U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS UNDER
SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
PLATINUM PEARLS, INC.
(Name of Small Business Issuer in its charter)
Nevada 86-0746356
- ------------------------------------------ --------------------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
P.O. Box 6154
Scottsdale, AZ 85261
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 480-991-8342
Securities to be registered under Section 12(g) of the Act:
Title of each class Name of each exchange on which
to be so registered each such class is to be registered
None N/A
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Common Stock, $.001 par value
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(Title of class)
Item 1. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
Platinum Pearls, Inc.,(the "Company"), a Nevada Corporation, incorporated on
September 30, 1993, under the name Baja Franchise Systems, Inc. In 1997, it
changed its name to Cornerstone Communications Corporation, and has just
recently changed its name to Platinum Pearls, Inc., to emphasize the Company's
focus on its "Platinum Pearls" program." The Company is a development stage
corporation engaged in the business of marketing the Platinum Pearls program, a
membership organization, tailored to the "baby boomer" generation. The program
is similar to that of "A.A.R.P." but focuses on a younger lifestyle and the
particular interests of the "baby boomer" generation, as the generation enters
the post-midlife era. The Company intends to establish a web page on the
Internet which will acquaint the member with all of the Company's services,
which will be retreats, workshops, fitness and exercise videos, books, and a
membership package which may include special long distance telephone rates,
travel discounts and discounts on various other products and services. This
filing is made voluntarily, and the reasons for the filing are to become a
reporting company in compliance with new NASD rules and to establish quotation
of its securities on the NASD OTC Bulletin Board. The Company intends to have a
market maker in its securities file a Form 211 with the NASD to obtain a
quotation of its securities on the NASD OTC Bulletin Board, but there can be no
assurance that these goals will be achieved.
Platinum Pearls is still a development stage corporation. Its current operations
are limited to raising capital for the implementation of its planned operations,
as enumerated above. Platinum Pearls has been in the development stage since its
inception in 1993. Its activities in the past three years have been limited to
obtaining equity financing for the implementation of its business plan. It
developed its business plan in 1996. The Company's stock is currently not quoted
on any quotation medium, and there have been no reorganizations in the past
three years. There have been changes in the Board of Directors pursuant to duly
held elections by shareholders, and changes in officers pursuant to duly held
elections by the Board of Directors. The president and Chairman of the Board of
Directors has been and continues to be since inception, Tom E. Hays, the founder
of the company and creator of its business plan.
The Company's business is not dependent upon one or a few major customers.
Government approval is not necessary for the Company's business, and government
regulations have no or only a negligible effect on their respective businesses.
The Company has not booked any significant research and development costs and
therefore do not expect to pass any of those costs to customers. The Company has
no product development and research and development costs.
The Company's mailing address is P.O. Box 6154, Scottsdale, AZ 85261. The
address of its principal executive offices is: 7316 E. Tuckey Lane, Scottsdale,
AZ 85250. The telephone number of its principal executive office is (480) 991-
8342, and the fax number is (480) 991-8551.
IN GENERAL - THE COMPANY
The company is engaged in the business of marketing the "Platinum Pearls"
program, a "quality of life enhancement program" presented as a membership
organization, geared to the "baby boomer" generation. The membership program
will be similar to "A.A.R.P.", but tailored to a younger lifestyle and the
particular interests of the "baby boomer" generation, as the generation enters
the post-midlife era. The goal of the Company will be to provide an "information
center" for the life improvement of its members. The Company intends to
establish a web page on the Internet which will acquaint the member with all of
the Company's services. The Company will also publish a periodic newsletter, the
first issue of which has already been published. The company will offer retreats
and workshops, a television show, fitness and exercise videos, books, and a
membership package which may include special long distance telephone rates,
travel discounts and discounts on various other products and services, utilizing
the Internet domain name "PlatinumPearls.com".
The Platinum Pearls concept is a program for living geared toward a maturing
population. The concept is that, as oysters turn irritants into pearls, life can
be richly rewarding and fulfilling if approached with the information and
techniques necessary to improve health, wealth and lifestyles as the baby boomer
generation moves into the second half of life. Each such piece of life-
improving information is a "Platinum Pearl." The Trademark "Platinum Pearls" has
been registered in the United States Patent and Trademark Office as Registration
No. 2,232,091, in the name of Tom E. Hays, and has been exclusively licensed to
the Company by its owners. The terms of the license provide for a royalty of 6%
of gross revenues generated by the Company's operations under the licensed mark,
with a minimum annual royalty payment of $20,000.
This Exclusive License Agreement is between the Company as Licensee, and Tom
Hays, President of the Company, and Susan Hays, as Licensor and owner of the
trade mark " Platinum Pearls ." It provides for a royalty fee of 6% of all gross
revenues generated by the Company's operations under the trademark, and
utilizing lifestyle improvement programs developed and to be developed in
conjunction with the trademark, except in the event of a sub-license by the
Company to a third party of the mark or concepts. In that case, which is subject
to written approval by Mr. and Mrs. Hays, and will entitle Mr. and Mrs. Hays to
receive 50% of the gross revenue generated by any such sub-licensing venture.
THE MARKET
The Company will tailor its programs, services and products to the "baby boomer"
generation; that generation comprised of people born in the post-war "baby boom"
between 1946 and 1964. The first group of these "baby boomers" are now reaching
50 years of age. The number of people reaching that age will continue to
increase each year for at least the next ten years, providing a steady stream of
new members to attract with innovative programs and membership benefits. There
are many other organizations available to this target generation, the largest of
which is The American Association of Retired Persons (AARP). However, the
Company believes that the majority of persons reaching age 50 in this generation
will not be inclined to join such organizations.
RETREATS, PROGRAMS AND WORKSHOPS
The Company plans to conduct self-help programs, featuring noted speakers and
authorities. The subjects of the workshops and seminars will be physical
fitness, creativity enhancement and motivational programs. These programs will
consist of one-day, week-end and week-long getaways designed for members to grow
mentally, physically and spiritually.
To supplement the programs and generate interest in Company products, the
Company will establish a web site on the Internet, and offer a two minute
morning show insert for barter syndication to local television stations. Each
show will feature an interesting and informative way to more fully enjoy living
in the next fifty years of life, followed by a stretching or movement piece set
to music. The Company will also offer a video magazine for syndication to cable
networks, which will consist of a 30 minute program each week, featuring in-
depth interviews of authors and practitioners who will share their ideas for
living a more rewarding life. The Company also plans to produce a radio show,
two hours in length, with a talk/music format.
PUBLICATIONS
The Company has published the first issue of the Platinum Pearls newsletter,
which the Company envisions will be published monthly, featuring the "best of
the best" new ideas and approaches to learning how to enjoy life more fully and
luxuriously. The latest innovations in health and fitness, books, games, foods,
medications, and travel will be featured in the magazine, which the Company
believes will eventually be marketed by subscription and newsstand sales. The
Company has outlined the concept of its first book, Platinum Pearls, which will
feature a compilation of chapter length articles by noted writers in a variety
of fields and persuasions, and which is designed to be a handbook for a
generation entering a new era of life. The book will serve as a guide to living
a better, more productive, happier and healthier life.
PRODUCTS
The Company plans to develop and market a CD-ROM containing videos, music,
articles and reference materials derived from its publications, television
shows, and its collection of articles, books, tapes and interviews. The
Company plans to develop and market exercise and fitness videos as well as
video clips from the Company's workshops and retreats. A direction for the
music to be used in the video programs and offered on cassettes and Compact
Discs has been selected and produced. The Company intends to market the music
to its members through its programs, workshops and retreats. As the Company
expands its membership and initial programming, it intends to identify, develop
and market skin care products, dietary supplements, herbal and aroma therapies,
books, tours, and clothing, promoted in conjunction with and consistent with
the Platinum Pearls concepts.
