance,
December 19, 1997 --- $ -- $ -- $ ---
Issuance of common
stock for cash 40,000 40 3,960 4,000
Issuance of common
stock for stock 4,942,000 4,942 0 4,942
Less net loss (4,942)
-------- ------- --------- -------
Balance,
December 31, 1997 4,982,000 $ 4,982 $ 3,960 $ 4,000
======== ======= ========= =======
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 37
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
From December 19, 1997
To December 31, 1998
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net loss $ (4,942)
Non-cash expenses included in net loss:
Liquidation of subsidiary 4,942
Increase in accounts payable 400
-----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 400
CASH FLOWS USED BY INVESTING ACTIVITIES
Organizational costs 400
-----------
NET CASH USED BY
INVESTING ACTIVITIES 400
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 40
Additional paid-in capital 3,960
-----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 4,000
NET INCREASE IN CASH 4,000
CASH AT BEGINNING OF PERIOD ---
-----------
CASH AT END OF PERIOD $ 4,000
===========
Supplemental disclosure of cash flow information:
Issuance of 4,942,000 shares of common stock in
exchange for common stock in the parent $ 4,942
===========
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 38
MCCARTHY GRENACHE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1997
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on December 19, 1997
under the laws of the state of Nevada. The business
purpose of the Company is to produce surgical
instruments.
The Company will adopt accounting policies and
procedures based upon the nature of future
transactions.
NOTE B STOCK OFFERING
The Company completed in December of 1997 a stock
offering. The offering consisted of selling 40,000
shares of its common stock at $.10 per share. The net
proceeds of this offering will be used for the purpose
of producing surgical instruments.
NOTE C RELATED PARTY TRANSACTIONS - STOCK EXCHANGE
In December of 1997, the Company was formed by
Gregorian Surgical Instruments, Inc. Therefore,
McCarthy Grenache, Inc. was its wholly owned
subsidiary. On December 26, 1997, the stockholders of
Gregorian Surgical Instruments, Inc.. approved an
exchange of all of the outstanding stock in Gregorian
Surgical Instruments, Inc. for stock in McCarthy
Grenache, Inc. on a share for share basis. At the time
of the exchange there were 4,942,000 shares of stock
outstanding of Gregorian Surgical Instruments, Inc.
for which the stockholders received 4,942,000 shares
of stock in McCarthy Grenache, Inc. There were no
tangible assets of Gregorian Surgical Instruments,
Inc. The excess of the par value of the common stock
over the assets acquired of the Gregorian Surgical
Instruments, Inc. was $4,942. This transaction has
been accounted for as a reverse merger.
Upon completion of the stock exchange, Gregorian
Surgical Instruments, Inc. became a wholly owned
subsidiary of McCarthy Grenache, Inc. and the board of
directors of Gregorian Surgical Instruments, Inc.
approved the dissolution and liquidation of Gregorian
Surgical Instruments, Inc. in December of 1997.
-6-
<PAGE> 39
PART III
ITEMS 1 AND 2. INDEX TO EXHIBITS AND DESCRIPTION
Exhibit
Number Description
- ------- -----------------------------------------------------
2.0 Exchange Agreement
3.0 Articles of Incorporation
3.1 By-Laws
23.0 Consent of Accountant
27.0 Financial Data Schedule
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant has caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly
authorized.
McCarthy Grenache, Inc.
(Registrant)
Date: November 11, 1999 By: /s/ SEAN MCCARTHY
--------------------------------
Sean McCarthy
President, CEO and duly
authorized officer
<PAGE> 40
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is made this 26 Th. day of December,
1997, by and between: GREGORIAN SURGICAL INSTRUMENTS, INC., a
company formed under the laws of British Columbia, Canada,
(hereafter "GSI"), its assignee, designee, or nominee and the
shareholders of the said GREGORIAN SURGICAL INSTRUMENTS, INC.
("GSI SHAREHOLDERS").
WHEREAS, GSI desires to exchange (the "EXCHANGE") the shares
GSI owns in its wholly owned subsidiary MCCARTHY GRENACHE, INC.,
("MGI") a Nevada corporation, with the shares currently held by
GSI SHAREHOLDERS in GSI, on a share for share basis in accordance
with the terms and conditions of this Agreement: and
WHEREAS, the GSI SHAREHOLDERS desire the said EXCHANGE in
accordance with the terms and conditions of this Agreement: and
WHEREAS, GSI and the GSI SHAREHOLDERS desire to facilitate
the EXCHANGE provided for herein.
NOW THEREFORE, in consideration of the mutual promises,
covenants and agreements of the parties contained herein, the
parties, intending to be legally bound hereby, agree as follows:
1. EXCHANGE OF SHARES. GSI shall deliver to the GSI
SHAREHOLDERS, FOUR MILLION NINE HUNDRED AND FORTY TWO THOUSAND
(4,942,000) SHARES of MGI, in EXCHANGE for FOUR MILLION NINE
HUNDRED AND FORTY TWO THOUSAND (4,942,000) GSI SHARES, for the
cancellation and the winding-up of GSI.
2. CLOSING DATE. This transaction shall be closed pursuant
to the terms and conditions herein on the date of execution of
this Agreement at midnight on December 26, 1997, at Vancouver,
British Columbia. The Date of Execution of this transaction is
herein called the "Closing Date". The actions outlined in
Section 3, which are to take place within seven (7) days of the
closing date are as follows.
3. CLOSING. At Closing, the parties shall take the
following actions:
3.1 Transfer of Shares. GSI shall deliver to the GSI
SHAREHOLDERS the MGI SHARES, upon the terms and subject to the
conditions set forth in this Agreement. GSI shall deliver to the
GSI SHAREHOLDERS the MGI SHARES free and clear of all claims and
encumbrances, and any restrictive legends. The MGI SHARES will
be registered in the name of each individual GSI SHAREHOLDER.
3.2 Transfer Agent Instructions. MGI will instruct its
Transfer Agent to issue the said MGI share certificates in
<PAGE>
exchange for the GSI SHARES without restrictive legend in the
name of each individual GSI SHAREHOLDERS pursuant to this
Agreement.
4. SECURITIES ACT OF 1933 AND RESTRICTIONS.
GSI covenants and agrees with the GSI SHAREHOLDERS as follows:
a) GSI understands that the SHARES acquired pursuant
to this Agreement do not require to be restricted under the 1933
Act with the Securities and Exchange Commission in reliance upon
the exemption from such restriction requirements afforded by the
reorganization provisions of the 1933 Act, governing the
replacement of shares of an original offering.
b) GSI hereby represents and warrants that it is a
company duly formed under the laws of the British Columbia with
principal executive and administrative offices located outside
the US
c) GSI represents and warrants that MGI, is a
corporation duly formed under the laws of the State of Nevada,
USA on December 22, 1997 and that it is a wholly owned subsidiary
of GSI.
5. CONDITIONS OF BOTH PARTIES OBLIGATIONS TO CLOSE.
For the purposes of paragraph 5 through 15 only of this
Agreement:
(i) "GSI" SHALL INCLUDE BOTH GSI AND IT'S WHOLLY
OWNED SUBSIDIARY MGI, and
(ii) The following shall be the conditions of GSI
and GSI SHAREHOLDERS ("BOTH PARTIES") obligations to close
hereunder:
5.1 Representations and Warranties of Both Parties
Representations and Warranties made by BOTH PARTIES to this
Agreement shall be true and correct as of the Closing Date.
5.2 No Default - Covenants and Agreement.
BOTH PARTIES shall not be in material default with respect
to any obligation under this Agreement and both shall have
performed or complied with all covenants, agreements, and
conditions to be performed or complied with prior to, or at, the
Closing.
<PAGE>
6. REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES.
BOTH PARTIES represent and warrant to the other that the
statements contained in Sections 6.1 through 6.9 are true and
correct on the date hereof.
6.1 Corporate Standing. GSI is a corporation duly
organized, validly existing, and in good standing under the laws
of British Columbia, and it has full power and authority to enter
into this Agreement and to carry out the transactions
contemplated hereby. The execution and delivery of this
Agreement by GSI does not, and the consummation of the
transactions contemplated hereby will not, violate or result in a
breach of any provisions of GSI's Charter or Bylaws.
6.2 Capital Stock. The authorized capital stock of GSI
consists of Twenty Five Million (25,000,000) shares of Common
Stock without par value of which amount FOUR MILLION NINE HUNDRED
AND FORTY TWO THOUSAND (4,942,000) SHARES of Common Stock have
been validly issued and are outstanding, fully paid and non
assessable as of December 29, 1997.
6.3 Authority. GSI has full power and authority to enter
into this Agreement and has taken all action or will use its best
efforts to take all action, corporate and otherwise, necessary to
authorize the execution, delivery and performance of this
Agreement, the completion of the transactions contemplated hereby
and the execution and delivery on behalf of GSI of any and all
instruments necessary or appropriate in order to effectuate fully
the terms and conditions of this Agreement. Upon delivery of the
shares and payment of the purchase price, good title to the MGI
SHARES will pass, free and clear of all restrictions on transfer,
liens, encumbrances, security interest and claims whatsoever, to
the GSI SHAREHOLDERS. Other than as may be required under the
laws of any country other than the United States of America, or
Canada, no consent or approval of any court, governmental agency
or other public authority, or of any other person, corporation or
entity with any actual or alleged interest in GSI is required as
a condition to (a) the validity or enforceability of this
Agreement or any other instruments to be executed by GSI to
effectuate this Agreement, or (b) the completion or validity of
any of the transactions contemplated by this Agreement. This
Agreement has been properly executed and delivered by the duly
authorized officer of GSI, and constitutes the valid and legally
binding agreement of GSI and is enforceable against GSI in
accordance with its terms.
