SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
K & L ELECTRONICS PHOTO AND SUPPLY CO.
(Name of small business issuer in its charter)
Nevada
(State or jurisdiction of incorporation or organization)
4813
(Primary Standard Industrial Classification Code Number)
860973399
(I.R.S. Employer Identification No.)
2102 North Donner Avenue, Tucson, AZ 85749
(Address of principal executive offices)
2102 North Donner Avenue, Tucson, AZ 85749
(Address of principal place of business or intended principal place of business)
Daniel L. Hodges
2102 North Donner Avenue, Tucson, AZ 85749, (520) 760-7759
(Name, address and telephone number of agent for service)
--------------------------
copy to:
David J. Levenson, Esquire
Mays & Valentine, L.L.P.
8201 Greensboro Drive
Suite 800
McLean, Virginia 22102
(703) 734-4328
<PAGE>
Approximate date of proposed sale to the public: From time to time after
the effective date of this Registration Statement.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act"), please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. / /
CALCULATION OF REGISTRATION FEE
================================================================================
Title of Each Class Amount Amount of
Securities to be Offering Price Per Registration
to be Registered Registered Unit Fee
- ------------------- -------------- ------------------ ------------
Common Stock, $.001par value 1,000,000 $ .001* $ .26
TOTAL .26
MINIMUM FEE....... $100.00
================================================================================
* Estimated solely for the purpose of calculating the Registration Fee. The
price of the shares has been determined by K & L on the basis of the par
value of the shares issued and outstanding.
================================================================================
================================================================================
------------------------
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until the registration statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
================================================================================
<PAGE>
K & L ELECTRONICS PHOTO AND SUPPLY CO.
CROSS REFERENCE SHEET
Form SB-2 Item Caption in Prospectus
PART I
Item 1. Front of Registration Statement and
Outside Front Cover of Prospectus........... Front of Registration
Statement and
Outside Front
Cover of Prospectus
Item 2. Inside Front and Outside Back Cover
Pages of Prospectus......................... Inside Front
and Outside
Back Cover Pages
of Prospectus
Item 3. Summary Information and Risk Factors........ Prospectus Summary;
Risk Factors
Item 4. Use of Proceeds............................. Use of Proceeds
Item 5. Determination of Offering Price............. Not Applicable
Item 6. Dilution.................................... Not Applicable
Item 7. Selling Shareholders........................ Selling Shareholders
Item 8. Plan of Distribution........................ Plan of Distribution
Item 9. Legal Proceedings........................... Business-Legal
Proceedings
Item 10. Directors, Executive Officers,
Promoters and Control Persons............... Management
Item 11. Security Ownership of Certain Beneficial
Owners and Management....................... Management-Principal
Stockholders
Item 12. Description of Securities................... Description of Securities
Item 13. Interest of Named Experts and Counsel....... Not Applicable
Item 14. Disclosure of Commission Position on
Indemnification............................. Indemnification of
Officers and Directors
Item 15. Organization Within Last Five Years......... Certain Transactions
Item 16. Description of Business..................... Business
Item 17. Management's Discussion and Analysis or
Plan of Operation........................... Management's Discussion
and Analysis
of Financial Conditions
and Plan of Operations
Item 18. Description of Property..................... Business-Properties
Item 19. Certain Relationships and
Related Transactions........................ Certain Transactions
Item 20. Market for Common Equity and Related
Stockholder Matters......................... Market Information
Item 21. Executive Compensation...................... Management and Executive
Compensation
Item 22. Financial Statements........................ Financial Statements
Item 23. Changes In and Disagreements
With Accountants on Accounting
and Financial Disclosure.................... Not Applicable
PART II
Item 24. Indemnification of Directors and Officers...
Item 25. Other Expenses of Issuance and Distribution.
Item 26. Recent Sales of Unregistered Securities.....
Item 27. Exhibits....................................
Item 28. Undertakings................................
<PAGE>
SUBJECT TO COMPLETION, DATED April 14, 2000
PROSPECTUS
K & L ELECTRONICS PHOTO AND SUPPLY CO.
1,000,000 SHARES OF COMMON STOCK $.001 PAR VALUE
This prospectus covers the resale, from time to time, of up to 1,000,000 shares
of common stock, $.001 par value per share, of K & L Electronics Photo and
Supply Co., a Nevada corporation, issued to Daniel L. Hodges and twenty-eight
other investors for their own accounts in the over-the-counter market, at
prevailing market prices, at negotiated prices or otherwise. We refer to the
outstanding common stock of K & L as the "shares" or the "common stock"
throughout this prospectus. We also refer to Mr. Hodges and the twenty-eight
other investors as the "Selling Shareholders." The selling price of any shares
will be determined by market factors at the time of resale. To our knowledge,
none of the Selling Shareholders have made any arrangement with any brokerage
firm for the sale of the shares. We issued the shares to the Selling
Shareholders in various private offerings without registration since 1997. See
"Selling Shareholders."
K & L will not be receiving any proceeds from the sale of shares by the Selling
Shareholders but will bear all of the expenses of the registration of the
shares.
K & L's common stock is not currently listed or quoted on any quotation medium.
There can be no assurance that K & L's common stock will ever be quoted on any
quotation medium or that any trading market for K & L's common stock will ever
develop.
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 2 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY INVESTORS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this prospectus is April 14, 2000
[Place the following paragraph landscape across the left side of the page.]
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not an offer to buy these securities in any
state where the offer or sale is not permitted.
<PAGE>
TABLE OF CONTENTS
Page
Prospectus Summary.......................................................... 1
Risk Factors................................................................ 2
Use of Proceeds............................................................. 7
Market Information.......................................................... 7
Selling Shareholders........................................................ 7
Selected Financial Data..................................................... 11
Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................. 13
Business.................................................................... 18
Management.................................................................. 20
Certain Transactions........................................................ 27
Description of Securities................................................... 28
Indemnification of Officers and Directors................................... 28
Transfer Agent, Warrant Agent and Registrar................................. 28
Shares Eligible for Future Sale............................................. 29
Plan Distribution........................................................... 29
Legal Matters............................................................... 30
Experts..................................................................... 30
Additional Information...................................................... 30
Until 90 days after the effective date, all dealers that effect transactions in
these shares, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
No dealer, sales representative or any other person has been authorized to give
any information or to make any representations in connection with the offering
described in this prospectus other than those contained in this prospectus, and,
if given or made, such information or representations must not be relied upon as
having been authorized by K & L. Neither the delivery of this prospectus nor any
sale made pursuant to this prospectus shall, under any circumstances, create any
implication that there has been no change in the affairs of K & L since the date
of this prospectus or that the information contained in it is correct as of any
time subsequent to its date.