COMPETITION
There are many other organizations available to this target generation, the
largest of which is The American Association of Retired Persons (AARP).
However, the Company believes that the majority of persons reaching age 50 in
this generation will not be inclined to join such organizations, as it is
identified with a much older membership. The Company is of the opinion that
the majority of persons now reaching age 50 will be less likely to join AARP
than the Company's organization, thinking of it as an "older" organization, one
their parents might belong to. The Company intends to offer a fresher, more
polished approach, specifically targeted to the present and the needs of the
baby boomer generation, and to present the "best of the best" of ideas and
approaches to face the challenges of life one faces during the aging process.
In this respect, the Company will alert its members to the best of the
information provided by its competitors as part of the Company's all-inclusive
approach, thus benefitting from the competitive atmosphere. The Company will be
competing with other organizations which offer self-help books, television shows
and exercise videos. There can be no assurance that other companies with greater
financial resources and experience will not identify the same opportunities on
which the Company has decided to concentrate.
PATENTS
The Company holds no patents for its products. The trademark, "Platinum Pearls"
has been registered in the United States Patent and Trademark Office as
Registration No.2,232,091, in the name of Tom E. Hays, and has been exclusively
licensed to the Company by its owners. The Company owns the domain name
www.platinumpearls.com for its web site.
RAW MATERIALS AND PRINCIPAL SUPPLIERS AND VENDOR
There are no raw materials used in the Company's services. The Company uses
printers for its newsletter, which services are generic in nature and the
Company is not under contract with any one printer. The Company has not yet
produced any videos or compact discs, and has no current supplier for these
products.
GOVERNMENT REGULATION
Government approval is not necessary for the Company's business, and
government regulations have no effect or a negligible effect on their
respective businesses.
EMPLOYEES
The Company presently employs one employee, the President and founder of the
Company, who devotes his part time efforts to the Company.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
PLAN OF OPERATIONS
The Company is a development stage corporation, engaged in the business of
marketing the Platinum Pearls program, a membership organization, tailored
to the "baby boomer" generation. The program is similar to that of "A.A.R.P."
but focuses on a younger lifestyle and the particular interests of the "baby
boomer" generation, as the generation enters the post-midlife era. The Company
intends to establish a web page on the Internet which will acquaint the member
with all of the Company's services, which will be retreats, workshops, fitness
and exercise videos, books, and a membership package which may include special
long distance telephone rates, travel discounts and discounts on various other
products and service. The Company has financed its operations to date through
the sale of its securities. See Item 10 - "Recent Sales of Unregistered
Securities." The Company's plan of operations over the next 12 months includes
the creation and promotion of its Internet web site.
During the next twelve months, the Company plans to satisfy its cash
requirements by additional equity financing. There can be no assurance that
the company will be successful in raising additional equity financing unless
its securities are quoted on the NASD OTC Bulletin Board, and there can be no
assurance that the company will be able to obtain a quote of its securities on
the Bulletin Board. If the company is not able to raise equity capital, it
will be able to satisfy its cash requirements for the next twelve months by
contributions or loans from its founder, Tom Hays. The Company intends to
undertake a subsequent private placement of its common stock in order to raise
future development and operating capital. The Company depends upon capital to
be derived from future financing activities such as subsequent offerings of its
stock. There can be no assurance that the Company will be successful in raising
the capital it requires unless and until the Company's position with regard to
the quotation of its securities has been resolved.
The Company is still considered to be a development stage company, with no
significant revenue, and is dependent upon the raising of capital through
placement of its common stock. There can be no assurance that the Company will
be successful in raising the capital it requires through the sale of its common
stock.
There are no contemplated product research and development costs the Company
will perform for the next twelve months. There is no expected purchase or sale
of any plant or significant equipment, and there is no expected significant
changes in the number of employees contemplated. The Company has no current
material commitments.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements. The Company's
expectation of results and other forward-looking statements contained in this
registration statement involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially from those
expected are the following: business conditions and general economic
conditions; competitive factors, such as pricing and marketing efforts; and the
pace and success of product research and development. These and other factors
may cause expectations to differ.
YEAR 2000 COMPLIANCE
With respect to Year 2000 compliance, the Company has performed an audit of all
of its computer hardware, internal accounting and software applications; in
short, all of its information technology and non information technology
systems, and found all to be Year 2000 compliant. As of this date, the Company
has been given assurances from its banking institution and transfer agent that
they are working toward compliance or are in compliance. The Company has
completed an audit of its suppliers to identify relevant Year 2000 issues, and
has found them all to be Year 2000 compliant. The status of the company's
progress is that it has completed all that it must do in order to be considered
Year 2000 compliant. The worst case scenario would be the risk that the
company's transfer agent may have not complied adequately. However, the
transfer agent has assured the Company that it is Year 2000 compliant. The
Company had nominal costs in becoming compliant, consisting of employee labor
and no actual costs to any third parties. The Company does not anticipate any
additional remediation costs, as it is already Year 2000 compliant. The
Company's contingency plans to handle a Year 2000 crisis, if one occurs, is to
change to an alternate Year 2000 compliant service provider.
Item 4. DESCRIPTION OF PROPERTY
The Company rents professional offices from its founder, on a month-to-month
basis, pursuant to an oral agreement, for a nominal amount. The Company has the
proprietary rights to the domain name for its web site, www.platinumpearls.com.
The Company owns the exclusive right to the name "Platinum Pearls" by license
from the founder of the Company. The Company owns no other property.
Item 5. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of the date of this
disclosure(1), by (I) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the issued and outstanding
shares of common stock, (ii) each of the Company's directors and executive
officers, and (iii) all directors and executive officers as a group.
Name and Address Number of Shares Percentage Owned
- ---------------- ---------------- ----------------
Tom E. Hays(1)(2) 1,250,000 81.33%
7316 E. Tuckey Lane
Scottsdale, AZ 85250
Susan R. Hays(2) 250,000 16.27%
7316 E. Tuckey Lane
Scottsdale, AZ 85250
J.T. Stewart 1,000 .06%
P.O. Box 34032
Dayton, OH 45434
Deanna Larson 1,000 .06%
1801 Holly Street
Nashville, TN 37206
Kissy Woosley 1,000 .06%
2717 Sharondale Court
Nashville, TN 37215
Directors & Officers 1,503,000 97.78%
As A Group
____________________
(1) Includes 500,000 shares issued to Edgewater Energy Corporation, whose
equity is principally owned by Mr. Hays.
(2) Tom E. Hays and Susan R. Hays jointly own 500,000 common shares.
Item 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors are elected by the shareholders to terms of one year. Officers
serve at the pleasure of the Board of Directors, and serve one year terms
unless removed by the Board prior to their terms.
The Executive Officers of the Company and its subsidiaries, and their ages,
are as follows:
Name Age Position
---------- --- --------
Tom E. Hays 59 Director, President, Treasurer
Susan R. Hays 49 Director, Vice President/Secretary
J.T. Stewart 42 Event Coordinator
Deanna Larson 39 Promotion and Publications Coordinator
Kissy Woosley 31 Marketing Coordinator
Tom E. Hays. Mr. Hays is the President and Director of the Company, as well as
the owner of an interest in the Platinum Pearls trademarks and copyrights.
