UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
INTERNATIONAL STAR, INC.
(Exact name of registrant as specified in its charter)
Nevada 86-0876846
(State of organization) (I.R.S. Employer Identification No.)
2808 CHILDRESS, Las Vegas, NV 89109
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 869-8757
Registrant's Attorney: W. Michael Howery, Esq., 4505 S. Wasatch Blvd., Suite
215, Salt Lake City, Utah 84124, (801) 273-1958, Fax (801) 273-1955.
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act: Common Stock,
$0.001 par value per share.
ITEM 1. DESCRIPTION OF BUSINESS
BACKGROUND
The Company
International STAR, Inc. (the "Company") was organized under the laws
of the State of Nevada on October 28, 1993 as Mattress Showrooms, Inc. At
organization, the Company issued 2,500 shares of common stock, no par value.
After amending its Articles of Corporation, as of April 22, 1997, the Company
has issued 27,480,000 Common Shares of $0.001 par value, as follows: 1) On April
22, 1997, the Company forward split the 6,000,000 then issued to shareholders to
30,000,000 shares; 2) on May 1, 1997, the Company canceled 17,400,000 shares to
Company organizers and re-issued 300,000 shares to them; 3) on May 1, 1997, an
additional 10,800,000 shares were issued pro-rata to existing shareholders for
services; and 4) on May 8, 1997, the Company issued 4,500,000 shares to
individuals providing services to the Company. The Company's principal office is
located at 2808 Childress, Las Vegas, Nevada 89134.
The Company changed its name to International STAR in 1997 and engaged
in the business of construction, sale and operation of "state of the art" waste
management systems, specializing in turnkey systems for management of hospital,
industrial, petroleum, chemical and municipal solid waste collection systems.
During the operational years 1997-August 1999, the Company's headquarters were
located at 545 Shoop Avenue, Suite 331, Idaho Falls, ID and the Company was
managed by Mr. Milo Larsen, President; Mr. Robert Gillins, Vice President of
Projects; and Mr. David Dalton, Vice President of Engineering. The above three
individuals resigned in August, 1999 due to lack of financing for the
establishment of such systems, each of which would cost from $10 to $30 million.
Mr. Kamal Alawas and Mr. Pat Westphal, Directors, have been managing the Company
since that time and enhancing the nature of the Company's business.
The Company's business, now, is bifurcated -- both in transportation
and mining. The Company has obtained mining leases in Arizona and plans the
exploitation of the leased properties in the year 2,000. In addition, the
Company has executed agreements with ALVIS Information Systems, Ltd. to provide
an AUTOMATIC VEHICLE LOCATION ability for trucking, towing operators, Leasing
Companies, the Armed Forces, ambulance sources, police departments and local,
state and federal agencies, and other companies in the United States and Canada.
The Company has field tested the units, which work in conjunction with the GPS
(Global Positioning Satellites.)
The Board of Directors has elected to begin implementing the Company's
principal business purpose, described below under "Item 2, Plan of Operation".
The Company is filing this registration statement pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act"), in order to ensure that
public information is readily accessible to all shareholders and potential
investors, to increase the Company's access to financial markets and in
compliance with recent rules and regulations of the Securities and Exchange
Commission.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has had no
operating history and has received no revenues or earnings from operations. The
Company has no significant assets or financial resources to sustain operating
expenses without corresponding revenues, at least until contracts are executed
for use of its QUIKTRACK (R) positioning product or mining operations begin in
earnest. There is no assurance that the Company will be successful in either of
the two major thrusts of its operations.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition, and management of the mining and global
positioning aspects of its operations. In the event the Company begins
operations or engages a joint venture partner, the success of the Company's
operations may be dependent upon management of the venture partner firm together
with numerous other factors beyond the Company's control.
IF ONE IS ENTERED INTO, NO STANDARDS FOR BUSINESS COMBINATION. There can be no
assurance the Company will successfully conclude contracts to sell its products
or be able, alone or with others, to successfully mine the properties for which
it has leases. The Company hopes to identify and evaluate suitable business
partners or conclude successful operations in either selling its proprietary
global positioning product or undertaking the profitable mining of located ore
bodies, but other then issuing shares to its original shareholders, the Company
never commenced any operational activities. The Company has not established a
specific length of operating history or a specified level of earnings, assets,
net worth or other criteria which it will require any additional target business
opportunity to have achieved, and without which the Company would not consider a
business combination in any form with such business opportunity. Accordingly,
the Company, in addition to its current operational plans, may enter into a
business combination with a business opportunity having no significant operating
history, losses, limited or no potential for earnings, limited assets, negative
net worth, or other negative characteristics.
CONFLICTS OF INTEREST - GENERAL. The Company's officers and directors may
participate in other business ventures which compete directly with the Company.
Additional conflicts of interest and non "arms-length" transactions may also
arise in the event the Company's officers or directors are involved in the
management of any firm with which the Company transacts business. See "ITEM 5,
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS - CONFLICTS OF
INTEREST".
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has not conducted
or received results of market research indicating that market demand exists for
the operations contemplated by the Company. Moreover, the Company does not have,
and does not plan to establish, a marketing organization. If there are either
operations or transactions with other entities by the Company, there is no
assurance the Company will successfully operate or complete such transactions.
LACK OF DIVERSIFICATION. The Company's proposed operations, even if successful,
will occur from its current management or may occur as the result in a business
combination with only one entity. Consequently, the resulting activities could
be limited to the entity's business. The Company's inability to diversify its
activities into a number of areas may subject the Company to economic
fluctuations within a particular business or industry or two, thereby increasing
the risks associated with the Company's operations.
REGULATION. The company will be subject to regulation under the Securities
Exchange Act of 1934, as well as other industry regulations and environmental
laws. In the event the Company engages in business combinations which result in
the Company holding passive investment interests in a number of entities, the
Company could be subject to regulation under the Investment Company Act of 1940.
Because of these possibilities, the Company could be required to file and comply
with numerous regulatory entities and/or would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION. Should
the Company's primary plan of operation include entering into a business
combination with a private concern such combining could result in the Company
issuing securities to shareholders of such private company. Issuing previously
authorized and unissued common stock of the Company will reduce the percentage
of shares owned by present and prospective shareholders, and a change in the
Company's control and/or management.
TAXATION. Federal and state tax consequences will, in all likelihood, be major
considerations in the operations of the Company and any business combination the
Company may undertake. Typically, these transactions may be structured to result
in tax-free treatment to both companies, pursuant to various federal and state
tax provisions. The Company intends to structure any business combination so as
to minimize the federal and state tax consequences to both the Company and the
target entity. Management cannot assure that a business combination will meet
the statutory requirements for a tax-free reorganization, or that the parties
will obtain the intended tax-free treatment upon a transfer of stock or assets.
A non-qualifying reorganization could result in the imposition of both federal
and state taxes, which may have an adverse effect on both parties to the
transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management believes that any potential target company must
provide audited financial statements for review, and for the protection of all
parties to the business combination. One or more attractive business
opportunities may forego a business combination with the Company, rather than
incur the expenses associated with preparing audited financial statements.
BLUE SKY CONSIDERATIONS. Because the securities registered hereunder have not
been registered for resale under the blue sky laws of any state, and the Company
has no current plans to register or qualify its shares in any state, holders of
these shares and persons who desire to purchase them in any trading market that
might develop in the future, should be aware that there may be significant state
blue sky restrictions upon the ability of new investors to purchase the
securities. These restrictions could reduce the size of any potential market. As
a result of recent changes in federal law, non-issuer trading or resale of the
Company's securities is exempt from state registration or qualification
requirements in most states. Accordingly, investors should consider any
potential secondary market for the Company's securities to be a limited one.
LIMITED OPERATIONAL HISTORY. The Company has only a limited operating history in
the precious mineral exploration and extraction business as well as the GPS
Industry, two of the industries in which the Company intends to focus its future
business efforts. Accordingly, the Company is subject to all risks inherent in a
developing business enterprise. The likelihood of success of the Company must be
considered in light of the problems, expenses, difficulties, complications, and
delays frequently encountered in connection with a new business in general and
those specific to the mineral exploration and extraction and GPS businesses and
the competitive and regulatory environment in which the Company will operate.
LACK OF MINERAL EXTRACTION EXPERIENCE BY MANAGEMENT. The Company's management
has not had direct experience in the management or operation of any business
engaged in the mineral extraction or exploration industry, although members of
management have prior experience in the natural resource industry. This lack of
experience may make the Company more vulnerable than others to certain risks,
and it may also cause the Company to be more vulnerable to business risks
associated with errors in judgment that could have been prevented by more
experienced management. Management's lack of previous experience in the mineral
extraction or exploration industry could have a material adverse effect on the
future operations and prospects of the Company.
INDUSTRY RISKS. Mineral exploration and extraction (particularly for gold) is
highly speculative in nature, frequently is nonproductive, and involves many
risks, including, without limitation, unforeseen geological formations,
cave-ins, environmental concerns and personal injury. Such risks can be
considerable and may add unexpected expenditures or delays to the Company's
plans. Moreover, an extended period of time may be needed to develop the
Company's mineral properties. Because the market prices of any minerals produced
are subject to fluctuation, the economic feasibility of production may change
during this period of time of development. Another factor is that the Company
will use the evaluation work of professional geologists, geophysicists, and
engineers for estimates in determining whether to commence or continue
extraction work. These estimates generally rely on scientific estimates and
economic assumptions, which in some instances may not be correct, and could
result in the expenditure of substantial amounts of money on a property before
it can be determined whether or not the property contains economically
recoverable mineralization. The Company is not able to determine at present
whether or not, or the extent to which, such risks may adversely affect the
Company's strategy and business plans. There can be no assurance that the
Company's mineral extraction activities will be successful or profitable.