<PAGE>
PROSPECTUS SUMMARY
Our summary is qualified by the more detailed information and consolidated
financial statements, including the notes thereto, you will find elsewhere in
this prospectus, including the information set forth under "Risk Factors." Some
of the statements contained in the prospectus summary and throughout this
prospectus regarding matters that are not historical facts, such as statements
regarding K & L's growth strategy, are forward-looking statements as such term
is defined in the Securities Act of 1933, as amended (the "Securities Act").
Since these forward-looking statements include risks and uncertainties, actual
results may differ materially from those expressed or implied by such
statements. Factors that could cause actual results to differ materially
include, but are not limited to, those discussed under "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Plan of
Operations" and "Business," as well as those discussed elsewhere in this
prospectus.
K & L Electronics Photo and Supply Co.
K & L is a development stage company which was organized under the laws of the
state of Nevada on December 31, 1997. K & L has not engaged in any operations
other than organizational matters. It was formed specifically to be a "blank
check" or "shell" corporation. The terms "blank check" or "shell" corporation
are used to describe a company that either has no specific business plan or
purpose or indicates that its business plan or purpose is to engage in a merger
or acquisition with an unidentified company.
The primary activity of K & L will involve seeking merger or acquisition
candidates with which it can either merge or acquire. K & L has not selected any
company for acquisition or merger and does not intend to limit potential
acquisition candidates to any particular field or industry. K & L does retain
the right to limit acquisition or merger candidates, if it so chooses, to a
particular field or industry. K & L's plans are in the conceptual stage only.
K & L's common stock is not listed on any recognized exchange or quoted on any
quotation medium. There are no plans, proposals, arrangements or understandings
with any persons concerning the development of a trading market in K & L's
common stock. We cannot assure you that K & L will ever acquire a suitable
merger or acquisition candidate or that its common stock will ever develop a
trading market.
The Offering
K & L previously issued 1,000,000 shares of its common stock to 29 individuals.
This prospectus covers any resale of these shares.
Common Stock Registered for Resale..............................1,000,000 shares
Common Stock Outstanding prior to the Offering..................1,000,000 shares
Common Stock Outstanding after the Offering.....................1,000,000 shares
RISK FACTORS
K & L's business is subject to numerous risk factors. You should carefully
consider the following risk factors, in addition to the other information
appearing in this prospectus, before investing in the shares.
K & L HAS ONLY ONE DIRECTOR AND ONE OFFICER.
K & L's president and sole officer is Daniel L. Hodges. Mr. Hodges is the sole
director and the majority shareholder. Because management consists of only Mr.
Hodges, K & L does not benefit from multiple judgments that a greater number of
directors or officers would provide. K & L must rely completely on the judgment
of its sole officer and director when selecting a target company. The decision
to enter into a business combination will likely be made without detailed
feasibility studies, independent analysis, market surveys or similar information
which, if K & L had more funds available to it, would be desirable. Mr. Hodges
anticipates devoting only a nominal amount of time per month to the business of
K & L. Mr. Hodges has not entered into a written employment agreement with K & L
and he is not expected to do so. K & L has not obtained key man life insurance
on Mr. Hodges. The loss of the services of Mr. Hodges would adversely affect
development of K & L's business and its likelihood of continuing operations.
K & L HAS NO OPERATING HISTORY, NO REVENUE, MINIMAL ASSETS AND OPERATES AT A
LOSS.
K & L has no operating history or any revenues or earnings from operations. K &
L has no significant assets or financial resources. K & L has operated at a loss
to date and will, in all likelihood, continue to have operating expenses without
corresponding revenues, at least until the consummation of a business
combination. As of March 31, 2000, K & L had incurred expenses of approximately
$3,800. Mr. Hodges has paid these expenses and he has no expectation or
agreement with K & L for reimbursement for those expenses. There is no assurance
that K & L will ever be profitable.
MR. HODGES MAY HAVE CONFLICTS OF INTEREST WITH K & L.
The terms of any future business combination involving K & L may include such
terms as Mr. Hodges' remaining a director or officer of K & L following the
business combination. However, the terms of a business combination may provide
for a payment by cash, securities or otherwise to Mr. Hodges for the purchase or
retirement of all or part of his common stock of K & L by a target company or
for services rendered incident to or following a business combination. Mr.
Hodges would directly benefit from such employment or payment. These benefits
may influence Mr. Hodges' choice of a target company. In addition, the Articles
of Incorporation of K & L provide that K & L indemnify its officers and/or
directors for liabilities, which can include liabilities arising under the
securities laws. Therefore, assets of K & L could be used or attached to satisfy
any liabilities subject to such indemnification.
In addition, Mr. Hodges has participated or is currently participating in other
blank check companies which may compete directly with K & L. See "Management -
Executive Officers, Key Employees and Directors" for a listing of these
companies. Additional conflicts of interest and non-arm's length transactions
may also arise in the future. As of the date of this prospectus, Mr. Hodges has
been or currently is involved with 130 shell companies, approximately 110 of
which are or will be seeking business opportunities for mergers or acquisitions.
Consequently, there are potential inherent conflicts of interest in Mr. Hodges'
acting as officer and director of K & L. Conflicts could also arise if K & L
were to enter into any business combination with a company in which Mr. Hodges
is involved. This type of business transaction is not an arm's-length
transaction because of Mr. Hodges' potential involvement with both parties.
While there is no K & L policy prohibiting such a transaction, K & L currently
does not intend to engage in a business combination of this type.
Many states, including Nevada where K & L is incorporated, have enacted laws to
address breaches of fiduciary duties of management when conflicts of interest
become problematic. You should note that shareholders' pursuit of remedies under
state laws can be prohibitively expensive and time consuming.
K & L's PROPOSED OPERATIONS ARE SPECULATIVE.
The success of K & L's proposed plan of operation will depend to a great extent
on the operations, financial condition and management of the not-yet-identified
target company. While business combinations with entities having established
operating histories are preferred, we cannot guarantee that K & L will be
successful in locating candidates meeting such criteria. In the event K & L does
complete a business combination, the success of K & L's operations will be
dependent upon the management of the target company and numerous other factors
beyond K & L's control. There is no assurance that K & L can identify a target
company and consummate a business combination.
THE PURCHASE OF PENNY STOCKS CAN BE RISKY.
In the event that a public trading market develops for K & L's shares following
a business combination, such securities may be classified as a "penny stock"
depending upon their market price and the manner in which they are traded.