Mr. Hays conceived the various program elements which comprise the Platinum
Pearls concept. Mr. Hays is an accomplished photographer, artist, and a
published songwriter, music producer, cinematographer, graphic designer and
video producer. In 1987, Mr. Hays took over leadership of an Oklahoma company
engaged in the "quick oil change" business, turned the company into a
profitable position, and took it public. The company operated 38 quick oil
change auto service centers in Oklahoma, Texas and Arizona. Fourteen of those
centers in Texas were sold to Jiffy Lube, nine in Oklahoma were sold to Avis
Lube, and fifteen in Arizona were sold to SpeeDee Oil Change, all at a profit.
In 1980, Mr. Hays was engaged in the oil and gas business, buying and brokering
oil and gas mineral leases and generating drilling prospects which he sold to
oil and gas drilling companies. He founded Edgewater Energy Corporation and
sponsored and was the general partner of five successful oil and gas drilling
limited partnerships which participated in the drilling and discovery of over
fifty oil and gas wells, many of which are still producing.
In 1978, he founded "facts: Marketing and Economics Research Corporation" and
developed a radio research product, "the Radio Audience Profile" which grew to
service 105 radio markets across the United States. In 1971, he purchased United
Concepts, Inc., an advertising agency, and managed both retail and industrial
advertising accounts for a variety of clients. He established an in-house audio
studio, a photo studio and a film processing facility, and produced and directed
many award winning educational and commercial audio, video and print programs.
Mr. Hays created a daily radio program named "The Oil and Gas Report" and
syndicated it to 17 radio markets in the Southwest. In the mid-1960's he began
producing music and successfully organized and promoted concerts and several
charted pop singles. In 1960, he founded Midwest Optical, Inc., and opened a
retail optical dispensary in Midwest City, Oklahoma, which expanded to three
stores before selling to a larger chain of stores. Mr. Hays attended Phillips
University in Enid, Oklahoma.
Susan R. Hays. Mrs. Hays is the current Vice President/ Secretary and Director
of the Company, as well as an owner of the " Platinum Pearls concept and
trademark. She has been the owner/operator of Brushstrokes Designs since 1981,
which engages in the business of the design and marketing of hand painted
needlepoint canvases which are sold through hundreds of stores throughout the
United States and Canada. Her designs are also found on greeting cards,
pottery and other objects. From 1973 through 1981, she managed the offices of
Fritzler, Knoblock and Wadley, an architectural firm. She has served on the
Boards of Directors for Baja International Foods, Channel One and Balloonies.
Mrs. Hays attended Oklahoma State University.
J.T. Stewart. Mr. Stewart is an Event Coordinator of the Company. He is the
founder of J.T. Stewart Enterprises, and is nationally recognized as a personal
development trainer. Mr. Stewart presents up to one hundred seminars, speeches
and training programs every year, and has trained for corporations such as J.C.
Penney Life Insurance, Huffy Bicycles and Hawthron Corporation. Mr. Stewart
founded and managed Stewart/Holaday Speakers Bureau. He also founded and
directed J. Thomas Communications, a marketing and public relations firm. J.
Thomas Communications has obtained media exposure for clients in USA Today, The
Wall Street Journal and Newsweek. He has also obtained electronic media
exposure for clients on Good Morning America, CNN, CNBC and National Public
Radio. Mr. Stewart attended the Theater Arts Program at Wright State
University in Dayton, Ohio.
Deanna Larson. Ms. Larson is the Publications Coordinator for the Company.
She began her career with Booklist Magazine (American Library Association) in
Chicago as Reviewer and Editorial Assistant to the Editor, writing reviews on
fiction and non-fiction books, and representing the magazine to national
publishers and publicists, freelance reviewers and subscribers. She served as
Assistant to Publicity Director of Transworld Publishers, a unit of Bantam
Doubleday Dell, where she became a Press Officer, developing media contacts and
arranging national broadcast/print reviews, in addition to writing a wide range
of sales and marketing material and point of sale print advertisements, press
kits, sales presentations, brochures, posters, floor displays and backdrops. She
served as Copywriter/Project Manager for Riverside Publishing, a Houghton
Mifflin Company, (an Educational Publisher) in Chicago, writing sales and
marketing material, including brochures, press releases, direct mail and
multimedia presentations. She has served as Proofreader/Listings Compiler for an
alternative newspaper, Fiction Reviewer for Booklist Magazine, Video Editor for
Chicago Access Cable Television, and Production Assistant for various commercial
production companies. Ms. Larson holds a B.A., cum laude, in Communications,
from Mundelein College, and a Master of Arts from Birkbeck College, University
of London.
Kissy Woosley. Ms. Woosley is the current Marketing Coordinator for the Company.
Ms. Woosley is a principal in Kissy and Tracey's Music in Motion where she
personally developed a music program for children, ages two through four, which
is presented in nursery schools and concerts. Previously, she was the co-founder
and co-president of Merry Bobbins, Inc., a design company specializing in
children's bed and bath accessories. Ms. Woosley is also a professional singer
and bandleader. She has scheduled shows, rehearsals and tours as well as
developed marketing strategies and promotional campaigns. Previously, she
served as Account Manager for Clinique Services, Inc., handling the Washington,
D.C. area Bloomingdales stores, and was responsible for hiring, training and
scheduling of personnel, planning and implementing of visual displays, and
creation of promotional campaigns. She has also served as Office manger of a
professional recording studio, scheduling recording sessions, promoting and
marketing of studio time and general management of studio operations. Ms.
Woosley holds a B.A., cum laude, from Georgetown University.
Item 6. EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation paid by the
Company to its Chief Executive Officer and all other executive officers for
services rendered up to the period ended September 30, 1999. No salaries are
being paid at the present time, until such time as there is available cash flow
from operations to pay salaries. There were no grants of options or SAR grants
given to any executive officers during the last fiscal year.
Annual Compensation
-------------------
Name and Position Salary Bonus Annual Deferred Salary
Tom Hays, President -0- -0- -0-
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Tom Hays, President and Chairman of the Board of Directors, and Susan R. Hays,
Secretary and Director, are the sole founders, promoters, and organizers of the
Company. The Company rents its offices from Mr. Hays on a month to month basis
on an arms length basis for an insignificant amount of monthly rental.
On or about October 1, 1993, 500,000 shares of common stock of the Company were
issued to Edgewater Energy Corporation, a company owned by Tom and Susan Hays,
in exchange for incorporation and organization costs, in reliance upon Section
4(2) of the Securities Act of 1933, to sophisticated investors in possession of
all relevant corporate information. There was no underwriter used in the
transaction.
On or about January 28, 1998, 500,000 shares of common stock of the Company were
issued to Tom and Susan Hays, and 510,000 shares were issued to Tom Hays for
cash proceeds of $135,000, in reliance upon Section 4(2) of the Securities Act
of 1933, to sophisticated investors in possession of all relevant corporate
information. There was no underwriter used in the transaction.
From January 1, 1998 through December 31, 1998, 8,000 shares of Company common
stock were issued in exchange for consulting services, in reliance upon Section
4(2) of the Securities Act of 1933, to sophisticated investors in possession of
all relevant corporate information. There was no underwriter used in the
transaction.
From January 1, 1999 through March 31, 1999, 4,000 shares of common stock were
issued for repayment of debt owed to Company creditors, in reliance upon Section
4(2) of the Securities Act of 1933, to sophisticated investors in possession of
all relevant corporate information. There was no underwriter used in the
transaction.
From January 1, 1999 through March 31, 1999, 15,000 shares of Company common
stock were issued in exchange for consulting services, in reliance upon Section
4(2) of the Securities Act of 1933, to sophisticated investors in possession of
all relevant corporate information. There was no underwriter used in the
transaction.
