FORM 10-K-SB-A1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-28311
NET MASTER CONSULTANTS, INC.
formerly HOUSTON PRODUCE CORPORATION
Texas 76-027334
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
34700 Pacific Coast Highway, Suite 303, Capistrano Beach CA 92624
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 248-1765
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 3,167,800
Yes[x] No[] (Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.)
[] (Indicate by check mark whether if disclosure of delinquent filers
('229.405) is not and will not to the best of Registrant's knowledge be
contained herein, in definitive proxy or information statements incorporated
herein by reference or any amendment hereto.)
As of 12/31/99
the aggregate number of shares held by non-affiliates was approximately
467,800
the number of shares outstanding of the Registrant's Common Stock was
3,167,800
Exhibit Index is found on page 16
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PART I
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INTRODUCTION
Our 1934 Act registration statement was voluntarily filed pursuant to
Section 12(g) of the Securities Exchange Act of 1934, in order to comply with
the requirements of National Association of Securities Dealers for continued
quotation on the Over the Counter Bulletin Board, often called AOTCBB@. Our
common stock is presently quoted on the OTCBB. The requirements of the OTCBB are
that the financial statements and information about our company be reported
periodically to the Commission and be and become information that the public can
access easily. This company wishes to report and provide disclosure voluntarily,
and will file periodic reports in the event that its obligation to file such
reports is excused or suspended under the Exchange Act.
This Company may be the subject of a "Reverse Acquisition". A reverse
acquisition is the acquisition of a private ("Target") company by a public
company, by which the private company's shareholders acquire control of the
public company. While no negotiations are in progress, and no potential targets
have been identified, our business plan is to find such a target or targets, and
attempt to acquire them for stock. While no such arrangements or plans have been
adopted or are presently under consideration, it would be expected that a
reverse acquisition of a target company or business would be associated with
some private placements and/or limited offerings of our common stock. Such
placements, or offerings, if and when made or extended, would be made with
disclosure and reliance on the businesses and assets to be acquired, and not
upon our present condition.
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ITEM 1. DESCRIPTION OF BUSINESS.
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(A) HISTORICAL INFORMATION. This Corporation Net Masters Consultants, Inc. was
incorporated in Texas on December 28, 1988, as Houston Produce Corporation. The
company intended to import fruits and vegetables from Latin America for sale in
the United States market; however, it has remained dormant until its
reactivation in March of 1997. As of this date, the issuer continues to be a
development stage company. On June 24, 1997, we changed our name to Net Masters
Consultants, Inc. and increased and changed its authorized capital to
100,000,000 shares of par value $0.0001. We had intended to become a global
Internet Media company that would offer a network of branded World-Wide Web
programming that would serve millions of users daily. The Registrant intended to
provide targeted resources and communications services, attracting a broad range
of audiences, based upon demographic, key-subject and geographic interests. To
date we have not succeeded in launching operations pursuant to the business
plan, and that plan was abandoned, on October 1, 1999. Management is presently
engaged in a search for a profitable business opportunity, by acquisition or
combination.
This corporation was not a "Blank Check Company", commonly called a "Blind
Pool", as referred to in either Rule 419 or Rule 504, or at any time its
founders or others were offered, purchased or acquired the outstanding
securities of this Registrant. After abandoning its business plan, it became a
company whose business plan was to find a profitable business combination. As a
practical matter, it is required to register its common stock pursuant to '12(g)
of the 1934 Act, and to pursue continued acceptance for quotation on the OTCBB
if it is to have any chance to compete with other issuers or registrants, for
business combinations by reverse acquisition. There are no lock-up or
shareholder pooling agreements between or among shareholders of this
corporation. All shares are owned and controlled independently by the persons to
whom they are issued. We have no Internet address.
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FOUNDERS SHARES: On December 29, 1988, 33,000 shares of common stock were
issued in exchange for organizational services and costs, valued by management
at $33.00. These shares were issued to the two founding shareholders. On March
27, 1997, we authorized a 1,000 to one forward split of the existing 33,000
shares to 33,000,000 shares of par value $0.0001, immediately following said
forward split, the Corporation resolved to cancel and replace the founders'
33,000,000 shares with 3,000,000 replacement founders' shares.
FURTHER ISSUANCES: On May 22, 1997, we authorized the issuance of 20,000
shares for $100,000.00, pursuant to Regulation D, Rule 504. On May 12, 1998, we
authorized the issuance of 2,800 shares for $2,800.00, pursuant to Regulation D,
Rule 504. As a result of the foregoing, on October 16, 1998, we had 3,022,800
shares issued and outstanding, among 48 shareholders. On or about December 29,
1998, we made a further issuance of 50,000 shares to a single investor, pursuant
Regulation D, Rule 504, for $5,000.00 cash; and similarly on March 3, 1999, a
further placement for cash, of 95,000 shares, pursuant to the Rule.
As a result of the foregoing, on December 31, 1999, we had 3,167,800 shares
issued and outstanding, among approximately 51 shareholders, as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Issuance:
Reference Number Original Forward Split
Exemption Issuances 1 to 1,000
- --------------------------------------------------------
1- section4(2) 33,000 33,000,000
2- section4(2) Founders Adjustment (30,000,000)
Subtotal 33,000 3,000,000
3- section504 20,000
4- section504 2,800
5- section504 50,000
6- section504 95,000
Subtotal 167,800
Totals 3,167,800
========================================================
</TABLE>
Substantially all of our non-affiliate owned shares have become or were
from issuance free of restriction in conformity with Rule 144, and might be
resold in brokerage transactions, in compliance with that Rule
SUBSEQUENT EVENT. On January 28,2000, we effected a further forward split
of our common stock, two for one. This subsequent event is not reflected in our
Audited Financial Statements of December 31, 1999.
(1) BANKRUPTCY, RECEIVERSHIP OR SIMILAR PROCEEDING. None from inception
to date.
(B) BUSINESS OF THE ISSUER. This Company has no current business. Its business
plan is to seek one or more profitable business combinations or acquisitions to
secure profitability for shareholders. It has no day to day operations at the
present time. Its officers and directors devote only insubstantial time and
attention to the affairs of this issuer at the present time, for the reason that
only such attention is presently required. Management has adopted a conservative
and patient policy of seeking opportunities of exceptional quality, in
management's view, and to accept that it may have to wait longer, as a result,
before consummating any transactions to create profitability for its
shareholder. Management recognizes that the higher the standards it imposes upon
itself, the greater may be it's competitive disadvantages with other more
attractive acquiring interests or entities. Due to circumstances unique to this
Registrant, it is not in a position to consider any specific proposal for the
use of this Registrant in reverse merger transactions, for the reason that it is
not now qualified for continued quotation on the OTC Bulletin Board on or after
February of 2000. Management has determined that it must so qualify itself by
this 1934 Act Registration of its common stock, as a class, pursuant to sec12(g)
of the Securities Act of 1934, before it can present itself as a viable
competitor in the reverse acquisition arena.
LIMITED SCOPE AND NUMBER OF POSSIBLE ACQUISITIONS: The Company does not
intend to restrict its consideration to any particular business or industry
segment, and the Company may consider, among others, finance, brokerage,
insurance, transportation, communications, research and development, service,
natural resources, manufacturing or high-technology. Of course, because of the
Company's limited resources, the scope and number of suitable candidate business
ventures available will be limited accordingly, and most likely the Company will
not be able to participate in more than a single business venture. Accordingly,
it is anticipated that the Company will not be able to diversify, but may be
limited to one merger or acquisition because of limited financing. This lack of
diversification will not permit the Company to offset potential losses from one
business opportunity against profits from another. To a large extent, a decision
to participate in a specific business opportunity may be made upon management's
analysis of the quality of the other firm's management and personnel, the
anticipated acceptability of new products or marketing concepts, the merit of
technological changes and numerous other factors which are difficult, if not
impossible, to analyze through the application of any objective criteria. In
many instances, it is anticipated that the historical operations of a specific
firm may not necessarily be indicative of the potential for the future because
of the necessity to substantially shift a marketing approach, expand operations,
change product emphasis, change or substantially augment management, or make
other changes. The Company will be dependent upon the management of a business
opportunity to identify such problems and to implement, or be primarily
responsible for the implementation of, required changes. Because the Company may
participate in a business opportunity with a newly organized firm or with a firm
which is entering a new phase of growth, it should be emphasized that the
Company may incur further risk due to the failure of the target's management to
have proven its abilities or effectiveness, or the failure to establish a market
for the target's products or services, or the failure to prove or predict
profitability.
PROBABLE INDUSTRY SEGMENTS FOR ACQUISITION. While the Company does not
intend to rule out its consideration to any particular business or industry
segment, Management has determined to focus its principal interest in evaluating
development stage companies in the electronic commerce, high-technology,
communication technologies, information services and internet industry segments.
It is nevertheless possible that an outstanding opportunity may develop in other
industry segments, such as finance, brokerage, insurance, transportation,
communications, research and development, service, natural resources,
manufacturing or other high-technology areas.
REPORTING UNDER THE 1934 ACT. Following the effectiveness of this 1934 Act
Registration of the common stock of this Registrant, certain periodic reporting
requirements will be applicable. First and foremost, a 1934 Registrant is
required to file an Annual Report on Form 10-K or 10-KSB, 90 days following the
end of its fiscal year. The key element of such annual filing is Audited
Financial Statement prepared in accordance with standards established by the
Commission. A 1934 Act Registrant also reports on the share ownership of
affiliates and 5% owners, initially, currently and annually. In addition to the
annual reporting, a Registrant is required to file quarterly reports on Form
10-Q or 10-QSB, containing audited or un-audited financial statements, and
reporting other material events. Some events are deemed material enough to
require the filing of a Current Report on Form 8-K. Any events may be reported
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currently, but some events, like changes or disagreements with auditors,
resignation of directors, major acquisitions and other changes require
aggressive current reporting. All reports are filed and become public
information. The practical effects of the foregoing requirements on the criteria
for selection of a target company are two-fold: first, the target must have
audited or auditable financial statements, and the target must complete an audit
for filing promptly upon the consummation of any acquisition; and, second, that
the target management must be ready, willing and able to carry forth those
reporting requirements or face de-listing from the OTCBB, if listed, and
delinquency and possible liability for failure to report.
TRANSACTIONS WITH MANAGEMENT. There is no present or foreseeable potential
that this Registrant will acquire a target business or company in which its
present management or principal shareholder, or affiliates, have an ownership
interest. Consideration has been given to corporate policy in this regard, and
it has been determined not to permit any transaction in other than an arm's
length acquisition of business assets owned and controlled by unrelated third
party interests. The basis for this policy is two fold: first, that related
party transactions are unnecessary in the judgment of management and involve
risks not necessary to invite; and second that related party transactions do not
offer the potential profitability for shareholders, that management believes
exists presently in the market place for public issuers amenable to reverse
merger transactions.
FINDERS FEE FOR MANAGEMENT. No finder's fees will be payable to Management
in connection with any forseeable reverse acquisition. Management is identified
with the principal shareholder. The Principal Shareholder's remaining share
ownership following any reverse acquisition, and the Principal Shareholder might
be expected to sell its controlling interest for consideration from the
acquiring shareholders of the acquisition target. Depending on the quality of
the target company, the principal shareholder may sell all, some, or none of the
control block, as matters for arm's length deal-making, when it comes to that
stage. Additionally, the Principal Shareholder is the Principal Consultant and
provides, has provided and may provide corporate services to the Registrant,
billable hourly in an established and customary manner. No finders fees,
commissions or other bonuses to Management, Principal Shareholder, or
affiliates, for securing or in connection with any acquisition, will be paid or
payable, as a matter of both current economic conditions and corporate policy.
Management has determined that in its view of the current market for such
transactions, such fees or bonuses are not justifiable.
CONSULTANTS. This Registrant has two consultants (1) Intrepid Internaitonal
Ltd.,a Nevada.Corporation, in which Dan Sifford, our former Officer and director
is an affiliate; and (2) Nora Coccaro, our sole remaining officer and director.
Accordingly, our officers and directors, former and current, classify themselves
as consultants.No other consultants are
presently engaged nor are there any plans to retain any consultants currently or
for the foreseeable future. It is, of course, conceivable that should a target
business be acquired, one or more consultants may be sought out by the
management of the acquired entity, following a change of control. As of this
time, there is no basis upon which Management could base anything more than mere
speculation as to what manner of consultant, what criteria for seeking or
selecting consultants, or what term of service any such consultant might
require; for the reason that all such consideration would be matters before the
Management of the Registrant only after a change of control which would result
from a reverse acquisition.