Section 3(a)(51) of the Securities Exchange Act of 1934 defines a "penny stock,"
for purposes relevant to K & L, as any equity security that has a market price
of less than $5.00 per share and is not admitted for quotation and does not
trade on the Nasdaq Stock Market or on a national securities exchange. For any
transaction involving a penny stock, unless exempt, the rules require delivery
by the broker of a document to investors stating the risks of investment in
penny stocks, the possible lack of liquidity, commissions to be paid, current
quotations and investors' rights and remedies, a special suitability inquiry,
regular reporting to the investor and other requirements. Prices for penny
stocks are often not available and investors are often unable to sell such
stock. Thus an investor may lose his entire investment in a penny stock and
consequently should be cautious of any purchase of penny stocks.
THERE IS A SCARCITY OF, AND SIGNIFICANT COMPETITION FOR, BUSINESS OPPORTUNITIES
AND COMBINATIONS.
K & L is and will continue to be an insignificant participant in the business of
seeking mergers with and acquisitions of business entities. A large number of
established and well-financed companies, including venture capital firms, are
active in mergers and acquisitions of companies which may be merger or
acquisition target candidates for K & L. Nearly all of these other participants
have greater financial resources, technical expertise and managerial
capabilities than K & L. Consequently, K & L will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination. Moreover, K & L will also compete with
numerous other small public companies in seeking merger or acquisition
candidates.
CURRENTLY, THERE IS NO AGREEMENT FOR A BUSINESS COMBINATION WITH K & L AND NO
MINIMUM REQUIREMENTS FOR A BUSINESS COMBINATION.
K & L has no current arrangement, agreement or understanding with respect to
engaging in a business combination with any specific entity. We cannot guarantee
that K & L will be successful in identifying and evaluating any suitable
business opportunities or in concluding a business combination. We have not
selected any particular industry or specific business within an industry as a
potential target company. K & L has not established any criteria, including a
specific length of operating history or a specified level of earnings, assets,
and/or net worth, which it will require a target company to have achieved, or
without which K & L would not consider a business combination with such business
entity. Accordingly, K & L may enter into a business combination with a business
entity having no significant operating history, losses, limited or no potential
for immediate earnings, limited assets, negative net worth or other negative
characteristics. We cannot guarantee you that K & L will be able to negotiate a
business combination on terms favorable to K & L.
WE MAY BE DELAYED OR PRECLUDED FROM AN ACQUISITION BY REPORTING REQUIREMENTS.
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, K & L is required to provide certain information about significant
acquisitions including audited financial statements of the acquired company.
These audited financial statements must be furnished within 75 days following
the effective date of a business combination. The target company will have the
obligation for obtaining audited financial statements. The additional time and
costs for some potential target companies to prepare financial statements may
significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by K & L. Acquisition prospects that do not have, or are
unable to obtain, the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable. Notwithstanding a target company's agreement to obtain audited
financial statements within the required time frame, these audited financials
may not be available to K & L at the time of effecting a business combination.
In cases where audited financials are unavailable, K & L will have to rely upon
unaudited information that has not been verified by outside auditors in making
its decision to engage in a transaction with the business entity. This risk
increases the prospect that a business combination with such a business entity
might prove to be an unfavorable one for K & L.
WE LACK MARKET RESEARCH AND MARKETING ORGANIZATION.
K & L has not conducted, and others have not made available to K & L, market
research indicating that demand exists for the transactions we contemplate. Even
in the event demand exists for a transaction of the type contemplated by K & L,
there is no assurance K & L will be successful in completing any such business
combination.
WE LIKELY WILL HAVE A CHANGE IN CONTROL AND MANAGEMENT FOLLOWING A BUSINESS
COMBINATION.
A business combination involving the issuance of K & L's common stock will, in
all likelihood, result in shareholders of a target company obtaining a
controlling interest in K & L. As a condition of the business combination
agreement, Mr. Hodges may agree to sell or transfer all or a portion of his
common stock to provide the target company with all or majority control of K &
L. The resulting change in control of K & L will occur without your vote and
will likely result in removal of Mr. Hodges as the present sole officer and
director of K & L and a corresponding reduction in or elimination of his
participation in the future affairs of K & L.
A BUSINESS COMBINATION WILL POSSIBLY DILUTE THE VALUE OF K & L's SHARES.
A business combination normally will involve the issuance of a significant
number of additional shares of K & L's common stock. Depending upon the value of
the assets acquired in the business combination, the per share value of K & L's
common stock may increase or decrease, perhaps significantly.
THERE ARE STATE REGULATIONS WHICH MIGHT AFFECT THE TRANSFERABILITY OF K & L's
SHARES.
K & L has not registered its shares for resale under the securities or "blue
sky" laws of any state and has no plans to register or qualify its shares in any
state. Current shareholders, and persons who desire to purchase the shares in
any trading market that may develop in the future, should be aware that there
may be significant state restrictions upon the ability of new investors to
purchase the securities.
Blue sky laws, regulations, orders, or interpretations place limitations on
offerings or sales of securities by "blank check" companies, or in "blind-pool"
offerings, or if such securities represent "cheap stock" previously issued to
promoters or others. These limitations typically provide, in the form of one or
more of the following limitations, that such securities are:
o not eligible for sale under exemption provisions permitting sales without
registration to accredited investors or qualified purchasers;
o not eligible for the transactional exemption from registration for
nonissuer transactions by a registered broker-dealer;
o not eligible for registration under the simplified small corporate offering
registration (SCOR) form available in many states;
o not eligible for the "solicitations of interest" exception to securities
registration requirements available in many states;
o required to be placed in escrow and the proceeds received held in escrow
subject to various limitations; or
o not permitted to be registered or exempted from registration, and thus not
permitted to be sold in the state under any circumstances.
Virtually all 50 states have adopted one or more of these limitations, or other
limitations or restrictions affecting the sale or resale of stock of blank check
companies, or securities sold in "blind pool" offerings or "cheap stock" issued
to promoters or others. Specific limitations on offerings by blank check
companies (or companies meeting such a definition, i.e., having no current
business operations and no specific business plan or purpose) have been adopted
in:
Alaska Nevada Tennessee
Arkansas New Mexico Texas
California Ohio Utah
Delaware Oklahoma Vermont
Florida Oregon Washington
Georgia Pennsylvania
Idaho Rhode Island
Indiana South Carolina
Nebraska South Dakota
K & L's selling efforts, and any secondary trading market which may develop, may
only be conducted in those jurisdictions where an applicable exemption is
available or where the shares have been registered. K & L has no current plan to
register its shares in any state and does not anticipate doing so until after
the consummation of a merger or acquisition, after which it will no longer be
classified as a blank check company. K & L has not taken, and does not
contemplate taking, any steps to ensure compliance with state securities laws.