There have been no other transactions since the beginning of fiscal year 1998,
or any currently proposed transactions, or series of similar transactions, to
which the Company was or is to be a party, in which the amount involved exceeds
$60,000, and in which any of the officers, or directors, or holders of over 5%
of the Company's stock have or will have any direct or indirect material
interest. The Company does not currently have any policy toward entering into
any future transactions with related parties.
Item 8. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company are a party or to
which the property interests of the Company or its subsidiaries are subject.
Item 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Company's common stock is not listed or quoted at the present time, and
there is no present public market for the Company's common stock. The Company
has obtained a market maker and who intends to file a form 211 with the National
Association of Securities Dealers to quote the Company's securities on the NASD
OTC Bulletin Board, but there can be no assurance that the Company's stock will
be quoted on the NASD OTC Bulletin Board. The filing of the Form 211 is
contingent upon this form 10 becoming effective with no pending comments by the
S.E.C. The Company has not paid any cash dividends since its inception and does
not contemplate paying any in the foreseeable future. It is anticipated that
earnings, if any, will be retained for the operation of the Company's business.
Item 10. RECENT SALES OF UNREGISTERED SECURITIES
On or about October 1, 1993, 500,000 shares of common stock of the Company were
issued to Edgewater Energy Corporation, a company owned by Tom and Susan Hays,
in exchange for incorporation and organization costs, in reliance upon Section
4(2) of the Securities Act of 1933, to sophisticated investors in possession of
all relevant corporate information. There was no underwriter used in the
transaction.
On or about January 28, 1998, 500,000 shares of common stock of the Company were
issued to Tom and Susan Hays, and 510,000 shares were issued to Tom Hays for
cash proceeds of $135,000, in reliance upon Section 4(2) of the Securities Act
of 1933, to sophisticated investors in possession of all relevant corporate
information. There was no underwriter used in the transaction.
From January 1, 1998 through December 31, 1998, 8,000 shares of Company common
stock were issued in exchange for consulting services, in reliance upon Section
4(2) of the Securities Act of 1933, to sophisticated investors in possession of
all relevant corporate information. There was no underwriter used in the
transaction.
From January 1, 1999 through March 31, 1999, 4,000 shares of common stock were
issued for repayment of debt owed to Company creditors, in reliance upon Section
4(2) of the Securities Act of 1933, to sophisticated investors in possession of
all relevant corporate information. There was no underwriter used in the
transaction.
From January 1, 1999 through March 31, 1999, 15,000 shares of Company common
stock were issued in exchange for consulting services, in reliance upon Section
4(2) of the Securities Act of 1933, to sophisticated investors in possession of
all relevant corporate information. There was no underwriter used in the
transaction.
There have been no other transactions since the beginning of fiscal year 1998,
or any currently proposed transactions, or series of similar transactions, to
which the Company was or is to be a party, in which the amount involved exceeds
$60,000, and in which any of the officers, or directors, or holders of over 5%
of the Company's stock have or will have any direct or indirect material
interest. The Company does not currently have any policy toward entering into
any future transactions with related parties.
Item 11. DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue 25,000,000 Shares, all of which are Common
Stock at a par value of $.001. The presently outstanding shares of Common Stock
are fully paid and non-assessable.
There are currently outstanding 1,537,000 Shares of Common Stock. Holders of
shares of Common Stock are entitled to one vote per share on all matters
submitted to a vote of the shareholders. Shares of Common Stock do not have
cumulative voting rights, which means that the holders of the majority of the
shareholder votes eligible to vote and voting for the election of the Board of
Directors can elect all members of the Board of Directors. Holders of shares of
Common Stock are entitled to one vote per share on all matters to be voted
upon by the stockholders generally. The approval of proposals submitted to
stockholders at a meeting other than for the election of directors requires the
favorable vote of a majority of the shares voting, except in the case of certain
fundamental matters (such as certain amendments to the Certificate of
Incorporation, and certain mergers and reorganizations), in which cases Nevada
law and the Company's Bylaws require the favorable vote of at least a majority
of all outstanding shares. Stockholders are entitled to receive such dividends
as may be declared from time to time by the Board of Directors out of funds
legally available therefor, and in the event of liquidation, dissolution or
winding up of the Company to share ratably in all assets remaining after payment
of liabilities. The holders of shares of Common Stock have no preemptive,
conversion, subscription or cumulative voting rights.
Under current Nevada law, a shareholder is afforded dissenters' rights which, if
properly exercised, may require the Company to purchase his or her shares.
Dissenters' rights commonly arise in extraordinary transactions such as mergers,
consolidations, reorganizations, substantial asset sales, liquidating
distributions, and certain amendments to the Company's certificate of
incorporation.
Item 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
NEVADA STATUTES
NRS 78.751 provides that the Company may provide in its articles of
incorporation, by laws or by agreement, to indemnify the Company's officers and
directors and affects their liability in that capacity, for any and all costs
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 the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if
it is ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under any
contract or otherwise by law.
The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to the statute:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
articles of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to NRS 78.7502 or for the
advancement of expenses made pursuant to subsection 2, may not be made to or
on behalf of any director or officer if a final adjudication establishes
that his acts or omissions involved intentional misconduct, fraud or a
knowing violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
ARTICLES OF INCORPORATION AND BY-LAWS
The Company's By-laws do not provide for indemnification of officers or
directors. Article XI if its Articles of Incorporation, as amended, provides to
limit the liability of officers and directors for damages for breach of
fiduciary duty unless the act of omission involves intentional misconduct,
fraud, a knowing violation of law or the payment of an unlawful dividend in
violation of NRS 78.300.
Report of Independent Certified Public Accountant dated September 30, 1999
Financial Statements
Balance Sheets
Statement of Income
Statement of Cash Flows
Statements of Stockholder's Equity
Notes to Financial Statements
REPORT OF INDEPENDENT AUDITOR
To the Shareholders and Board of Directors Platinum Pearls, Inc.
I have audited the accompanying balance sheets of Platinum Pearls, Inc.,(A
Development Stage Company) as of September 30, 1999 and December 31, 1998, and
the related statements of income, stockholders' equity, and cash flows for the
nine months ended September 30, 1999 and the year then ended. These financial
statements are the responsibility of the Company'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
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for our opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Platinum Innovative Pearls, Inc.(A
Development Stage Company) at September 30, 1999 and December 31, 1998, and the
results of operations and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Oxnard, California
/s/ Roger G. Castro
September 30, 1999
[CAPTION]
Platinum Pearls, Inc.