6.4 Financial Condition. GSI furnished, or made available
to the GSI SHAREHOLDERS, the financial statements (the "Financial
Statements") contained in GSI's records and all 15C2-11 reports
filed to date (collectively, hereafter, the "Reports").
There has been no material adverse change in, material loss or
destruction of, or material amount of damage to, the financial
condition or business of GSI since the filing of the most recent
Report arising from transactions whether or not in the ordinary
course of business. The regular books of account of GSI fairly
and accurately reflect all transactions since the filing of the
most recent Report are true, correct and complete, and are
maintained and kept in accordance with generally accepted
accounting principles consistently applied. GSI has no
liabilities or obligations, whether accrued, absolute, contingent
or otherwise, which would materially and adversely affect the
condition (financial and otherwise) of GSI, except and to the
extent reflected or reserved against in the balance sheets
included in the Financial Statements or otherwise disclosed in
the Reports. No dividends are due or unpaid by GSI.
6.5 Lawsuits and Proceedings. Except as disclosed in the
Financial Statements and Reports, there are no material actions
at law or in equity, governmental proceedings or investigations
pending or to the knowledge of GSI threatened against GSI or
against or with respect to the business or assets of GSI, and GSI
is not in material default with respect to any decree, injunction
or the order of any court or government authority. Except as
disclosed in the Financial Statements or Reports, GSI is in
substantial compliance with and has not received any notice of
any claimed violation of, any material federal, state, county or
municipal laws, ordinances, and regulation, and there is no
action at law or in equity, arbitration proceeding, governmental
proceeding or investigation, or motion or request to any court,
pending or to the knowledge of GSI threatened, against or with
respect to GSI with respect to this Agreement or any of the
transactions contemplated hereby.
6.6 Taxes. GSI knows of no outstanding claims against GSI
for taxes which constitute a lien on the shares being sold
hereunder.
6.7 Extraordinary Transactions. Since the filing of the
GSI's most recent Report, GSI has not:
(i) mortgaged, pledged or subjected to lien, charge or
any other encumbrance any of its assets;
(ii) except in the ordinary course of business, sold or
transferred any of its assets;
(iii) made any management decisions involving any
material change in its policies with regard to the provision of
services, sales, purchasing or the business, financial,
accounting (including reserves and the amounts thereof) or tax
policies or practices; or
<PAGE>
(iv) declared or paid any dividends on, or made any
distributions in respect of any outstanding shares of capital
stock of GSI.
6.8 Adverse Circumstances. Except as disclosed in the
Reports or described herein, to the best knowledge of GSI, there
are no facts, developments or circumstances, existing or
threatened, of a special or unusual nature that may be materially
adverse to the assets, business, financial condition or future
prospects of GSI.
7. COVENANTS AND AGREEMENTS OF GSI SHAREHOLDERS.
The GSI SHAREHOLDERS hereby Covenant and agree as follows:
7.1 Action. As of the execution of this Agreement by the
GSI SHAREHOLDERS the GSI SHAREHOLDERS shall take all action
necessary or appropriate to authorize the execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby.
7.2 Impairment - Representations and Warranties.
GSI SHAREHOLDERS shall not take any action or fail to take any
action without prior written approval of GSI which might cause
any representation or warranty of GSI SHAREHOLDERS made herein
not to be true on the Closing Date, or impair GSI SHAREHOLDER'S
ability to carry out its obligations under this Agreement.
7.3 Due Diligence. GSI SHAREHOLDERS or their agents have
had a full opportunity to conduct their due diligence of GSI in
connection with this Agreement to their complete satisfaction.
The GSI SHAREHOLDERS are familiar with GSI in connection with
this Agreement to its complete satisfaction. The GSI SHAREHOLDERS
are familiar with GSI, its financial condition, business and
prospects, has been provided with the Reports and with such other
information concerning GSI's financial and other affairs as GSI
SHAREHOLDERS deem necessary to enter into and perform this
Agreement, has had sufficient opportunity to review such material
and to ask questions and receive answers to verify the accuracy
of such information, and is not in any way relying upon any
information, representation or warranty (without implying that
the supplying of any such information or the making of any such
representation or warranty has occurred) that GSI or its
officers, directors, employees, agents and attorneys have
provided, or have failed to provide, to the GSI SHAREHOLDERS in
entering into or performing this Agreement.
8. DELIVERY OF DOCUMENTS BY GSI. At the Closing, and in
addition to all other documents and instruments which GSI is
required to deliver pursuant to this Agreement, GSI shall deliver
<PAGE>
to the GSI SHAREHOLDERS the following documents duly executed by
GSI or the directors, officers, or employees of, or counsel to
GSI or appropriate governmental officials, in form and substance
satisfactory to the GSI SHAREHOLDERS and their counsel.
8.1 Good Standing. A Certificate of good standing from the
Secretary of State, of the State of Nevada, for MGI.
8.2 Other Documents. Such other documents, certificates
and instruments relating to the transactions contemplated by this
Agreement as the GSI SHAREHOLDERS or its counsel may reasonable
request or deem necessary.
9. INDEMNIFICATION. GSI and the GSI SHAREHOLDERS mutually
agree to indemnify and to hold the other harmless from and
against all material damages, losses, costs, liabilities,
expenses and deficiencies, including, without limitation,
additional taxes, and reasonable interest, attorney, accountant
and expert witness fees and expenses (collectively "Material
Damages") that result from or arise out of any misrepresentation,
breach of warranty, or non-fulfillment of any agreement, covenant
or obligation of the other under this Agreement. Each party
agrees to give the other prompt written notice of any event or
assertion of which it has knowledge concerning any Material
Damages to which it may request indemnification hereunder. Each
party will cooperate with the other in determining the validity
of any such claim or assertion. The indemnifying party hereunder
shall have the right to defend with counsel reasonably
satisfactory to the indemnified party any claims for Material
Damages for which the indemnified party has requested
indemnification hereunder, and after notice from the indemnifying
party regarding its assumption of the defense thereof, the
indemnifying party regarding its assumption of the defense
thereof, the indemnifying party shall not be liable to he
indemnified party for any legal or other expenses subsequently
incurred by the reasonable costs of investigation. Each party
agrees not to settle or compromise any claims for Material
damages without the prior written consent of the other. The
obligation of each party to indemnify the other under this
Section, shall terminate on the anniversary of the Closing Date,
except as to matters to which such party had made a claim for
indemnification or given written notice of a possible claim for
indemnification on or prior to such date.
10. BROKERAGE FEES. No broker, finder or intermediary is
entitled to receive any brokerage or similar type of commission,
fee, or payment arising out of this transaction, and GSI
SHAREHOLDERS will hold GSI harmless against any claim for such
commission fee or similar type of payment.
11. TERMINATION OF AGREEMENT. This Agreement and the
transactions contemplated hereby may be terminated by the GSI
SHAREHOLDERS without liability of any kind to GSI by written
<PAGE>
instrument, signed by the GSI SHAREHOLDERS and delivered at any
time on or prior to the Closing Date, giving notice of
termination, if;
(a) There has been a material misrepresentation or material
breach of warranty on the part of GSI in the representations and
warranties set forth herein or in any Exhibit hereto or in any
share certificate delivered pursuant hereto, or GSI shall have
failed to perform or comply with, in any material respect, any
covenant, agreement or condition to be performed or complied with
prior to, or at the Closing.
(b) In the reasonable judgment of the GSI SHAREHOLDERS the
transactions contemplated by this Agreement have become
inadvisable or impracticable by reasons of:
(i) the announcement or the institution by federal, state
or local authorities of an investigation of or litigation or
proceedings against GSI which may have a material and adverse
effect on GSI, or the transactions contemplated hereby; or
(ii) the commencement since the date of this Agreement by
any other person, corporation or entity of litigation or
proceedings against or in regard to GSI, which may have a
material and adverse effect upon the authority or ability of GSI
to consummate the transactions contemplated hereby; or,
(c) the business, assets, results of operations, financial
condition or future prospects of GSI have been significantly and
adversely affected by reason of changes or developments in
operations, other than in the ordinary course of business, since
the filing of GSI's most recent Report as provided to GSI
SHAREHOLDERS.
12. AFFECT AFTER TERMINATION. In the event that this
Agreement shall be terminated in accordance with the provisions
of this Agreement, then all further obligations of each party to
the other under this Agreement shall terminate without further
liability.
13. EXPENSES. All legal, accounting and other costs and
fees incurred by BOTH PARTIES, in connection with the
transactions contemplated by this Agreement shall be borne and
paid for by the party incurring the same.