A BUSINESS COMBINATION MAY RESULT IN UNFAVORABLE TAXATION TO K & L.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination K & L may undertake. Currently, such
transactions may be structured so as to result in tax-free treatment to both
companies, pursuant to various federal and state tax provisions. K & L intends
to structure any business combination so as to minimize the federal and state
tax consequences to both K & L and the target company. However, there can be no
assurance that such business combination will meet the statutory requirements of
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 and their shareholders.
USE OF PROCEEDS
The principal purpose of this registration statement is to create a more liquid
public market for K & L's common stock. Upon the effectiveness of this
registration statement, all of K & L's outstanding shares of common stock will
be registered for resale under the Securities Act. While K & L will bear the
expenses of the registration of the shares, K & L will not realize any proceeds
from any actual resales of the shares that might occur in the future. All
proceeds from any resale will be received by the Selling Shareholders.
MARKET INFORMATION
K & L's common stock is not listed or quoted at the present time, and there is
no present public market for K & L's common stock. There can be no assurance
that a public market for K & L's common stock will ever develop.
Dividend Policy
K & L has never declared or paid cash dividends on its capital stock. K & L
currently intends to retain earnings, if any, to finance the growth and
development of its business and does not anticipate paying any cash dividends in
the foreseeable future.
Holders
As of the date of this prospectus, there are 29 shareholders of record.
SELLING SHAREHOLDERS
The following table sets forth certain information as of the date of this
prospectus, with respect to the Selling Shareholders for whom K & L is
registering shares for resale to the public.
<PAGE>
<TABLE>
<CAPTION>
Method of Shares
Original Issuance Beneficially Maximum No. of
Date of (i.e. purchase, Owned Prior to Shares to be Sold
Name of Original gift, etc.) Offering (1) Pursuant to this
Security Holder Issue Prospectus (1)
<S> <C> <C> <C> <C>
Daniel L. Hodges (2) 1/4/98 For services 800,000 (4) 800,000 (4)
rendered (3)
Frank Anjakos 1/4/99 Gift (5) 2,000 2,000
Cindy Baker 1/4/98 Gift (5) 2,000 2,000
Steve Bays 1/4/99 Gift (5) 2,000 2,000
Brain Delfs 1/4/98 Gift (5) 2,000 2,000
James Delfs 1/4/98 Gift (5) 2,000 2,000
Sam Erbst 1/4/98 Gift (5) 2,000 50,000
Gus Fotinos 1/4/98 Gift (5) 2,000 2,000
Allyson Fox 1/4/98 Gift (5) 2,000 2,000
Audra Guthery 1/4/98 Gift (5) 2,000 2,000
David H. Hack 1/4/98 Gift (5) 50,000 2,000
Matthew S. Hodges 1/4/98 Gift (5) 2,000 2,000
Kim Lasater 1/4/98 Gift (5) 2,000 2,000
Jeff Milton 1/4/98 Gift (5) 2,000 2,000
Suzanne Morvay 1/4/98 Gift (5) 2,000 2,000
Mike Neighbors 1/4/98 Gift (5) 2,000 50,000
Thomas Nieman 1/4/98 Gift (5) 2,000 2,000
Ron Olson 1/4/98 Gift (5) 2,000 2,000
Mark Polifka 1/4/98 Gift (5) 2,000 2,000
Sophie Radecki 1/4/98 Gift (5) 2,000 2,000
Jonathan Roberts 1/4/98 Gift (5) 50,000 50,000
2102 N. Donner Avenue
Tucson, AZ 85749
<PAGE>
Lowell E. Robinson 1/4/98 Gift (5) 2,000 2,000
P. O. Box 23
Arivaca, AZ 85601
Monica Romero 1/4/98 Gift (5) 2,000 2,000
Melissa Saucedo 1/4/98 Gift (5) 2,000 2,000
Kevin Sherlock 1/4/98 Gift (5) 50,000 2,000
Howard Smith 1/4/98 Gift (5) 2,000 2,000
John Sylvester 1/4/98 Gift (5) 2,000 2,000
Raymond Willey 1/4/98 Gift (5) 2,000 2,000
Jennifer L. Worden 1/4/98 Gift (5) 2,000 2,000
9055 E. Catlina Highway
No. 5206
Tucson, AZ 85749
</TABLE>
(1) On October 20, 1999, the outstanding shares of K & L's common stock were
forward split 1,000 to 1, resulting in a total of 1,000,000 shares
outstanding.
(2) Officer and director of K & L.
(3) These shares were issued in reliance on Section 4(2) of the Securities Act.
In consideration of Mr. Hodges contributing $450 toward the organizational
expenses of K & L, and for $350 in services rendered, on January 4, 1998, K
& L issued Mr. Hodges 800 shares of K & L's common stock.
(4) Restricted shares.
(5) These shares were issued to individuals as gifts by Mr. Hodges in reliance
on Section 4(2) of the Securities Act (for U. S. residents) or Regulation S
(for Canadian residents). No consideration (cash or otherwise) was received
in exchange for the share issuances. The shares were gifted to individuals
whom Mr. Hodges knew either through familial relationships or business
associations. Mr. Hodges also selected individuals who could provide some
potential for introducing K & L to potential merger or acquisition
candidates or business opportunities as well as individuals who were
willing to provide K & L with clerical services for no renumeration. There
are no known relationships between any of the shareholders, or between Mr.
Hodges as the sole officer and director and any shareholders, except that
Matthew Hodges is the adult nephew of Mr. Hodges, Jennifer Warden is the
wife of Mr. Hodges, and Brian Delfs and James Delfs are brothers.
- --------------------------------------------------------------------------------
State by State Tabulation of Selling Shareholders
- --------------------------------------------------------------------------------
Arizona 992,000
- ------------------------------------- ------------------------------------------
- ------------------------------------- ------------------------------------------
California 4,000
- ------------------------------------- ------------------------------------------
- ------------------------------------- ------------------------------------------
Canada 4,000
- ------------------------------------- ------------------------------------------
All of the shares offered by this prospectus may be offered for resale, from
time to time, by the Selling Shareholders, pursuant to this prospectus, in one
or more private or negotiated transactions, in open market transactions in the
over-the-counter market, or otherwise, or by a combination of these methods, at
fixed prices that may be changed, at market prices prevailing at the time of the
sale, at prices related to such market prices, at negotiated prices, or
otherwise. The Selling Shareholders may effect these transactions by selling
their shares directly to one or more purchasers or to or through broker-dealers
or agents. The compensation to a particular broker-dealer or agent may be in
excess of customary commissions. Each of the Selling Shareholders may be deemed
an "underwriter" within the meaning of the Securities Act in connection with
each sale of shares. The Selling Shareholders will pay all commissions, transfer
taxes and other expenses associated with their sales.