LOAN FINANCING NOT ANTICIPATED. There are no foreseeable circumstances
under which loan financing will be sought or needed during Registrant's present
development stage.
DEPENDENCE ON MANAGEMENT. This Company is required to rely on Management's
skill, experience and judgement, both in regard to extreme selectivity, and in
any final decision to pursue any particular business venture, as well as the
form of any business combination, should agreement be reached at some point to
acquire or combine. Please see Item 2 of this Part, Managements Discussion and
Analysis or Plan of Operation, and also Item 7 of this Part, Certain
Relationships and Related Transactions.
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(1) PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS.
[None.]
(2) DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES.
[None.]
(3) STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICE.
[None.]
(4) COMPETITIVE BUSINESS CONDITIONS AND THE SMALL BUSINESS ISSUER'S
COMPETITIVE POSITION IN THE INDUSTRY. Other better capitalized firms are engaged
in the search for acquisitions or business combinations which firms may be able
to offer more and may be more attractive to acquisition candidates. This
Registrant became a candidate for reverse acquisition transactions only this
past October. Management, in evaluating market conditions and unsolicited
proposals, has formed the estimate that the selection of a business combination
is probable within the next twelve months. There is no compelling reason why
this Registrant should be preferred over other reverse-acquisition public
corporation candidates. It has no significant pool of cash it can offer and no
capital formation incentive for its selection. It has a limited shareholder base
insufficient for acquisition target wishing to proceed for application to
NASDAQ. In comparison to other "public shell companies" this Registrant is
unimpressive, in the judgement of management, and totally lacking in unique
features which would make it more attractive or competitive than other "public
shell companies". While management believes that the competition of other
"public shell companies" is intense and growing, it has no basis on which to
quantify its impression. This Registrant is not desperate or overly eager to
find a business partner, and its management has resolved to allow such time as
may be required to find an opportunity of superior value and potential.
Notwithstanding the confidence of management in its knowledge, skill and that of
its consultants and principal shareholder, there can be no assurance that this
issuer will prove competitively attractive to the kinds of transactions it
seeks. Please See the Item 2 of this part, Management Discussion and Analysis,
for more information and disclosure.
(5) SOURCES OF AND AVAILABILITY OF RAW MATERIALS AND THE NAMES OF
PRINCIPAL SUPPLIERS. Not Applicable.
(6) DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS. Not Applicable.
(7) PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY
AGREEMENTS OR LABOR CONTRACTS.
[None.]
(8) NEED FOR ANY GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES
AND STATUS. Not Applicable.
(9) EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE
BUSINESS. Not Applicable. However, this issuer would expect to maintain its
corporate status with the State of its incorporation, and would file its tax
returns and reports required to be filed with the Commission. This issuer wishes
to report and provide disclosure voluntarily, and will file periodic reports in
the event that its obligation to file such reports is suspended under the
Exchange Act. If and when this 1934 Act Registration is effective and clear of
comments by the staff, this issuer will be eligible for continued quotation on
the OTCBB for the purchase and sale of the shares of its common stock in
brokerage transactions. In connection with such continuation on the OTCBB, this
Registrant would expect to comply with NASD regulations, to the extent that any
such regulations are applicable to the conduct of the Registrant's affairs.
(10) ESTIMATE OF AMOUNT SPENT ON RESEARCH AND DEVELOPMENT IN EACH OF LAST
TWO YEARS.
[None.]
(11) COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS. Not
Applicable.
(12) NUMBER OF TOTAL EMPLOYEES AND FULL-TIME EMPLOYEES. None. The
Registrant has two officers who devote an insubstantial amount of time to the
affairs of this Registrant and who serve without compensation.
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(13) YEAR 2000 COMPLIANCE, EFFECT ON CUSTOMERS AND SUPPLIERS. None. The
issuer has no computers or digital equipment of its own, no suppliers or
customers. Accordingly, the issuer has determined that it is faced with no year
2000 compliance issues other than those shared by the public in general.
(C) FINANCING PLANS. For more information, please see Item 6 of Part II,
Management's Discussion and Analysis.
(D) PLANNED ACQUISITIONS. There are no planned acquisitions at this time.
ITEM 2. DESCRIPTION OF PROPERTY.
We have no property and enjoy the non-exclusive use of offices and telephone of
its officers and attorneys.
ITEM 3. LEGAL PROCEEDINGS.
There are no legal proceedings pending against the Company, as of the
preparation of this Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
[None]
The Remainder of this Page is Intentionally left Blank
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND STOCKHOLDER MATTERS.
(A) MARKET INFORMATION. The Common Stock of this corporation is quoted Over the
Counter on the Bulletin Board ("OTCBB"). There was no substantial market
activity before December 1998. Based upon standard reporting sources, the
following information is provided:
<TABLE>
<CAPTION>
<S> <C> <C>
period high bid low bid
- ---------------------------
1st 1999 6.25 4.50
2nd 1999 7.00 5.00
3rd 1999 5.19 2.88
4th 1999 6.75 4.56
===========================
</TABLE>
The foregoing price information is based upon inter-dealer prices without
retail mark-up, mark-down or commissions and may not reflect actual
transactions, and is based upon standard reporting sources, taken off the
Internet.
(B) HOLDERS. There are presently approximately 51 shareholders of the common
stock of this Registrant.
(C) DIVIDENDS. No cash dividends have been paid by the Company on its Common
Stock or other Stock and no such payment is anticipated in the foreseeable
future.
(D) REVERSE ACQUISITIONS. A reverse acquisition of a target business or
company would be expected to involve a change of control of the Registrant, and
the designation of new management. The financial statements of this Registrant
would become largely unreflective of the true condition of the Registrant after
such an acquisition. Shareholder approval would be solicited, pursuant to the
laws of the State of Nevada, to approve the acquisition, change of control, and
any material corporate changes incidental to the reorganization of this
Registrant. In connection with the solicitation of shareholder approval, whether
or not proxies are solicited, the Registrant would provide shareholders with the
fullest possible disclosure of all information material to shareholder
consideration, and such disclosure would include audited financial statements of
the target entity, if available. If shareholder approval is sought in advance of
audited financial statements of an acquisition target, the authority of
management to consummate any transaction would be contingent on a proper audit
of the target meeting the criteria of any un-audited information relied upon by
shareholders.
(E) DIVIDENDS. We have not paid any cash dividends on our Common Stock, and do
not anticipate paying cash dividends on its Common Stock in the next year. We
anticipate that any income generated in the foreseeable future will be retained
for the development and expansion of our business. Future dividend policy is
subject to the discretion of the Board of Directors and will depend upon a
number of factors, including future earnings, debt service, capital
requirements, business conditions, the financial condition of the Company and
other factors that the Board of Directors may deem relevant.
(F) SALES OF UNREGISTERED COMMON STOCK 1999.
Date Title Exemption Price Amount Services
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3/3/99 Common Stock Rule 504 $0.10 95,000 $9,500
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Issued for professional and consulting services, to Intrepid International,
S.A., 24843 Del Prado, Suite 318, Dana Point, CA 92629. "Services" included
repayment of substantial advances for legal services, copying, printing and
various filing fees and miscellaneous expenses. These shares are no longer owned
by or for Intrepid, they having been sold into the market in brokerage
transactions.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
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(A) PLAN OF OPERATION NEXT TWELVE MONTHS. This Company has no current
business. Its business plan is to seek one or more profitable business
combinations or acquisitions to secure profitability for shareholders. This
Issuer's Management, and this Issuer's Principal shareholder are in continuous
receipt of proposals from high-technology, telecommunication and internet
projects, some new start-up, some with significant research and development in
progress. It has not been and is not believed to be necessary for this Issuer to
advertise, or for management to travel in search of candidates. It is likely
that management might travel in connection with a candidate it intends to select
and with which it intends to enter into a committed relationship. Extensive due
diligence and evaluation of proposals is made by the principal shareholder in
connection with its own business, and perforce for the benefit of this Issuer.
(1) CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS.
This Company has no immediate or forseeable need for additional funding, from
sources outside of its circle of shareholders, and their consultants, during the
next twelve months. The expenses of its audit, legal and professional
requirements, including expenses in connection with this 1934 Act Registration
of its common stock, have been and continue to be advanced by its management and
principal shareholder. No significant cash or funds are required for its
Management to evaluate possible transactions. Management reports that proposals
are regularly made to the management and that it has not proven necessary for
management to engage in costly search procedures. The issuer enjoys the
non-exclusive use of office, telecommunication and incidental supplies of
stationary, provided by its Officers and Attorneys, who are related to its sole
Consultant. The Officers, Directors, and Attorneys of this Registrant are
substantially the same as those of its sole consultant, such that its
maintenance expenses are minimal and manageable during this period and for the
foreseeable future.
In the event, contrary to the expectation of management, that no
combination is made within the next twelve months, this issuer may be forced to
deal with minimal costs involved in maintenance of corporate franchise and
filing reports as may be required, when and if this 1934 Act registration is
effective. Should this become necessary, the maximum amount of such advances is
estimated not to exceed $20,000.00. These expenses would involve legal and
auditing expenses. The Consultant and Counsel have agreed, informally, to defer
compensation, pending acquisition. It is possible that any advances may be
settled by compensation in common stock. Should further auditing be required,
such services by the Independent Auditor may not be the subject of deferred
compensation.
The following language is found in Note 1-a of the independent auditor:
"The Company is in the development stage according to Financial Accounting
Standards Board Statement No. 7 and is currently focusing its intention on
raising capital in order to pursue its goals." Then, at Note 2: "It is
management's plan to find an operating company to merge with." Again at Note 3:
"The Company is a development stage company as defined in Financial Accounting
Standards Board Statement No. 7. It is concentrating substantially all of its
efforts in raising capital and developing its business operations in order to
generate significant revenues.
After some unsuccessful efforts to launch operations, the original
business plan was abandoned, on or about October 15, 1999. The Registrant has no
present business or business plan other than to seek a profitable business
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combination, most likely in a reverse acquisition or similar transaction.
Accordingly, its plan is to seek one or more profitable business combinations or
acquisitions to secure profitability for shareholders. The issuer will be
concentrating on selecting a business combination candidate, when its 1934 Act
Registration is effective and complete. No current fund raising programs are
being conducted or contemplated before merger, acquisition or combination is
announced, and then any such capital formation would be offered to investors
based upon the assets and businesses to be acquired, and not on this Registrant
in its present condition, without businesses, revenues, or income producing
assets.
It is unlikely that this company can attract capital before it identifies
an acquisition target. It is likely that this company can attract capital when
it has done so, based upon the attractiveness of businesses and assets to be
acquired.
This Issuer does not anticipate any contingency upon which it would
voluntarily cease filing reports with the SEC, even though it may cease to be
required to do so. It is in the compelling interest of this Issuer to report its
affairs quarterly, annually and currently, as the case may be, generally to
provide accessible public information to interested parties, and also
specifically to maintain its qualification for the OTCBB, if and when the
Issuer's intended application for submission be effective.
SUMMARY OF PRODUCT RESEARCH AND DEVELOPMENT.
[None.]
EXPECTED PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT.
[None.]
EXPECTED SIGNIFICANT CHANGE IN THE NUMBER OF EMPLOYEES.
[None.]
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
(1) OPERATIONS AND RESULTS FOR THE PAST TWO FISCAL YEARS. This Registrant
has not succeeded in launching operations during the past two fiscal years. It
has had no revenues to date. It has incurred some expenses during these periods.
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
- --------------------------------------
Auditing 0.00 1,853
Bank Charges 0.00 0
Travel 0.00 0
Legal and Professional 0.00 28,695
Filing Fees 0.00 0
Other Accounting 0.00 250
Transfer Agency 0.00 500
Contract Services 0.00 2,500
Misc 0.00 0
TOTALS 80,025 33,798
======================================
</TABLE>
(2) FUTURE PROSPECTS. We are unable to predict when it may participate
in a business opportunity. The reason for this uncertainty arises from its
limited resources, and competitive disadvantages with respect to other public or
semi-public issuers. Notwithstanding the foregoing cautionary statements,
8
<PAGE>
assuming the continuation of current conditions, this issuer would expect to
proceed to select a business combination within no sooner than six months nor
expect to close an acquisition in a shorter period than within the next twelve
months. It cannot attract a partner before it can perfect the continued
quotation of its common stock on the OTCBB by this 1934 Act Registration.