LACK OF PROVEN OR PROBABLE MINERAL RESERVES. The economic viability of a mineral
property cannot be determined until extensive exploration and development have
been conducted and a more comprehensive feasibility study performed. Although
the Company has conducted sampling on its mineral properties indicating that
precious minerals exist on these properties and the Company has confirmed the
level of existing precious minerals as well as the recovery procedures necessary
to successfully extract them, and had independent testing undertaken to confirm
the results of the Company's internal sampling, there is no guarantee that
further sampling and the implementation of mining procedures on the properties
to be exploited by the Company will verify and continue to bear out the
qualities of ores necessary to make mining in the area which the Company
chooses, viable. Further, the Company needs to do more geological and mineral
testing to more firmly establish proven or probable mineral reserves for mineral
properties. Consequently, the Company has been unable to ascertain with
certainty whether adequate minerals reserves sufficient for profitable
operations exist.
The Company is currently undertaking on-going internal testing and is planning
to obtain more independent third-party testing as soon as funds are available
therefor. Notwithstanding the preceding, management believes that the company's
surface sampling indicates the existence of sufficient mineralization to warrant
continued development of the Company's mineral properties at present. However,
there can be no assurance that proven or probable ore reserves will ultimately
be established.
TECHNOLOGICAL RISK FACTOR. The ultimate realization of the Company's investment
in its mineral properties depends upon the commercial feasibility of the
technology that the Company intends to use in the company's mineral extraction
process. While the technology is being used throughout the mineral industry, the
technology must prove capable of producing precious minerals on a large scale
and at cost levels that will enable production to occur profitably. There can be
no assurance that the technology will prove capable of producing precious
minerals at this scale and at these cost levels..
TITLE RISKS. Title to mining properties in the western United States involves
certain inherent risks due to the impossibility of determining the validity of
unpatented claims from real estate records, as well as the potential for
problems arising from the frequently ambiguous conveyancing history
characteristic of many mining properties. Although the Company believes it
conducted reasonable investigations (in accordance with standard mining industry
practice) of the validity of ownership of and the ability of certain holders of
certain mining claims to transfer to the Company certain rights and other
interests therein, there can be no assurance that it holds good and marketable
title to all of its U.S. properties. characteristic of many mining properties.
The Company has, however, claims in good standing through August of 2,000. In
addition, the Company has conducted reviews of title and obtained
representations regarding ownership from holders of mineral rights. The
Company's practice will be, if possible, to obtain title insurance with respect
to its major mineral properties when a decision is made to proceed with large
scale mining. This insurance, however, may not be sufficient to cover loss of
investment or of future profits.
LIMITED DIVERSIFICATION. The Company currently has rights, and for the
foreseeable future will have rights, in only a limited number of mineral
properties, although the Company intends to acquire additional mineral
properties in the future. At the present, the success of this aspect of the
Company's business depends entirely upon the Company's ability to extract
minerals from its current properties on a profitable basis. This limited
diversification may make the results of the Company's operations more volatile
than they would be if the Company owned or controlled more mineral properties.
In addition, the Company currently owns, and for the foreseeable future will
own, an interest in only one gaming facility. Again, this limited
diversification in the gaming industry may make the results of the Company's
operations more volatile than they would be if the Company owned and operated
more gaming facilities.
VOLATILE MARKET PRICES FOR GOLD. The price of gold will have a material effect
on the Company's financial operations. Following deregulation, the market price
for gold has been highly speculative and volatile. Since the end of 1987 the
price of gold has declined from a high of approximately $500 per ounce to
approximately $281 per ounce. Instability in the price of gold may affect the
profitability of the Company's operations. No assurances can be given that the
Company has or will discover gold mineralization will discover gold in
commercial quantities or, if such mineralization in commercial quantities has
been or is hereafter discovered, that gold could be produced at a profit given
such market price fluctuations.
CHANGES TO MINING LAWS. Legislation has been introduced in prior sessions of the
U.S. Congress to make significant revisions to the U.S. General Mining Law of
1872, which could affect the Company's unpatented mining claims on federal
lands. In the past, there has been proposed legislation that would impose a
royalty on gold production. It cannot be predicted if these types of limiting
proposals will become law, However, if a change in gross royalty occurs, it
would affect the profitability of the Company's precious mineral extraction
activities.
INSURANCE COVERAGE AND UNINSURED LOSSES. The Company will procured insurance
covering personal injury, workers' compensation and damage to property and
equipment. There can be no assurance that the Company will be successful in
maintaining such insurance at rates acceptable to the Company or that such
insurance will prove adequate. Moreover, in view of recent trends in damage
awards in personal injury lawsuits, insurance apparently adequate at the time of
its procurement may prove insufficient to satisfy large losses or judgments
against that may subsequently be obtained against the Company. Furthermore,
certain types of insurance coverage (generally against losses caused by natural
disasters and Acts of God) are either unattainable or prohibitively expensive.
Substantial damage awards against the Company or substantial damages not covered
by insurance could affect the Company's ability to continue as a going concern
and may force the Company to seek protection under the federal bankruptcy laws.
LIQUIDITY. The Company has had no constant and continual flow of revenues.
During the past several years, the Company has been able to continue meeting
cash requirements by renegotiating its existing debt obligations, issuing new
debt, selling certain non-revenue producing assets, reducing overhead expenses,
and issuing equity securities. While the Company's need for additional capital
cannot now be precisely ascertained because of the indefiniteness of the
ultimate size and scope of the Company's mineral extraction activity, management
believes that the Company's future capital needs will exceed the Company's
current financial position.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and "forward-looking
statements" as that term is defined in Section 27A of the Securities Act of 1933
as amended (the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934 as amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical fact, are
forward-looking statements. Although Management believes that the expectations
reflected in these forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without limitation, in
conjunction with those forward-looking statements contained in this Statement.
PLAN OF OPERATION - GENERAL
The Company's plan is to bring to operation its two primary industries, mining
exploration and development as well as its ALVIS global positioning product
which is currently being sought by numerous transportation companies,
nationwide. The Company will also seek, investigate, and if such investigation
warrants, acquire an interest in one of more business opportunities presented to
it by persons or firms desiring the perceived advantages of a publicly held
corporation. At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any specific business or
company, and the Company has not identified any specific business or company for
investigation and evaluation. No member of Management or any promoter of the
Company, or an affiliate of either, has had any material discussions with any
other company with respect to any acquisition of that company. The Company will
not restrict its search to any specific business, industry, or geographical
location, and may participate in business ventures of virtually any kind or
nature. Discussion of the proposed business under this caption and throughout
this Registration Statement is purposefully general and is not meant to restrict
the company's virtually unlimited discretion to search for and enter into a
business combination.
MINING DIVISION OPERATIONS
The mining division of International STAR, Inc (STAR) has obtained mining leases
in Arizona near Hoover Dam. The claims consist of four sections of land with
alluvial deposits making the ore recovery very inexpensive. Development of the
leases has been progressing to obtain adequate data to justify the investment of
the capital necessary and to support the decision to place the property into
production. Soil analysis and fire assays have been performed on numerous
samples with resulting levels of precious metal concentrations that warrant
commercial processing.
Sources of Opportunities
Based on the results of the soi1 analysis and fire assays AuRIC
Metallurgical Laboratories was contracted to perform an independent
sampling program, insure chain of custody and develop a "vat leaching"
process to recover the metals. The Company has conducted two standard
industry recovery tests on ore collected from the property. Such tests
showed recoverable gold in the ore and the Company is pursuing the
determination of profitability from the amounts found. The Company,
should adequate amounts of gold be found in the ore, will pursue the
development of the properties.
2. CURRENT PLANS
There are five activities planned to occur in the near future:
1. The first activity involves entering into a joint venture with
Northern Arizona Industrial Development Authority (NAIDA) of Mojave
County Arizona. NAIDA will provide immediate funding to upgrade the
TYRO mill site at Bullhead City, AZ. The mill, a vat leach
operation, capable of processing 100 ton/day of our ore, can be
operating two weeks after funding is in place. It is possible to
enhance the Mill to produce 800 ton/day within 6 months.
NAIDA has agreed to supervise all operations at the mill site. NAIDA
will be paid 15% of the value of each dore bar produced for
providing the funding and supervision of the operation. An agreement
was signed with NAIDA on October 12, 1998.
2. The second activity the Company will undertake will be to upgrade
the mill's lab and retention ponds at the TYRO mill site.
Currently the chemists at the TYRO facility are conducting 200 lb
tests on the head ore. These tests are a precursor to larger
production runs. The tests consist of chemical experimentation.
grinding consistency, agitational retention time in solution, and
metal recovery. These procedures will establish the correct protocol
to substantiate earlier tests on a production scale of 100 tons, 200
tons, 500 tons and 1000 tons, optimizing the recovery rate.
3. The third activity to be undertaken by the Company will be to
block off a section of the claim (one square mile) into 100 equally
sized subsections. A sample will be taken with an auger drill to a
depth of 10 feet at the center of each sub. This upgrade will be
included in the $600,000 investment from NADA, provided such an
investment may be consummated. These samples will be analyzed to
determine the level and possible homogeneity of the precious metals
throughout this section of the claim. The results of these analyses
will determine the best location to start future recovery and
processing operations and will give data on the extent of the
precious metals.
4. The fourth activity undertaken by the Company in this area will
be extensive testing to further enhance recovery values. This
testing will focus on pretreatment prior to placing the ore in the
vat leach agitation process.
ALVIS (R) GLOBAL POSITIONING DIVISION
Sources of Opportunities
The Company has done testing of a proprietary licensed product
designed to bring transportation into the 21st Century by providing
equipped vehicles with instant global positioning capabilities.
Named ALVIS (R) for AUTOMATIC VEHICLE LOCATION, the system uses
global positioning satellites for determining asset location in real
time. The Company currently plans to market this state-of-the-art
product under any number of existing methods. The Company is
currently testing which methods of market penetration work best for
it. An agreement was executed on September 28, 1999, giving the
Company national marketing rights on the units.