14. MISCELLANEOUS PROVISIONS.
14.1 Survival of Representations, Warranties and Covenants.
The respective representations, warranties, covenants and
agreements made in this Agreement by BOTH PARTIES shall survive
Closing for a period of one (1) year.
<PAGE>
14.2 Assignment. This Agreement and all rights and
obligations hereunder may be assigned by BOTH PARTIES, in whole
or in part, without prior knowledge and /or written consent of
the other party.
14.3 Notices. Any notice, request, instruction or other
document or communication required or permitted to be delivered
in person or by deposit in the mail, postage prepaid, for mailing
by certified or registered mail, will be made as follows:
If to GSI delivered and mailed to:
Scott Taylor, Esq.
Barrister and Solicitor
20526 Fraser Highway
Langley, BC, Canada, V3A 4G2
If to the GSI SHAREHOLDERS, delivered and mailed to:
Davis & Co.
Barristers and Solicitors
2800 Park Place
666 Burrard Street
Vancouver, BC, Canada, V6C 2Z7
14.4 Section Headings. Section headings are for the
convenience only and shall not limit or otherwise affect any
provisions of this Agreement.
14.5 Entire Agreement. This Agreement and any Exhibits
hereto; constitute the entire agreement and understanding of the
parties hereto with respect to the matters herein set forth, and
all prior negotiations, writings and understandings relating to
the subject matter of this Agreement are merged herein and are
superseded and canceled by this Agreement.
14.6 Waivers - Amendments. Any of the terms or conditions
of this Agreement may be waived, but only in writing by the party
which is entitled to the benefit thereof, and this Agreement may
be amended or modified, in whole or in part, only by Agreement in
writing, executed by all parties to this Agreement.
14.7 Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of British Columbia, Canada,
without regard to conflict of law.
15.9 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed original as
well as by facsimile, but all of which together shall constitute
one and the same instrument.
<PAGE>
THIS AGREEMENT IS HEREBY EXECUTED at the date first mentioned
above in Vancouver, British Columbia.
GREGORIAN SURGICAL INSTRUMENTS, INC.
/s/ PAUL GREGORY December 26, 1997
By: Paul Gregory, President
MCCARTHY GRENACHE, INC.
/s/ SEAN MCCARTHY December 26, 1997
By: Sean McCarthy, President
SHAREHOLDERS OF
GREGORIAN SURGICAL INSTRUMENTS, INC.
/s/ SUSAN ALEXANDER December 26, 1997
By: Susan Alexander, Spokesperson
SHAREHOLDERS OF GREGORIAN SURGICAL INSTRUMENTS, INC.
Secretary of State
[seal]
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada Secretary
of State, do hereby certify that MCCARTHY GRENACHE, INC. did on
December 19, 1997 file in this office the original Articles of
Incorporation; that said Articles are now on file and of record
in the office of the Secretary of State of the State of Nevada,
and further, that said Articles contain all the provisions
required by law of said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed the Great Seal of State, at my office, in
Carson City, Nevada, on December 22, 1997.
/s/ DEAN HELLER
Secretary of State
By /s/ KELLY R. DAVENPORT
Certification Clerk
<PAGE>
[File stamped as follows: State of Nevada, Dec 19 1997, No.
C28589-97, Dean Heller, Secretary
of State]
ARTICLES OF INCORPORATION
OF
McCARTHY GRENACHE, INC.
KNOW ALL MEN BY THESE PRESENTS, that we the undersigned, do
hereby associate into a corporation under and pursuant to the
provisions and by virtue of the laws of the State of Nevada, as
provided in the Corporation Act of 1925, and all acts amendatory
and supplemental thereto, and for that purpose do hereby make,
subscribe, acknowledge, certify and set forth as follows:
FIRST: That the name of the corporation shall be:
McCARTHY GRENACHE, INC.
SECOND: The corporation may maintain offices, agencies and
places of business in any state in the United States and in
foreign countries without restriction as to place; and the
corporation may keep such books, papers and records of the
corporation as are not required by law to be kept within the
State of Nevada, and as the Directors may find convenient, in
such offices, agencies and places of business.
THIRD: The nature of the business to be transacted and the
objects and purposes to be promoted and carried on by the
corporation shall be as follows:
a) The provisions in the clauses contained in this Article
are to be construed both as purposes and powers and shall, except
when otherwise expressed in this Article be in no wise limited or
restricted by reference to or inference from the terms of any
clause of this, or of any other Article of these Articles, but
each of the purposes and powers specified in this Article shall
be regarded as independent purposes and powers; and the
specification herein contained of
<PAGE>
particular powers is not intended to be, and shall not be held to
be, in limitation of the general powers herein contained, or in
limitation of the powers granted to corporations under the laws
of the State of Nevada, but is intended to be, and shall be held
to be, in furtherance thereof.
b) To perform services of every kind and nature authorized
by law for any person, firm, association or corporation. To
enter into, make, perform and carry out contracts of every kind
and character with any person, firm, association or corporation.
c) To engage in and conduct every type of building and/or
contracting and/or mining work in the State of Nevada and in
every state and territory of the United States, and/or in any
foreign country, including, but not limited to the construction
of all types of buildings, highways, mining developments,
irrigation works, naval and military installations, docks, piers,
airports, ranching and farming projects, and also to engage in
every type and manner of activity incidental thereto; and in
connection with or independently of the above, to own, lease and
rent and/or in any manner deal with and trade in every type and
manner of motor vehicles, machinery, equipment, merchandise and
supplies, and to manage, operate and conduct every type and
manner of business in which such may be employed; to enter into
every kind and manner of contract and agreement concerning such
work; to give and post bond for the faithful performance thereof;
and without limitation, except as may be imposed by law, to do
every act and thing necessary and/or required in the carrying on,
operating and conducting of a general contracting business; to
engage in the transportation of passengers and commodities both
intrastate and interstate, and
<PAGE>
within the State of Nevada, and in any other state and territory
in the United States and/or in any foreign country; to build,
rent, lease, buy, sell, own, operate and manage machine shops,
foundries, garages, service stations, depots, hotels,
restaurants, taxi cabs, stages, bus lines, freight lines,
passenger and transportation lines, railroads and steamships, and
airlines.
d) To manufacture, purchase, sell and deal in, export and
import personal property of all kinds other than and in addition
to goods, wares and merchandise hereinbefore set forth and
described, and to pledge, hypothecate, or to otherwise encumber
the same in any manner whatsoever, or to borrow thereon, in such
ways and to such extent as may be prescribed or required by the
laws of any state of the United States or any other country.
e) To mortgage, pledge, hypothecate and trade in all manner
of goods, wares, merchandise, commodities and products, including
machinery and mechanical appliances of every description.
f) To acquire by purchase, lease or otherwise, the good
will, business, property, assets, franchises and rights, in whole
or in part of any person, firm, association or corporation; and
to assume all or any of the liabilities thereof and to pay for
the same in cash, with the stock of this corporation or its
debentures, or bonds, or otherwise, and to hold, maintain,
operate and conduct, as well as in any manner to dispose of, the
whole or any part of the property so acquired, but always in
accordance with, and subject to, the laws of the State of Nevada.
g) To borrow money and contract debts when necessary for the
transaction of the business of the corporation, for the exercise
of its corporate rights, privileges or franchises, or for any
other purpose of its incorporation; also to issue bonds,
<PAGE>
promissory notes, bills of exchange, debentures and other
obligations and also evidences of indebtedness, payable at
specified time or times, or payable upon the happening of a
specified event or events, and when necessary to secure the same
by mortgage, pledge or otherwise, for money borrowed or goods
purchased or for payment of property bought or acquired or for
any other lawful obligation; also to issue, sell and dispose of
certificates of investment or participation certificates, upon
such terms and under such conditions as are or may be prescribed
by the laws of the State of Nevada, or by the by-laws of the
corporation.
h) To loan the funds of the corporation upon notes, bonds,
mortgages, deeds of trust, debentures or other securities, or
property, real, personal or mixed, or otherwise.
i) To receive, collect and dispose of principal and
interest, dividends, income, increment and profits upon or from
all or any notes, stocks, bonds, deeds of trust, debentures,
securities, obligations and other property held, owned or
possessed by the corporation, or any other person, firm or
corporation as escrow or trustee or for the use and benefit of
the corporation and to exercise in respect of all such stocks,
bonds, mortgages, deeds of trust, notes, debentures, obligations,
securities and all other property and any and all bonds, any and
all rights of individual ownership thereof.
j) To purchase, acquire and to hold, use, operate,
introduce, sell, assign or otherwise dispose of, hire, let or
license, any patents, patent rights, licenses, trademarks, trade
names, privileges, formulas, secret processes, and any and all
inventions, improvements and processes used in connection with or
secured
<PAGE>
under letters patent and grants of the United States of America
or any other country or government, and which may appear likely
to be advantageous or useful to the corporation, and to use,
exercise, develop, and grant licenses in respect of and to turn
to account, manufacture, build and construct under such patents,
licenses, processes and the like, inventions and improvements
with the view of working and developing the same and effectuating
the foregoing objects or any part thereof.
k) To act as agent, attorney in fact, trustee, or in any
other representative capacity for other persons, firms or
corporations.