SELECTED FINANCIAL DATA
The following selected consolidated financial data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Plan of
Operations" and the Consolidated Financial Statements, including the Notes
thereto, included elsewhere in this prospectus. The statement of operations data
for the years ended 1998 and 1999 and the balance sheet data at 1998 and 1999
are derived from K & L's Consolidated Financial Statements, which have been
audited by K & L's independent auditors, included elsewhere in this prospectus,
and include all adjustments that K & L considers necessary for a fair
presentation of the financial position and results of operations at that date
and for such periods.
BALANCE SHEET DATA:
December 31,
---------------------
1999 1998
Assets....................................... $ -- $ --
Liabilities - Accounts Payable............... $ -- $ 100
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 1,000,000 shares at
December 31, 1999 and 1998........... 1,000 1,000
Paid-In Capital........................... 250 --
Retained Deficit.......................... (1,100) (1,100)
Deficit Accumulated
During the Development Stage............ (150) --
Total Stockholders' Equity............. -- (100)
Total Liabilities and
Stockholders' Equity................. $ -- $ --
STATEMENT OF OPERATIONS DATA:
Cumulative Since Inception
For Year Ended of Development
December 31, Stage
--------------------
1999 1998
Revenues:
Expenses: $ -- $ -- $ --
150 1,100 150
Net Loss $(150) $(1,100) $(150)
Basic & Diluted
loss per share $ -- $ -- $ --
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND PLAN OF OPERATIONS
We ask that you read the following discussion in conjunction with K & L's
Consolidated Financial Statements, including the Notes thereto, which appear
elsewhere in this prospectus.
Company Overview
K & L was dormant from its inception on December 31, 1997 until October 20,
1999. K & L has been in the developmental stage since October 20, 1999 and has
no operations to date. Other than issuing shares, K & L never commenced any
operational activities. K & L's common stock is not listed on any recognized
exchange or quoted on any quotation medium. We can not assure you that K & L
will ever acquire a suitable merger or acquisition candidate or that its common
stock will ever develop a trading market.
Plan Of Operations - General
K & L was organized for the purpose of creating a corporate vehicle to seek,
investigate and, if such investigation warrants, acquire an interest in one or
more business opportunities presented to it by persons or firms who or which
desire to seek perceived advantages of a publicly held corporation. At this
time, K & L has no plan, proposal, agreement, understanding or arrangement to
acquire or merge with any specific business or company, and K & L has not
identified any specific business or company for investigation and evaluation.
Mr. Hodges, K & L's sole officer and director, has not had any material
discussions with any company with respect to K & L's acquisition of that
company.
K & L will not restrict its search to any specific business, industry or
geographical location, and K & L may participate in a business venture of
virtually any kind or nature. Our discussion of the proposed business of K & L
is purposefully general and is meant to demonstrate K & L's virtually unlimited
discretion to search for and enter into potential business opportunities.
Sources Of Opportunities
K & L does not intend to actively seek out investors. Rather, K & L seeks to
merge with or acquire assets or shares of an entity which is already actively
engaged in a business that generates revenues, in exchange for K & L's common
stock. Mr. Hodges expects that upon successful regulatory clearance of this
Registration Statement on Form SB-2, he will be contacted by a number of target
companies.
In addition, K & L anticipates that business opportunities will be referred to K
& L by various sources, including Mr. Hodges, professional advisers, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals. K & L will seek a potential
business opportunity from all known sources, but will rely principally on
personal contacts of Mr. Hodges as well as indirect associations between him and
other business and professional people. We can not predict the number of
individuals or companies who may approach Mr. Hodges about K & L.
K & L will not enter into a business combination with a company in which Mr.
Hodges or his affiliates or associates has a current ownership interest.
However, there is no policy, corporate bylaw or shareholder resolution
prohibiting K & L from merging or acquiring a business, asset or company in
which any potential promoter, affiliate or associate of K & L or Mr. Hodges has
any direct or indirect ownership.
K & L does not currently plan to engage professional firms specializing in
business acquisitions or reorganizations; however K & L has not formulated any
policy regarding the use of consultants or outside advisors. In addition, K & L
has not, and does not intend to, advertise in search of business opportunities.
However, K & L may, in the future, advertise and promote K & L in financial
newspapers, magazines and on the Internet.
K & L may seek a business opportunity with a firm that only recently commenced
operations, or a developing company in need of additional funds for expansion
into new products or markets, or an established company seeking a public
vehicle. In some instances, a business opportunity may involve the acquisition
or merger with a corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common stock. K & L
may purchase assets and establish wholly owned subsidiaries in various
businesses or purchase existing businesses as subsidiaries.
K & L anticipates that its selection of a business opportunity in which to
participate may be complex and extremely risky. Because of general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, Mr. Hodges believes that there are numerous
firms seeking the benefits of a publicly traded corporation like K & L. The
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 or similar benefits to key employees,
providing liquidity (subject to restrictions of applicable statues) for all
shareholders, and other factors. 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.
K & L has, and will continue to have, insufficient capital with which to provide
the owners of potential target companies with any significant cash or other
assets. However, Mr. Hodges believes K & L will offer owners of business
opportunities 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 business opportunities 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 target company
will also incur significant legal and accounting costs in connection with the
business combination including the costs of preparing post-effective amendments,
Forms 8-K, agreements and related reports and documents. However, Mr. Hodges has
not conducted market research and is not aware of statistical data which would
support the perceived benefits of a merger or acquisition transaction for the
owners of a business opportunity.
Evaluation Of Opportunities
The analysis of new business opportunities will be undertaken by, or under the
supervision of, Mr. Hodges, who may not be considered a professional business
analyst. Mr. Hodges will be the key person in the search, review and negotiation
with potential acquisition or merger candidates. While Mr. Hodges likely has no
quantifiable experience in the businesses of any particular target companies
that may be reviewed, he has experience in managing development stage companies
similar to K & L. Mr. Hodges will rely upon his own efforts in accomplishing the
business purposes of K & L. Mr. Hodges is currently employed in other positions
and will devote only a nominal portion of his time to the business affairs of K
& L, until such time as an acquisition has been determined to be highly
favorable. After that time, however, Mr. Hodges expects to spend full time in
investigating and closing any acquisition. In addition, in the face of competing
demands for his time, Mr. Hodges may grant priority to his other positions
rather than to K & L.