(C) REVERSE ACQUISITION CANDIDATE. This corporation is searching for a
profitable business opportunity. The acquisition of such an opportunity could
and likely would result in some change in control of the Issuer at such time.
This would likely take the form of a reverse acquisition. That means that this
issuer would likely acquire businesses and assets for stock in an amount that
would effectively transfer control of this corporation to the acquisition target
company or ownership group. It is called a reverse-acquisition because it would
be an acquisition by this issuer in form, but would be an acquisition of this
issuer in substance. Capital formation issues for the future of this Issuer
would arise only when targeted business or assets have been identified. Until
such time, we has no basis upon which to propose any substantial infusion of
capital from sources outside of our circle of affiliates.
Targeted acquisitions for stock may be accompanied by capital formation
programs, involving knowledgeable investors associated with or contacted by the
owners of a target company. While no such arrangements or plans have been
adopted or are presently under consideration, it would be expected that a
reverse acquisition of a target company or business would be associated with
some private placements and/or limited offerings of common stock of this Issuer
for cash. Such placements, or offerings, if and when made or extended, would be
made with disclosure of and reliance on the businesses and assets to be
acquired, and not upon the present or future condition of this Issuer without
revenues or substantial assets.
- --------------------------------------------------------------------------------
ITEM 7. FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
Please see the Exhibit Index found on page 16 of this Report. The financial
statements listed therein, attached hereto and filed herewith are incorporated
herein by this reference as though fully set forth herein.
- --------------------------------------------------------------------------------
ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
- --------------------------------------------------------------------------------
[None.]
The Remainder of this Page is Intentionally left Blank
9
<PAGE>
- --------------------------------------------------------------------------------
PART III
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM 9.
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
- --------------------------------------------------------------------------------
The following persons are Officers/Directors of Registrant, to serve until
their successors might be elected or appointed. The time of the next meeting of
shareholders has not been determined and is not likely to take place before a
targeted acquisition or combination is determined.
J. Dan Sifford, Jr. (age 61) is a director and President of Registrant. He
grew up in Coral Gables, Florida, where he attended Coral Gables High School and
the University of Miami. After leaving the University of Miami, Mr. Sifford
formed a wholesale consumer goods distribution company which operated throughout
the southeastern United States and all of Latin America. In 1965, as an
extension of the operations of the original company, he founded Indiasa
Corporation (Indiasa), a Panamanian company which was involved in supply and
financing arrangements with many of the Latin American Governments, in
particular, their air forces and their national airlines. As customer
requirements dictated, separate subsidiaries were established to handle specific
activities. During each of the past five years he has served as President of
Indiasa, which serves only as a holding company owning: 100% of Indiasa Aviation
Corp. (a company which owns aircraft but has no operations); 100% of Overseas
Aviation Corporation (a company which owns Air Carrier Certificates but has no
operations); 50% of Robmar International, S.A. (a company operates a
manufacturing plant in Argentina and Brazil, but in which Mr. Sifford holds no
office). In addition to his general aviation experience, Mr. Sifford, an Airline
Transport rated pilot, has twenty two years experience in the airline business,
and is currently the President of Airline of the Virgin Islands, Ltd. a commuter
passenger airline operating in the Caribbean, and has been its president
continuously during each of the past five years.
Mr. Sifford is not and has never been a broker-dealer. He has acted
primarily as consultant, and in some cases has served as an interim officer and
director of public companies in their development stage. The following
disclosure identifies those public companies: Air Epicurean, Inc., All American
Aircraft, Earth Industries, DP Charters, Inc., Ecklan Corporation, EditWorks,
Ltd., Market., Market Formulation & Research, Inc., NetAir.com, Inc., NSJ
Mortgage Capital Corporation, Inc., North American Security & Fire, Oasis 4th
Movie Project, Professional Recovery Systems, Inc., Richmond Services, Inc.,
Telecommunications Technologies, Ltd., and World Staffing II, Inc.
Of these last mentioned companies, he is currently serving in this
Registrant, in DP Charters, in Ecklan Corporation, in Oasis 4th Movie Project,
in Richmond Services, Inc, and in NetAir.com, Inc.
Nora Coccaro (age 43) is a director and corporate secretary of Registrant.
She grew up in Montevideo, Uruguay, where she attended medical school at the
University of Uruguay. She has been involved in the North and South American
financial communities for the past 15 years, participating in management of
public companies and particularly in
Canadian and American mining activities in South America. She was Venezuelan
Operations Manager of Ourominas Minerals Inc. from 1995 until 1997. In 1996 and
1997, she was retained by Homestake Mining Company as consultant in Central
America to review mineral title administration procedures, land status and
market research. In 1998, Ms. Ms Coccaro was appointed Director of Americana
Gold & Diamond Holdings, Inc. a Nasdaq Bulletin Board company and from 1998
until May 1999 she was Director and Executive Vice-President of Black Swan Gold
Mines, a Toronto Senior company.
Since September 1998 she also served as the Consul of Uruguay to Western Canada.
10
<PAGE>
- --------------------------------------------------------------------------------
ITEM 10. EXECUTIVE COMPENSATION.
- --------------------------------------------------------------------------------
Neither J. Dan Sifford nor Nora Coccaro are compensated directly by this
Registrant. Mr. Sifford is compensated indirectly as an Officer of the
Registrant's Sole consultant, Intrepid International, S. A. (Panama)/Intrepid
International, Ltd. (AIntrepid US@). Intrepid bills the Registrant on a time/fee
basis. Mr. Sifford's compensation from Intrepid is not directly related or
linked to the amount of fees billed by Intrepid for Mr. Sifford's actual
time/fee. For more information and expanded disclosure, please refer to the
following Item 12 of this Part.
- --------------------------------------------------------------------------------
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
- --------------------------------------------------------------------------------
(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. To the best of
Registrant's knowledge and belief the following disclosure presents the total
security ownership of all persons, entities and groups, known to or discoverable
by Registrant, to be the beneficial owner or owners of more than five percent of
any voting class of Registrant's stock. These following 5% or more shareholders
are unrelated to Management or to its sole consultant. Neither management, nor
any affiliate of management, or of the consultant to management, has any
interest in any of the following shareholders, nor do any of the following
shareholders possess any interest or affiliation with either management or its
consultant.
11
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
5% Owners # Shares % of Total
- ---------------------------------------------------
MFC Merchant Bank S.A. 270,000 8.52
6, Cours de Rive
CH-1211 Geneva 3
Switzerland
- ---------------------------------------------------
Euroswiss Securities Ltd. 270,000 8.52
Queensway House
Queen Street
St. Helier, Jersey
Channel Islands
- ---------------------------------------------------
Harpings Management Ltd. 270,000 8.52
Market Street
Douglas, Isle of Man
- ---------------------------------------------------
MFC Securities AG 270,000 8.52
B rglistrasse 6
CH-8002 Z rich
Switzerland
- ---------------------------------------------------
First Capital Invest Corp. 270,000 8.52
M hlebachstrasse 54
CH-8032 Z rich
Switzerland
- ---------------------------------------------------
Valorinvest Ltd. 270,000 8.52
Quai des Bergues
CH-1201 Geneva
Switzerland
- ---------------------------------------------------
Value Invest Ltd. 270,000 8.52
Letzigraben 89
CH-8040 Z rich
Switzerland
- ---------------------------------------------------
Pensbreigh Holdings Ltd. 270,000 8.52
Chancery Chambers
Bridgetown, Barbados
- ---------------------------------------------------
Volendam Securities C.V. 270,000 8.52
Veerkade 2
NL-3016 de Rotterdam
Postbus 23444
NL-3001 KK Rotterdam
Netherlands
- ---------------------------------------------------
Noble Trading 270,000 8.52
Shipley House
So. Shipley Street
P.O. Box N-7755
Nassau, Bahamas
- ---------------------------------------------------
Total 5% Owners 2,700,000 85.23
- ---------------------------------------------------
Total Issued and Outstanding 3,167,800 100.00
===================================================
</TABLE>
12
<PAGE>
(B) SECURITY OWNERSHIP OF MANAGEMENT. To the best of Registrant's knowledge
and belief the following disclosure presents the total beneficial security
ownership of all Directors and Nominees, naming them, and by all Officers and
Directors as a group, without naming them, of Registrant, known to or
discoverable by Registrant.
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Address of Beneficial Owner Actual %
Shares
Owned
- -----------------------------------------------------------
Nora Coccaro (1) -0- 0.00
1177 W. Hastings, Suite 1818
Vancouver BC V6E 2K3
J. Dan Sifford, Jr. (1) -0- 0.00
62 Bay Heights Drive
Miami, Florida 33133
All Officers and Directors as a Group 0 0.00
Total Shares Issued and Outstanding 3,167,800 100.00
===========================================================
</TABLE>
(1) Mr. Sifford and Ms. Coccaro are presently Interim Officers and Directors,
for the benefit of Shareholders. Mr. Sifford is an officer of the Registrant's
sole consultant. Neither Mr. Sifford nor the consultant are shareholders of the
Registrant. Please see the following Items 5, 6 and 7 for expanded disclosure
and further information.
SUBSEQUENT EVENT. On January 4, 2000, we effected a further forward split
of our common stock, two for one. This subsequent event is not reflected in our
Audited Financial Statements of December 31, 1999.
(C) CHANGES IN CONTROL. There are no arrangements known to Registrant,
including any pledge by any persons, of securities of Registrant, which may at a
subsequent date result in a change of control of the Issuer. The Issuer is
searching for a profitable business opportunity. The Issuer is searching for a
profitable business opportunity. The acquisition of such an opportunity could
and likely would result in some change in control of the Issuer at such time.
13
<PAGE>
This would likely take the form of a reverse acquisition. That means that this
issuer would likely acquire businesses and assets for stock in an amount that
would effectively transfer control of this issuer to the acquisition target
company or ownership group. It is called a reverse-acquisition because it would
be an acquisition by this issuer in form, but would be an acquisition of this
issuer in substance.
- --------------------------------------------------------------------------------
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- --------------------------------------------------------------------------------
Intrepid International, S. A. ("intrepid") is the sole consultant of this
Registrant. The Officer/Director of this Registrant is an affiliate of Intrepid.
Intrepid International, S. A. was incorporated in the Republic of Panama in 1984
to offer financial services to natural resource companies, primarily those
engaged in the production of oil and gas. Following the world wide collapse of
oil prices in the mid-eighties, Intrepid broadened the focus of its universe of
support services to include a wider range of companies, with an emphasis on
public companies and private companies, companies engaged in the transition from
privately held to publicly held, and development stage companies, whether public
or private, requiring professional business and corporate guidance. In August of
1997 the Company sought a United States Representative and entered into a
relationship with a group of corporate and business specialists who, after
contracting with the Company, incorporated as Intrepid International, Ltd.
("Intrepid US") to provide the required representation and agency for the
Company in North America and Europe. Intrepid US is incorporated in the State of
Nevada. Intrepid is not an investment banker, nor a broker or dealer in
securities. Intrepid is a provider of technical support services to client
companies, generally, and an occasional investor for its own account. It is not,
and its officers and affiliates are not shareholders of this Registrant. The
services of Intrepid and its associated counsel are billed monthly on a time/fee
basis. Please see Exhibits 6.1, 6.2 and 6.3 for the retainer agreements by which
Intrepid and its associated counsel were and are retained.
J. Dan Sifford, Jr., is the United States Managing Director for Intrepid
International, S.A. (Panama). He is fluent in the Spanish Language. His
biographical information is found under Item 5 of this Part, Directors,
Executive Officers, Promoters and Control Persons.
The officers and directors of Intrepid International, Ltd. (Nevada)
(Intrepid US) are two individuals; Kirt W. James, and J. Dan Sifford, Jr. The
Officers, Owners and Directors of the Panama parent do not direct or participate
in the management of this Registrant.
For purposes of the following paragraphs of this Item, "company" refers to
the consultant Intrepid International, S.A., a Panama Corporation, and does not
refer to the Registrant.