Evaluation of Opportunities
The Manufacturer has concluded field testing (Phase I) of the system
in which the system was installed and tested on units owned and
operated by a mid sized trucking company operating nationwide, in
Canada and Mexico. The testing took place in the Los Angeles area
and included 1) instant unit location several times per minute, and
2) unit speed in real time several times per minute.
Phase II of the testing shall begin shortly and will test a new and
updated version of the system which is smaller in size and self
contained for ease of installation and use. The new system will have
the capability of switching from RF (radio frequency) to CDPD
(cellular digital packet date) depending upon the strongest signal
in the area.
Acquisition of Opportunities
The Company is currently in negotiation with STM International of
Houston, Texas to sub-license the distribution of the units for and
plans to market the units under the registered name QWIKTRACK (R).
Marketing intends to focus on all areas including retail, wholesale,
and internet.
The Company is also currently negotiating with a National service
company to install the deluxe units. The instant track unit can be
installed by the consumer. Once a marketing network has been set up,
the consumer can purchase the QUIKTRACK (R) units through several
means, including from internet sites, distributors and a national
corporate sales office.
COMBINATION WITH OTHER FIRM.
The Company may seek a combination with a firm which only recently commenced
operations, or a developing company in need of additional funds to expand into
new products or markets or seeking to develop a new product or service, or an
established business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to be easier to
raise by a public company. In some instances, a business opportunity may involve
acquiring or merging with a corporation which does not need substantial
additional cash but which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing businesses as
subsidiaries.
Selecting a business opportunity will be complex and extremely risky. Because of
general economic conditions, rapid technological advances being made in some
industries, and shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded corporation. Such
perceived benefits of a publicly traded corporation may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for the principals of a business, creating a means for
providing incentive stock options of similar benefits to key employees,
providing liquidity (subject to restrictions of applicable states) for all
shareholders, and other items. Potentially available business opportunities may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Management believes that the Company may be able to benefit from the use of
"leverage" to acquire a target company. Leveraging a transaction involves
acquiring a business while incurring significant indebtedness for a large
percentage of the purchase price of that business. Through leveraged
transactions, the Company would be required to use less of its available funds
to acquire a target company and, therefore, could commit those funds to the
operations of the business, to combinations with other target companies, or to
other activities. The borrowing involved in a leveraged transaction will
ordinarily be secured by the assets of the acquired business. If that business
is not able to generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender would be able to
exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that the Company must commit to
acquire a business, may correspondingly increase the risk of loss to the
Company. No assurance can be given as to the terms or availability of financing
for any acquisition by the Company. During periods when interest rates are
relatively high, the benefits of leveraging are not as great as during periods
of lower interest rates, because the investment in the business held on a
leveraged basis will only be profitable if it generates sufficient revenues to
cover the related debt and other costs of the financing. Lenders from which the
Company may obtain funds for purposes of a leveraged buy-out may impose
restrictions on the future borrowing, distribution, and operating policies of
the Company. It is not possible at this time to predict the restrictions, if
any, which lenders may impose, or the impact thereof on the Company.
The Company has insufficient capital with which to provide the owners of
businesses significant cash or other assets. Management believes the Company
will offer owners of businesses the opportunity to acquire a controlling
ownership interest in a public company at substantially less cost than is
required to conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition registration costs
in the event they wish to register a portion of their shares for subsequent
sale. The Company will also incur significant legal and accounting costs in
connection with the acquisition of a business opportunity, including the costs
of preparing post-effective amendments, Forms 8-K, agreements, and related
reports and documents. Nevertheless, the officers and directors of the Company
have not conducted market research and are not aware of statistical data which
would support the perceived benefits of a merger or acquisition transaction for
the owners of a business. The Company does not intend to make any loans to any
prospective merger or acquisition candidates or to unaffiliated third parties.
The Company will not restrict its search for any specific kind of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate life. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have it shares publicly traded, or may seek other
perceived advantages which the Company may offer. However, the Company does not
intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition. The Company also has
no plans to conduct any offerings under Regulation S.
Sources of Opportunities
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of its
officers and directors as well as indirect associations between them
and other business and professional people. It is not presently
anticipated that the Company will engage professional firms
specializing in business acquisitions or reorganizations.
Management may not be experienced in matters relating to any new
business of the Company and will rely upon their own efforts, the
efforts of the Company's shareholders and outside consultants or
advisors. There have been no discussions, understandings, contract
or agreements with any outside consultants other than those
discussed above.
As is customary in the industry, the Company may pay a finder's fee
for locating an acquisition prospect. If any such fee is paid, it
will be approved by the Company's Board of Directors and will be in
accordance with the industry standards. Such fees are customarily
between 1% and 5% of the size of the transaction, based upon a
sliding scale of the amount involved. Such fees are typically in the
range of 5% on a $1,000,000 transaction ratably down to 1% in a
$4,000,000 transaction. Management has adopted a policy that such a
finder's fee or real estate brokerage fee could, in certain
circumstances, be paid to any employee, officer, director or 5%
shareholder of the Company, if such person plays a material role in
bringing a transaction to the Company.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any product
which may be acquired. Accordingly, if it acquires the rights to a
product, rather than entering into a merger or acquisition, it most
likely would need to seek debt or equity financing or obtain funding
from third parties, in exchange for which the Company would probably
be required to give up a substantial portion of its interest in any
acquired product. There is no assurance that the Company will be
able either to obtain additional financing or to interest third
parties in providing funding for the further development, marketing
and manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or
under the supervision of the officers and directors of the Company
(see "Management"). Management intends to concentrate on identifying
prospective business opportunities which may be brought to its
attention through present associations with management. In analyzing
prospective business opportunities, management will consider, among
other factors, such matters as:
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may be
available and the depth of that management
7. the potential for further research, development or exploration
8. specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the Company
9. the potential for growth of expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products,
services or trades
12. name recognition
Management will meet personally with management and key personnel of
the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate the
above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be obtained.
Opportunities in which the Company participates will present certain
risks, many of which cannot be identified adequately prior to
selecting a specific opportunity. The Company's shareholders must,
therefore, depend on Management to identify and evaluate such risks.
Promoters of some opportunities may have been unable to develop a
going concern or may present a business in its development stage (in
that it has not generated significant revenues from its principal
business activities prior to the Company's participation). Even
after the Company's participation, there is a risk that the combined
enterprise may not become a going concern or advance beyond the
development stage. Other opportunities may involve new and untested
products, processes, or market strategies which may not succeed.
Such risks will be assumed by the Company and, therefore, its
shareholders.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require substantial
management time and attention as well as substantial costs for
accountants, attorneys, and others. If a decision is made not to
participate in a specific business opportunity the costs incurred in
the related investigation would not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific
business opportunity, the failure to consummate that transaction may
result in the loss by the Company of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction with a
suitable target company. If no such target is found, therefore, no
return on an investment in the Company will be realized, and there
will not, most likely, be a market for the Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition,
the Company may become a party to a merger, consolidation,
reorganization, joint venture, franchise, or licensing agreement
with another corporation or entity. It may also purchase stock or
assets of an existing business. Once a transaction is complete, it
is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a
majority or all of the Company's officers and directors may, as part
of the terms of the transaction, resign and be replaced by new
officers and directors without a vote of the Company's shareholders.
It is anticipated that securities issued in any such reorganization
would be issued in reliance on exemptions from registration under
applicable Federal and state securities laws. In some circumstances,
however, as negotiated element of this transaction, the Company may
agree to register such securities either at the time the transaction
is consummated, under certain conditions, or at specified time
thereafter. The issuance of substantial additional securities and
their potential sale into any trading market which may develop in
the Company's Common Stock may have a depressive effect on such
market.
While the actual terms of a transaction to which the Company may be
a party cannot be predicted, it may be expected that the parties to
the business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the acquisition in
a so called "tax free" reorganization under Sections 368(a) (1) or
351 of the Internal Revenue Code of 1986, as amended (the "Code").
In order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more
of the voting stock of the surviving entity. In such event, the
shareholders of the Company, including investors in this offering,
would retain less than 20% of the issued and outstanding shares of
the surviving entity, which could result in significant dilution in
the equity of such shareholders.
As part of the Company's investigation, officers and directors of
the Company will meet personally with management and key personnel,
may visit and inspect material facilities, obtain independent
analysis or verification of certain information provided, check
references of management and key personnel, and take other
reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.
The manner in which the Company participates in an opportunity with
a target company will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the
management of the opportunity, and the relative negotiating strength
of the Company and such other management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's shareholders
would acquire in exchange for their shareholdings in the target
company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all
likelihood, hold a lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage
ownership may be subject to significant reduction in the event the
Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to
have a significant dilutive effect on the percentage of shares held
by the Company's then shareholders, including purchasers in this
offering.
Management has advanced, and will continue to advance, funds which
shall be used by the Company in identifying and pursuing agreements
with target companies. Management anticipates that these funds will
be repaid from the proceeds of any agreement with the target
company, and that any such agreement may, in fact, be contingent
upon the repayment of those funds.
COMPETITION
The Company is an insignificant participant among firms which engage in business
combinations with, or financing of, development-stage enterprises. There are
many established management and financial consulting companies and venture
capital firms which have significantly greater financial and personal resources,
technical expertise and experience than the Company. In view of the Company's
limited financial resources and management availability, the Company will
continue to be at significant competitive disadvantage vis-a-vis the Company's
competitors.
YEAR 2000 COMPLIANCE
The Company is aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches. The Company has assessed
these issues as they relate to the Company, and since the Company currently has
no operating business and does not use any computers, and since it has no
customers, suppliers or other constituents, it does not believe that there are
any material year 2000 issues to disclose in this Form 10-SB.