For example, in analyzing prospective business opportunities, Mr. Hodges will
consider the following matters:
the available technical, financial and managerial resources; working capital and
other financial requirements of the target;
o the target's history of operations, if any;
o the target's prospects for the future;
o the present and expected competition in the target's industry;
o the quality and experience of management services which may be available
and the depth of that management within the target;
o the potential for further research, development or exploration in the
target's industry;
o specific risk factors which may be anticipated to impact the proposed
activities of K & L;
o the potential for growth or expansion and profit;
o the perceived public recognition or acceptance of products, services or
trades of the target and the industry and brand or name identification; and
o all other relevant factors.
Mr. Hodges and/or his legal and financial advisers intend to meet personally
with management and key personnel of the firm sponsoring the business
opportunity as part of their investigation. To the extent possible, K & L
intends to utilize written reports and personal investigation to evaluate the
above factors. K & L will not acquire or merge with any company for which
audited financial statements cannot be obtained.
Mr. Hodges is currently involved in promoting approximately 110 blank check
companies, many of which have registered their shares with the SEC under the
Securities and Exchange Act of 1934. All of these companies are in various
stages of searching for merger or acquisition opportunities, and thus, there are
potential inherent conflicts of interest in Mr. Hodges' acting as officer and
director of K & L and these other companies. See "Business-Management" for a
listing of companies in which Mr. Hodges is involved. Insofar as he is engaged
in other business activities, Mr. Hodges anticipates he will devote only a
nominal amount of time to K & L's affairs. In addition, Mr. Hodges may in the
future become a shareholder, officer or director of other companies which may be
formed for the purpose of engaging in business activities similar to those
conducted by K & L. Accordingly, additional direct conflicts of interest may
arise in the future with respect to such other entities. See "RISK FACTORS - MR.
HODGES MAY HAVE CONFLICTS OF INTEREST WITH K & L" for more discussion on
potential conflicts of interest.
K & L does not currently have a right of first refusal pertaining to
opportunities that come to Mr. Hodges' attention insofar as such opportunities
may relate to K & L's proposed business operations. Mr. Hodges will consider
merger and/or acquisition opportunities and intends to make them available to K
& L and the companies that he is affiliated with on an equal basis and in his
sole discretion. K & L has not adopted any conflict of interest policy with
respect to these types of transactions. If a situation arises in which more than
one company with which Mr. Hodges is involved desires to merge with or acquire a
specific target company and the principals of the proposed target company have
no preference as to which company will merge or acquire the target company, the
company that first filed a registration statement with the Securities and
Exchange Commission will be entitled to proceed with the proposed transaction.
Acquisition Of Opportunities
K & L does not intend to make any loans to any prospective merger or acquisition
candidates or unaffiliated third parties. However, as is customary in the
industry, K & L may pay a finder's fee for persons locating and introducing an
acquisition prospect. In the event K & L consummates a transaction with an
entity introduced by a finder, we may compensate the finder for the referral in
the form of a finder's fee. If a finder's fee is paid, we anticipate that the
finder's fee will be either in the form of restricted common stock issued by K &
L as part of the terms of the proposed transaction, or in the form of cash
consideration. If the finder's fee is paid in the form of common stock, the
Board of Directors will approve this issuance. If the finder's fee is in the
form of cash, the payment will have to be tendered by the acquisition or merger
candidate because K & L has insufficient cash available to make any fee payment.
If any such fee is paid, it will be approved by K & L'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 dollar amount involved. These fees are typically in the range of 5% on a
$1,000,000 transaction ratably down to 1% in a $4,000,000 transaction.
As part of any transaction, the acquired company may require that Mr. Hodges or
other shareholders of K & L sell all or a portion of their shares to the
acquired company, or to the principals of the acquired company. The sales price
of these shares may be lower than the anticipated market price of K & L's common
stock at that time. K & L shareholders will not be provided the opportunity to
approve or consent to such sale.
Mr. Hodges may actively negotiate for the purchase of his common stock as a
condition to or in connection with a proposed merger or acquisition transaction.
Any terms of a sale of Mr. Hodges' shares may not be afforded to other
shareholders of K & L. The opportunity to sell all or a portion of his shares in
connection with an acquisition may influence Mr. Hodges' decision to enter into
a specific transaction. However, Mr. Hodges believes that since the anticipated
sales price will potentially be less than market value, the potential of a stock
sale will be a material factor in any decision to enter a specific transaction.
This description of potential sales of Mr. Hodges' stock is not based upon any
corporate bylaw, shareholder or board resolution, or contract or agreement. No
other payments of cash or property are expected to be received by Mr. Hodges in
connection with any acquisition.
In implementing a structure for a particular business acquisition, K & L may
become a party to a merger, consolidation, reorganization, joint venture,
franchise or licensing agreement with the target corporation. K & L may also
purchase stock or assets of the existing business. On the consummation of a
transaction, it is likely that the present management and shareholders of K & L
will not be in control of K & L. Mr. Hodges may, as part of the terms of the
acquisition transaction, resign and be replaced by new officers and directors
without a vote of K & L's shareholders. Except as may be required by state or
federal securities law applicable to the particular form of transfer, K & L does
not intend to provide K & L's shareholders with any complete disclosure
documents, including a proxy statement and/or audited financial statements,
concerning an acquisition or merger candidate and its business prior to the
consummation of any acquisition or merger transaction.
A potential target might insist that K & L issue the target shares of K & L's
common stock as part of the business combination. We believe that any stock that
K & L might issue in any reorganization would be issued in reliance on
exemptions from registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of this transaction, K &
L may agree to register the shares either at the time the transaction is
consummated, under certain conditions or at specified time thereafter. The
issuance of substantial additional shares of stock and their potential sale into
any trading market in K & L's common stock may have a dilutive and depressive
effect on such trading market.
While the actual terms of a transaction to which K & L may be a party cannot be
predicted, we expect that the parties to the business combination will want to
avoid the creation of a taxable event and 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. In order to obtain tax-free treatment, 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 this event, the shareholders of K & L,
including past and current investors, 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.