Laurencio Jaen O., an original incorporator who has served as President and
Director of the Company since its inception in 1984, resides in Panama City,
Republic of Panama. He is, and has been for the past twenty five years, Vice
President of Indiasa Corporation ("Indiasa"), a Panamanian corporation, which,
through one of its subsidiaries, Robmar International, is involved in the
manufacture and distribution of chemical products in Argentina and Brazil and
which, through its former subsidiary Indiasa Aviation Corporation, was, for
eight years ending in 1981, engaged in aviation consulting, the leasing,
purchase and sale of aircraft, and the operation of a cargo airline, primarily
in Latin America. Mr. Jaen was a founder of PAISA, Panama's international
airline, served as president of the Colon Free Zone (the worlds largest free
trade zone), and as Director of Panama's Social Security Administration. He has
also served as the President of the Panamanian Chamber of Commerce, and as a
member of the Board of Presidential Advisors of the Republic of Panama.
Teodoro F. Franco L., Secretary and a Director of the Company, has, for
thirty years, been a specialist in maritime and aviation law. Mr. Franco is a
partner in Franco and Franco, a Panama law firm with offices around the world.
14
<PAGE>
In addition to his law practice he has served as Panamanian Consul to Liverpool,
England and for the past five years as Ambassador to Great Britain. The firm of
Franco and Franco is regarded with the highest degree of integrity and
professionalism in the business and political community in Panama with its
partners and several of its associates holding or having held public office in
Panama. The firm practices maritime, aviation and commercial law and currently
is the legal firm for: IBERIA (the Spanish national airline), KLM (the Dutch
national airline), VIASA (the Venezuelan national airline), Aeroflot (the
Russian national airline) and various smaller Latin American national airlines
as well as being the registered agents for thousands of ocean going ships around
the world flying the Panamanian flag. Mr. Franco brings to the Company a wealth
of international legal, commercial and diplomatic experience.
Leopoldo Kennion G., Treasurer and a Director of the Company, is, and has
for twenty years, been a Certified Public Accountant specializing in
international accounting and is an associate in the law firm of Franco and
Franco. Mr. Kennion practices maritime, aviation and commercial accounting
serving the specialized needs of the transnational clients of Franco and Franco
by providing an interface between them and their auditors.
- --------------------------------------------------------------------------------
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
- --------------------------------------------------------------------------------
(A) FINANCIAL STATEMENTS. Please see Exhibit Index following.
(B) FORM 8-K REPORTS.
[None.]
(C) EXHIBITS. Please see Exhibit Index following.
15
<PAGE>
Exhibit Table Category / Description of Exhibit Page Number
Table
#
[2] ARTICLES/CERTIFICATES OF INCORPORATION, AND BY-LAWS
- --------------------------------------------------------------------------------
2.1 Articles of Incorporation: Houston Produce Corporation 40
2.2 Articles of Amendment: Net Master Consultants, Inc. 50
2.3 By-Laws 54
- --------------------------------------------------------------------------------
[6] MATERIAL CONTRACTS
- --------------------------------------------------------------------------------
6.1 Financial Services Consulting Agreement 61
6.2 Attorney Disclosure and Special Relationship Agreement 76
6.3 Attorney Disclosure and Special Relationship Agreement 80
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
F-1 Audited Financial Statements for years ending December 31, 1999, 1998
================================================================================
16
<PAGE>
SIGNATURES
17
<PAGE>
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 individual capacities
and on the date indicated.
NET MASTER CONSULTANTS, INC.
formerly HOUSTON PRODUCE CORPORATION
by
______/s/_______
Nora Coccaro
Director and President
18
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 2.1
ARTICLES OF INCORPORATION
HOUSTON PRODUCE CORPORATION
FILED DECEMBER 28, 1982
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
ARTICLES OF INCORPORATION
OF
HOUSTON PRODUCE CORPORATION
- --------------------------------------------------------------------------------
PREAMBLE
We, the undersigned natural persons, of the age of eighteen (18) years
or more, acting as incorporators of a corporation under the Texas Business
Corporation Act, do hereby adopt the following Articles of Incorporation for
such corporation:
NAME
The name of the corporation is HOUSTON PRODUCE CORPORATION.
II.
DURATION
The period of duration of the corporation is perpetual.
III.
PURPOSE
The purposes f or which the corporation is organized are to engage in
any and all lawful business for which corporations may be incorporated under the
Business Corporation Act of the State of Texas.
IV.
SHARES
Preferred Shares Series 'A" with Par Value.
Preferred Shares Series "B" without Par Value.
Preferred Shares Series 'C" with Par Value.
And Common Shares with Par Value.
The corporation is -authorized to issue four classes of shares to be
designated respectively 'Preferred Shares Series 'A", "Preferred Shares Series
"B", "Preferred Shares Series "C", and "Common Shares". The total number of
Preferred Shares Series 'A' the corporation is authorized to issue is 15,000,000
and the par value of each such shares is $10.00. The total number of Preferred
Shares Series 'B" the corporation is authorized to issue is 100,000 and all such
shares are without par value. The total number of Preferred Shares Series 'C'
the corporation is authorized to issue is 15,000,000 and the par value of each
such shares is $10.00. The total number of Common Shares the corporation is
authorized to issue is 100,000 and par value of each such shares is $1.00.
20
<PAGE>
Dividends on Preferred Shares
Series "A" and "C"
The holders of the preferred shares Series "A" and "C" shall be entitled to
receive dividends out of any funds legally available therefor, at the rate of
nine and one-half percent (9 1/2%) per annum of the par value thereof, and no
more, payable in preference and priority to any payment of any dividend on
common shares and payable in cash quarterly in the months of March, June,
September and December, or otherwise, as the Board of Directors may from time to
time determine. The right to such dividends on preferred shares shall not be
cumulative, and no right shall accrue to the holders of such shares by reason of
the Board's failure to pay or declare and set apart dividends thereon for any
given period as herein provided.
Noncumulative and Non participaing Liquidations Preferences
On any voluntary or involuntary liquidation of the corporation, the ho -
Idars of the preferred shares shall receive an amount equal to t-he par value of
such shares plus any dividends declared and unpaid thereon, and no more, before
any amount shall be paid to the holders of the common shares. If the assets of
the corporation should be insufficient to permit payment to the preferred
shareholders of their full preferential amounts as herein provided, then such
assets shall be distributed ratably among the outstanding preferred shares.
Subject to such preferential rights, the holders of the common shares shall
receive, ratably, all remaining assets of the corporation. A consolidation or
merger of the corporation with or onto any other corporation, or a sale of all
or substantially all of the assets the corporation shall not be deemed a
liquidation, dissolution, or winding up of the corporation within the meaning of
this paragraph.
Redemption Clause
(1) The corporation, at the option of the Board of Directors, may at
any time redeem the whole, or from time to time redeem any part, of the Series
"A" and/or Series 'C" preferred shares but not Series "B" preferred shares
outstanding by paying in cash or equivalent property value therfor the sum of
$10.00 per share, [plus all dividends declared but unpaid] thereon as provided
in this Article to and including the date of redemption, hereinafter referred to
as the "redemptive price," and by giving to each Series 'A' and/or Series 'C'
preferred shareholder of record at his last known address, as shown on the
records of the corporation, at least twenty, but not more than fifty, day's
prior notice personally or in writing, by mail, postage prepaid, stating the
class or series or part of any class or series of shares to be redeemed and the
date and plan of redemption, the redemptive price, and the place where the
shareholders may obtain payment of the redemptive price on surrender of their
respective share certificates, hereinafter called the "redemption notice."
Should only a part of the outstanding preferred shares be redeemed, such
redemption shall be effected by lot, or pro rata, as prescribed by the Board of
Directors; provided, however, that no preferred shares shall be redeemed unless
all accrued dividends on all outstanding preferred shares shall have been paid
for all
21
<PAGE>
past dividend periods and full dividends for the current period on all
outstanding preferred shares, except those to be redeemed, shall have been paid
or declared and set apart for payment. On or after the date fixed for
redemption, each holder of shares called for redemption shall, unless he shall
have previously exercised his option to convert his preferred shares as provided
in this Article, surrender his certificate for such shares to the corporation at
the place designated in the redemption notice and shall thereupon be entitled to
receive payment of the redemptive price. Should less than all the shares
represented by any surrendered certificate be redeemed, a new certificate for
the unredeemed shares shall be issued. If the redemption notice is duly given
and if sufficient funds are available therefor on the date fixed for redemption,
then, whether or not the certificates evidencing the shares to be redeemed are
surrendered, all rights with respect to such shares shall terminate on the date
fixed for redemption, except for the right of the holders to receive the
redemption price, without interest, on surrender of their certificate therefor.
(2) If, on or prior to any date fixed for redemption of -preferred
shares as herein provided, the corporation deposits with any bank or trust
company in Texas, or any bank or trust company in the United States duly
appointed and acting as transfer agent for the corporation, as a trust fund, a
sum sufficient to redeem, on the date fixed for redemption thereof, the shares
called for redemption, with irrevocable instructions and authority to the bank
or trust company to publish the notice of redemption thereof, or to complete
such publication if theretofore commenced, and to pay, on and after the date
fixed for redemption or prior thereto, the redemptive price of -the shares to
their respective holders on surrender of their share certificates, then from and
after the date of the deposit, even though such date may be prior to the date
fixed for redemption, the shares so called shall be deemed to be redeemed and
dividends on those shares shall cease to accrue after the date fixed for
redemption. The deposit shall be deemed to constitute full payment of the
shares to their holders and from and after the date of the deposit the shares
shall be deemed to be no longer outstanding, and the holders thereof shall cease
to be shareholders with respect to such shares and shall have no rights with
respect thereto, except the right to receive from the bank or trust company
payment of the redemptive price of the shares, without interest, on surrender of
their certificates therefor, or the right to convert said shares to common stock
as provided in this Article. Any money so deposited on account of the
redemptive price of preferred shares converted after the making of the deposit
shall be repaid to the corporation forthwith on the conversion of such preferred
shares.
(3) Shares redeemed by the corporation shall be restored to the status
of authorized but unissued shares of the corporation.
(4) Series "B' preferred shares shall not be redeemable.
Conversion Rights of Series "B" Preferred Shares
(1) The holder of any Series "B' preferred shares, shall at his option
on delivery to the corporation of his written notice electing to convert said
shares to common shares and on surrender at the office of the corporation or
office of the transfer agent for such shares, duly endorsed
22
<PAGE>
to the corporation, be entitled to receive ninety-nine one hundredths (.99)
share of common stock for each share of Series "B" preferred stock so converted.
(2) Provided, however, that the number of common shares to be issued as
provided in Subparagraph I of this Paragraph shall be adjusted by appropriate
amendment of said Subparagraph I to take into account any and all increases or
reduction in the number of outstanding common shares which may have accrued
since the date of the first issuance of the Series 'B" preferred shares by
reason of a stock split, share dividend, merger, consolidation, or other capital
change or reorganization affecting the number of outstanding common shares so as
fairly and equitably to preserve so far as reasonably possible the original
conversion rights of the preferred shares, and provided further that when such
adjustment is required no notice of redemption shall be given until such
amendment and adjustment shall have been accomplished.
(3) . Neither fractional shares, nor scrip or other r-certificates
evidencing such shares, shall be issued by the corporation on conversion of the
Series 'B" preferred shares as herein provided, but the corporation shall pay in
lieu therof the full value in cash to the holders who would but for this
provision be entitled to receive such fractional shares.
(4) Series 'B" preferred shares so converted shall not be reissued.
(5) The corporation shall at all times reserve and keep available out
of its authorized but unissued common shares solely for the purpose of effecting
conversion of its Series "B" preferred shares the full number of common shares
deliverable on conversion of all Series "B' preferred shares from time to time
outstanding and shall obtain and keep in force such permits with the Texas
Securities Commissioner or other appropriate authorities as may be required in
order to enable it lawfully to issue and deliver such number of common shares.
Voting Rights of Common Stock and Preferred Shares Series "B"
Holders of common stock and Preferred Shares Series "B" stock in this
corporation shall be entitled to one vote for each and every share standing in
his, her or its name at any and all meetings of the stockholders of the
corporation. The common stock shall be entitled as a class to elect one (1) of
the directors of this corporation, and the Preferred Shares Series 'B" stock
shall be entitled as a class to elect two (2) of the directors of this
corporation, so long as the By-Laws provide for three (3) directors. If the
By-Laws provide for a different number of directors (but never less than one),
the common stock shall be entitled to elect one less the Preferred Shares Series
'B" stock, and the Preferred Shares Series 'B" stock shall be entitled to elect
one or more directors than the common stock.