(A Development Stage Company)
BALANCE SHEET AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
September 30 December 31
1999 1998
ASSETS
Current Assets:
Cash $ 1,591 $ 109
Prepaid expenses - 20,000
Total Current Assets ------- -------
1,591 20,109
------- -------
Fixed Assets:
Machinery and equipment 22,695 22,695
Furniture and equipment (5,672) (3,242)
------- --------
Total Fixed Assets 17,023 19,453
Other Assets:
License rights 59,000 59,000
Less accumulated amortization (7,375) ( 7,375)
------- --------
Total Other Assets 51,625 53,100
------- --------
TOTAL ASSETS $ 70,239 $ 92,662
________ _______
-------- -------
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Total Current Liabilities $ - $ -
------- -------
Stockholders' Equity:
Common stocks, $.001 par value
Authorized shares - 25,000,000
Issued and outstanding shares
1,537,000 and 1,518,000 respectively 1,537 1,518
Capital in excess of par value 138,486 134,490
Deficit accumulated during
development stage ( 69,784) ( 43,346)
------- -------
Total Stockholders' Equity 70,239 92,662
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 70,239 $ 92,662
[CAPTION]
Platinum Pearls, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF INCOME FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND FOR THE YEAR
ENDED DECEMBER 31, 1998 AND
SEPTEMBER 30, 1993 (INCEPTION) THROUGH SEPTEMBER 30,
1999
Cumulative
During
Development September 30 December 31
Stage 1999 1998
Income
Sales $ -0- -0- -0-
----- -------- --------
Total Income - - -
----- -------- --------
Expenses:
Royalty fees 40,000 20,000 20,000
Legal and professional 6,325 975 5,350
Depreciation and amortization 13,047 3,905 9,142
Administrative 10,412 1,558 8,854
------- --------- ---------
Total Expenses 69,784 26,438 43,346
-------- --------- ---------
Net loss $ (69,784) $ (26,438) $(43,346)
======== ======== =======
[CAPTION]
Platinum Pearls, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
AND FOR THE YEAR ENDED DECEMBER 31, 1998
AND FROM SEPTEMBER 30, 1993 (INCEPTION) THROUGH
SEPTEMBER 30, 1999
Cumulative
During
Development September 30 December 31
Stage 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (69,784) $ (26,438) $(43,346)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 12,867 3,905 9,142
Prepaid expenses - 20,000 (20,000)
-------- -------- ---------
NET CASH USED BY OPERATING ACTIVITIES (56,917) (2,533) (81,195)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of fixed assets (22,695) - (22,695)
Exclusive license rights (58,500) (58,500)
--------- -------- ---------
NET CASH USED BY INVESTING ACTIVITIES (81,195) (81,195)
CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES
Issuance of common stocks 139,008 4,000 135,008
-------- -------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 139,008 4,000 135,008
INCREASE IN CASH 1,076 1,467 (391)
BEGINNING CASH - 109 500
------- ----- ------
ENDING CASH $ 1,076 $ 1,576 $ 109
======= ===== ======
NON CASH DISCLOSURE
500,000 shares issued for
exclusive license rights $ 500 $ 500
23,000 shares issued for services $ 23 23
4,000 shares issued to repay debt $ 4 4
[CAPTION]
Platinum Pearls, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FROM SEPTEMBER 30, 1993 (INCEPTION)
THROUGH SEPTEMBER 30, 1999
Common Additional
Shares Stock@ Paid-In Retained
Outstanding Par Value Capital Deficit Total
----------- ---------- ------- -------- -----
Balance form 9/27/93
(inception) through 12/31/97 500,000 500 0 0 500
Net loss Dec. 31, 1998 $ (43,346) (43,346)
Stocks Issued for Cash 510,000 5 10 134,490 135,000
12/1/98 - 12/98
Stocks issued for services 8,000 8 8
Jan. 1, 1998-Dec. 31, 1998
Stocks issued for 500,000 500 500
license rights
-------- ----- ------- ------- ------
Balance at 12/31/98 1,518,000 1,518 134,490 (43,346) 92,662
Net loss- September 30, 1999 (22,910) (22,910)
Stocks issued for debt
repayment 1/1/99-9/30/99 4,000 4 3,996 4,000
Stocks issued for services
1/1/99-9/30/99 15,000 15 15
--------- ----- -------- ------- ------
1,537,000 1,537 138,486 (66,256) 73,767
--------- ----- ------- -------- ------
--------- ----- ------- -------- ------
[CAPTION]
Platinum Pearls, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF THE BUSINESS
Platinum Pearls, Inc. (The Company) was incorporated under the laws of the state
of Nevada on September 30, 1993 as Baja Franchise Systems, Inc. On February 28,
1998 , the name was changed to Platinum Pearls, Inc. The purpose for which the
Corporation is organized is to engage in any lawful act or activity for which a
corporation may be organized under the General Corporation Law of the State of
Nevada including, without limitation, to engage directly or through a subsidiary
or subsidiaries in the business of marketing the Platinum Pearls program, "a
quality life enhancement program."
The Company has been in the development stage since its inception on September
30, 1998. Planned principal operations have not commenced since then. There
were no activities from its inception date through September 30, 1999.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period when
the goods are shipped to the customers.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash equivalents.
The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average number
of shares outstanding at the dates of the financial statements. Fully Diluted
Earnings Per Shares shall be shown on stock options and other convertible issues
that may be exercised within ten years of the financial statement dates.
E. Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE 3. EXCLUSIVE LICENSE AGREEMENT
On January 29, 1998, the Company entered into an exclusive license agreement
with certain officers who are also stockholders of Platinum Pearls, Inc. The
Company paid $58,500 and issued 500,000 shares of common stock at par value for
such licenses. The Company will also pay on an annual basis a minimum royalty
fee of $20,000 as set forth by the terms of the agreement. The license
agreement is being amortized using straight-line method over its remaining
useful life of 10 years.
NOTE 4. GOING CONCERN
The Company has nominal assets and no current operations with which to create
operating capital. The Company seeks to raise operating capital with which to
seek business opportunities to utilize the technology its has acquired.
NOTE 5. PROPERTY AND EQUIPMENT
The Company capitalizes the purchase and fixtures for major purchases in excess
of $300 per item. Capitalized amounts are depreciated over the useful life of
the assets using the straight-line method of depreciation.
The following is a summary of property and equipment at cost, less accumulated
depreciation:
1999 1998
------- -------
Furniture and equipment $22,695 $22,695
Less accumulated depreciation ( 5,672) (3,242)
Total $17,023 $19,453
------- -------
------- -------
NOTE 6. INCOME TAXES
The Company has adopted the provisions of SFAS No. 109 "Accounting for Income
Taxes." SFAS 109 requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the differences between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These losses are
as follows:
Year of Loss Amount Expiration Date
1998 $43,346 2013
Item 14. EXHIBITS, FINANCIAL STATEMENTS
14(a) Report of Independent Certified Public Accountant September 30, 1999
Financial Statements
Balance Sheets
Statement of Income
Statement of Cash Flows
Statements of Stockholder's Equity
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable
(c) Exhibits
Exhibit No. D E S C R I P T I O N
----------- ---------------------
3.1 Articles of Incorporation Platinum Pearls, Inc.
3.2 Certificate of Amendment to Articles of Incorporation
3.3 Certificate of Amendment to Articles of Incorporation
3.4 By-laws Platinum Pearls, Inc.
4.1 Specimen certificate of common stock
10 Other Documents - Exclusive License Agreement
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
Platinum Pearls, Inc.
/s/ Tom E. Hays
_____________________________________
TOM E. HAYS, President and Director
Date: January 10, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Tom E. Hays
___________________________________
TOM E. HAYS, President and Director
Date: January 10, 2000
/s/ Susan R. Hays
________________________________________________
SUSAN R. HAYS, Vice President/Secretary/Director
Date: January 10, 2000
EXHIBIT 3.1
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
ARTICLES OF INCORPORATION
SEPTEMBER 30, 1993
12040-93
DEAN HELLER
SECRETARY OF STATE
ARTICLES OF INCORPORATION OF BAJA FRANCHISE SYSTEMS, INC.
The undersigned, to form a Nevada corporation, CERTIFIES THAT:
I. NAME: The name of the corporation is:
BAJA FRANCHISE SYSTEMS, INC.
II. PRINCIPAL OFFICE: The name and address of the registered agent of this
corporation within the State of Nevada is Corporate Services Center, Inc., 1280
Terminal Way, #3, Reno, Nevada 89502; this corporation may maintain an office
or offices in such other place within or without the State of Nevada as may be
from time to time designated by the Board of Directors or by the By-Laws of the
corporation; and this corporation may conduct all corporation business of every
kind or nature, including the holding of any meetings of directors or
shareholders, within the State of Nevada, as well as without the State of
Nevada.