REGULATION AND TAXATION
The Investment Company Act of 1940 defines an "investment company" as an issuer
which is or holds itself out as being engaged primarily in the business of
investing, reinvesting or trading securities. While the Company does not intend
to engage in such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The Company could be
expected to incur significant registration and compliance costs if required to
register under the Investment Company Act of 1940. Accordingly, management will
continue to review the Company's activities from time to time with a view toward
reducing the likelihood the Company could be classified as an "investment
company". The Company intends to structure any merger or acquisition in such
manner as to minimize Federal and state tax consequences to the Company and to
any target company.
EMPLOYEES
The Company's only employees at the present time are its officers and directors,
who will devote as much time as the Board of Directors determine is necessary to
carry out the affairs of the Company. (See "Management").
ITEM 3. DESCRIPTION OF PROPERTY
The Company neither owns nor leases any real property at this time. The Company
rents 400 sq. ft. of office space at 2808 Childress, Las Vegas, NV. The Company
pays its own charges for long distance telephone calls and other miscellaneous
secretarial, photocopying, and similar expenses. This is a verbal agreement
between Pat Westphal and the Board of Directors.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The Company, as of September 30, 1999 has no beneficial owners of five percent
(5%) or more of the Company's common stock. The following chart indicates the
stock held by the Company's directors individually.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Title of Class Name/Address of Owner Shares Beneficially Owned Percentage Ownership
- -------------- --------------------- ------------------------- --------------------
Common Kamal Alawas
3008 95th Drive SE 2,000,000 4%
Everett, WA 98205
Common Pat Westphal
2808 Childress 900,000 1.80%
Las Vegas, NV 89134
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The members of the Board of Directors of the Company serve until the next annual
meeting of the stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. There are no
agreements for any officer or director to resign at the request of any other
person, and none of the officers or directors named below are acting on behalf
of, or at the direction of, any other person.
The Company's officers and directors will devote their time to the business on
an "as-needed" basis, which is expected to require 30-40 hours per week.
Information as to the directors and executive officers of the Company is as
follows:
Name/Address Age Position
- ------------------- ---------- ------------
Kamal Alawas
3008 95th Drive SE 47 CEO/Director
Everett, WA 98205
Pat Westphal
2808 Childress 56 Director
Las Vegas, NV 89134
Kamal Alawas- Mr. Alawas was born January 17, 1952 in Lebanon. He
currently resides in the State of Washington. His schooling includes
university study both in Europe and in the United States. He has
been active in business in the Northwest for eight years and has
owned his own restaurant for 5 years.
Since 1983 he has been President of Alawas Investments Corp. which
is an international investment company. He has served on the Board
of Sidon International, a public company, as secretary and director
of Cal Tech Ltd, and as C.F.O. of Rainbow Petroleum.
Pat Westphal-Mr. Westphal resides at 2808 Childress, Las Vegas, NV
89134 and was born March 15, 1943. He serves as a Director of the
Corporation. He is a Canadian citizen. He graduated from high school
in Kitchener, Ontario, Canada. He is a retired Sgt. of the Royal
Canadian Mounted Police, having served for 20 years. His specialty
therein was white collar crime and intelligence.
He is the past president of two Vancouver, B.C. mining companies,
Adams Siller and C.T. Exploranda from 1984 to 1986. He is the past
president of Protect American Security, a company specializing in
physical security and security systems marketing in the Vancouver
area. He has served as Investor Relation Coordinator for several
mining companies listed on the Canadian Stock Exchange.
CONFLICTS OF INTEREST
Insofar as the officers and directors are engaged in other business activities,
management anticipates it will devote only a minor amount of time to the
Company's affairs. The officers and directors of the Company may in the future
become shareholders, officers or directors of other companies which may be
formed for the purpose of engaging in business activities similar to those
conducted by the Company. The Company does not currently have a right of first
refusal pertaining to opportunities that come to management's attention insofar
as such opportunities may relate to the Company's proposed business operations.
The officers and directors are, so long as they are officers or directors of the
Company, subject to the restriction that all opportunities contemplated by the
Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director. Subject to the next
paragraph, if a situation arises in which more than one company desires to merge
with or acquire that target company and the principals of the proposed target
company have no preference as to which company will merge or acquire such target
company, the company of which the President first became an officer and director
will be entitled to proceed with the transaction. Except as set forth above, the
Company has not adopted any other conflict of interest policy with respect to
such transactions.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities Act of
1934 and the Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940
insofar as the Company will not be engaged in the ;business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's Officers and/or Directors receive any compensation for
their respective services rendered to the Company, nor have they received such
compensation in the past. They both have agreed to act without compensation
until authorized by the Board of Directors, which is not expected to occur until
the Registrant has generated revenues from operations after consummation of a
merger or acquisition. As of the date of this registration statement, the
Company has no funds available to pay directors. Further, none of the directors
are accruing any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a prospective
merger or acquisition candidate to the Company. In the event the Company
consummates a transaction with any entity referred by associates of management,
it is possible that such an associate will be compensated for their referral in
the form of a finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part of the terms
of the proposed transaction, or will be in the form of cash consideration.
However, if such compensation is in the form of cash, such payment will be
rendered by the acquisition or merger candidates, because the Company has
insufficient cash available. The amount of such finder's fee cannot be
determined as of the date of this registration statement, but is expected to be
comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finder's fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein. Persons "associated" with management is meant to
refer to persons with whom management may have had other business dealings, but
who are not affiliated with or relatives of management.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Registrant for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a policy that the
Company will not seek an acquisition or merger with any entity in which any of
the Company's Officers, Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership interest.
Management is not aware of any circumstances under which this policy may be
changed through their own initiative.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is quoted on the over-the-counter market in the
United States under the symbol ISRI. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the after-market for the
Company's securities.
As the Company successfully completes contracts with its GPS system or with its
mineral exploration division, or after a merger or acquisition has been
completed, one or both of the Company's officers and directors will most likely
be the persons to contact prospective market makers. It is also possible that
persons associated with the entity that merges with or is acquired by the
Company will contact prospective market makers. The Company does not intend to
use consultants to contact market makers.
MARKET PRICE
As of December 1, 1999 the Registrant's Common Stock was quoted on the
Over-the-Counter Market under the symbol ISRI. The average 15 day bid and ask
for the stock is $ .62 ask and $ .56 bid with and average of 280, 285 shares
being traded.
Effective August 11, 1993, the Securities and Exchange Commission adopted Rule
15g-9, which established the definition of a "penny stock", for purposes
relevant to the Company, as any equity security that has a market price of less
than $5.00 per share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks; and (ii) the broker or dealer receive
from the investor a written agreement to the transaction setting forth the
identity and quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and objectives of the
person; and (ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which in highlight form, (i) sets
forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker/dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
The National Association of Securities Dealers, Inc. (the "NASD"), which
administers NASDAQ, has recently made changes in the criteria for initial
listing on the NASDAQ Small Cap market and for continued listing. For initial
listing, a company must have net tangible assets of $4 million, market
capitalization of $50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years. For initial
listing, the common stock must also have a minimum bid price of $4 per share. In
order to continue to be included on NASDAQ, company must maintain $1,000,000 in
net tangible assets and a $1,000,000 market value of its publicly-traded
securities. In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
Management believes it will, in the near future, realize a stock price from
operations or intends to strongly consider undertaking a transaction with any
merger or acquisition candidate, which will allow the Company's securities to be
traded without the aforesaid limitations. However, there can be no assurances
that such operations will be successful or, upon a successful merger or
acquisition, the Company will qualify its securities for listing on NASDAQ or
some other national exchange, or be able to maintain the maintenance criteria
necessary to insure continued listing. The failure of the Company to qualify its
securities or to meet the relevant maintenance criteria after such qualification
in the future may result in the discontinuance of the inclusion of the Company's
securities on a national exchange. In such events, trading, if any, in the
Company's securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to dispose of, or
to obtain accurate quotations as to the market value of, the Company's
securities.
HOLDERS
As of March 23, 1998, there were 78 shareholders of record of the Company's
Common Stock, 20,008,550 free trading shares and 7,471,450 restricted shares
issued and outstanding. All of the issued and outstanding shares of the
Company's Common Stock were issued in accordance with the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933.
DIVIDENDS
The Registrant has not paid any dividends to date, and has no plans to do so in
the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
With respect to the sales made, the Registrant relied on Section 4(2) of the
Securities Act of 1933, as amended. No advertising or general solicitation was
employed in offering the shares. The securities were offered for investment only
and not for the purpose of resale or distribution, and the transfer thereof was
appropriately restricted. A total of 7,471,450 of the outstanding shares are
deemed restricted. The Company has offered shares to the public under an
isolated transaction exemption to the Securities and Exchange Act.
In general under Rule 144, a person (or persons whose shares are aggregated) who
has satisfied a one year holding period, under certain circumstances, may sell
within any three-month period a number of shares which does not exceed the
greater of one percent (1%) of the then outstanding Common Stock or the average
weekly trading volume during the four calendar weeks prior to such sale. Rule
144 also permits, under certain circumstances, the sale of shares without any
quantity limitation by a person who has satisfied a two-year holding period and
who is not, and has not been for the preceding three months, an affiliate of the
Company.
ITEM 11. DESCRIPTION OF SECURITIES
COMMON STOCK
The Company's Articles of Incorporation, as amended, authorizes the issuance of
50,000,000 shares of Common Stock, $0.001 par value per share, of which
27,480,000 are issued and outstanding. The shares are non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights. Holders of common
shares are entitled stockholders. The shares are fully paid, non-assessable,
without pre-emptive rights and do not carry cumulative voting rights. Holders of
common shares are entitled to share ratably in dividends, if any, as may be
declared by the Company from time-to-time, from funds legally available. In the
event of a liquidation, dissolution, or winding up of the Company, the holders
of shares of common stock are entitled to share on a pro-rata basis all assets
remaining after payment in full of all liabilities.