l) To guarantee, purchase, hold, sell, transfer, assign,
mortgage, pledge or otherwise dispose of the shares of the
capital stock, or of any bonds, securities or evidences of
indebtedness, created by any other corporation or corporation of
the State of Nevada, or of any other state or government, and
while owner of such stocks to exercise all rights, powers and
privileges of ownership, including the right to vote thereon.
m) To purchase, hold, sell, transfer and re-issue shares of
its own stock, but always in accordance with, and as permitted
by, the laws of the State of Nevada, and the by-laws of the
corporation.
n) To enter into, make and perform contracts of every kind
with any person, firm, association or corporation, public,
private or municipal; or anybody politic, and with any state of
with the government of the United States or any dependency
thereof, as well as any foreign government; and in general to
carry on and conduct and engage in any business in connection
with the foregoing,
<PAGE>
either as manufacturer, dealer, principal, agent, or otherwise
permitted to corporations organized under the laws of Nevada.
o) To establish, maintain, operate, conduct and carry on in
the State of Nevada and in any or all of the several states,
territories, possessions and dependencies of the United States,
the District of Columbia, and in any foreign country, its
business or any part or parts thereof, and as many other
businesses, stores, plants, factories, mills, warehouses,
offices, and agencies as may be necessary or deemed expedient for
the corporation and its business, as well as for the extension,
expansion and exploitation of the affairs, operation and benefit
of the corporation.
p) To elect not to be taxed as a corporation, but as a
Subchapter S Corporation under the United States Internal Revenue
Code.
q) And generally to do all and everything necessary,
suitable, convenient or proper for the accomplishment of any of
the purposes or the attainment of any of the objects or the
furtherance of any of the powers hereinbefore set forth, either
alone or in association with other corporations, firms, or
individuals, and to do every other act or thing incidental or
pertaining to or growing out of the aforesaid purposes or powers,
and/or any of them, provided the same be not inconsistent with
the laws of the State of Nevada; and also to exercise any and all
of the powers conferred upon corporations by the laws of the
State of Nevada which now exist or which may be hereafter
conferred upon or granted to corporations by the laws of the said
State of Nevada.
r) In furtherance and not in limitation of the powers
conferred by the laws of the State of Nevada, the Board of
Directors is expressly authorized from time to time
<PAGE>
to determine whether and to what extent and at what times and
places and under what conditions and regulations the books and
accounts of this corporation, or any of them other than the stock
ledger, shall be open to inspection of the stockholders, and no
stockholder shall have the right to inspect any account or book
or document of the corporation, except as conferred by law or
authorized by Resolution of the Directors or of the Stockholders.
FOURTH: This corporation is authorized to issue Twenty-Five
Million (25,000,000) common shares of stock at one tenth of one
cent ($.001) par value rights and privileges to be set by the
Board of Directors and no other class of stock shall be
authorized. All or part of the shares of the capital stock may be
issued by the corporation from time to time and for such
consideration as may be determined upon and fixed by the Board of
Directors as provided by law.
FIFTH: The initial members of the Governing Board shall be known
as Directors and the number thereof shall be One. A different
number of Directors may be fixed by the By-laws, provided, that
the number may be increased or decreased within the limit above
specified from time to time pursuant to the By-laws.
The names of the First Board, consisting of one (1) Directors,
shall be as follows:
NAMES: Delbert Marshall
ADDRESS: 1000 Saliman Drive #Al04 Carson City,
Nevada 89701
SIXTH: The capital stock, after the value thereof has been paid
in, shall be subject to no further assessment to pay debts of the
corporation.
SEVENTH: The name of the incorporators signing these Articles of
Incorporation is as follows:
NAMES: Delbert Marshall
ADDRESS: 1000 Saiman Drive #Al04 Carson City,
Nevada 89701
<PAGE>
EIGHTH: This corporation is to have perpetual existence.
NINTH: In furtherance, and not in limitation of the powers
conferred by statute, the Board of Directors is expressly
authorized:
Subject to the By-laws, if any, adopted by the stockholders,
to make, alter or amend the By-laws of the corporation;
To fix the amount to be reserved as working capital over and
above its capital stock paid in; to authorize and cause to be
executed mortgages and liens upon the real and personal property
of this corporation;
From time to time, to determine whether, and to what extent,
and at what times and places, and under what conditions and
regulations, the accounts and books of this corporation (other
than the original or duplicate stock ledger), or any of them,
shall be open to inspection of stockholders, and no stockholder
shall have any right of inspecting any account, book or document
of this corporation except as conferred by statute, unless
authorized by a Resolution of the stockholders or directors; By
Resolution, or Resolutions, passed by a majority of the whole
board, to designate one or more committees, each committee to
consist of two or more of the directors of the corporation,
which, to the extent provided in said Resolution, or Resolutions,
or in the By-laws of the corporation, shall have, and may
exercise the powers of the Board of Directors in the management
of the business affairs of the corporation, and may have power to
authorize the seal of the corporation to be affixed to all papers
which may require it. Such committee, or committees, shall have
such name, or names, as may be stated in
<PAGE>
the By-laws of the corporation, or as may be determined by
resolution adopted by the Board of Directors;
Pursuant to the affirmative vote of the stockholders, of at
least a majority of the stock issued and outstanding, having
voting power, given at a stockholders' meeting duly called for
that purpose, or when authorized by the written consent of the
holders of at least a majority of the voting stock issued and
outstanding, the Board of Directors shall have power and
authority, at any meeting, to sell, lease or exchange all of the
property and assets of this corporation, including its good will
and its corporate franchises, upon such terms and conditions as
its Board of Directors deem expedient and for the best interests
of the corporation.
This corporation may, in its By-laws, confer powers upon its
Directors in addition to the foregoing, and in addition to the
powers and authorities expressly conferred upon them by statute.
TENTH: Both Stockholders and Directors shall have power, if the
By-laws so provide, to hold their meetings, and to have one or
more offices within or without the State of Nevada, and to keep
the books of this corporation (subject to the requirements of the
statutes) outside the State of Nevada at such places as may from
time to time be designated by the Board of Directors.
ELEVENTH: This corporation reserves the right to amend, alter,
change or repeal any provision contained in these Articles of
Incorporation, in the manner now or hereafter prescribed by
statute or by these Articles of Incorporation, and all rights
conferred upon stockholders herein are granted subject to this
reservation.
TWELFTH: Bruce Thompson whose address is 128 Fortune Drive
Dayton, Nevada 89403 will be the Resident Agent of the
corporation.
<PAGE>
I, Bruce Thompson, hereby accept appointment as Resident Agent
for the above named corporation.
Dated this 16th day of December, 1997. /s/ BRUCE THOMPSON
We, THE UNDERSIGNED, being the original incorporators
hereinbefore named for the purpose of forming a corporation to do
business both within and without the State of Nevada, and in
pursuance of the Corporation Laws of the State of Nevada, being
Chapter 177 of the Laws of 1925, and the acts amendatory thereof
and supplemental thereto, do make and file this certificate,
hereby declaring and certifying that the facts herein stated are
true.
/s/ DELBERT MARSHALL
State of Nevada )
Carson City )
On this 16th day of December, 1997, in Carson City, Nevada,
before me the undersigned, a Notary Public in and for Carson
City, State of Nevada personally appeared:
Delbert Marshall
Known to me to be the person whose name is subscribed to the
foregoing document and acknowledged to me that he executed the
same.
/s/ BEVERLY THOMPSON
Notary Public
(Seal)
BEVERLY THOMPSON
NOTARY PUBLIC - NEVADA
CARSON CITY
My Appt. Exp. March 1, 1998
BY-LAWS OF
MCCARTHY GRENACHE, INC.
ARTICLE I
SHAREHOLDERS
Section 1.01 Annual Meeting. The annual meeting of the
shareholders shall be held at such date and time as shall be
designated by the board of directors and stated in the notice of
the meeting or in a duly-executed waiver of notice thereof. If
the corporation shall fail to provide notice of the annual
meeting of the shareholders as set forth above, the annual
meeting of the shareholders of the corporation shall be held
during the month of November or December of each year as
determined by the Board of Directors, for the purpose of
electing, directors of the corporation to serve during the
ensuing year and for the transaction of such other business as
may properly come before the meeting. If the election of the
directors is not held on the day designated herein for any annual
meeting, of the shareholders, or at any adjournment thereof, the
president shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as is convenient.
Section 1.02 Special Meetings. Special meetings of the
shareholders may be called by the president or the Board of
Directors and shall be called by the president at the written
request of the holders of not less than 51 % of the issued and
outstanding shares of capital stock of the corporation.
All business lawfully to be transacted by the shareholders
may be transacted at any special meeting at any adjournment
thereof. However, no business shall be acted upon at a special
meeting, except that referred to in the notice calling the
meeting, unless all of the outstanding capital stock of the
corporation is represented either in person or by proxy. Where
all of the capital stock is represented, any lawful business may
be transacted and the meeting shall be valid for all purposes.
Section 1.03 Place of Meetings. Any meeting, of the
shareholders of the corporation may be held at its principal
office in the State of Nevada or such other place in or out of
the United States as the Board of Directors may designate. A
waiver of notice signed by the shareholders entitled to vote may
designate any place for the holding of such meeting.
Section 1.04 Notice of Meetings.