III. PURPOSE: The purpose for which this corporation is formed is:
To engage in any lawful activity.
IV. AUTHORIZATION OF CAPITAL STOCK: The amount of the total authorized capital
stock of the corporation shall be TWENTY FIVE THOUSAND DOLLARS ($25,000.00),
consisting of Twenty Five Million (25,000,000) shares of common stock with a par
value of $.001 per share.
V. INCORPORATOR: The name and post office address of the incorporator signing
these Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
Tom E. Hays 4615 E. Palomino Road
Phoenix, Arizona 85018
VI. DIRECTORS: The governing board of this corporation shall be known as
directors, and the first board shall consist of one director. So long as all of
the shares of this corporation are owned beneficially and of record by either
one or two shareholders, the number of directors may be fewer than three, but
not fewer than the number of shareholders. Otherwise, the number of directors
shall not be fewer than three. Subject to the foregoing limitations, the number
of directors may, at any time or times, be increased or decreased by a duly
adopted amendment to these Articles of Incorporation, or in such manner as
provided in the By-Laws of this corporation.
The name and post office address of the director constituting the first Board of
Directors is as follows:
NAME POST OFFICE ADDRESS
Tom E. Hays 4615 E. Palomino Road
Phoenix, Arizona 85018
VII. STOCK NON-ASSESSABLE: The capital stock or the holders thereof, after the
amount of the subscription price has been paid in, shall not be subject to any
assessment whatsoever to pay the debts of the corporation.
VIII. TERM OF EXISTENCE: This corporation shall have perpetual existence.
IX. CUMULATIVE VOTING: No cumulative voting shall be permitted in the election
of directors.
X. PREEMPTIVE RIGHTS: Shareholders shall not be entitled to preemptive rights.
THE UNDERSIGNED, being the incorporator hereinbefore named for the purposed of
forming a corporation pursuant to the General Corporation Law of the State of
Nevada, does make and file these Articles of Incorporation, hereby declaring and
certifying the facts herein stated are true, and, accordingly, has hereunto set
his hand this _27____ day of September, 1993.
/s/ Tom E. Hays
- ---------------------
Tom E. Hays
STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
On this _27_ day of __Sept.________, 1993, before me, a Notary Public,
personally appeared Tom E. Hays who acknowledged he executed the above
instrument.
/s/ Vianne E. O'Neil
_________________________________
Notary Public
[SEAL OF NOTARY PUBLIC]
EXHIBIT 3.2
12040-93
DEAN HELLER
SECRETARY OF STATE
FILED IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
FEB 09, 1998
NO. C12040-93
DEAN HELLER
SECRETARY OF STATE
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF BAJA FRANCHISE SYSTEMS,
INC.
We, the undersigned President and Secretary of Baja Franchise Systems, Inc. do
hereby certify:
That the Board of Directors of said corporation at a meeting duly convened and
held on January 20, 1998, adopted resolutions to amend the original Articles of
Incorporation as follows:
Article I is hereby amended to change the name of the corporation from Baja
Franchise Systems, Inc. to Cornerstone Communications Corporation and to read in
full as follows:
"The name of the corporation is: Cornerstone Communications Corporation."
Article XI is hereby added to limit the liability of officers and directors and
to read in full as follows:
"A director or officer of the Corporation shall not be liable to the Corporation
or its shareholders for damages for breach of fiduciary duty as a director or
officer unless the act or omission involves intentional misconduct, fraud, a
knowing violation of law or the payment of an unlawful dividend in violation of
NRS 78.300."
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation are 2,000,000; that the said changes
and amendments have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
/s/ TOM HAYS
____________________________
Tom Hays, President
/s/ SUSAN HAYS
____________________________
Susan Hays, Secretary
STATE OF TENNESSEE
COUNTY OF DAVIDSON
On January 26, 1998, personally appeared before me, a Notary Public, Tom Hays,
who acknowledged that he executed the above document.
/s/ KENNY L. YOUNG
________________________
Notary Public
On January 26, 1998, personally appeared before me, a Notary Public, Susan Hays,
who acknowledged that he executed the above document.
/s/ KENNY L. YOUNG
________________________
Notary Public
EXHIBIT 3.3
SECRETARY OF STATE
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
MAY 14, 1998
NO. C12040-93
DEAN HELLER
SECRETARY OF STATE
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF CORNERSTONE
COMMUNICATIONS, INC.
We, the undersigned President and Secretary of Cornerstone Communications
Corporation do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened and
held on February 27, 1998, adopted resolutions to amend the original Articles of
Incorporation as follows:
Article I is hereby amended to change the name of the corporation from
Cornerstone Communications Corporation to Platinum Pearls, Inc. and to read in
full as follows:
"The name of the corporation is: Platinum Pearls, Inc."
Article XI is hereby added to limit the liability of officers and directors and
to read in full as follows:
"A director or officer of the Corporation shall not be liable to the Corporation
or its shareholders for damages for breach of fiduciary duty as a director or
officer unless the act or omission involves intentional misconduct, fraud, a
knowing violation of law or the payment of an unlawful dividend in violation of
NRS 78.300."
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation are 2,000,000; that the said changes
and amendments have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
/s/ TOM HAYS
____________________________
Tom Hays, President
/s/ SUSAN HAYS
____________________________
Susan Hays, Secretary
STATE OF ARIZONA
COUNTY OF MARICOPA
On May 8th, 1998, personally appeared before me, a Notary Public, Tom Hays, who
acknowledged that he executed the above document.
/s/ LAURIE J. KLUCZNIK
________________________
Notary Public
On May 8th, 1998, personally appeared before me, a Notary Public, Susan Hays,
who acknowledged that she executed the above document.
/s/ LAURIE J. KLUCZNIK
________________________
Notary Public
EXHIBIT 3.4
BY-LAWS OF Platinum Pearls, Inc.
BY-LAWS OF Baja Franchise Systems, INC.
ARTICLE I - OFFICES
The principal office of the corporation in the State of Nevada shall be located
at 1280 Terminal Way, #3, in the city of Reno, County of Washoe. The corporation
may have such other offices, either within or without the State of incorporation
as the board of directors may designate or as the business of the corporation
may from time to time require.
ARTICLE II - STOCKHOLDERS
1. ANNUAL MEETING.
The annual meeting of the stockholders shall be held in the month of July in
each year, beginning with the year 1994, at a date and time to be specified by
the board of directors, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting.
2. SPECIAL MEETINGS.
Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the president or by the
directors, and shall be called by the president at the request of the holders of
not less than twenty-five (25) per cent of all the outstanding shares of the
corporation entitled to vote at the meeting.
3. PLACE OF MEETING.
The directors may designate any place, either within or without the State unless
otherwise prescribed by statute, as the place of meeting for any annual meeting
or for any special meeting called by the directors. A waiver of notice signed
by all stockholders entitled to vote at a meeting may designate any place,
either within or without the state unless otherwise prescribed by statute, as
the place for holding such meeting. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be the principal office
of the corporation.
4. NOTICE OF MEETING.
Written or printed notice stating the place, day and hour of the meeting and, in
case of a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten (10) days nor more than sixty (60)
days before the date of the meeting, either personally or by mail, by or at the
direction of the president, or the secretary, or the officer or persons calling
the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, addressed to the stockholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid.