Management is not aware of any circumstances in which additional shares of any
class or series of the Company's stock would be issued to management or
promoters, or affiliates or associates of either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company and its affiliates may not be liable to its shareholders for errors
in judgment or other acts or omissions not amounting to intentional misconduct,
fraud, or a knowing violation of the law, since provisions have been made in the
Articles of Incorporation and By-laws limiting such liability. The Articles of
Incorporation and By-laws also provide for indemnification of the officers and
directors of the Company in most cases for any liability suffered by them or
arising from their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud, or a knowing violation of the
law. Therefore, purchasers of these securities may have a more limited right of
action than they would have except for this limitation in the Articles of
Incorporation and By-laws.
The officers and directors of the Company are accountable to the Company as
fiduciaries, which means such officers and directors are required to exercise
good faith and integrity in handling the Company's affairs. A shareholder may be
able to institute legal action on behalf of himself and all others similarly
stated shareholders to recover damages where the Company has failed or refused
to observe the law.
Shareholders may, subject to applicable rules of civil procedure, be able to
bring a class action or derivative suit to enforce their rights, including
rights under certain federal and state securities laws and regulations.
Shareholders who have suffered losses in connection with the purchase or sale of
their interest in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of the proceeds
from the sale of these securities, may be able to recover such losses from the
Company.
ITEM 13. FINANCIAL STATEMENTS
The financial statements and supplemental data required by this Item 13 follow
the index of financial statements appearing at Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Registrant has changed accountants once since its formation due to change of
location and management of the Company. Management has had no disagreements with
the findings of its accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
ITEM 16. ARTICLES OF INCORPORATION
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange Act of
1934, the Registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
/s/ Kamal Alawas
CEO, Director
<PAGE>
International Star, Inc.
FINANCIAL STATEMENTS
Balance Sheet as of:
December 31, 1998 and
December 31, 1997
Statements of Operations and Cash Flows and
Stockholders' Equity for the periods ending
Year ended December 31, 1998
Year ended December 31, 1997
Footnotes to financial statements
<PAGE>
Randy Simpson CPA P.C.
11775 South Nicklaus Road
Sandy, Utah 84092
Fax & Phone (801) 572-3009
Independent Auditors' Report
The Board of Directors and Stockholders of International Star, Inc.
We have audited the accompanying balance sheets of International Star Inc. (the
Company) as of December 31, 1998 and December 31, 1997 and the related
statements of operations, stockholders' equity, and cash flows for the years
ended December 31, 1998 and 1997. 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the above mentioned financial statements fairly present, in all
material respects, the financial position of International Star Inc. as of
December 31, 1998 and December 31,1997 and the results of its operations and its
cash flows for the years ended December 31, 1998 and 1997, in conformity with
generally accepted accounting principles.
/s/ Randy Simpson, CPA PC
RANDY SIMPSON, CPA
A Professional Corporation
January 10, 2000
Salt Lake City, Utah
<PAGE>
International Star, Inc.
Balance Sheets
December 31, 1998 and December 31, 1997
December 31, December 31,
1998 1997
--------- ---------
Assets
Current assets
Cash $ -- $ 17,412
--------- ---------
Total Current Assets -- --
Fixed Assets
Equipment & fixtures -- 6,981
Less accumulated depreciation (698)
--------- ---------
Net equipment 6,283
--------- ---------
Total Assets $ -- $ 23,695
========= =========
Liabilities & Stockholders' Deficit
Current liabilities
Payables and accrued interest $ 13,564 $ 18,503
Advance from affiliates / stockholders 69,208
Loan from affiliate / stockholder 50,000 50,000
--------- ---------
Total Current Liabilities 132,772 68,503
Stockholders' deficit
Common Stock, $.001 par value;
authorized 100,000,000 shares,
issued and outstanding
27,480,000 shares on
December 31, 1998 and 1997 27,480 27,480
Excess of par value over paid in capital (12,480) (12,480)
Accumulated Deficit (147,772) (59,808)
--------- ---------
Total Stockholders' Deficit (132,772) (44,808)
--------- ---------
Total Liabilities and Stockholders'
Deficit $ -- $ 23,695
========= =========
See Accompanying Notes to the Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
International Star, Inc.
Statements of Operations
Year Year
Ending Ending
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C> <C>
Revenues $ -- $ 17,444
Expenses:
Operating expenses 450 33,246
Interest expense 1,500 875
Depreciation Expense / equipment abandonment 6,283 698
General and Administrative 79,731 37,433
------------ ------------
Total Expenses 87,964 72,252
------------ ------------
Net Loss $ (87,964) $ (54,808)
============ ============
Weighted Average Shares Common Stock Outstanding 27,480,000 27,480,000
Net Loss Per Common Share $ (0.00) $ (0.00)
============ ============
See Accompanying Notes to the Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
International Star, Inc.
Statement of Cash Flows
Years Ending December 31, 1998, and 1997
December 31, December 31,
1998 1997
-------- --------
<S> <C> <C>
Cash flows used in operating activities:
Net Loss $(87,964) $(54,808)
Depreciation Expense / Equipment abandonment 6,283 698
Common stock issued for compensation -- 10,000
-------- --------
Changes to operating assets and liabilities: -- --
-------- --------
Increase (decrease) in accounts payable and accrued interest (4,939) 18,503
-------- --------
Cash flows used in operating acitivities (86,620) (25,607)
Cash flows used in investing activities: -- --
Fixed asset capital expeditures -- 6,981
-------- --------
Cash flows used in investing acitivities -- (6,981)
Cash flows from financing activities:
Advances from stockholders / affiliates 69,208 --
Loans from stockholders / affiliates -- 50,000
-------- --------
Cash flows used in investing acitivities 69,208 50,000
-------- --------
Net increase (decrease) in cash (17,412) 17,412
-------- --------
Cash at beginning of period 17,412 --
-------- --------
Cash at end of period $ -- $ 17,412
======== ========
See Accompanying Notes to the Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
International Star, Inc.
Statement of Stockholders' Equity
January 1, 1997 to December 31, 1998
(par value in
excess of paid
Common Common in capital)
Stock Stock Paid-In Accumulated Total
Shares Amount Capital Deficit Equity
---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1997 2,500 $ 0 $ 5,000 $ (5,000) $ --
Forward split of stock from 2,500 shares to 6,000,000
shares (2,400 to 1) change from no par value to
.001 par value 5,997,500 6,000 (6,000) -- --
Forward split of stock from 6,000,000 to 30,000,000
shares (5 to 1) 24,000,000 24,000 (24,000) -- --
Cancellation of 17,100,000 shares and issuance
of a .8 to 1 forward split , net outstanding
of 22,980,000 (7,020,000) (7,020) 7,020 -- --
Common stock issued for services to officers and
certain shareholders 4,500,000 4,500 5,500 -- 10,000
Net loss year ending December 31, 1997 -- -- -- (54,808) (54,808)
Balances December 31, 1997 27,480,000 27,480 (12,480) (59,808) (44,808)
Net loss for year ending December 31, 1998 -- -- (87,964) (87,964)
---------- ----------- ----------- ----------- -----------
Balances December 31, 1998 27,480,000 $ 27,480 $ (12,480) $ (147,772) $ (132,772)
========== =========== =========== =========== ===========
See Accompanying Notes to the Financial Statements
</TABLE>
<PAGE>
International Star, Inc.
Notes to Financial Statements
A. Origination and History
- ----------------------
International Star, Iinc. ("the Company") was incorporated October 28,
1993 as a Nevada corporation. On November 5, 1993, the Company issued 2,500
shares, no par value, for cash consideration of $5,000 in a 504 intrastate
offering. The Company amended its Articles of Incorporation on January 22, 1997
increasing authorized common stock from 2,500 shares to 100,000,000 shares and
modified its par value to $0.001 per share.
In January, 1997 the Company forward split its common stock to
6,000,000 shares in a 2400:1 exchange. In April, 1997 the Company again forward
split its stock 5:1 increasing the total outstanding shares to 30,000,000 and in
a reorganization of outstanding shares cancelled 17,400,000 shares, forward
split the balance of the shares .8:1 for an additional issuance of 10,080,000
shares to the 12,600,000 shares outstanding then and issued 300,000 shares to
the shareholders' who cancelled the 17,400,000 shares, resulting in 22,980,000
shares outstanding. Also, in April, 1997, the Company issued 4,500,000 shares in
consideration of services performed by various individuals and corporations,
which services were valued at $10,000. The 4,500,000 share transaction, which
predates the 5:1 and .8:1 transactions was apparently not impacted by either of
the two aforementioned forward splits, resulting in 27,480,000 shares
outstanding.
In April, 1997 the Company entered the waste management business. A
loan of $50,000 was obtained from an affiliated entity, American Holding Group
at 3%, (no formal loan documents have been drafted) and the Company opened an
office in Idaho Falls, Idaho. Due to a lack of capital, the Company was only
able to obtain a small instrumentation sale for $17,444 to Asia Kingtec Co.
LTD., in Taiwain, in December, 1997. The Company closed its office in January,
1998 and abandoned the computers and office equipment purchased at $6,981 to the
three individuals who lead the Company into the waste management business.
The three individuals who were officers and directors in the waste
management operations resigned in August, 1999 The Company accepted the
resignations on September 8, 1999.
The Company then refocused its efforts into mining in 1998.On March 3,
1998, the Company entered into a mineral lease with James R. Ardoin. The lease
does not require any minimum royalty payments, and charges a royalty payment of
2% of net smelter returns. The term of the lease is for 20 years. The Company
has not commenced commercial operations on the lease.
On July 17, 1998, the Company entered into an extraction agreement with
AuRic Mettallurgical Laboratories, Inc., a Utah limited liability corporation,
with the requirement that the Company pay a 1% Net Smelter Return to AuRic for
utilization of its technology.
<PAGE>
International Star, Inc.
Notes to Financial Statements
On October 12, 1998, the Company entered into a letter of intent with
North American Industrial Development Authority, Inc. (NAIDA) of Kingman,
Arizona that indicates that it desires to construct and investment in a mineral
processing plant to process ores from the Company's mineral property. NAIDA will
receive 15% of the total ore produced.