(a) The secretary shall sign and deliver to all
shareholders of record written or printed notice of any
meeting at least ten (10) days, but not more than sixty (60)
days, before the date of such meeting; which notice shall
state the place, date and time of the meeting, the general
nature of the business to be transacted, and, in the case of
any meeting at which directors are to be elected, the names
of nominees, if any, to be presented for election.
Page 1
<PAGE>
(b) In the case of any meeting, any proper business
may be presented for action, except that the following items
shall be valid only if the general nature of the proposal is
stated in the notice or written waiver of notice:
(1) Action with respect to any contract or
transaction between the corporation and one or more of
its directors or another firm, association, or
corporation in which one or more of its directors has a
material financial interest;
(2) Adoption of amendments to the Articles of
Incorporation; or
(3) Action with respect to the merger,
consolidation, reorganization, partial or complete
liquidation, or dissolution of the corporation.
(c) The notice shall be personally delivered or mailed
by first class mail to each shareholder of record at the last
known address thereof, as the same appears on the books of the
corporation, and the giving of such notice shall be deemed
delivered the date the same is deposited in the United States
mail, postage prepaid. If the address of any shareholder does
not appear upon the books of the corporation, it will be
sufficient to address any notice to such shareholder at the
principal office of the corporation.
(d) The written certificate of the person calling any
meeting, duly sworn, setting forth the substance of the notice,
the time and place the notice was mailed or personally delivered
to the several shareholders, and the addresses to which the
notice was mailed shall be prima facie evidence of the manner and
fact of giving such notice.
Section 1.05 Waiver of Notice. If all of the shareholders of
the corporation shall waive notice of a meeting, no notice shall
be required, and, whenever all of the shareholders shall meet in
person or by proxy, such meeting shall be valid for all purposes
without call or notice, and at such meeting any corporate action
may be taken.
Section 1.06 Determination of Shareholders of Record.
(a) The Board of Directors may at any time fix a
future date as a record date for the determination of the
shareholders entitled to notice of any meeting or to vote or
entitled to receive payment of any dividend or other distribution
or allotment of any rights or entitled to exercise any rights in
respect of any other lawful action. The record date so fixed
shall not be more than sixty (60) days prior to the date of such
meeting nor more than sixty (60) days prior to any other action.
When a record date is so fixed, only shareholders of record on
that date are entitled to notice of and to vote at the meeting or
to receive the dividend, distribution or allotment of rights, or
to exercise their rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after the
record date.
Page 2
<PAGE>
(b) If no record date is fixed by the Board of
Directors, then (1) the record date for determining shareholders
entitled to notice of or to vote at a meeting of shareholders
shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held; (2) the record date for
determining shareholders entitled to give consent to corporate
action in writing without a meeting, when no prior action by the
Board of Directors is necessary, shall be the day on which
written consent is given; and (3) the record date for determining
shareholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto, or the sixtieth (60th) day prior to
the date of such other action, whichever is later.
Section 1.07 Quorum: Adjourned Meetings.
(a) At any meeting of the shareholders, a majority of
the issued and outstanding shares of the corporation represented
in person or by proxy, shall constitute a quorum.
(b) If less than a majority of the issued and
outstanding shares are represented, a majority of shares so
represented may adjourn from time to time at the meeting, until
holders of the amount of stock required to constitute a quorum
shall be in attendance. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted which
might have been transacted as originally called. When a
shareholders' meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the
adjournment is taken, unless the adjournment is for more than ten
(10) days in which event notice thereof shall be given.
Section 1.08 Voting.
(a) Each shareholder of record, such shareholder's duly
authorized proxy or attorney-in-fact shall be entitled to one (1)
vote for each share of stock standing registered in such
shareholder's name on the books of the corporation on the record
date.
(b) Except as otherwise provided herein, all votes with
respect to shares standing, in the name of an individual on the
record date (included pledged shares) shall be cast only by that
individual or such individual's duly authorized proxy or
attorney-in-fact. With respect to shares held by a representative
of the estate of a deceased shareholder, guardian, conservator,
custodian or trustee, votes may be cast by such holder upon proof
of capacity, even though the shares do not stand in the name of
such holder. In the case of shares under the control of a
receiver, the receiver may cast votes carried by such shares even
though the shares do not stand in the name of the receiver
provided that the order of the court of competent jurisdiction
which appoints the receiver contains the authority to cast votes
carried by such shares. If shares stand in the name of a minor,
votes may be cast only by the duly-appointed guardian of the
estate of such minor if such guardian has provided the
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corporation with written notice and proof of such appointment.
(c) With respect to shares standing in the name of a
corporation on the record date, votes may be cast by such officer
or agents as the by-laws of such corporation prescribe or, in the
absence of an applicable by-law provision, by such person as may
be appointed by resolution of the Board of Directors of such
corporation. In the event no person is so appointed, such votes
of the corporation may be cast by any person (including the
officer making the authorization) authorized to do so by the
Chairman of the Board of Directors, President or any Vice
President of such corporation.
(d) Notwithstanding anything to the contrary herein
contained, no votes may be cast by shares owned by this
corporation or its subsidiaries, if any. If shares are held by
this corporation or its subsidiaries, if any, in a fiduciary
capacity, no votes shall be cast with respect thereto on any
matter except to the extent that the beneficial owner thereof
possesses and exercises either a right to vote or to give the
corporation holding the same binding instructions on how to vote.
(e) With respect to shares standing in the name of two
or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, husband and wife as community
property, tenants by the entirety, voting trustees, persons
entitled to vote under a shareholder voting agreement or
otherwise and shares held by two or more persons (including proxy
holders) having the same fiduciary relationship respect in the
same shares, votes may be cast in the following manner:
(1) If only one such person votes, the votes of
such person binds all.
(2) If more than one person casts votes, the act
of the majority so voting binds all.
(3) If more than one person casts votes, but the
vote is evenly split on a particular matter, the votes shall
be deemed cast proportionately as split.
(f) Any holder of shares entitled to vote on any matter
may cast a portion of the votes in favor of such matter and
refrain from casting the remaining, votes or cast the same
against the proposal, except in the case of elections of
directors. if such holder entitled to vote fails to specify the
number of affirmative votes, it will be conclusively presumed
that the holder is casting affirmative votes with respect to all
shares held.
(g) If a quorum is present, the affirmative vote of
holders of a majority of the shares represented at the meeting
and entitled to vote on any matter shall be the act of the
shareholders, unless a vote of greater number or voting by
classes is required by the laws of the State of Nevada, the
Articles of Incorporation and these By-Laws.
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Section 1.09 Proxies. At any meeting of shareholders, any
holder of shares entitled to vote may authorize another person or
persons to vote by proxy with respect to the shares held by an
instrument in writing and subscribed to by the holder of such
shares entitled to vote. No proxy shall be valid after the
expiration of six (6) months from the date of execution thereof,
unless coupled with an interest or unless otherwise specified in
the proxy. In no event shall the term of a proxy exceed seven
(7) years from the date of its execution. Every proxy shall
continue in full force and effect until its expiration or
revocation. Revocation may be effected by filing an instrument
revoking the same or a duly-executed proxy bearing a later date
with the secretary of the corporation.
Section 1.10 Order of Business. At the annual shareholders
meeting, the regular order of business shall be as follows:
(1) Determination of shareholders present and
existence of quorum;
(2) Reading and approval of the minutes of the
previous meeting or meetings;
(3) Reports of the Board of Directors, the
president, treasurer and secretary of the corporation, in
the order named;
(4) Reports of committee;
(5) Election of directors;
(6) Unfinished business;
(7) New business;
(8) Adjournment.
Section 1.11 Absentees Consent to Meetings. Transactions
of any meeting of the shareholders are as valid as though had at
a meeting duly-held after regular call and notice if a quorum is
present, either in person or by proxy, and if, either before or
after the meeting, each of the persons entitled to vote, not
present in person or by proxy (and those who, although present,
either object at the beginning of the meeting to the transaction
of any business because the meeting has not been lawfully called
or convened or expressly object at the meeting to the
consideration of matters not included in the notice which are
legally required to be included therein), signs a written waiver
of notice and/or consent to the holding of the meeting or an
approval of the minutes thereof All such waivers, consents, and
approvals shall be filed with the corporate records and made a
part of the minutes of the meeting. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting,
except when the person objects at the beginning of the meeting to
the transaction of any business because the meeting is not
lawfully called or convened and except that attendance at a
meeting is not a waiver of any right to object to the
consideration of matters not included in the
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notice if such objection is expressly made at the beginning.
Neither the business to be transacted at nor the purpose of any
regular or special meeting of shareholders need be specified in
any written waiver of notice, except as otherwise provided in
Section 1.04(b) of these By-Laws.
Section 1.12 Action Without meeting. Any action which may
be taken by the vote of the shareholders at a meeting may be
taken without a meeting if consented to by the holders of a
majority of the shares entitled to vote or such greater
proportion as may be required by the laws of the State of Nevada,
the Articles of Incorporation, or these By-Laws. Whenever action
is taken by written consent, a meeting of shareholders needs not
be called or noticed.