5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
For the purpose of determining stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or stockholders entitled
to receive payment of any dividend, or in order to make a determination of
stockholders for any other proper purpose, the directors of the corporation may
provide that the stock transfer books shall be closed for a stated period but
not to exceed, in any case, twenty (20) days. If the stock transfer books shall
be closed for the purpose of determining stockholders entitled to notice of or
to vote at a meeting of stockholders, such books shall be closed for at least
fifteen (15) days immediately preceding such meeting. In lieu of closing the
stock transfer books, the directors may fix in advance a date as the record date
for any such determination of stockholders, such date in any case to be not more
than sixty (60) days and, in case of a meeting of stockholders, not less than
ten (10) days prior to the date on which the particular action requiring such
determination of stockholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders, or stockholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of stockholders. When a determination of stockholders entitled to
vote at any meeting of stockholders has been made as provided in this section,
such determination shall apply to any adjournment thereof.
6. VOTING LISTS.
The officer or agent having charge of the stock transfer books for shares of the
corporation shall make, at least ten (10) days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of
ten (10) days prior to such meeting, shall be kept on file at the principal
office of the corporation and shall be subject to inspection by any stockholder
at any time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any stockholder during the whole time of the meeting. The
original stock transfer book shall be prima facie evidence as to who are the
stockholders entitled to examine such list or transfer books or to vote at the
meeting of stockholders.
7. QUORUM.
At any meeting of stockholders a majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than said number of
the outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
8. PROXIES.
At all meetings of stockholders, a stockholder may vote by proxy executed in
writing by the stockholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the secretary of the corporation before or at the time
of the meeting.
9. VOTING.
Each stockholder entitled to vote in accordance with the terms and provisions of
the certificate of incorporation and these by-laws shall be entitled to one
vote, in person or by proxy, for each share of stock entitled to vote held by
such stockholders. Upon the demand of any stockholder, the vote for directors
and upon any question before the meeting shall be by ballot. All elections for
directors shall be decided by plurality vote; all other questions shall be
decided by majority vote except as otherwise provided by the Certificate of
Incorporation or the laws of this State.
10. ORDER OF BUSINESS.
The order of business at all meetings of the stockholders, shall be as follows:
1. Roll Call.
2. Proof of notice of meeting or waiver of notice.
3. Reading of minutes of preceding meeting.
4. Reports of Officers.
5. Reports of Committees.
6. Election of Directors.
7. Unfinished Business.
8. New Business.
11. INFORMAL ACTION BY STOCKHOLDERS.
Unless otherwise provided by law, any action required to be taken at a meeting
of the shareholders, or any other action which may be taken at a meeting of the
shareholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by a majority of the shareholders
entitled to vote with respect to the subject matter thereof.
ARTICLE III - BOARD OF DIRECTORS
1. GENERAL POWERS.
The business and affairs of the corporation shall be managed by its board of
directors. The directors shall in all cases act as a board, and they may adopt
such rules and regulations for the conduct of their meetings and the management
of the corporation, as they may deem proper, not inconsistent with these by-laws
and the laws of this State.
2. NUMBER, TENURE AND QUALIFICATIONS.
The number of directors of the corporation shall be set by the board, but shall
not exceed seven (7). Each director shall hold office until the next annual
meeting of stockholders and until his successor shall have been elected and
qualified.
3. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without other notice than this
by-law immediately after, and at the same place as, the annual meeting of
stockholders. The directors may provide, by resolution, the time and place for
the holding of additional regular meetings without other notice than such
resolution.
4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request of the
president or any two directors. The person or persons authorized to call
special meetings of the directors may fix the place for holding any special
meeting of the directors called by them.
5. NOTICE.
Notice of any special meeting shall be given at least five (5) days previously
thereto by written notice delivered personally, or by telegram, or mailed to
each director at his business address. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail so addressed with
postage thereon prepaid. If notice be given by telegram, such notice shall be
deemed to be delivered when the telegram is delivered to the telegraph company.
The attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened.
6. QUORUM.
At any meeting of the directors a majority shall constitute a quorum for the
transaction of business, but if less than said number is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the directors.
8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of a majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled by
vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the un-
expired term of his predecessor.
9. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the stockholders
or by action of the board. Directors may be removed without cause only by vote
of the stockholders.
10. RESIGNATION.
A director may resign at any time by giving written notice to the board, the
president or the secretary of the corporation. Unless otherwise specified in
the notice, the resignation shall take effect upon receipt thereof by the board
or such officer, and the acceptance of the resignation shall not be necessary to
make it effective.
11. COMPENSATION.
No compensation shall be paid to directors, as such, for their services, but by
resolution of the board a fixed sum and expenses for actual attendance at each
regular or special meeting of the board may be authorized. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
12. PRESUMPTION OF ASSENT.
A director of the corporation who is present at a meeting of the directors at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
13. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution, may designate from among its members an executive
committee and other committees, each consisting of three or more directors.
Each such committee shall serve at the pleasure of the board.
ARTICLE IV - OFFICERS
1. NUMBER.
The officers of the corporation shall be a president, a vice-president, a
secretary and a treasurer, each of whom shall be elected by the directors. Such
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the directors.
2. ELECTION AND TERM OF OFFICE.
The officers of the corporation to be elected by the directors shall be elected
annually at the first meeting of the directors held after each annual meeting of
the stockholders. Each officer shall hold office until his successor shall have
been duly elected and shall have qualified or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided.
3. REMOVAL.
Any officer or agent elected or appointed by the directors may be removed by the
directors whenever in their judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
4. VACANCIES.
A vacancy in any office because of death, resignation, removal, disqualification
or otherwise, may be filled by the directors for the un- expired portion of the
term.
5. PRESIDENT.
The president shall be the principal executive officer of the corporation and,
subject to the control of the directors, shall in general supervise and control
all of the business and affairs of the corporation. He shall, when present,
preside at all meetings of the stockholders and of the directors. He may sign,
with the secretary or any other proper officer of the corporation thereunto
authorized by the directors, certificates for shares of the corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the directors
have authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the directors or by these by-laws to
some other officer or agent of the corporation, or shall be required by law to
be otherwise signed or executed; and in general shall perform all duties
incident to the office of president and such other duties as may be prescribed
by the directors from time to time.
6. VICE-PRESIDENT.
In the absence of the president or in event of his death, inability or refusal
to act, the vice-president shall perform the duties of the president, and when
so acting, shall have all the powers of and be subject to all the restrictions
upon the president. The vice-president shall perform such other duties as from
time to time may be assigned to him by the President or by the directors.
7. SECRETARY.
The secretary shall keep the minutes of the stockholders' and of the directors'
meetings in one or more books provided for that purpose, see that all notices
are duly given in accordance with the provisions of these by-laws or as
required, be custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder, have general
charge of the stock transfer books of the corporation and in general perform all
duties incident to the office of secretary and such other duties as from time to
time may be assigned to him by the president or by the directors.
8. TREASURER.
If required by the directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or sureties as the
directors shall determine. He shall have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with these by-laws and in general perform all of the duties incident to the
office of treasurer and such other duties as from time to time may be assigned
to him by the president or by the directors.
9. SALARIES.
The salaries of the officers shall be fixed from time to time by the directors
and no officer shall be prevented from receiving such salary by reason of the
fact that he is also a director of the corporation.
ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS.
The directors may authorize any officer or officers, agent or agents, to enter
into any contract or execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or confined to
specific instances.
2. LOANS.
No loans shall be contracted on behalf of the corporation and no evidences of
indebtedness shall be issued in its name unless authorized by a resolution of
the
directors. Such authority may be general or confined to specific instances.
3. CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation, shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the directors.