The Company has not maintained a corporate bank account since the
termination of its Idaho operations. The Company's operations are conducted by
the Company's officers and directors through their own accounts. The Company's
offices, general and administrative expenses have all been advanced by these
individuals and corporations and accounted for as advances from
affiliates/shareholders. The Company has no ability to repay its accounts
payable, loans and advances from affiliates as the Company has no assets.
<PAGE>
International Star, Inc.
Balance Sheet
August 31, 1999
( Unaudited )
(Unaudited)
August 31,
1999
----------
Assets
Current assets
Cash $ --
Total Current Assets --
Fixed Assets
Equipment & fixtures --
Less accumulated depreciation
----------
Net equipment
----------
Total Assets $ --
==========
Liabilities & Stockholders' Deficit --
Current liabilities
Payables and accrued interest $ 14,780
Advances from affiliates / stockholders 162,035
Loan from affiliate / stockholder 50,000
----------
Total Current Liabilities 226,815
Stockholders' deficit
Common Stock, $.001 par value;
authorized 100,000,000 shares,
issued and outstanding 27,480,000 shares on
December 31, 1998 and 1997 27,480
Excess of par value over paid in capital (12,480)
Accumulated Deficit (241,815)
----------
Total Stockholders' Deficit (226,815)
----------
Total Liabilities and Stockholders' Deficit $ --
==========
See Interim Footnote.
<PAGE>
International Star, Inc.
Statements of Operations
(Unaudited)
(Unaudited)
Eight Months
Ending
August 31,
1999
----------
Revenues $ --
Expenses:
Operating expenses --
Interest expense 1,000
General and Administrative 93,043
----------
Total Expenses 94,043
----------
Net Loss $ (94,043)
==========
Weighted Average Shares Common Stock Outstanding 27,480,000
Net Loss Per Common Share $ (0.00)
==========
See Interim Footnote.
<PAGE>
International Star, Inc.
Statement of Cash Flows
Eight Months Ended August 31, 1999
( Unaudited)
December 31,
1998
----------
Cash flows used in operating activities:
Net Loss $ (94,043)
----------
Changes to operating assets and liabilities: --
----------
Increase (decrease) in accounts payable and accrued
interest 1,216
----------
Cash flows used in operating acitivities (92,827)
Cash flows from financing activities:
Advances from stockholders / affiliates 92,827
Loans from stockholders / affiliates --
----------
Cash flows used in investing acitivities 92,827
----------
Net increase (decrease) in cash --
----------
Cash at beginning of period --
----------
Cash at end of period $ --
==========
See interim footnote.
<PAGE>
International Star, Inc.
Notes to interim financials
1. Interim Financial Statements:
The unaudited interim financial statement has been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission (SEC).
Certain information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to these rules and regulations, although the Company
believes that the disclosures made are adequate to make the information
presented not misleading. In the opinion of management, all adjustments
necessary for a fair presentation of results of operations have been made to the
interim financial statements. Results of operations for the eight months period
ended September 30, 1999 are not necessarily indicative of results of operations
for the respective full years.
A summary of the Company's significant accounting policies and other
information necessary to understand these consolidated interim financial
statements is presented to the Company's audited financial statements for the
years ended December 31, 1998 and 1997. Accordingly, the Company's audited
financial statements should be read in connection with these financial
statements.
ARTICLES OF INCORPORATION
KNOW ALL MEN BY THESE PRESENTS:
That we the undersigned, have vo1untarily associated ourselves
together for the purpose of forming a corporation under and pursuant to
the laws of the State of Nevada, and we do hereby certify:
FIRST: The name of the corporation is :Mattress Showrooms Inc.
SECOND: The principal office of the corporation is to be
located at 4660 S Eastern Ave. Suite 102, Las Vegas, Nevada 89119 in
the City of Las Vegas, County of Clark, State of Nevada, and that the
Resident Agent in charge thereof is Vazquez & Associates, but the
corporation may maintain an office at such towns, cities and places
outside the State of Nevada as the Board of Directors may, from time to
time, determine, or as may be designated by the By laws of the
corporation.
THIRD: That the purpose for which said corporation is formed,
and the nature of the objects proposed to be transacted and carried an
by it are: Retail Mattress & Furniture Sales and to engage in any
lawful activity or practice.
FOURTH: The total authorized capital stock of the corporation
shall be TWENTY~FIVE HUNDRED (2500) Shares of Class A Common stock
without par value, all if which shall be entitled to voting power.
FIFTH: The members of the governing board shall be styled Directors,
and the number of such Board of Directors shall not be less than two
(2) nor more than five (5), and the names and addresses of the first
Board of Directors consisting of members, are as follows:
NAME POST OFFICE ADDRESS
-------------- -------------------------------
Nelson Vasquez 4660 S Eastern Avenue, Ste 102
Las Vegas, NV 89119
SIXTH: The capital stock of the corporation after the amount
of the subscription price had been paid in money, property of services,
as the Directors shall determine, shall not be subject to assessment to
pay the debts of the corporation, nor for any other purpose, and no
stock issued as fully paid up shall ever be assessable, or assessed,
and the Articles of Incorporation shall not be amended in this
particular.
SEVENTH: Every stockholder of this corporation shall, upon the
sale of any new stock of such corporation, of the same class as that
which he already hold, have the right to purchase his pro rata share of
such new stock in proportion to this shareholdings at that time, for
such amounts as may be determined to be the offering price of the stock
to either shareholders or nor-shareholders.
EIGHTH: The names and post office addresses of each of the
incorporators signing these Articles of incorporation are as follows:
NAME POST OFFICE ADDRESS
-------------- -------------------------------
Nelson Vasquez 4660 S. Eastern Ave Ste 102
Las Vegas, NV 89119
NINTH: The corporation shall have perpetual existence.
TENTH: The stockholders of the corporation shall not be
individually liable for the debts or the liabilities of the
corporation, except that the holder of shares of stock not fully paid
shall be personally liable to the corporation in amounts not to exceed
the amount unpaid on the shares held by him, at the subscription price,
then, and then only, when there is a written contract of subscription
of stock.
ELEVENTH: The Board of Directors shall have the power and
authority to make and alter, or amend the By Laws, to fix the amount in
each or to otherwise be reserved as working capital, and to authorize
and cause to be executed, mortgage, and other liens upon the property,
business and franchises of the corporation.
IN WITNESS WHEREOF, the undersigned incorporators have
executed these Articles of Incorporation this 26 day of October, 1993.
/s/ Nelson Vasquez
STATE OF NEVADA
COUNTY OF CLARK
On this 26 day of October, 1993, before me the undersigned, a
Notary Public in and for the county of Clark, State of Nevada,
personally appeared Nelson Vasquez, known to me to be the persons named
in the above and foregoing instrument, and each for himself, duly
acknowledged to me that he or she is one of the persons named in and
who executed the above and foregoing instrument, and that he or she,
and each of them, executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
/s/ Delaina Marzullo
BYLAWS FOR THE REGULATION, EXCEPT AS OTHERWISE PROVIDED BY STATUTE OR
ITS ARTICLES OF INCORPORATION, OF A NEVADA CORPORATION KNOWN AS:
INTERNATIONAL STAR, INC.
ARTICLE 1
Offices
Section 1.01 -- Principal And Registered Office.
The principal and registered office for the transaction of the business
of the Corporation is hereby fixed and located at Las Vegas, Nevada. The
Corporation may have such other offices, either within or without the State of
Nevada as the Corporation's board of directors (the "Board) may designate or as
the business of the Corporation may require from time to time.
Section 1.02 -- Other Offices.
Branch or subordinate offices may at any time be established by the
Board at any place or places wherein the Corporation is qualified to do
business.
ARTICLE 2
Meetings of Shareholders
Section 2.01 -- Meeting Place.
All annual meetings of shareholders and all other meetings of
shareholders shall be held either at the principal office, or at any other place
within or without the State of Nevada which may be designated either by the
Board, pursuant to authority hereinafter granted, or by the written consent of a
majority of shareholders entitled to vote thereon, given either before or after
the meeting and filed with the secretary of the Corporation.
Section 2.02 -- Annual Meetings.
A. The annual meetings of shareholders shall be held on the third
Monday of January each year, at the hour of 3:00 o'clock p.m., commencing with
the year 1999, provided, however, that should the day of the annual meeting fall
upon a legal holiday, then any such annual meeting of shareholders shall be held
at the same time and place on the next business day thereafter which is not a
legal holiday.
B. Written notice of each annual meeting signed by the president or
vice president, or the secretary, or an assistant secretary, or by such other
person or persons as the Board may designate, shall be given to each shareholder
entitled to vote thereat, either personally or by mail or other means of written
communication, charges prepaid, addressed to such shareholder at his address
appearing on the books of the Corporation or given by him to the Corporation for
the purpose of notice. If a shareholder gives no address, notice shall be deemed
to have been given to him if sent by mail or other means of written
communication addressed to the place where the principal office of the
Corporation is situated, or if published at least once in some newspaper of
general circulation in the county in which said office is located. All such
notices shall be sent to each shareholder entitled thereto, or published, not
less than ten (10) nor more than thirty (30) days before each annual meeting,
and shall specify the place, the day and the hour of such meeting, and shall
also state the purpose or purposes for which the meeting is called.
C. Failure to hold the annual meeting shall not constitute dissolution
or forfeiture of the Corporation, and a special meeting of the shareholders may
take the place thereof.
Section 2.03 -- Special Meetings.
Special meetings of the shareholders, for any purpose or purposes
whatsoever, may be called at any time by the president or by the Board, or by
one or more shareholders holding not less that ten percent (10%) of the voting
power of the Corporation. Except in special cases where other express provision
is made by statute, notice of such special meetings shall be given in the same
manner as for annual meetings of shareholders. Notices of any special meeting
shall specify in addition to the place, day and hour of such meeting, the
purpose or purposes for which the meeting is called.