ARTICLE II
DIRECTORS
Section 2.01 Number, Tenure and Qualification. Except as
otherwise provided herein, the Board of Directors of the
corporation shall consist of at least one (1) but no more than
nine (9) persons, who shall be elected at the annual meeting of
the shareholders of the corporation and who shall hold office for
one (1) year or until their successors are elected and qualify.
Section 2.02 Resignation. Any director may resign effective
upon giving written notice to the chairman of the Board of
Directors, the president, or the secretary of the corporation,
unless the notice specifies a later time for effectiveness of
such resignation. If the Board of Directors accepts the
resignation of a director tendered to take effect at a future
date, the Board or the shareholders may elect a successor to take
office when the resignation becomes effective.
Section 2.03 ) Reduction in Number. No reduction of the
number of directors shall have the effect of removing any
director prior to the expiration of his term of office.
Section 2.04 Removal.
(a) The Board of Directors or the shareholders of the
corporation, by a majority vote, may declare vacant the office of
a director who has been declared incompetent by an order of a
court of competent jurisdiction or convicted of a felony.
Section 2.05 Vacancies.
(a) A vacancy in the Board of Directors because of
death, resignation, removal, change in number of directors, or
otherwise may be filled by the shareholders at any regular or
special meeting or any adjourned meeting thereof or the remaining
director(s) by the affirmative vote of a majority thereof. A
Board of Directors consisting of less than the maximum number
authorized in Section 2.01 of ARTICLE II constitutes vacancies on
the Board of Directors for purposes of this paragraph and may be
filled as set forth above
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including by the election of a majority of the remaining
directors. Each successor so elected shall hold office until the
next annual meeting of shareholders or until a successor shall
have been duly-elected and qualified.
(b) If, after the filling of any vacancy by the
directors, the directors then in office who have been elected by
the shareholders shall constitute less than a majority of the
directors then in office, any holder or holders of an aggregate
of five percent (5%) or more of the total number of shares
entitled to vote may call a special meeting of shareholders to be
held to elect the entire Board of Directors. The term of office
of any director shall terminate upon such election of a
successor.
Section 2.06 Regular Meetings. Immediately following the
adjournment of, and at the same place as, the annual meeting of
the shareholders, the Board of Directors, including directors
newly elected, shall hold its annual meeting without notice,
other than this provision, to elect officers of the corporation
and to transact such further business as may be necessary or
appropriate. The Board of Directors may provide by resolution
the place, date and hour for holding additional regular meetings.
Section 2.07 Special Meetings. Special meetings of the
Board of Directors may be called by the chairman and shall be
called by the chairman upon the request of any two (2) directors
or the president of the corporation.
Section 2.08 Place of Meetings. Any meeting of the
directors of the corporation may be held at its principal office
in the State of Nevada, or at such other place in or out of the
United States as the Board of Directors may designate. A waiver
or notice signed by the directors may designate any place for the
holding of such meeting.
Section 2.09 Notice of Meetings. Except as otherwise
provided in Section 2.06, the chairman shall deliver to all
directors written or printed notice of any special meeting, at
least three (3) days before the date of such meeting, by delivery
of such notice personally or mailing such notice first class
mail, or by telegram. If mailed, the notice shall be deemed
delivered two (2) business days following the date the same is
deposited in the United States mail, postage prepaid. Any
director may waive notice of any meeting, and the attendance of a
director at a meeting shall constitute a waiver of notice of such
meeting, unless such attendance is for the express purpose of
objecting to the transaction of business threat because the
meeting is not properly called or convened.
Section 2.10 Quorum:Adjourned Meetings.
(a) A majority of the Board of Directors in office
shall constitute a quorum.
(b) At any meeting of the Board of Directors where a
quorum is not present, a majority of those present may adjourn,
from time to time, until a quorum is present, and no notice of
such adjournment shall be required. At any adjourned meeting
where a quorum is present, any business may be transacted which
could have been transacted at the meeting originally called.
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Section 2.11 Action Without Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or
any committee thereof may be taken without a meeting if a written
consent thereto is signed by all of the members of the Board of
Directors or of such committee. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board
of Directors or committee. Such action by written consent shall
have the same force and effect as the unanimous vote of the Board
of Directors or committee.
Section 2.12 Telephonic Meetings. Meetings of the Board of
Directors may be held through the use of a conference telephone
or similar communications equipment so long as all members
participating in such meeting can hear one another at the time of
such meeting. Participation in such a meeting constitutes
presence in person at such meeting.
Section 2.13 Board Decisions. The affirmative vote of a
majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.
Section 2.14 Powers and Duties.
(a) Except as otherwise provided in the Articles of
Incorporation or the laws of
the State of Nevada, the Board of Directors is invested with the
complete and unrestrained authority to manage the affairs of the
corporation, and is authorized to exercise for such purpose as
the general agent of the corporation, its entire corporate
authority in such manner as it sees fit. The Board of Directors
may delegate any of its authority to menace, control or conduct
the current business of the corporation to any standing or
special committee or to any officer or agent and to appoint any
persons to be agents of the corporation with such powers,
including the power to sub-delegate, and upon such terms as may
be deemed fit.
(b) The Board of Directors shall present to the
shareholders at annual meetings of the shareholders, and when
called for by a majority vote of the shareholders at a special
meeting of the shareholders, a full and clear statement of the
condition of the corporation, and shall, at request, furnish each
of the shareholders with a true copy thereof.
(c) The Board of Directors, in its discretion, may
submit any contract or act for approval or ratification at any
annual meeting of the shareholders or any special meeting,
properly called for the purpose of considering any such contract
or act, provided a quorum is present. The contract or act shall
be valid and binding upon the corporation and upon all the
shareholders thereof, if approved and ratified by the affirmative
vote of a majority of the shareholders at such meeting.
(d) In furtherance and not in limitation of the powers
conferred by the laws of the State of Nevada, the Board of
Directors is expressly authorized and empowered to issue
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stock of the Corporation for money, property, services rendered,
labor performed, cash advanced, acquisitions for other
corporations or for any other assets of value in accordance with
the action of the Board of Directors without vote or consent of
the shareholders and the judgment of the Board of Directors as to
the value received and in return therefore shall be conclusive
and said stock, when issued, shall be fully-paid and
non-assessable.
Section 2.15 Compensation. The directors shall be allowed
and paid all necessary expenses incurred in attending any
meetings of the Board.
Section 2.16 Board Officers.
(a) At its annual meeting, the Board of Directors
shall elect, from among its members, a chairman to preside at the
meetings of the Board of Directors. The Board of Directors may
also elect such other board officers and for such term as it may,
from time to time, determine advisable.
(b) Any vacancy in any board office because of death,
resignation, removal or otherwise may be filled by the Board of
Directors for the unexpired portion of the term of such office.
Section 2.17 Order of Business. The order of business at
any meeting, of the Board of Directors shall be as follows:
(1) Determination of members present and
existence of quorum;
(2) Reading and approval of the minutes of any
previous meeting or meetings;
(3) Reports of officers and committeemen;
(4) Election of officers;
(5) Unfinished business;
(6) New business;
(7) Adjournment.
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ARTICLE III
OFFICERS
Section 3.01 Election. The Board of Directors, at its first
meeting following the annual meeting of shareholders, shall elect
a president, a secretary and a treasurer to hold office for one
(1) year next coming and until their successors are elected and
qualify. Any person may hold two or more offices. The Board of
Directors may, from time to time, by resolution, appoint one or
more vice presidents, assistant secretaries, assistant treasurers
and transfer agents of the corporation as it may deem advisable;
prescribe their duties; and fix their compensation.
Section 3.02 Removal; Resignation. Any officer or agent
elected or appointed by the Board of Directors may be removed by
it whenever, in its judgment, the best interest of the
corporation would be served thereby. Any officer may resign at
any time upon written notice to the corporation without prejudice
to the rights, if any, of the corporation under any contract to
which the resigning officer is a party.
Section 3.03 Vacancies. Any vacancy in any office because
of death, resignation, removal, or otherwise may be filled by the
Board of Directors for the unexpired portion of the term of such
office.
Section 3.04 President. The president shall be the general
manager and executive officer of the corporation, subject to the
supervision and control of the Board of Directors, and shall
direct the corporate affairs, with full power to execute all
resolutions and orders of the Board of Directors not especially
entrusted to some other officer of the corporation. The
president shall preside at all meetings of the shareholders and
shall sign the certificates of stock issued by the corporation,
and shall perform such other duties as shall be prescribed by the
Board of Directors.
Unless otherwise ordered by the Board of Directors, the
president shall have full power and authority on behalf of the
corporation to attend and to act and to vote at any meetings of
the shareholders of any corporation in which the corporation may
hold stock and, at any such meetings, shall possess and may
exercise any and all rights and powers incident to the ownership
of such stock. The Board of Directors, by resolution from time
to time, may confer like powers on any person or persons in place
of the president to represent the corporation for these purposes.
Section 3.05 Vice President. The Board of Directors may
elect one or more vice presidents who shall be vested with all
the powers and perform all the duties of the president whenever
the president is absent or unable to act, including the signing
of the certificates of stock issued by the corporation, and the
vice president shall perform such other duties as shall be
prescribed by the Board of Directors.