Restrictions on Preemptive Rights
No holder of any shares of any class of stock of the corporation shall, as
such holder, have any preemptive or preferential right to receive, purchase, or
subscribe to (1) any unissued or treasury shares of any class of stock (whether
now or hereafter authorized) of the corporation, (2) any obligations, evidences
of indebtedness, or other securities of the
23
<PAGE>
corporation convertible into or exchangeable for,, or carrying or accompanied by
any rights to receive, purchase, or subscribe to, any such unissued or treasury
shares, (3) any right of subscription to or to receive, or any warrant or option
for the purchase of, any of the foregoing securities, (4) any other securities
that may be issued or sold by the corporation, other than such (if any) as the
Board of Directors of the corporation, in its sole and absolute discretion, may
determine from time to time.
No shareholder shall have the right to cumulate his votes at any election
for directors of this corporation.
Transfer Restrictions
Before there can be a valid sale or transfer of any of the shares of the
corporation by any holder thereof, such holder shall first offer said shares to
the corporation and then to the other holders of common shares in the following
manner:
(1) Such offering shareholder shall deliver a notice in writing by mail
or otherwise, to the Secretary of the corporation stating the price, terms, and
conditions of such proposed sale or transfer, the number of shares to be sold or
transferred, and his intention to so sell or transfer such shares. Within
thirty (30) days thereafter, the corporation shall have the prior right to
purchase such shares so offered at the price and on the terms and conditions
stated in the notice; provided, however, that the corporation shall not at any
time be permitted to purchase all of "'its outstanding voting shares. Should
the corporation fail to purchase the shares at the expiration of the thirty (30)
day period, or prior thereto decline to purchase the shares, the Secretary of
the corporation shall, within five (5) days thereafter, mail or deliver to each
of the other (common) shareholders of record a copy of the notice given by the
shareholder to the Secretary. Such notice may be delivered to the shareholders
personally, or may be mailed to them at their last known address as such address
may appear on the books of the corporation. Within thirty (30) days after the
mailing or delivering 6f the copies of the orders to the shareholders, any such
shareholder or shareholders desiring to acquire any part or all of the shares
referred to in the notice shall deliver by mail, or otherwise, to the Secretary
of the corporation a written offer or offers, expressed to be acceptable
immediately, to purchase a specified number of such shares at the price and on
the terms stated in the notice. Each such offer shall be accompanied by the
purchase price therefor with authorization to pay such price against delivery of
the shares.
(2) If the total number of shares specified in the offers to purchase
exceeds the number of shares to be sold or transferred, each offering
shareholder shall be entitled to purchase such proportion of such shares as the
number of shares of the corporation which he holds bears to the total number of
shares held by all shareholders desiring to purchase the shares.
(3) If all the shares to be sold or transferred are not disposed of under
such appointment, each shareholder desiring to purchase shares in a number in
excess of his proportionate share, as provided above, shall be entitled to
purchase such proportion of those shares which remain thus
24
<PAGE>
undisposed of, as the total number of shares which he holds bears to the
total number of shares held by all of the shareholders desiring to purchase
shares inexcess of those to which they are entitled under such appointment.
(4) If within said thirty (30) day period, the offer or offers to purchase
aggregate less than the number of shares to be sold or transferred, the
shareholder desiring to sell or transfer such shares shall not be obligated to
accept any such offer or offers and may dispose of all of the shares referred to
in his notice to any person or persons whomsoever; provided, however, that he
shall not sell or transfer such shares at a lower price or on terms more
favorable to the purchaser or transferee than those specified in his notice to
the Secretary of the corporation.
Voting Rights of
Preferred Shares Series "A" and "C"
Preferred Shares Series "A' and Series 'C" shall have no voting rights
except those granted by law. The holders of Common Stock and-Preferred Shares
Series "B" shall have the exclusive voting rights and powers, including the
exclusive right to notice of shareholders meetings.
V.
REQUIRED CAPITAL
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money, labor done, or property actually received,
which sum is not less than One Thousand Dollars ($1,000.00).
VI.
REGISTERED OFFICE AND AGENT
The address of its registered office is 2001 Kirby Drive, Suite 1008,
Houston, Texas 77019, and the name of its registered agent at such address is
JAMES T. MAHAN.
VII
VOTING REQUIREMENTS FOR CORPORATE ACTIONS
Subject to the Business Corporation Act of the State of Texas and as
permitted by Article 9.08 of such Act, the decision to amend its Articles of
Incorporation, to sell any and all of its assets, to enter into a corporate
merger or acquisition, to issue securities, to dissolve the corporation or to
take any action required by shareholders in accordance with such Act, may be
made by the affirmative vote of shareholders owning at least fifty-one percent
(51%) of the issued and outstanding shares of the common stock of the
corporation at the time of voting.
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VIII.
INTERESTED TRANSACTIONS
Except as may be otherwise provided in the Texas Business Corporation Act,
no contract, act, or transaction of the corporation with any person or persons,
firm, trust, or association, or any other corporation shall be affected or
invalidated by the fact that any Director, officer, or shareholder of this
corporation is a party to, or is interested in, such contract, act, or
transaction, or in any way connected with any such person or persons, firm,
trust, or association, or is a Director, officer, or shareholder of, or
otherwise interested in, any such other corporation, nor shall any duty to pay
damages on account of this corporation be imposed upon such Director, officer,
or shareholder of this corporation solely by reason of such fact, regardless of
whether the vote, action, or presence of any such Director, officer, or
shareholder may be, or may have been, necessary to obligate this corporation on,
or in connection with, such contract, .act, or transaction, provided that, if
such vote, action, or presence is, or shall have been, necessary, such interest
or connection (other than an interest as a non-controlling shareholder of any
such other corporation) be known or disclosed to the Board of Directors of this
corporation.
IX.
INDEMNIFICATION
Each Director and officer or former Director or officer or any person who
may have served at the request of this corporation as a Director or officer of
another corporation in which this corporation owns shares of capital stock or of
which this corporation is a creditor (and their heirs, executors, and
administrators) may be indemnified by the corporation against reasonable costs
and expenses incurred by him in connection with any action, suit, or proceeding
to which he may be made a party by reason of his being or having been such
Director or officer, except in relation to any actions, suits, or proceedings in
which he has been adjudged liable because of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office, or in the event of a settlement, each Director and officer (and his
heirs, executors, and administrators) may be indemnified by the corporation
against payments made, including reasonable costs and expenses, provided that
such indemnity shall be conditioned upon the prior determination by a resolution
of two-thirds (2/3) of those members of the Board of Directors of the
corporation who are not involved in the action, suit, or proceeding that the
Director or officer has no liability by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his office, and provided further that if a majority of the members of
the Board of Directors of the corporation are involved in the action, suit, or
proceedings, such determination shall have been made by a written opinion of
independent counsel. Amounts paid in settlement shall not exceed costs,
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fees, and expenses which would have been reasonably incurred if the action,
suit, or proceeding had been litigated to a conclusion. Such a determination by
the Board of Directors, or by independent counsel, and the payments of amounts
by the corporation on the basis thereof shall not prevent a shareholder from
challenging such indemnification by appropriate legal proceedings on the grounds
that the person indemnified was liable to the corporation or its security
holders by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office. The
foregoing rights and indemnification shall not be exclusive of any other rights
to which the officers and Directors may be entitled according to law.
X.
DIRECTORS
The number of Directors constituting the initial Board of Directors is one
(1), and the name and address of the person who is to serve as Director until
the first annual meeting of the shareholders or until his successor is elected
and qualified is:
James S. Clifton, Jr.
24115 Griffin Lane
Houston, Texas 77449
XI.
INCORPORATORS
The names and addresses of the incorporators which includes all of the
i,,ti4tial subscribers to the corporation's shares and securities evidencing the
right to acquire its shares are:
James S. Clifton, Jr.
24115 Griffin Lane
Houston, Texas 77449
IN WITNESS WHEREOF, we have executed these Articles of Incorporation on
This 27th day of December, 1988.
_____________/s/______________
James S. Clifton, Jr
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EXHIBIT
ARTICLES OF AMENDMENT
NET MASTER CONSULTANTS, INC.
FILED JUNE 24, 1997
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28
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Corporation Section Incorporation,
ARTICLE ONE
The name of the corporation is HOUSTON PRODUCE CORPORATION.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted
by the shareholders of the corporation on May 12, 1997.
This amendment:
i. deletes Article I. of the original Articles of Incorporation in its
entirety and provides for a now Article 1. as set forth below; and
ii. deletes Article IV. SHARESof the original Articles of Incorporation
in its entirety and provides for a new Article IV, SHARES as set forth below.
The amendment deletes the language in Article 1. of the original
Articles of Incorporation and the full text of Article I shall be as follows:
The name of the corporation is NET MASTER CONSULTANTS, INC.
The amendment deletes the language in Article IV. All SHARES of the
original Articles of Incorporation and the full text of Article IV SHARES shall
be as follows:
IV.
SHARES
The aggregate number of shares In which the corporation shall have
authority to issue is 1 00,000,000 shares of the par value of $0.0001 each
Common Voting Equity Stock, such shares to carry the short title "Common"; and
no other class of stock.
The Board of Directors may further create separate series within any
class of stock.
ARTICLE THREE
The number of shares of the corporation outstanding at the time of
such adoption was 33,000; and the number of shares entitled to vote thereon was
33,000.
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ARTICLE FOUR
The number of shares voted for such amendment was 33,000; and the number of
shares voted against such amendment was 0.
ARTICLE FIVE
The manner in which any exchange, reclassification or cancellation of
issued shares provided for in the amendment shall be affected, is as follows,
The Officers are empowered and directed to effectuate a 1000 to 1 forward
split of the Company's Common Stock; such that the existing 33,000 shares shall
become 33,000,000 of par value $0.0001,
ARTICLE SIX
The manner in which such amendment effects a change in the amount of stated
capital, and the amount of stated capital as changed by such amendment, are as
follows:
This amendment empowers and directs the Officers to effectuate a 1000 to 1
forward split of the Company's Common Stock; such that the existing issued and
outstanding 33,000 Common Shares of $1.00 par value shall become 33,000,000
Common Shares of $0.0001 par value.
This amendment will have the effect of reducing stated capital by $219,700.
Dated- May 12, 1997
HOUSTON PRODUCE CORPORATION
_________/s/_________
Dan Sifford
President
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SECRETAR Y OF STATE
CERTIFICATE OF AMENDMIENT
OF
NET MASTER CONSULTANTS, INC.
FORMERLY
HOUSTON PRODUCE CORPORATION
- --------------------------------------------------------------------------------
The undersigned, as Secretary of State of Texas, hereby certifies that the
attached Articles of Amendment for the above named entity have been received in
this office and are found to conform to law.
ACCORDINGLY the undersigned, as Secretary of State, and by virtue of the
authority vested in the Secretary by law, hereby issues this Certificate of
Amendment.
Dated: June 24, 1997
Effective: June 24, 1997
____________/s/___________
Antonio O. Garza, Jr.
Secretary of State
31
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ARTICLES OF AMENDMENT
AFTER ISSUANCE OF STOCK
(pursuant to Texas business corporation act
Houston Produce Corporation.
(OF TEXAS)
- --------------------------------------------------------------------------------
(1) The Original Articles of Incorporation as filed on December
28, 1988, shall be changed and amended as follows:
Article 1. Name is hereby superseded by, and is hereafter to read as set
forth immediately following:
The name of the Corporation is NET MASTER CONSULTANTS, INC.
Article IV. Shares is superseded by, and is hereafter to read as set forth
immediately following:
The aggregate number of shares which the corporation shall have authority
to issue is
100,000,000 shares of the par value of $0.0001 each Common Voting Equitv
Stock, such
shares to carry the short title "Common"; and no other class of stock. The
Board of Directors may further create separate series within any class of stock.
(2) Adoption of the Amendment occurred by unanimous consent of the
Board of Directors following shareholder approval as follows: On May 12, 1997,
the shareholders conferred authority on the Board of Directors to adopt the
above Amendment, 33,000 shares (of common stock) being issued and outstanding
and 33,000 (100%) being present or by proxy and all of those 33,000 voting in
favor of the resolution. The amendments were adopted by the Board of Directors
on May 12, 1997. No shares of any of the eliminated classes of stock are or
were issued or outstanding.
Dated: May 12,1997
____________/S/____________
J. DAN SIFFORD, JR.
PRESIDENT
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EXHIBIT 2.3
BY-LAWS 6.1
FINANCIAL SERVICES CONSULTING AGREEMENT
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33
<PAGE>
BY-LAWS
OF
NET MASTER CONSULTANTS, INC.