Section 2.04 -- Adjourned Meetings And Notice Thereof.
A. Any shareholders' meeting, annual or special, whether or not a
quorum is present, may be adjourned from time to time by the vote of a majority
of the shares, the holders of which are either present in person or represented
by proxy thereat, but in the absence of a quorum, no other business may be
transacted at any such meeting.
B. When any shareholders' meeting, either annual or special, is
adjourned for thirty (30) days or more, notice of the adjourned meeting shall be
given as in the case of an original meeting. Otherwise, it shall not be
necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting, other than by announcement at the meeting at
which such adjournment is taken.
Section 2.05 -- Entry Of Notice.
Whenever any shareholder entitled to vote has been absent from any
meeting of shareholders, whether annual or special, an entry in the minutes to
the effect that notice has been duly given shall be conclusive and
incontrovertible evidence that due notice of such meeting was given to such
shareholder, as required by law and these bylaws.
Section 2.06 -- Voting.
At all annual and special meetings of shareholders, each shareholder
entitled to vote thereat shall have one vote for each share of stock so held and
represented at such meetings, either in person or by written proxy, unless the
Corporation's articles of incorporation ("Articles") provide otherwise, in which
event, the voting rights, powers and privileges prescribed in the Articles shall
prevail. Voting for directors or upon any question duly put before any meeting,
may be by voice roll call. If a quorum is present at a meeting of the
shareholders, the vote of a majority of the shares represented at such meeting
shall be sufficient to bind the corporation, unless otherwise provided by law or
the Articles.
Section 2.07 -- Quorum.
The presence in person or by proxy of the holders of a majority of the
shares entitled to vote at any meeting shall constitute a quorum for the
transaction of business. The shareholders present at a duly called or held
meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.
Section 2.08 -- Consent Of Absentees.
The transactions of any meeting of shareholders, either annual or
special, however called and notice given thereof, shall be as valid as though
done at a meeting duly held after regular call and notice, if a quorum be
present either in person or by proxy, and if, either before of after the
meeting, each of the shareholders entitled to vote, not present in person or by
proxy, sign a written Waiver of Notice, or a consent to the holding of such
meeting, or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of such meeting.
Section 2.09 -- Proxies.
Every person entitled to vote or execute consents shall have the right
to do so either in person or by an agent or agents authorized by a written proxy
executed by such person or his duly authorized agent and filed with the
secretary of the Corporation; provided however, that no such proxy shall be
valid after the expiration of eleven (11) months from the date of its execution,
unless the shareholder executing it specifies therein the length of time for
which such proxy is to continue in force, which in no case shall exceed seven
(7) years from the date of its execution.
Section 2.10 -- Shareholder Action Without A Meeting.
Any action required or permitted to be taken at a meeting of the
shareholders may be taken without a meeting if a written consent thereto is
signed by shareholders 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 consents is required. In no instance
where action is authorized by this written consent need a meeting of
shareholders be called or notice given. The written consent must be filed with
the proceedings of the shareholders. A written statement in summary form of the
actions so taken by majority consent shall also be mailed within a reasonable
time thereafter to all of the other shareholders at their last known address on
the official shareholder list.
ARTICLE 3
Board of Directors
Section 3.01 -- Powers.
Subject to the limitations of the Articles, these bylaws, and the
provisions of Nevada corporate law as to action to be authorized or approved by
the shareholders, and subject to the duties of directors as prescribed by these
bylaws, all corporate powers shall be exercised by or under the authority of,
and the business and affairs of the corporation shall be controlled by, the
Board. Without prejudice to such general powers, but subject to the same
limitations, it is hereby expressly declared that the directors shall have the
following powers:
A. To select and remove all the other officers, agents and employees of
the Corporation, prescribe such powers and duties for them as are not
inconsistent with law, with the Articles, or these bylaws, fix their
compensation, and require from them security for faithful service.
B. To conduct, manage and control the affairs and business of the
Corporation, and to make such rules and regulations therefor not inconsistent
with the law, the Articles, or these bylaws, as they may deem best.
C. To change the principal office for the transaction of the business
if such change becomes necessary or useful; to fix and locate from time to time
one or more subsidiary offices of the Corporation within or without the State of
Nevada, as provided in Section 1.02 of Article 1 hereof; to designate any place
within or without the State of Nevada for the holding of any shareholders'
meeting or meetings; and to adopt, make and use a corporate seal, and to
prescribe the forms of certificates of stock, and to alter the form of such seal
and of such certificates from time to time, as in their judgment they may deem
best, provided such seal and such certificates shall at all times comply with
the provisions of law.
D. To authorize the issuance of shares of stock of the Corporation from
time to time, upon such terms as may be lawful, in consideration of money paid,
labor done or services actually rendered, debts or securities canceled, or
tangible or intangible property actually received, or in the case of shares
issued as a dividend, against amounts transferred from surplus to stated
capital.
E. To borrow money and incur indebtedness for the purposes of the
Corporation, and to cause to be executed and delivered therefore, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecation or other evidences of debt and securities therefore.
F. To appoint an executive committee and other committees and to
delegate to the executive committee any of the powers and authority of the Board
in management of the business and affairs of the Corporation, except the power
to declare dividends and to adopt, amend or repeal bylaws. The executive
committee shall be composed of one or more directors.
Section 3.02 -- Number And Qualification Of Directors.
The authorized number of directors of the Corporation shall not be less
than one (1) nor more than seven (7), or such other number as may be required by
law as in effect from time to time, or as otherwise approved by the
shareholders.
Section 3.03 -- Election And Term Of Office.
The directors shall be elected at each annual meeting of shareholders,
but if any such annual meeting is not held, or the directors are not elected
thereat, the directors may be elected at any special meeting of shareholders.
All directors shall hold office until their respective successors are elected.
Section 3.04 -- Vacancies.
A. Vacancies in the Board may be filled by a majority of the remaining
directors, though less than a quorum, or by a sole remaining director, and each
director so elected or appointed shall hold office until his successor is
elected at an annual or a special meeting of the shareholders.
B. A vacancy or vacancies in the Board shall be deemed to exist in case
of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail at any annual or
special meeting of shareholders at which any director or directors are elected
to elect the full authorized number of directors to be voted for at that
meeting.
C. The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors.
D. No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his term of office.
ARTICLE 4
Meetings of the Board of Directors
Section 4.01 -- Place Of Meetings.
Regular meetings of the Board shall be held at any place within or
without the State of Nevada which has been designated from time to time by
resolution of the Board or by written consent of all members of the Board. In
the absence of such designation, regular meetings shall be held at the principal
office of the Corporation. Special meetings of the Board may be held either at a
place so designated, or at the principal office. Failure to hold an annual
meeting of the Board shall not constitute forfeiture or dissolution of the
Corporation.
Section 4.02 -- Organization Meeting.
Immediately following each annual meeting of shareholders, the Board
shall hold a regular meeting for the purpose of organization, election of
officers, and the transaction of other business. Notice of such meeting is
hereby dispensed with.
Section 4.03 -- Other Regular Meetings.
Other regular meetings of the Board shall be held, without call, unless
the directors agree to not have this regular meeting, on the third Monday of
each month at the hour of 3:00 o'clock p.m.; provided however, that should the
day of the meeting fall upon a legal holiday, then such meeting shall be held at
the same time on the next business day thereafter which is not a legal holiday.
Notice of all such regular meetings of the Board is hereby dispensed with.
Section 4.04 -- Special Meetings.
A. Special meetings of the Board may be called at any time for any
purpose or purposes by the president, or, if he is absent or unable or refuses
to act, by any vice president or by any two directors.
B. Written notice of the time and place of special meetings shall be
delivered personally to each director or sent to each director by mail
(including overnight delivery services such as Federal Express) or telegraph,
charges prepaid, or telephonic facsimile addressed to him at his address as it
is shown upon the records of the Corporation, or if it is not shown upon such
records or is not readily ascertainable, at the place in which the regular
meetings of the directors are normally held. No such notice is valid unless
delivered to the director to whom it was addressed at least twenty-four (24)
hours prior to the time of the holding of the meeting. However, such mailing,
telegraphing, telefaxing or delivery as above provided herein shall constitute
prima facie evidence that such director received proper and timely notice.
Section 4.05 -- Notice Of Adjournment.
Notice of the time and place of holding an adjourned meeting need not
be given to absent directors, if the time and place be fixed at the meeting
adjourned.
Section 4.06 -- Waiver Of Notice.
The transactions of any meeting of the Board, however called and
noticed or wherever held, shall be as valid as though a meeting had been duly
held after regular call and notice, if a quorum be present, and if, either
before or after the meeting, each of the directors not present sign a written
waiver of notice or a consent to holding such meeting or an approval of the
minutes thereof. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Section 4.07 -- Quorum.
If the Corporation has only one director, then the presence of that one
director constitutes a quorum. If the Corporation has only two directors, then
the presence of both such directors is necessary to constitute a quorum. If the
Corporation has three or more directors, then a majority of those directors
shall be necessary to constitute a quorum for the transaction of business,
except to adjourn as hereinafter provided. A director may be present at a
meeting either in person or by telephone. Every act or decision done or made by
a majority of the directors present at a meeting duly held at which a quorum is
present, shall be regarded as the act of the Board, unless a greater number be
required by law or by the Articles.
Section 4.08 -- Adjournment.
A quorum of the directors may adjourn any directors' meeting to meet
again at a stated day and hour; provided however, that in the absence of a
quorum, a majority of the directors present at any directors' meeting, either
regular or special, may adjourn such meeting only until the time fixed for the
next regular meeting of the Board.
Section 4.09 -- Fees And Compensation.
Directors shall not receive any stated salary for their services as
directors, but by resolution of the Board, a fixed fee, with or without expenses
of attendance, may be allowed for attendance at each meeting. Nothing stated
herein shall be construed to preclude any director from serving the Corporation
in any other capacity as an officer, agent, employee, or otherwise, and
receiving compensation therefore, or from serving as an officer or director for
any other corporation.