Section 3.06 Secretary. The secretary shall keep the
minutes of all meetings of the shareholders and the Board of
Directors in books provided for that purpose. The secretary
shall
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attend to the giving and service of all notices of the
corporation, may sign with the president in the name of the
corporation all contracts authorized by the Board of Directors or
appropriate committee, shall have the custody of the corporate
seal, shall affix the corporate seal to all certificates of stock
duly issued by the corporation, shall have charge of stock
certificate books, transfer books and stock ledgers, and such
other books and papers as the Board of Directors or appropriate
committee may direct, and shall, in general perform all duties
incident to the office of the secretary. All corporate books
kept by the secretary shall be open for examination by any
director at any reasonable time.
Section 3.07 Assistant Secretary. The Board of Directors
may appoint an assistant secretary who shall have such powers and
perform such duties as may be prescribed for him by the secretary
of the corporation or by the Board of Directors.
Section 3.08 Treasurer. The treasurer shall be the chief
financial officer of the corporation, subject to the supervision
and control of the Board of Directors, and shall have custody of
all the funds and securities of the corporation. When necessary
or proper, the treasurer shall endorse on behalf of the
corporation for collection checks, notes and other obligations,
and shall deposit all monies to the credit of the corporation in
such bank or banks or other depository as the Board of Directors
may designate, and shall sign all receipts and vouchers for
payments made by the corporation. Unless otherwise specified by
the Board of Directors, the treasurer shall sign with the
president all bills of exchange and promissory notes of the
corporation, shall also have the care and custody of the stocks,
bonds, certificates, vouchers, evidence of debts, securities and
such other property belonging to the corporation as the Board of
Directors shall designate, and shall sign all papers required by
law, by these By-laws or by the Board of Directors to be signed
by the treasurer. The treasurer shall enter regularly in the
books of the corporation, to be kept for that purpose, full and
accurate accounts of all monies received and paid on account of
the corporation and whenever required by the Board of Directors,
the treasurer shall render a statement of any or all accounts.
The treasurer shall at all reasonable times exhibit the books of
account to any directors of the corporation and shall perform all
acts incident to the position of treasurer subject to the control
of the Board of Directors. The treasurer shall, if required by
the Board of Directors,give a bond to the corporation in such sum
and with such security as shall be approved by the Board of
Directors for the faithful performance of all the duties of the
treasurer and for restoration to the corporation in the event of
the treasurer's death, resignation, retirement, or removal from
office, of all books, records, papers, vouchers, money and other
property belonging to the corporation. The expense of such bond
shall be borne by the corporation.
Section 3.09 Assistant Treasurer. The Board of Directors may
appoint an assistant treasurer who shall have such powers and
perform such duties as may be prescribed by the treasurer of the
corporation or by the Board of Directors, and the Board of
Directors may require the assistant treasurer to give a bond to
the corporation in such sum and with such security as it may
approve, for the faithful performance of the duties of assistant
treasurer, and for the restoration to the corporation, in the
event of the assistant treasurer's death, resignation, retirement
or removal from office, of all books, records, papers, vouchers,
money and other property belonging to the corporation. The
expense of such bond shall be borne by the corporation.
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ARTICLE IV
CAPITAL STOCK
Section 4.01 Issuance. Shares of capital stock of the
corporation shall be issued in such manner and at such times and
upon such conditions as shall be prescribed by the Board of
Directors.
Section 4.02 Certificates. Ownership in the corporation
shall be evidenced by certificates for shares of stock in such
form as shall be prescribed by the Board of Directors, shall be
under the seal of the corporation and shall be signed by the
president or the vice president and also by the secretary or an
assistant secretary. Each certificate shall contain the name of
the record holder, the number, designation, if any, class or
series of shares represented, a statement of summary of any
applicable rights, preferences, privileges, or restrictions
thereon, and a statement that the shares are assessable, if
applicable. All certificates shall be consecutively numbered.
The name and address of the shareholder, the number of shares,
and the date of issue shall be entered on the stock transfer
books of the corporation.
Section 4.03 Surrender: Lost or Destroyed Certificates. All
certificates surrendered to the corporation, except those
representing shares of treasury stock, shall be canceled and no
new certificates shall be issued until the former certificate for
a like number of shares shall have been canceled, except that in
case of a lost, stolen, destroyed or mutilated certificate, a new
one may be issued therefor. However, any shareholder applying
for the issuance of a stock certificate in lieu of one alleged to
have been lost, stolen, destroyed or mutilated shall, prior to
the issuance of a replacement, provide the corporation with his,
her or its affidavit of the facts surrounding the loss, theft,
destruction or mutilation and an indemnity bond in an amount and
upon such terms as the treasurer, or the Board of Directors,
shall require. In no case shall the bond be in amount less than
twice the current market value of the stock and it shall
indemnify the corporation against any loss, damage, cost or
inconvenience arising as a consequence of the issuance of a
replacement certificate.
Section 4.04 Replacement Certificate. When the Articles of
Incorporation are amended in any way affecting, the statements
contained in the certificates for outstanding shares of capital
stock of the corporation or it becomes desirable for any reason,
including, without limitation, the merger or consolidation of the
corporation with another corporation or the reorganization of the
corporation, to cancel any outstanding certificate for shares and
issue a new certificate therefor conforming to the rights of the
holder, the Board of Directors may order any holders of
outstanding certificates for shares to surrender and exchange the
same for new certificates within a reasonable time to be fixed by
the Board of Directors. The order may provide that a holder of
any certificate(s) ordered to be surrendered shall not be
entitled to vote, receive dividends or exercise any other rights
of shareholders until the holder has complied with the order
provided that such order operates to suspend such rights only
after notice and until compliance.
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Section 4.05 Transfer of Shares. No transfer of stock shall
be valid as against the corporation except on surrender and
cancellation by the certificate therefor, accompanied by an
assignment or transfer by the registered owner made either in
person or under assignment. Whenever any transfer shall be
expressly made for collateral security and not absolutely, the
collateral nature of the transfer shall be reflected in the entry
of transfer on the books of the corporation.
Section 4.06 Transfer Agent. The Board of Directors may
appoint one or more transfer agents and registrars of transfer
and may require all certificates for shares of stock to bear the
signature of such transfer agent and such registrar of transfer.
Section 4.07 Stock Transfer Books. The stock transfer books
shall be closed for a period of ten (10) days prior to all
meetings of the shareholders and shall be closed for the payment
of dividends as provided in Article V hereof and during such
periods as, from time to time, may be fixed by the Board of
Directors, and, during such periods, no stock shall be
transferable.
Section 4.08 Miscellaneous. The Board of Directors shall
have the power and authority to make such rules and regulations
not inconsistent herewith as it may deem expedient concerning the
issue, transfer and registration of certificates for shares of
the capital stock of the corporation.
ARTICLE V
DIVIDENDS
Section 5.01 Dividends may be declared, subject to the
provisions of the laws of the State of Nevada and the Articles of
Incorporation, by the Board of Directors at any regular or
special meeting and may be paid in cash, property, shares of
corporate stock, or any other medium. The Board of Directors may
fix in advance a record date, as provided in Section 1.06 of
these By-laws, prior to the dividend payment for the purpose of
determining shareholders entitled to receive payment of any
dividend. The Board of Directors may close the stock transfer
books for such purpose for a period of not more than ten (10)
days prior to the payment date of such dividend.
ARTICLE VI
OFFICES; RECORDS; REPORTS; SEAL AND FINANCIAL MATTERS
Section 6.01 Principal Office. The principal office of the
corporation in the State of Nevada shall be as designated by the
Board of Directors and so filed with the State of Nevada, and the
corporation may also have an office in any other state or
territory as the Board of Directors may designate.
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Section 6.02 Records. The stock transfer books and a
certified copy of the By-laws, Articles of Incorporation, any
amendments thereto, and the minutes of the proceedings of the
shareholders, the Board of Directors, and committees of the Board
of Directors shall be kept at the principal office of the
corporation for the inspection of all who have the right to see
the same and for the transfer of stock. All other books of the
corporation shall be kept at such places as may be prescribed by
the Board of Directors.
Section 6.03 Financial Report on Request. Any shareholder
or shareholders holding at least five percent (5%) of the
outstanding shares of any class of stock may make a written
request for an income statement of the corporation for the three
(3) month, six (6) month, or nine (9) month period of the current
fiscal year ended more than thirty (30) days prior to the date of
the request and a balance sheet of the corporation as of the end
of such period. In addition, if no annual report for the last
fiscal year has been sent to shareholders, such shareholder or
shareholders may make a request for a balance sheet as of the end
of such fiscal year and an income statement and statement of
changes in financial position for such fiscal year. The
statement shall be delivered or mailed to the person making the
request within thirty (30) days thereafter. A copy of the
statements shall be kept on file in the principal office of the
corporation for twelve (12) months, and such copies shall be
exhibited at all reasonable times to any shareholder demanding an
examination of them or a copy shall be mailed to each
shareholder. Upon request by any shareholder, there shall be
mailed to the shareholder a copy of the last annual, semiannual
or quarterly income statement which it has prepared and a balance
sheet as of the end of the period. The financial statements
referred to in this Section 6.03 shall be accompanied by the
report thereon, if any, of any independent accountants engaged by
the corporation or the certificate of an authorized officer of
the corporation that such financial statements were prepared
without audit from the books and records of the corporation.