- --------------------------------------------------------------------------------
ARTICLE I - OFFICES
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1. REGISTERED OFFICE AND AGENT
The registered office of the corporation shall be maintained at
3131 Southwest Freeway
Suite 46
Houston, TX 77098
The registered office or the registered agent, or both, may be changed
by resolution of the board of directors, upon filing the statement required by
law.
2. PRINCIPAL OFFICE
The principal office of the corporation shall be at
24843 Del Prado
Suite 318
Dana Point, CA 92629
provided that the board of directors shall have power to change the location of
the principal office in its discretion.
3. OTHER OFFICES
The corporation may also maintain other offices at such places within
or without the State of Texas as the board of directors may from time to time
appoint or as the business of the corporation may require.
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ARTICLE II - SHAREHOLDERS
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1. PLACE OF MEETING
All meetings of shareholders, both regular and special, shall be held
either at the principal office of the corporation in Texas or at such other
places, either within or without the state, as shall be designated in the notice
of the meeting.
2. ANNUAL MEETING
The annual meeting of shareholders for the election of directors and
for the transaction of all other business which may come before the meeting
shall be held on the 15th day of April in each year (if not a legal holiday and,
if a legal holiday, then on the next business day following) at the hour
specified in the notice of meeting.
If the election of directors shall not be held on the day above
designated for the annual meeting, the board of directors shall cause the
election to be held as soon thereafter as conveniently may be at a special
meeting of the shareholders called for the purpose of holding such election.
The annual meeting of shareholders may beheld for any other purpose in
addition to the election of directors which may be specified in a notice of such
meeting. The meeting may be called by resolution of the board of directors or by
a writing filed with the secretary signed either by a majority of the directors
or by shareholders owning a majority in amount of the entire capital stock of
the corporation issued and outstanding and entitled to vote at any such meeting.
3. NOTICE OF SHAREHOLDERS' MEETING
A 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) more than fifty
(50) days before the date of the meeting, either personally or by mail, by or at
the direction of the president, secretary or the officer or person calling the
meeting, to each shareholder 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 shareholder at his address as it appears on the
share transfer books of the corporation, with postage thereon prepaid.
4. VOTING OF SHARES
Each outstanding share with voting privileges, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, except to the extent that the voting rights of the shares of any
class or classes are limited or denied by the Articles of Incorporation or by
law.
Treasury shares, shares of its own stock owned by another corporation
the majority of the voting stock of which is owned or controlled by this
corporation, and shares of its own stock held by this corporation in a fiduciary
capacity shall not be voted, directly or indirectly, at any meeting, and shall
not be counted in determining the total number of outstanding shares at any
given time.
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A shareholder may vote either in person or by proxy executed in writing
by the shareholder or by his duly authorized attorney-in-fact. No proxy shall be
valid after eleven (11) months from the date of its execution unless otherwise
provided in the proxy. Each proxy shall be revocable unless expressly provided
therein to be irrevocable, and in no event shall it remain irrevocable for a
period of more than eleven (11) months.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected and
for whose election he has a right to vote, or unless prohibited by the articles
of incorporation, to cumulate his votes by giving one candidate as many votes as
the number of such directors multiplied by the number of his shares shall equal,
or by distributing such votes on the same principal among any number of such
candidates. Any shareholder who intends to cumulate his votes as herein
authorized shall give written notice of such intention to the secretary of the
corporation on or before the day preceding the election at which such
shareholder intends to cumulate his votes.
5. CLOSING TRANSFER BOOKS AND FIXING RECORD DATE
For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the board of directors may provide
that the share transfer books shall be closed for a stated period not exceeding
fifty (50) days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting. In lieu of closing the stock transfer books, the by-laws
or in the absence of an applicable by-law the board of directors, may fix in
advance a date as the record date for any such determination of shareholders,
not later than fifty (50) days and, in case of a meeting of shareholders, not
earlier than ten (10) days prior to the date on which the particular action,
requiring such determination of shareholders is to be taken. If the share
transfer books are not closed and no record date is fixed for the determination
of shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders 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 board
of directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof, except where the determination has been made through the closing of
share transfer books and the stated period of closing has expired.
6. QUORUM OF SHAREHOLDERS
Unless otherwise provided in the articles of incorporation, the holders
of a majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders, but in no event shall a
quorum consist of the holders of less than one-third (1/3) of the shares
entitled to vote and thus represented at such meeting. The vote of the holders
of a majority of the shares entitled to vote and thus represented at a meeting
at which a quorum is present shall be the act of the shareholders' meeting,
unless the vote of a greater number is required by law, the articles of
incorporation of the By-Laws.
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<PAGE>
7. VOTING LISTS
The officer or agent having charge of the share transfer books for the
shares of the corporation shall make, at least ten (10) days before each meeting
of shareholders, a complete list of the shareholders 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 registered
office of the corporation and shall be subject to inspection by any shareholder
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 shareholder during the whole time of the meeting. The original
share transfer books shall be prima-facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote any
meeting of shareholders.
8. INFORMAL ACTION BY STOCKHOLDERS
Any action required or permitted to be taken at a meeting of the
stockholders may be taken without meeting if a written consent thereto is signed
by the stockholders holding at least a majority of the voting power, except that
if a different proportion of voting power is required for such an action at a
meeting, then that proportion of written consent is required; provided however,
that written notice of any action so taken must be promptly given to all
stockholders
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ARTICLE III - DIRECTORS
- --------------------------------------------------------------------------------
1. BOARD OF DIRECTORS
The business and affairs of the corporation shall be managed by a board
of directors. Directors need not be residents of the State of Texas nor be
shareholders in the corporation.
2. NUMBER AND ELECTION OF DIRECTORS
The number of directors shall be 3 provided that the number may be
increased or decreased from time to time by an amendment to these by-laws, but
no decrease shall have the effect of shortening the term of any incumbent
director. At each annual election the shareholders shall elect directors to hold
office until the next succeeding annual meeting.
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<PAGE>
3. VACANCIES
Any vacancy occurring in the board of directors may be filled by the
affirmative vote of the remaining directors, though less than a quorum of the
board. A director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors shall be filled by election at an annual
meeting or at a special meeting of shareholders called for that purpose.
37
<PAGE>
4. QUORUM OF DIRECTORS
A majority of the board of directors shall constitute a quorum for the
transaction of business. The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the board of directors.
5. ANNUAL MEETING OF DIRECTORS
Within thirty days after each annual meeting of shareholders the board
of directors elected at such meeting shall hold an annual meeting at which they
shall elect officers and transact such other business as shall come before the
meeting.
6. REGULAR MEETING OF DIRECTORS
A regular meeting of the board of directors may be held at such time as
shall be determined from time to time by resolution of the board of directors.
7. SPECIAL MEETINGS OF DIRECTORS
The secretary shall call a special meeting of the board of directors
whenever requested to do so by the president or by two directors. Such special
meeting shall be held at the time specified in the notice of meeting.
8. PLACE OF DIRECTORS' MEETINGS
All meetings of the board of directors (annual, regular or special)
shall be held either at the principal office of the corporation or at such other
place, either within or without the State of Texas, as shall be specified in the
notice of meeting.
9. NOTICE OF DIRECTORS' MEETINGS
All meetings of the board of directors (annual, regular or special)
shall be held upon five (5) days' written notice stating the date, place and
hour of meeting delivered to each director either personally or by mail or at
the direction of the president or the secretary or the officer or person calling
the meeting.
In any case where all of the directors execute a waiver of notice of
the time and place of meeting, no notice thereof shall be required, and any such
meeting (whether annual, regular or special) shall be held at the time and at
the place (either within or without the State of Texas) specified in the waiver
of notice. Neither the business to be transacted at, nor the purpose of, any
annual, regular or special meeting of the board of directors need be specified
in the notice or waiver of notice of such meeting.
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<PAGE>
10. COMPENSATION
Directors, as such, shall not receive any stated salary for their
services, but by resolution of the board of directors a fixed sum and expenses
of attendance, if any, may be allowed for attendance at each annual, regular or
special meeting of the board, provided, that nothing herein contained shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
11. ACTION BY CONSENT OF DIRECTORS
In lieu of a formal meeting, action may be taken by unanimous written
consent of the directors.
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ARTICLE IV - OFFICERS
- --------------------------------------------------------------------------------
1. OFFICERS ELECTION
The officers of the corporation shall consist of a president, one or
more vice-presidents, a secretary, and a treasurer. All such officers shall be
elected at the annual meeting of the board of directors provided for in Article
III, Section 5. If any office is not filled at such annual meeting, it may be
filled at any subsequent regular or special meeting of the board. The board of
directors at such annual meeting, or at any subsequent regular or special
meeting may also elect or appoint such other officers and assistant officers and
agents as may be deemed necessary. Any two or more offices may be held by the
same person, except the offices of president and secretary.
All officers and assistant officers shall be elected to serve until the
next meeting of directors (following the next annual meeting of shareholders) or
until their successors are elected; provided, that any officer or assistant
officer elected or appointed by the board of directors may be removed with or
without cause at any regular or special meeting of the board whenever in the
judgment of the board of directors the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Any agent appointed shall serve for
such term, not longer than the next annual meeting of the board of directors, as
shall be specified, subject to like right of removal by the board of directors.
2. VACANCIES
If any office becomes vacant for any reason, the vacancy may be filled
by the board of directors.
3. POWER OF OFFICERS
Each officer shall have, subject to these by-laws, in addition to the
duties and powers specifically set forth herein, such powers and duties as are
commonly incident to this office and such duties and powers as the board of
directors shall from time to time designate. All officers shall perform their
duties subject to the directions and under the supervision of the board of
directors. The president may secure the fidelity of any and all officers by bond
or otherwise.
4. PRESIDENT
The president shall be the chief executive officer of the corporation.
He shall preside at all meetings of the directors and shareholders. He shall see
that all orders and resolutions of the board are carried out, subject however,
to the right of the directors to delegate specific powers, except such as may be
by statute exclusively conferred on the president, to any other officers of the
corporation.
He or any vice-president shall execute bonds, mortgages and other
instruments requiring a seal, in the name of the corporation, and, when
authorized by the board, he or any vice-president may affix the seal to any
instrument requiring the same, and the seal when so affixed shall be attested by
the signature of either the secretary or an assistant secretary. He or any
vice-president shall sign certificates of stock.
The President shall be an ex-officio member of all standing committees.
He shall submit a report of the operations of the corporation for the
year to the directors at their meeting next preceding the annual meeting of the
shareholders and to the shareholders at their annual meeting.
5. VICE-PRESIDENTS
The vice-president shall, in the absence or disability of the
president, perform the duties and exercise the powers of the president, and they
shall perform such other duties as the board of directors shall prescribe.
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6. THE SECRETARY AND ASSISTANT SECRETARIES
The secretary shall attend all meetings of the board and all meetings
of the shareholders and shall record all votes and the minutes of all
proceedings and shall perform like duties for the standing committees when
required. He shall give or cause to be given notice of all meetings of the
shareholders and all meetings of the board of directors and shall perform such
other duties as may be prescribed by the board. He shall keep in safe custody
the seal of the corporation, and when authorized by the board, affix the same to
any instrument requiring it, and when so affixed, it shall be attested by his
signature or by the signature of an assistant secretary.
The assistant secretary shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the secretary, and they
shall perform such other duties as the board of directors shall prescribe.
In the absence of the secretary or an assistant secretary, the minutes
of all meetings of the board and shareholders shall be recorded by such person
as shall be designated by the president or by the board of directors.
7. THE TREASURER AND ASSISTANT TREASURERS
The treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
The treasurer shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements. He shall keep and maintain the corporation's books of account and
shall render to the president and directors an account of all of his
transactions as treasurer and of the financial condition of the corporation and
exhibit his books, records and accounts to the president or directors at any
time. He shall disburse funds for capital expenditures as authorized by the
board of directors and in accordance with the orders of the president, and
present to the president for his attention any requests for disbursing funds if
in the judgment of the treasurer any such request is not property authorized. He
shall perform such other duties as may be directed by the board of directors or
by the president.
If required by the board of directors, he shall give the corporation a
bond in such sum and with such surety or sureties as shall be satisfactory to
the board for the faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
The assistant treasurers in the order of their seniority shall, in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer, and they shall perform such other duties as the board
of directors shall prescribe.