K & L will not have sufficient funds (unless it is able to raise funds in a
private placement) to undertake any significant development, marketing and
manufacturing of any products which it may acquire. K & L does not intend to
raise any funds, via private placement or otherwise, prior to the effectiveness
of a merger or acquisition. Upon the merger or acquisition, K & L intends to
obtain funds in one or more private placements to finance the operation of the
acquired business. Persons purchasing securities in these placements and other
shareholders may not have the opportunity to participate in the decision
relating to any acquisition. K & L's proposed business is sometimes referred to
as a blank check because any investors will entrust their investment to K & L's
management before they have a chance to analyze any ultimate use to which their
money may be put. Accordingly, K & L would probably be required to give up a
substantial portion of its interest in any acquired product. We cannot assure
you that K & L will be able either to obtain additional financing or interest
third parties in providing funding for the further development, marketing and
manufacturing of any products acquired.
We believe that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial time, attention and costs for
accountants, attorneys and others. If K & L and/or the target business decide
not to participate in a specific business opportunity, the costs incurred in the
related investigation would not be recoverable.
Liquidity And Capital Resources
K & L has never previously undertaken an offering of its common stock. Mr.
Hodges has contributed all current expenses of K & L. K & L has no assets, no
liquidity and no capital resources.
BUSINESS
K & L
Since its formation on December 31, 1997, K & L has not engaged in any
operations other than organizational matters. It was formed specifically to be a
"blank check" or "clean public shell" corporation, for the purpose of either
merging with or acquiring an operating company with operating history and
assets. K & L is a "clean public shell" because it has not commenced operational
activities, and has no debt liabilities. K & L has not been involved in any
litigation nor has it had any prior regulatory problems or business failures. We
believe that a strong attraction of K & L as a merger partner or acquisition
vehicle will be its status as a reporting public company without any history of
prior business failures, litigation or prior regulatory problems.
Mr. Hodges was not the original incorporator of K & L. Mr. Hodges retained the
services of Laughlin & Associates to incorporate or provide already incorporated
Nevada and Wyoming companies. Subsequent to incorporation, the original
incorporator resigned as director and Mr. Hodges was appointed as sole officer
and director of K & L. Mr. Hodges continues to be the sole officer and director
of K & L and majority shareholder.
As the sole director, Mr. Hodges has commenced implementation of K & L's
principal business purpose, which is to seek merger or acquisition candidates. K
& L intends to seek to acquire assets or shares of an entity actively engaged in
business which generates revenues, in exchange for its securities. K & L has not
selected any company as an acquisition or merger candidate and does not intend
to limit itself to any particular field or industry, but does, in its sole
discretion, retain the right to do so. K & L's plans are in the conceptual stage
only. There is no relationship between the particular name of K & L and K & L's
intended business plan. If successful in completing a merger or acquisition, K &
L expects that it would change its name to reflect the marketing goals of the
business combination.
Properties
K & L has a working agreement with one of its shareholders for use of office
space, telephones and secretarial services supplied free of charge to K & L. K &
L has no property.
Competition
K & L is an insignificant participant which competes 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 personnel
resources, technical expertise and experience than K & L in this field. In view
of K & L's limited financial resources and management availability, K & L
continues to be at a significant competitive disadvantage.
Regulation And Taxation
K & L intends to structure a merger or acquisition in such a manner as to
minimize federal and state tax consequences to K & L and to any target company.
Patents
K & L owns no patents and no Internet domain names.
Employees
K & L has no full-time or part-time employees. Mr. Hodges, the sole officer and
director of K & L, has agreed to allocate a nominal portion of his time to the
activities of K & L without compensation.
Legal Proceedings
K & L is not subject to any pending litigation, legal proceedings or claims.
<PAGE>
MANAGEMENT
Executive Officers, Key Employees And Directors
The members of the Board of Directors of K & L serve until the next annual
meeting of shareholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors.
Currently, there is only one executive officer, key employee and director of
K & L:
Name Age Position
Daniel L. Hodges 34 President/Secretary/Director
DANIEL L. HODGES. Daniel L. Hodges has been the sole Director, President, Chief
Financial Officer and Secretary of K & L since shortly after its formation. Mr.
Hodges has been president and director of Solomon Consulting Corp. which
specializes in corporate and securities consulting since 1995. He has owned and
operated an industrial manufacturing company, "APRI, Inc." since 1998. APRI,
Inc. (which stands for Architectural PRoducts Incorporated) is a company in the
business of manufacturing concrete precast products such as pillars, balastrade
assemblies, wainscot, benches, etc. APRI ceased operations in 1999 and is in the
process of selling the casting and molding assets for the sum of $150,000 to a
third party named Cornerstone Precast, LLC. Mr. Hodges has no affiliation with
Cornerstone Precast, LLC. APRI, Inc. had gross revenues of $383,000 in 1998 and
estimated gross revenues of $140,000 in 1999. APRI, Inc. leased premises in
Tucson, Arizona of 8,000 square feet of industrial warehouse space for its
operations. This lease terminated in 1999. APRI never had more than eight
employees at any one time. Mr. Hodges is currently on the board of directors of
two charitable organizations as well as a number of blank check companies, as we
indicate on the chart below. Mr. Hodges received his B.S. from Thomas A. Edison
State College in Trenton, New Jersey. He is also a graduate of the U.S. Air
Force Undergraduate Pilot Training program and is currently the rank of Captain
as an officer in the Air National Guard.
The following chart summarizes certain information concerning the blank check
companies with which Mr. Hodges is or has been a director and which have filed
or intend to file a registration statement with the SEC. The term "n/a"
indicates that the company referenced has not entered into an agreement for a
business combination or merger.
<TABLE>
<CAPTION>
Company Name Inc. Form10SB SEC File No. Merger Info-
State File Date If Applic.