4. DEPOSITS.
All funds of the corporation not otherwise employed shall be deposited from time
to time to the credit of the corporation in such banks, trust companies or other
depositories as the directors may select.
ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSFER
1. CERTIFICATES FOR SHARES.
Certificates representing shares of the corporation shall be in such form as
shall be determined by the directors. Such certificates shall be signed by the
president and by the secretary or by such other officers authorized by law and
by
the directors. All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the stockholders, the number of
shares and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the corporation for transfer shall
be canceled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and canceled, except
that
in case of a lost, destroyed or mutilated certificate a new one may be issued
therefor upon such terms and indemnity to the corporation as the directors may
prescribe.
2. TRANSFERS OF SHARES.
(a) Upon surrender to the corporation or the transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, and
cancel
the old certificate; every such transfer shall be entered on the transfer book
of
the corporation.
(b) The corporation shall be entitled to treat the holder of record of any
share
as the holder in fact thereof, and, accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such share on the part of any
other person whether or not it shall have express or other notice thereof,
except
as expressly provided by the laws of this state.
ARTICLE VII - FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the board of
directors.
ARTICLE VIII - DIVIDENDS
The directors may from time to time declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE IX - SEAL
The directors shall provide a corporate seal which shall be circular in form and
shall have inscribed thereon the name of the corporation, the state of
incorporation, year of incorporation and the words, "Corporate Seal".
ARTICLE X - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be given to
any stockholder or director of the corporation under the provisions of these by-
laws or under the provisions of the articles of incorporation, a waiver thereof
in writing signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving
of such notice.
ARTICLE XI - AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be adopted
by a vote of the stockholders representing a majority of all the shares issued
and outstanding, at any annual stockholders' meeting or at any special
stockholders' meeting when the proposed amendment has been set out in the notice
of such meeting.
Dated: Sept. 30, 1993
/s/ TOM E. HAYS
- -------------------------
Incorporator
Exhibit 4.1
SPECIMEN OF COMMON STOCK CERTIFICATE
Platinum Pearls, Inc.
[________]NUMBER SHARES[________]
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA 25,000,000 SHARES COMMON
STOCK
AUTHORIZED, $.001 PAR VALUE
COMMON STOCK CUSIP 72765L 10 7
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
Is the RECORD HOLDER OF SHARES OF FULLY PAID AND NON-ASSESSABLE
SHARES OF COMMON STOCK OF Platinum Pearls, Inc. TRANSFERABLE ON THE BOOKS OF THE
CORPORATION IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS
CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE AND THE SHARES REPRESENTED
HEREBY ARE SUBJECT TO THE LAWS OF THE STATE OF NEVADA, AND TO THE CERTIFICATE OF
INCORPORATION AND BYLAWS OF THE CORPORATION, AS NOW OR HEREAFTER AMENDED. THIS
CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT.
WITNESS the facsimile seal of the Corporation and the signature of its duly
authorized officers.
Dated:
[SEAL OF Platinum Pearls, Inc.]
/s/ TOM E. HAYS /S/ SUSAN HAYS
- - ----------------------- ---------------------
President Secretary
COUNTERSIGNED
AMERICAN REGISTRAR & TRANSFER CO.
342 E. 900 South
P.O. Box 1798
Salt Lake City, Utah 84110
By: ^^Illegible Signature^^
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ____Custodian____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as Act ________________________
tenants in common (State)
Additional abbreviation may also be used though not in above list.
FOR VALUE RECEIVED, _________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------
- ----------------------------------------
__________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Shares of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
__________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named
Corporation with full power of substitution in the premises.
Dated: ---------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.
EXHIBIT 10
EXCLUSIVE LICENSE AGREEMENT
This Exclusive License Agreement (hereafter "Agreement") entered into this 29
day
of January, 1998, between Tom and Susan Hays (hereafter "licensor") and
Cornerstone Communications Corp. (Hereafter "Licensee.")
Whereas Licensor has filed, under serial #75/427026, for trade mark rights on
the
name "Platinum Pearls", and has developed and will develop a range of lifestyle
enhancement programs to be incorporate within the "Platinum Pearls" trade mark,
and
Whereas Cornerstone Communications Corporation is desirous of obtaining
exclusive rights to the use of said mark and programs developed and to be
developed thereunder,
Now, therefore, the parties agree as follows:
1. Licensor licenses to Licensee (a) the exclusive right to use of the trade
mark name, "Platinum Pearls" and (b) the exclusive right to use the lifestyle
enhancement programs and concepts developed to date by Licensor, which are to be
marketed under the mark assigned above, and (c) all other related programs and
concepts to be developed by Licensor, which are also to be marketed under the
assigned mark.
2. In consideration for said License, Licensee agrees to pay Licensor a royalty
determined as follows:
a. 6% of gross revenues generated by Licensee's operations under the licensed
mark, except,
b. In the event of a sub-license by Licensee to a third party of either the
mark
or programs or concepts developed therefor, which arrangement is subject to
written approval by Licensor (and approval may not be unreasonably withheld),
then Licensor shall be entitled to 50% of gross revenue generated by any such
sub-licensing agreement entered into by Licensee. Said sub-licensing agreement
may not be for less than the 6% referenced in (a) above. Any such sub-licensing
payment shall be made to Licensor within 30 days of receipt by Licensee, and
Licensor shall have the right to reasonably inspect and audit Licensee's books
and records to confirm the accuracy of such payments.
3. Additional Compensation. Licensee additionally hereby agrees to reimburse
Licensor for $58,500 in expenses incurred by Licensor in development of the mark
and related programs and materials, and to issue to Licensor 500,000 shares of
the first preferred shares of the Licensee.
4. Minimum Annual Royalty Payment. This Agreement shall remain in effect for
the term set forth herein on condition that the royalty payment, on an annual
basis, shall not be less than $20,000. Licensor acknowledges receipt of
$40,000,
which the parties agree is a non-refundable advance of two years of the minimum
royalty payment due, subject only to additional payments to Licensor arising out
of additional amounts which may be calculated to be due, pursuant to paragraph 2
above.
5. Term of the Agreement. The terms of this Agreement shall be ten years,
subject only to each party's performance of their obligation set forth herein.
Upon conclusion of said term, and providing Licensee has given Licensor 90 days
prior notice, in writing, of its intent to renew this Agreement, and is in full
compliance with all obligations herein, Licensee shall have the right to renew
this license for an additional ten (10) year term upon the same terms and
conditions as herein set forth.
6. Events of Default. The Parties agree that this Agreement is in default if
(a) the payments set forth herein are not paid by Licensee; (b) Licensees fails
to notify and obtain Licensor's approval of any sub-licensing agreement; (c)
Licensee files for protection under the U.S. Bankruptcy Code. Any default, not
cured within 10 days of written Notice of Default to be provided by Licensor to
Licensee, or as otherwise provided by a court of law, shall terminate the
license
issued under this Agreement.
7. Jurisdiction. The parties agree that jurisdiction over this Agreement and
any disputes arising hereunder, shall be with the State of Arizona, Maricopa
County, and any disputes shall be resolved under Arizona law.
8. Agreement Non-Assignable. This Agreement may not be pledged, sold, or
assigned, other than sub-licensing agreements as set forth herein-above, without
the express written consent of Licensor, in their sole discretion.
CORNERSTONE COMMUNICATIONS CORP.
By /s/ SUSAN R. HAYS
- --------------------
its Secretary
- --------------------
Licensee
/s/TOM HAYS
- --------------------
Tom Hays
/s/SUSAN HAYS
- --------------------
Susan Hays
LICENSOR