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ARTICLE V - CERTIFICATES OF STOCK: TRANSFER. ETC.
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1. CERTIFICATES OF STOCK
The certificates for shares of stock of the corporation shall be
numbered and shall be entered in the corporation as they are issued. They shall
exhibit the holder's name and number of shares and shall be signed by the
president or a vice-president and the secretary or an assistant secretary and
shall be sealed with the seal of the corporation or a facsimile thereof. If the
corporation has a transfer agent or a registrar, other than the corporation
itself or an employee of the corporation, the signatures of any such officer may
be facsimile. In case any officer or officers who shall have signed or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before said certificate may
nevertheless be issued by the corporation with the same effect as though the
person or persons who signed such certificates or whose facsimile signature or
signatures shall have been used thereon had been such officer or officers at the
date of its issuance. Certificates shall be in such form as shall in conformity
to law be prescribed from time to time by the board of directors.
The corporation may appoint from time to time transfer agents and
registrars, who shall perform their duties under the supervision of the
secretary.
2. TRANSFERS OF SHARES
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, cancel the old certificate, and record the transaction upon its books.
3. REGISTERED SHAREHOLDERS
The corporation shall be entitled to treat the holder of record of any
share or shares of stock 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 is shall have express or
other notice thereof, except as otherwise provided by law.
4. ISSUANCE OF ADDITIONAL SHARES
The corporation shall be enabled to issue additional common shares or
to create additional classes of stock.
5. LOST CERTIFICATE
The board of directors may direct a new certificate or certificates to
be issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost. when
authorizing such issue of a new certificate or certificates, the board of
directors in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost or destroyed certificate or
certificates or his legal representatives to advertise the same in such manner
as it shall require or to give the corporation a bond with surety and in form
satisfactory to the corporation (which bond shall also name the corporation's
transfer agents and registrars, if any, as obligees) in such sum as it may
direct as indemnity against any claim that may be made against the corporation
or other obligees with respect to the certificate alleged to have been lost or
destroyed, or to advertise and also give such bond.
41
<PAGE>
- --------------------------------------------------------------------------------
ARTICLE VI - DIVIDEND
- --------------------------------------------------------------------------------
1. DECLARATION
The board of directors may declare at any annual, regular or special
meeting of the board and the corporation may pay, dividends on the outstanding
shares in cash, property or in the shares of the corporation to the extent
permitted by, and subject to the provisions of, the laws of the State of Texas.
2. RESERVES
Before payment of any dividend there may be set aside out of any funds
of the corporation available for dividends such sum or sums as the directors
from time to time in their absolute discretion think proper as a reserve fund to
meet contingencies or for equalizing dividends or for repairing or maintaining
any property of the corporation or for such other purpose as the directors shall
think conducive to the interest of the corporation, and the directors may
abolish any such reserve in the manner in which it was created.
- --------------------------------------------------------------------------------
ARTICLE VII - MISCELLANEOUS
- --------------------------------------------------------------------------------
1. INFORMAL ACTION
Any action required to be taken or which may be taken at a meeting of
the shareholders, directors or members of the executive committee, may be taken
without a meeting if a consent in writing setting forth the action so taken
shall be signed by all of the shareholders, directors, or members of the
executive committee, as the case may be, entitled to vote with respect to the
subject matter thereof, and such consent shall have the same force and effect as
a unanimous vote of the shareholders, directors, or members of the executive
committee, as the case may be, at a meeting of said body.
2. SEAL
The corporate seal shall be circular in form and shall contain the name
of the corporation, the year of its incorporation and the name "TEXAS". The seal
may be used by causing it or a facsimile to be impressed or affixed or in any
other manner reproduced. The corporate seal may be altered by order of the board
of directors at any time.
3. CHECKS
All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the board
of directors may from time to time designate.
4. FISCAL YEAR
The fiscal year of the corporation shall be determined by resolution of
the Board of Directors.
5. DIRECTORS' ANNUAL STATEMENT
The board of directors shall present at each annual meeting of
shareholders a full and clear statement of the business and condition of the
corporation.
6. CLOSE CORPORATIONS: MANAGEMENT BY SHAREHOLDERS
If the articles of incorporation of the corporation and each
certificate representing its issued and outstanding shares states that the
business and affairs of the corporation shall be managed by the shareholders of
the corporation rather than by a board of directors, then, whenever the context
so requires by the shareholders of the corporation shall be deemed the directors
of the corporation for purposes of applying any provision of these By-Laws.
42
<PAGE>
7. AMENDMENTS
(a) By Directors
The board of directors may amend or repeal the By-Laws, or adopt new
by-laws, unless:
1. The Articles of Incorporation or the State reserves the power
exclusively to the shareholders in whole or in part; or
2. The shareholders in amending, repealing or adopting a particular
by-law expressly provide that the board of directors may not amend that by-law.
(b) By Shareholders
Unless the Articles of Incorporation or By-Law adopted by the
shareholders provides otherwise as to all or some portion of the By-Laws, the
shareholders may amend, repeal or adopt the By-Laws even though the By-Laws may
also be amended, repealed or adopted by the board of directors.
The above By-Laws approved and adopted by the Board of Directors on
January 5, 1999.
________/s/______
Kirt W. James,
President
43
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 6.2
ATTORNEY DISCLOSURE AND SPECIAL RELATIONSHIP AGREEMENT
- --------------------------------------------------------------------------------
ATTORNEY DISCLOSURE AND
SPECIAL RELATIONSHIP AGREEMENT
WILLIAM STOCKER
ATTORNEY AT LAW
THIS AGREEMENT is made by and between Intrepid International, Ltd., a Nevada
Corporation, (hereafter "intrepid"), and Net Master Consultants, Inc. a Texas
Corporation, (hereafter "Intrepid-Client"), and William Stocker, Intrepid's
General Counsel, and dated January 1, 1999. In consideration of the mutual
promises contained herein, and on the terms and conditions herein set forth, the
parties agree as follows:
A. SUMMARY.
Net Master Consultants, Inc. has employed Intrepid International, Ltd. to
perform certain financial services to Client, some of which services are to be
provided for Client, and in the Client's name, by attorneys with established and
continuing relationship to Intrepid. The purpose of this agreement is to provide
full written disclosure, and to define special character of both the ostensible
and actual relationships between the parties.
William Stocker is actually General Counsel of Intrepid International, Ltd.
William Stocker will be authorized by this agreement to act as ostensible
Special Securities Counsel for Net Master Consultants, Inc..
B. RECITALS
1. INTREPID RETAINER AGREEMENT. Intrepid International, Ltd. is or
will be hereby retained as financial services consultants for the
Intrepid-Client, pursuant to that certain Financial Services Consulting
Agreement of even date herewith. Among the services contemplated to be provided
by that Agreement are the services of its General Counsel William Stocker,
attorney at law, as Special Securities Counsel for the Intrepid-Client.
2. INTREPID GENERAL COUNSEL. William Stocker, attorney at law, is General
Counsel to Intrepid, first and foremost and always, and this paramount status
and relationship has been and is hereby fully disclosed, in connection with the
Intrepid-Client's consideration of the potential services of William Stocker as
Special Counsel with Limited Authority, in connection with, and only in
connection with the services requested and agreed to between Intrepid and the
Intrepid-Client.
3. DEFINITION OF "SPECIAL COUNSEL WITH LIMITED AUTHORITY". As used in this
Attorney Disclosure Agreement, this expression shall have the following meaning,
consistently and without exception: Intrepid General Counsel is authorized,
where appropriate to employ the designation "Special Counsel" or "Special
Securities Counsel" for the Intrepid-Client, in connection with, and only in
connection with services to and for the Intrepid-Client requested by the
Intrepid-Client to be performed by Intrepid pursuant to the Financial Services
Consulting Agreement of even date herewith. Intrepid General Counsel, as between
such Counsel and the Intrepid-Client, is not Intrepid-Client's Counsel, nor
counsel to the Intrepid-Client generally, or in any other manner than specified
in this definition. Special Counsel will not take action which is not authorized
by the Intrepid-Client nor represent to any person any general authority to
speak for or bind the Intrepid-Client in any manner.
4. INTREPID-CLIENT'S RIGHT TO DECLINE THE RELATIONSHIP. The
Intrepid-Client has been informed, and is informed hereby, that the
Intrepid-Client is not required to join in the special relationship disclosed
and defined herein. Intrepid-Client may employ or require its own counsel or
independent counsel for any and all purposes at its expense and in addition to
its obligations to Intrepid. The Intrepid-Client is advised to retain its own
counsel, as appropriate, to review and advise the Intrepid-Client as to any
matter arising from its relationship to Intrepid or Intrepid's Counsel.
44
<PAGE>
5. MANAGEMENT'S PREFERENCE. It is the desire of sophisticated management
that the unnecessary expense of cumulative counsel with respect to purely
technical matters is not warranted, necessary or appropriate, with respect to
the limited authority and scope of the Special Counsel relationship, as defined,
and that no conflict of interest exists or is likely to arise from the strict
and precise observance of that relationship as defined. Accordingly management
understands, accepts and affirmatively requests such an arrangement.
C. SPECIAL COUNSEL AGREEMENT
1. SPECIAL COUNSEL. The Intrepid-Client and Intrepid Counsel hereby agree
and adopt that special technical relationship of Special Counsel with Limited
Authority as defined hereinabove, for the sole and separate purpose of allowing
Intrepid Counsel to perform services appropriate to the services of Intrepid
requested by the Intrepid-Client.
2. BILLINGS. Special Counsel (Intrepid's Counsel) shall invoice and bill
applicable time and services to Intrepid, separately with respect to matters
applicable to this Intrepid-Client. Time shall be billable at $250.00/hr, and
such incidental secretarial services shall be billable at $85.00/hr, as may be
reasonably and necessarily performed by its secretary. Additional services may
be performed by subcontractor attorneys, subject to arrangements approved by the
Intrepid-Client in advance. Intrepid shall be responsible, as between Intrepid
and its counsel, for the compensation and discharge of its Counsel's billings.
Intrepid shall include Counsel's segregated billings along with its own, and, as
between Intrepid and the Intrepid-Client, the Intrepid-Client shall be
responsible to Intrepid for the total of its own and Counsel's billings. Certain
special minimum fixed fees shall apply to Legal Opinions: (a) Opinions for the
Issuance of free trading stock, $2,500.00; Opinions to remove restriction on
issued restricted securities; $2,000.00; Opinions to issue restricted
securities, as defined in Rule 144(a), $1,000.00.
3. TERMINATION. The terms of this agreement may be terminate by either
Intrepid-Client or Special Counsel at any time upon written or other reasonable
notice to the other.
4. MISCELLANEOUS This agreement sets forth the entire agreement and
understanding between the parties and supersedes all prior discussions,
agreements and understandings, if any, of any and every kind and nature, between
them. This agreement is made and shall be construed and interpreted according to
the laws of the Intrepid-Client's place of Incorporation if that be Nevada or
Texas, and if not, pursuant to the laws of the State of Nevada.
ACCORDINGLY the parties cause this agreement to be signed by their duly
authorized representative, as of the date written below.
Intrepid International, Ltd.
By
___________/s/____________ _______/s/___________
Kirt W. James, William Stocker
President Attorney at law
THE ABOVE IS UNDERSTOOD AND AGREED TO and I state under the penalties of perjury
that I am authorized to execute this letter agreement:
Net Master Consultants, Inc.
Date: 1/1/99 By:
___________/s/__________
Dan Sifford, President
45
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 6.3
ATTORNEY DISCLOSURE AND SPECIAL RELATIONSHIP AGREEMENT
- --------------------------------------------------------------------------------
46
<PAGE>
ATTORNEY DISCLOSURE AND
SPECIAL RELATIONSHIP AGREEMENT
KARL E. RODRIGUEZ
ATTORNEY AT LAW
THIS AGREEMENT is made by and between Intrepid International, Ltd., a Nevada
Corporation, (hereafter "Intrepid"), and Net Master Consultants, Inc. a Texas
Corporation, (hereafter "Intrepid-Client"), and Karl E. Rodriguez, Exim
International, Inc.'s General Counsel, and dated January 1, 1999. In
consideration of the mutual promises contained herein, and on the terms and
conditions herein set forth, the parties agree as follows:
A. SUMMARY.
Net Master Consultants, Inc. has employed Intrepid International, Ltd. to
perform certain financial services to Client, some of which services are to be
provided for Client, and in the Client's name, by attorneys with established and
continuing relationship to Intrepid. The purpose of this agreement is to provide
full written disclosure, and to define special character of both the ostensible
and actual relationships between the parties.