Section 4.10 -- Action Without A Meeting.
Any action required or permitted to be taken at a meeting of the Board,
or a committee thereof, may be taken without a meeting if, before or after the
action, a written consent thereto is signed by all the members of the Board or
of the committee. The written consent must be filed with the proceedings of the
Board or committee.
Section 4.11 -- Committees.
The Board of Directors may form and establish one or more committees
from among its members and may delegate and direct that business be considered
and conducted on behalf of the corporation through such committee(s), and fees
or compensation for serving on such committee(s) may be established from time to
time by the Board.
ARTICLE 5
Officers
Section 5.01 -- Executive Officers.
The executive officers of the Corporation shall be a president, a
secretary, and a treasurer/chief financial officer. The corporation may also
have, at the direction of the Board, a chairman of the Board, one or more vice
presidents, one or more assistant secretaries, one or more assistant treasurers,
and such other officers as may be appointed in accordance with the provisions of
Section 5.03 of this Article. Officers other than the president and the chairman
of the board need not be directors. Any one person may hold more than one
office, unless otherwise prohibited by the Articles or by law.
Section 5.02 -- Appointment.
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Sections 5.03 and 5.05 of this
Article, shall be appointed annually by the Board; officers serve at the
pleasure of the Board, and each shall hold his office until he resigns or is
removed or otherwise disqualified to serve, or his successor is appointed and
qualified.
Section 5.03 -- Subordinate Officers, Etc.
The Board may appoint such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority, and perform such duties as are provided in these bylaws or as
the Board may from time to time determine.
Section 5.04 -- Removal And Resignation.
A. Any officer may be removed, either with or without cause, by a
majority of the directors at the time in office, at any regular or special
meeting of the Board.
B. Any officer may resign at any time by giving written notice to the
Board or to the president or secretary. Any such resignation shall take effect
on the date such notice is received or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Section 5.05 -- Vacancies.
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to such office.
Section 5.06 -- Chairman Of The Board.
The Chairman of the Board, if there be such an officer, shall, if
present, preside at all meetings of the Board, and exercise and perform such
other powers and duties as may be from time to time assigned to him by the Board
or prescribed by these bylaws.
Section 5.07 -- President.
Subject to such supervisory powers, if any, as may be given by the
Board to the Chairman of the Board (if there be such an officer), the president
shall be the chief executive officer of the Corporation and shall, subject to
the control of the Board, have general supervision, direction and control of the
business and officers of the Corporation. He shall preside at all meetings of
the shareholders and, in the absence of the Chairman of the Board, or if there
be none, at all meetings of the Board. He shall be an ex-officio member of all
the standing committees, including the executive committee, if any, and shall
have the general powers and duties of management usually vested in the office of
president of a corporation, and shall have such other powers as may be
prescribed by the Board or these bylaws.
Section 5.08 -- Vice President.
In the absence or disability of the president, the vice presidents, in
order of their rank as fixed by the Board, or if not ranked, the vice president
designated by the Board, shall perform all the duties of the president and when
so acting shall have all the powers of, and be subject to all the restrictions
upon, the president. The vice presidents shall have such other powers and
perform such other duties as from time to time may be prescribed for them
respectively by the Board or these bylaws.
Section 5.09 -- Secretary.
A. The secretary shall keep, or cause to be kept, at the principal
office or such other place as the Board may direct, a book of minutes of all
meetings of directors and shareholders, with the time and place of holding,
whether regular or special, and if special, how authorized, the notice thereof
given, the names of those present and absent at directors' meetings, the number
of shares present or represented at shareholders' meetings, and the proceedings
thereof; and any waivers, consents, or approvals authorized to be given by law
or these bylaws; and such other matters as the Board may determine to be kept
therein.
B. The secretary shall keep, or cause to be kept, at the principal
office, a share register, or a duplicate share register, showing (i) the name of
each shareholder and his or her address; (ii) the number and class or classes of
shares held by each, and the number and date of certificates issued for the
same; and (iii) the number and date of cancellation of every certificate
surrendered for cancellation.
C. The secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the Board required by these bylaws or by law
to be given, and he shall keep the seal of the Corporation, if any, in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by the Board or these bylaws.
Section 5.10 -- Treasurer/Chief Financial Officer.
A. The treasurer/chief financial officer shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the properties
and business transactions of the Corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus and
shares. Any surplus, including earned surplus, paid-in surplus and surplus
arising from a reduction of stated capital, shall be classified according to
source and shown in a separate account. The books of account shall at all times
be open to inspection by any director.
B. The treasurer/chief financial officer shall deposit all monies and
other valuables in the name and to the credit of the Corporation with such
depositaries as may be designated by the Board. He shall disburse the funds of
the Corporation as may be ordered by the Board, shall render to the president
and directors, whenever they request it, an account of all of his transactions
as treasurer and of the financial condition of the Corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board or these bylaws.
ARTICLE 6
Miscellaneous
Section 6.01 -- Record Date And Closing Stock Books.
The Board may fix a time in the future, not exceeding ten (10) days
preceding the date of any meeting of shareholders, and not exceeding thirty (30)
days preceding the date fixed for the payment of any dividend or distribution,
or for the allotment of rights, or when any change or conversion or exchange of
shares shall go into effect, as a record date for the determination of the
shareholders entitled to notice of and to vote at any such meeting, or entitled
to receive any such dividend or distribution, or any such allotment of rights,
or to exercise the rights in respect to any such change, conversion or exchange
of shares, and in such case only shareholders of record on the date so fixed
shall be entitled to notice of and to vote at such meetings, or to receive such
dividend, distribution or allotment of rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any shares on the books of the
Corporation after any record date fixed as herein set forth. The Board may close
the books of the Corporation against transfers of shares during the whole, or
any part, of any such period.
Section 6.02 -- Inspection Of Corporate Records.
The share register or duplicate share register, the books of account,
and records of proceedings of the shareholders and directors shall be open to
inspection upon the written demand of any shareholder or the holder of a voting
trust certificate, at any reasonable time during normal business hours, and for
a purpose reasonably related to his interests as a shareholder or as the holder
of a voting trust certificate, and shall be exhibited at any time during normal
business hours when required by the demand of ten percent (10%) of the shares
represented at any shareholders' meeting. Such inspection may be made in person
or by an agent or attorney, and shall include the right to make extracts. Demand
of inspection other than at a shareholders' meeting shall be made in writing
upon the president, secretary, or assistant secretary, and shall state the
reason for which inspection is requested.
Section 6.03 -- Checks, Drafts, Etc.
All checks, drafts or other orders for payment of money, notes or other
evidences of indebtedness, issued in the name of or payable to the Corporation,
shall be signed or endorsed by such person or persons and in such manner as,
from time to time, shall be determined by resolution of the Board. Section 6.04
- -- Annual Report.
The Board shall cause to be sent to the shareholders not later than one
hundred twenty (120) days after the close of the fiscal or calendar year an
annual report, including complete financial statements of the condition of the
Corporation and management's discussion regarding the state of the Corporation.
Section 6.05 -- Contracts, Etc., How Executed.
The Board, except as otherwise provided in these bylaws, may authorize
any officer, officers, agent, or agents, to enter into any contract, deed or
lease, or execute any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to specific
instances; and unless so authorized by the Board, no officer, agent, or employee
shall have any power or authority to bind the Corporation by any contract or
engagement or to pledge its credit or render it liable for any purpose or for
any amount.
Section 6.06 -- Certificates Of Stock.
A certificate or certificates for shares of the capital stock of the
Corporation shall be issued to each shareholder when any such shares are fully
paid up. All such certificates shall be signed by the president or a vice
president and the secretary or an assistant secretary, or be authenticated by
facsimiles of the signature of the president and secretary or by a facsimile of
the signatures of the president and the written signature of the secretary or an
assistant secretary. Every certificate authenticated by a facsimile of a
signature may be countersigned by a transfer agent or transfer clerk, as the
Board directs.
Section 6.07 -- Inspection Of Bylaws.
The Corporation shall keep in its principal office for the transaction
of business the original or a copy of these bylaws, as amended or otherwise
altered to date, certified by the secretary, which shall be open to inspection
by the shareholders at all reasonable times during normal office hours.
Section 6.08 -- Indemnification.
The Corporation shall indemnify its officers and directors for any
liability including prompt reimbursement or provision for reasonable attorney
fees and costs of defense arising out of any act or omission of any officer or
director on behalf of the Corporation to the full extent allowed by the laws of
the State of Nevada, if the officer or director acted in good faith and in a
manner the officer or director reasonably believed to be in, or not opposed to,
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the conduct was unlawful. Any
indemnification under this section (unless ordered by a court) shall be make by
the corporation only as authorized in the specific case upon a determination
that indemnification of the director or officer is proper in the circumstances
because the officer or director has met the applicable standard of conduct. Such
determination shall be made by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or, regardless of whether or not such a quorum is obtainable and a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or by the stockholders.
ARTICLE 7
Amendments
Section 7.01 -- Power Of Shareholders and Directors.
New bylaws may be adopted, or these bylaws may be amended or repealed,
by the affirmative vote of the shareholders collectively having a majority of
the voting power or by the written assent of such shareholders. Subject to the
rights of shareholders as provided herein, bylaws other than a bylaw, or
amendment thereof, changing the authorized number of directors, may also be
adopted, amended, or repealed by the Board.
<PAGE>
Certificate of Secretary
The undersigned does hereby certify that he/she is the duly elected
President of International STAR, Inc., a corporation duly organized and existing
under the laws of the State of Nevada; that the above and foregoing bylaws of
said corporation were duly and regularly adopted as such by the board of
directors of the Corporation at the first meeting of said Board, which was duly
and regularly held, and that the above and foregoing Bylaws are now in full
force and effect.
DATED this 5th day of November, 1993.
By: /s/ Nelson Vazquez
President
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