Section 6.04 Right of Inspection.
(a) The accounting books and records and minutes of
proceedings of the shareholders and the Board of Directors and
committees of the Board of Directors shall be open to inspection
upon the written demand of any shareholder or holder of a voting
trust certificate at any reasonable time during usual business
hours for a purpose reasonably related to such holder's interest
as a shareholder or as the holder of such voting trust
certificate. This right of inspection shall extend to the
records of the subsidiaries, if any, of the corporation. Such
inspection may be made in person or by agent or attorney, and the
right of inspection includes the right to copy and make extracts.
(b) Every director shall have the absolute right at
any reasonable time to inspect and copy all books, records and
documents of every kind and to inspect the physical properties of
the corporation and/or its subsidiary corporations. Such
inspection may be made in person or by agent or attorney, and the
right of inspection includes the right to copy and make extracts.
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<PAGE>
Section 6.05 Corporate Seal. The Board of Directors may, by
resolution, authorize a seal, and the seal may be used by causing
it, or a facsimile, to be impressed or affixed or reproduced or
otherwise. Except when otherwise specifically provided herein,
any officer of the corporation shall have the authority to affix
the seal to any document requiring it.
Section 6.06 Fiscal Year. The fiscal year-end of the
corporation shall be the calendar year or such other term as may
be fixed by resolution of the Board of Directors.
Section 6.07 Reserves. The Board of Directors may create,
by resolution, out of the earned surplus of the corporation such
reserves as the directors may, from time to time, in their
discretion, think proper to provide for contingencies, or to
equalize dividends or to repair or maintain any property of the
corporation, or for such other purpose as the Board of Directors
may deem beneficial to the corporation, and the directors may
modify or abolish any such reserves in the manner in which they
were created.
ARTICLE VII
INDEMNIFICATION
Section 7.01 Indemnification. The corporation shall, unless
prohibited by Nevada Law, indemnify any person (an "Indemnitee")
who is or was involved in any manner (including, without
limitation, as a party or a witness) or is threatened to be so
involved in any threatened, pending or completed action suit or
proceeding, whether civil, criminal, administrative, arbitrative
or investigative, including without limitation, any action, suit
or proceeding brought by or in the right of the corporation to
procure a judgement in its favor (collectively, a "Proceeding")
by reason of the fact that he 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,
employee benefit plan or other entity or enterprise, against all
Expenses and Liabilities actually and reasonably incurred by him
in connection with such Proceeding. The right to indemnification
conferred in this Article shall be presumed to have been relied
upon by the directors, officers, employees and agents of the
corporation and shall be enforceable as a contract right and
inure to the benefit of heirs, executors and administrators of
such individuals.
Section 7.02 Indemnification Contracts. The Board of
Directors is authorized on behalf of the corporation, to enter
into, deliver and perform agreements or other arrangements to
provide any Indemnitee with specific rights of indemnification in
addition to the rights provided hereunder to the fullest extent
permitted by Nevada Law. Such agreements or arrangements may
provide (i) that the Expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding, must
be paid by the corporation as they are incurred and in advance of
the final disposition of any such action, suit or proceeding
provided that, if required by Nevada Law at the time of such
advance, the officer or director provides an undertaking, to
repay such amounts if it is ultimately determined
Page 15
<PAGE>
by a court of competent jurisdiction that such individual is not
entitled to be indemnified against such expenses, (iii) that the
Indemnitee shall be presumed to be entitled to indemnification
under this Article or such agreement or arrangement and the
corporation shall have the burden of proof to overcome that
presumption, (iii) for procedures to be followed by the
corporation and the Indemnitee in making any determination of
entitlement to indemnification or for appeals therefrom and (iv)
for insurance or such other Financial Arrangements described in
Paragraph 7.02 of this Article, all as may be deemed appropriate
by the Board of Directors at the time of execution of such
agreement or arrangement.
Section 7.03 Insurance and Financial Arrangements. The
corporation may, unless prohibited by Nevada Law, purchase and
maintain insurance or make other financial arrangements
("Financial Arrangements") on behalf of any Indemnity for any
liability asserted against him and liability and expenses
incurred by him in his capacity as a director, officer, employee
or agent, or arising out of his status as such, whether or not
the corporation has the authority to indemnify him against such
liability and expenses. Such other Financial Arrangements may
include (i) the creation of a trust fund, (ii) the establishment
of a program of self-insurance, (iii) the securing of the
corporation's obligation of indemnification by granting a
security interest or other lien on any assets of the corporation,
or (iv) the establishment of a letter of credit, guaranty or
surety.
Section 7.04 Definitions. For purposes of this Article:
Expenses. The word "Expenses" shall be broadly construed and,
without limitation, means (i) all direct and indirect costs
incurred, paid or accrued, (ii) all attorneys' fees, retainers,
court costs, transcripts, fees of experts, witness fees, travel
expenses, food and lodging, expenses while traveling, duplicating
costs, printing, and binding costs, telephone charges, postage,
delivery service, freight or other transportation fees and
expenses, (iii) all other disbursements and out-of-pocket
expenses, (iv) amounts paid in settlement, to the extent
permitted by Nevada Law, and (v) reasonable compensation for time
spent by the Indemnitee for which he is otherwise not compensated
by the corporation or any third party, actually and reasonably
incurred in connection with either the appearance at or
investigation, defense, settlement or appeal of a Proceeding or
establishing or enforcing a right to indemnification under any
agreement or arrangement, this Article, the Nevada Law or
otherwise; provided, however, that "Expenses" shall not include
any judgments or fines or excise taxes or penalties imposed under
the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or other excise taxes or penalties.
Liabilities. "Liabilities" means liabilities of any type
whatsoever, including, but not limited to, judgments or fines,
ERISA or other excise taxes and penalties, and amounts paid in
settlement.
Nevada Law. "Nevada Law" means Chapter 78 of the Nevada
Revised Statutes as amended and in effect from time to time or
any successor or other statutes of Nevada having, similar import
and effect.
This Article. "This Article" means Paragraphs 7.01 through
7.04 of these By-Laws or any portion of them.
Power of Stockholders. Paragraphs 7.01 through 7.04,
including this Paragraph, of these By-Laws may be amended by the
stockholders only by vote of the holders of sixty-six and
two-thirds percent (66 2/3%) of the entire number of shares of
each class, voting separately, of the outstanding capital stock
of the corporation (even though the right of any class to vote is
otherwise restricted or denied); provided, however, no amendment
or repeal of this Article shall adversely affect any right of any
Indemnitee existing at the time such amendment or repeal becomes
effective.
Page 16
<PAGE>
Power of Directors. Paragraphs 7.01 through 7.04 and this
Paragraph of these ByLaws may be amended or repealed by the Board
of Directors only by vote of eighty percent (80%) of the total
number of Directors and the holders of sixty-six and two-thirds
percent (66 2/3) of the entire number of shares of each class,
voting separately, of the outstanding capital stock of the
corporation (even though the night of any class to vote is
otherwise restricted or denied); provided, however, no amendment
or repeal of this Article shall adversely affect any right of any
Indemnitee existing, at the time such amendment or repeal becomes
effective.
ARTICLE VIII
BY-LAWS
Section 8.01 Amendment. Amendments and changes of these
By-Laws may be made at any regular or special meeting of the
Board of Directors by a vote of not less than all of the entire
Board, or may be made by a vote of, or a consent in writing
signed by the holders of a majority of the issued and outstanding
capital stock.
Section 8.02 Additional by-laws. Additional by-laws not
inconsistent herewith may be adopted by the Board of Directors at
any meeting of the Board of Directors at which a quorum is
present by an affirmative vote of a majority of the directors
present or by the unanimous consent of the Board of Directors in
accordance with Section 2.11 of these By-laws.
CERTIFICATION
I, the undersigned, being the duly elected secretary of the
Corporation, do hereby certify that the foregoing By-laws were
adopted by the Board of Directors on the day of ,19
/s/ SEAN MCCARTHY
-----------------------
Secretary
Page 17
October 20, 1999
McCarthy Grenache, Inc.
Las Vegas, Nevada
I David E. Coffey C.P.A., have audited your financial
statements as of September 30, 1999 which include cumulative
figures since inception at December 19, 1997. I hereby consent to
your use of those statements in your form 10-SB being filed with
the Securities and Exchange Commission.
Sincerely,
/s/ DAVID COFFEY, CPA
David Coffey, C.P.A.
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 1998 (AUDITED) AND THE
PERIOD ENDED SEPTEMBER 30, 1999 (AUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-START> JAN-01-1998 JAN-01-1999
<PERIOD-END> DEC-31-1998 SEP-30-1999
<CASH> 1,417 20,065
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 320 260
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 1,737 20,325
<CURRENT-LIABILITIES> 400 400
<BONDS> 0 0
0 0
0 0
<COMMON> 5,042 5,122
<OTHER-SE> (3,705) 14,803
<TOTAL-LIABILITY-AND-EQUITY> 1,737 20,325
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 3,663 1,412
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (5,663) (1,412)
<EPS-BASIC> (.000) (.000)
<EPS-DILUTED> (.000) (.000)
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