Karl E. Rodriguez is actually General Counsel of Exim International, Inc.
Karl E. Rodriguez will be authorized by this agreement to act as ostensible
Special Transactional Counsel for Net Master Consultants, Inc..
A. RECITALS
1. INTREPID RETAINER AGREEMENT. Intrepid International, Ltd. is or
will be hereby retained as financial services consultants for the
Intrepid-Client, pursuant to that certain Financial Services Consulting
Agreement of even date herewith. Among the services contemplated to be provided
by that Agreement are the services of Karl E. Rodriguez, attorney at law, as
Special Transactional Counsel for the Intrepid-Client.
2. EXIM INTERNATIONAL, INC., is a financial consulting firm, not a broker,
dealer or registered investment advisor, a principal consultant to Intrepid
International, Ltd.
3. EXIM GENERAL COUNSEL. Karl E. Rodriguez, attorney at law, is General
Counsel to Intrepid's Consultant, Exim International, Inc., first and foremost
and always, and this paramount status and relationship has been and is hereby
fully disclosed, in connection with the Intrepid-Client's consideration of the
potential services of Karl E. Rodriguez as Special Counsel with Limited
Authority, in connection with, and only in connection with the services
requested and agreed to between Intrepid and the Intrepid-Client.
47
<PAGE>
4. DEFINITION OF ASPECIAL COUNSEL WITH LIMITED AUTHORITY@. As used in this
Attorney Disclosure Agreement, this expression shall have the following meaning,
consistently and without exception: Exim General Counsel Karl E. Rodriguez is
authorized, where appropriate to employ the designation "Special Counsel" or
"Special Transactional Counsel" for the Intrepid-Client, in connection with, and
only in connection with services to and for the Intrepid-Client requested by the
Intrepid-Client to be performed by Intrepid pursuant to the Financial Services
Consulting Agreement of even date herewith. Exim General Counsel, Karl E.
Rodriguez as between such Counsel and the Intrepid-Client, is not
Intrepid-Client's Counsel, nor counsel to the Intrepid-Client generally, or in
any other manner than specified in this definition. Special Counsel will not
take action which is not authorized by the Intrepid-Client nor represent to any
person any general authority to speak for or bind the Intrepid-Client in any
manner."
5. INTREPID-CLIENT'S RIGHT TO DECLINE THE RELATIONSHIP. The
Intrepid-Client has been informed, and is informed hereby, that the
Intrepid-Client is not required to join in the special relationship disclosed
and defined herein. Intrepid-Client may employ or require its own counsel or
independent counsel for any and all purposes at its expense and in addition to
its obligations to Intrepid. The Intrepid-Client is advised to retain its own
counsel, as it may deem appropriate, to review and advise the Intrepid-Client as
to any matter arising from its relationship to Intrepid or Exim's Counsel.
6. MANAGEMENT'S PREFERENCE. It is the desire of sophisticated management
that the unnecessary expense of cumulative counsel with respect to purely
technical matters is not warranted, necessary or appropriate, with respect to
the limited authority and scope of the Special Counsel relationship, as defined,
and that no conflict of interest exists or is likely to arise from the strict
and precise observance of that relationship as defined. Accordingly management
understands, accepts and affirmatively requests such an arrangement.
B. SPECIAL COUNSEL AGREEMENT
1. SPECIAL COUNSEL. The Intrepid-Client and Intrepid Counsel hereby agree
and adopt that special technical relationship of Special Counsel with Limited
Authority as defined hereinabove, for the sole and separate purpose of allowing
Intrepid Counsel to perform services appropriate to the services of Intrepid
requested by the Intrepid-Client.
2. BILLINGS. Special Counsel (Exim's Counsel) shall invoice and bill
applicable time and services to Intrepid, separately with respect to matters
applicable to this Intrepid-Client. Time shall be billable at $250.00/hr, and
such incidental secretarial services shall be billable at $85.00/hr, as may be
reasonably and necessarily performed by its secretary. Additional services may
be performed by subcontractor attorneys, subject to arrangements approved by the
Intrepid-Client in advance. Intrepid shall be responsible, as between Intrepid
and its counsel, for the compensation and discharge of its Counsel's billings.
Intrepid shall include Counsel's segregated billings along with its own, and, as
between Intrepid and the Intrepid-Client, the Intrepid-Client shall be
responsible to Intrepid for the total of its own and Counsel's billings. Certain
special minimum fixed fees shall apply to Legal Opinions: (a) Opinions for the
Issuance of free trading stock, $2,500.00; Opinions to remove restriction on
issued restricted securities; $2,000.00; Opinions to issue restricted
securities, as defined in Rule 144(a), $1,000.00.
48
<PAGE>
3. TERMINATION. The terms of this agreement may be terminate by either
Intrepid-Client or Special Counsel at any time upon written or other reasonable
notice to the other.
4. MISCELLANEOUS This agreement sets forth the entire agreement and
understanding between the parties and supersedes all prior discussions,
agreements and understandings, if any, of any and every kind and nature, between
them. This agreement is made and shall be construed and interpreted according to
the laws of the Intrepid-Client's place of Incorporation if that be Nevada or
Texas, and if not, pursuant to the laws of the State of Nevada.
ACCORDINGLY the parties cause this agreement to be signed by their duly
authorized representative, as of the date written below.
Intrepid International, Ltd.
by
/s/ /s/
___________________________ ___________________________
Kirt W. James, President Karl E. Rodriguez
Attorney at Law
THE ABOVE IS UNDERSTOOD AND AGREED TO and I state under the penalties of perjury
that I am authorized to execute this letter agreement:
Net Master Consultants, Inc.
Date: 1/1/99 By:
______/s/______
Dan Sifford,
President
49
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT F-1
AUDITED FINANCIAL STATEMENTS
FOR YEARS ENDING DECEMBER 31, 1999, 1998
- --------------------------------------------------------------------------------
50
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Net Master Consultants, Inc.
We have audited the accompanying balance sheets of Net Master Consultants, Inc.
(a Development Stage Company) as of December 31, 1999 and 1998 and the related
statements of operations, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Net Master Consultants, Inc. (a
Development Stage Company) as of December 31, 1999 and 1998 and the results of
its operations and cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company's
recurring operating losses and lack of working capital raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to those matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
________/s/_________
Salt Lake City, Utah
February 7, 2000
51
<PAGE>
Netmaster Consultants, Inc.
(a development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
<S> <C> <C>
December 31,
1999 1998
- ----------------------------------------------------------------------
ASSETS
Current Assets
Cash $ 705 $ 705
Total Current Assets 705 705
Total Assets $ 705 $ 705
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilites
Accounts Payable $ 66,662 $ 0
Stockholders' Equity
Common Stock, authorized
100,000,000 shares of $.0001 par value,
issued and outstanding 3,167,800 and
3,167,800 shares respectively 317 317
Additional Paid in Capital 117,016 117,016
Deficit Accumulated During the
Development Stage (180,518) (113,856)
Stock Subscriptions (2,772) (2,772)
Total Stockholders' Equity (65,957) 705
Total Liabilities and Stockholders' Equity $ 705 $ 705
</TABLE>
The accompanying notes are an integral part of these financial statements
52
<PAGE>
Netmaster Consultants, Inc.
(a development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Comulative
For the Years Total
Ended December 31, Since
1999 1998 Inception
- ------------------------------------------------------------------------------------
Revenues: $ 0 $ 0 $ 0
Expenses:
General and Administrative 66,662 33,798 113,856
Total Expenses 66,662 33,798 113,856
Net (Loss) (66,662) (33,798) (113,856)
Net Loss Per Share ($0.020) ($0.011) ($0.004)
Weighted average shares outstanding 3,167,800 3,045,800 25,940,222
</TABLE>
The accompanying notes are an integral part of these financial statements
53
<PAGE>
Netmaster Consultants, Inc.
(a development Stage Company)
Statements of Stockholders' Equity
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Deficit
Accumulated
Additional During the
Common Stock Paid In Development
Shares Amount Capital Stage
- ---------------------------------------------------------------------------------------------
Inception at December 28, 1998 0 $ 0 $ 0 $ 0
Shares issued for services 33,000,000 3,300 (3,267) 0
Net Loss for the years ended
December 31, 1998-1996 0 0 0 (33)
Balances, December 31, 1996 33,000,000 3,300 (3,267) (33)
Canceled 30,000,000 shares (30,000,000) (3,000) 3,000 0
Issued of stock at $5 per share
on June 17, 1997 20,000 2 99,998 0
Net Loss for the year ended December
31, 1997 0 0 0 (80,025)
Balances, December 31, 1997 3,020,000 302 99,731 (80,058)
Stock issued at $.10 for services
valued at $9,500 95,000 10 9,490 0
Stock issued for subscription agreement 52,800 5 7,795 0
Net Loss for the year ended December
31, 1998 0 0 0 (33,798)
Balance, December 31, 1998 3,167,800 317 117,016 (113,856)
Net Loss for the year ended December
31, 1999 0 0 0 (66,662)
Balances, December 31, 1999 3,167,800 $ 317 $ 117,016 ($180,518)
</TABLE>
The accompanying notes are an integral part of these financial statements
54
<PAGE>
Netmaster Consultants, Inc.
(a development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Comulative
For the Years Ended Total
December 31, Since
1999 1998 Inception
- ------------------------------------------------------------------------------------
Cash Flows from Operating
Activities
Net Loss ($66,662) ($33,798) ($180,518)
Adjustments to reconcile 0 0
Increase in accounts payable 66,662 0 66,662
Net cash flows provided
(used) by operating activities 0 (33,798) (113,856)
Cash Flows from investment
Activities: 0 0 0
Cash Flows from Financing
Activities
Stock subscriptions received 0 5,028 5,028
Stock issued for organization costs 0 0 33
Issued common stock for cash 0 0 100,000
Issued common stock for services 0 9,500 114,561
Net cash flows provided
(Used) by financing activities 0 9,500 9,500
Net increase (decrease) in cash 0 (19,720) 705
Cash, beginning of year 705 19,975 0
Cash, end of year $ 705 $ 19,975 $ 0
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash Paid for:
Interest $ 0 $ 0 $ 0
Taxes $ 0 $ 0 $ 0
</TABLE>
The accompanying notes are an integral part of these financial statements
55
<PAGE>
The accompanying notes are an integral part of these financial statements
NET MASTER CONSULTANTS, INC.
(a Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 1 - Summary of Significant Accounting Policies
a. Organization
Net Master Consultants, Inc. (the "Company") was incorporated as
Houston Produce Corporation under the laws of the State of Texas on December 28,
1988. The Company was organized primarily for the purpose of importing fruits
and vegetables from Latin America for sale in the United States market however
it has remained dormant until its reactivation in March of 1997. In June 1997
the Company changed the name to Net Master Consultants, Inc.
The Company is in the development stage according to Financial Accounting
Standards Board Statement No. 7 and is currently focusing its attention on
raising capital in order to pursue its goals.
b. Accounting Method
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating loss
carryforwards totaling approximately $180,000 that will be offset against future
taxable income. These NOL carryforwards begin to expire in the year 2004. No
tax benefit has been reported in the financial statements because the Company
believes there is a 50% or greater chance the carryforward will expire unused.
The accompanying notes are an integral part of these financial statements
56
<PAGE>
NET MASTER CONSULTANTS, INC.
(a Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 1 - Summary of Significant Accounting Policies (Continued)
e. Provision for Income Taxes (Continued)
Deferred tax assets and the valuation account is as follows at December 31,
1999 and 1998.
December 31,
1999 1998
Deferred tax asset:
NOL carrryforward $61,200 $27,654
Valuation allowance (61,200) (27,654)
Total $ 0 $ 0
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has few tangible assets
and has had recurring operating losses for the past few years and is dependent
upon financing to continue operations. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty. It is
management's plan to find an operating company to merge with, thus creating
necessary operating revenue.
NOTE 3 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating substantially
all of its efforts in raising capital and developing its business operations in
order to generate significant revenues.
NOTE 4 - Stock Split
In 1997, the Company's Board of Directors authorized a 1,000 for one
forward stock split and the cancellation of 30,000,000 shares as part of the
reorganization and reincorporation. The Company's financial statements have
been retroactively restated to show the effects of the stock split.
57
<PAGE>