<S> <C> <C> <C> <C>
A Better Way Financial Corporation Wyoming 01/24/2000 0-29061 n/a
Amazing Investments, Inc. Wyoming 12/23/1999 0-28533 n/a
American Frontiers Marketing Company Wyoming 01/26/2000 0-29131 n/a
Arcadia Investments, Inc. Wyoming 12/17/1999 0-28535 n/a
Blackjack Financial, Inc. Wyoming 12/17/1999 0-28531 n/a
Boulder Creek Financial, Inc. Wyoming 12/23/1999 0-28623 n/a
Business to Business, Inc. Wyoming 12/17/1999 0-28533 n/a
Caprock Canyon Investments, Inc Wyoming 12/27/1999 0-28647 n/a
Cedar Grove Marketing, Inc. Wyoming 12/22/2000 0-28615 n/a
Cherokee Investments, Inc. Wyoming 01/05/2000 0-28777 n/a
Coyote Canyon Corporation Wyoming 01/26/2000 0-29133 n/a
Easy Living Investments, Inc. Wyoming 01/26/2000 0-29135 n/a
Equality Investments, Inc. Wyoming 01/26/2000 0-29137 n/a
Essential Solutions, Inc. Wyoming 01/26/2000 0-29139 n/a
Fantastic Financial Corporation Wyoming 01/24/2000 0-29063 n/a
Feather Valley Financial, Inc. Wyoming 12/27/1999 0-28649 n/a
Freedom Financial Corporation Wyoming 12/27/1999 0-28651 n/a
Granite Cliffs Incorporated Wyoming 12/27/1999 0-28653 n/a
Harvest Valley Ventures, Inc. Wyoming 12/22/1999 0-28617 n/a
Magical Marketing, Inc. Wyoming 12/22/1999 0-28611 n/a
Monumental Marketing, Inc. Wyoming 01/05/2000 0-28769 n/a
Neighborhood Investments,Ltd. Wyoming 12/27/1999 0-28655 n/a
Preferred Investments, Inc. Wyoming 01/26/2000 0-29141 n/a
Private Access, Inc. Wyoming 01/26/2000 0-29143 n/a
Red Butte Financial, Inc. Wyoming 01/26/2000 0-29151 n/a
Spring Valley Management Corporation Wyoming 01/26/2000 0-29145 n/a
Stone Field Management Company Wyoming 01/26/2000 0-29147 n/a
Stonewall Financial, Ltd. Wyoming 12/22/1999 0-28613 n/a
Sweetwater Investing, Inc. Wyoming 01/04/2000 0-28751 n/a
Unimann, Inc. Wyoming 12/23/1999 0-28625 n/a
Valuable Ventures, Inc. Wyoming 12/27/1999 0-28673 n/a
Walnut Valley Ventures, Inc. Wyoming 01/26/2000 0-29153 n/a
Western Financial Corporation Wyoming 01/26/2000 0-29149 n/a
White Horse Resources, Inc. Wyoming 01/24/2000 0-29065 n/a
White Oak Corporation Wyoming 12/27/1999 0-28671 n/a
Achievement Investments Nevada 02/16/2000 0-29535 n/a
American Machine, Inc. Nevada 02/11/2000 0-29465 n/a
Buccaneer Marketing & Investments Nevada 02/11/2000 0-29467 n/a
Conservative West, Inc. Nevada 02/11/2000 0-29469 n/a
Deerwood, Inc. Nevada 02/11/2000 0-29471 Withdrawal in Process(1)
Essential Laser Concepts Ltd. Nevada 02/16/2000 0-29533 n/a
Everyday Assembly Productions, Inc. Nevada 02/16/2000 0-29537 n/a
Forgotten Investments Company, Inc. Nevada 02/16/2000 0-29539 n/a
Green Clover Luck Corporation Nevada 02/16/2000 0-29541 n/a
Green Oaks Concepts, Ltd. Nevada 02/16/2000 0-29543 n/a
In Full Affect, Inc. Nevada 02/16/2000 0-29545 n/a
K.B. Far Incorporation Nevada 02/16/2000 0-29547 n/a
Knight Investment Ltd. Nevada 02/16/2000 0-29549 n/a
Market Integrity, Inc. Nevada 02/16/2000 0-29569 n/a
Nascent Technology, Inc. Nevada 02/16/2000 0-29551 n/a
Obligation Futures, Inc. Nevada 02/16/2000 0-29553 n/a
Par 3 Services, Inc. Nevada 02/16/2000 0-29555 n/a
Passover Management International, Inc. Nevada 02/16/2000 0-29571 n/a
Profits Emporium, Inc. Nevada 02/16/2000 0-29557 n/a
Ring of Fire Marketing, Ltd. Nevada 02/16/2000 0-29559 n/a
Seminar Strategies & Marketing, Inc. Nevada 02/16/2000 0-29561 n/a
Silver Rose Development, Inc. Nevada 02/23/2000 0-29659 n/a
Social Engagements, Inc. Nevada 02/16/2000 0-29563 n/a
Superior Global Services, Inc. Nevada n/a n/a n/a
Triumphant Endeavors, Inc. Nevada 02/22/2000 0-29629 n/a
Alph-Net Consulting Group, Inc. Nevada n/a n/a n/a
Ambercom Incorporated Nevada n/a n/a n/a
Arthur Morris, Inc. Nevada n/a n/a n/a
Big Surf, Inc Nevada 01/12/2000 0-28857 n/a
Casterbridge Management, Inc. Nevada 01/26/2000 0-29157 n/a
Cerritos Holdings Nevada 10/20/1999 0-27733 See details below (2)
Cirrus Development Corp. Nevada 01/14/2000 0-28899 n/a
Clearwater Communications, Corp. Nevada 02/02/2000 0-29289 n/a
Flozone Marketing Co., Inc, Nevada n/a n/a n/a
G.E. Pension Capital Management Corp Nevada n/a n/a n/a
GENETI Corp. Nevada 01/14/2000 0-28901 n/a
Glass Dolphin, Inc. Nevada 01/12/2000 0-28851 n/a
H&L Investments Nevada 10/20/1999 0-27735 See details below (3)
HJS & BDS, Inc. Nevada n/a n/a n/a
Interlock Services Nevada 11/08/1999 0-27983 See details below (4)
International Lottery & Gaming, Inc. Nevada 01/25/2000 0-29119 n/a
K&L Electronics Photo and Supply, Co. Nevada n/a n/a n/a
Klamath Falls Corp. Nevada n/a n/a n/a
Laredo Investments, Inc. Nevada 11/05/1999 0-27959 See details below (5)
M.H. Trucking, Inc. Nevada n/a n/a n/a
Models, Inc. Nevada 01/12/2000 0-28855 n/a
Morenci Corp. Nevada 10/20/1999 0-27737 See details below (6)
Netsite Media, Inc. Nevada n/a n/a n/a
Nova Masonry, Inc. Nevada n/a n/a n/a
Pacific Administrative Services, Inc. Nevada 01/12/2000 0-28849 n/a
Peppercorn Industrial Corporation Nevada 01/26/2000 0-29155 n/a
Phantom Consulting Corp. Nevada 01/26/2000 0-29159 n/a
Providence Holdings, Inc. Nevada n/a n/a n/a
PSM Corp. Nevada 10/20/1999 0-27739 See details below (7)
RBO Holdings Inc. Nevada 01/12/2000 0-28859 n/a
RK Johnson Ltd. Nevada 01/12/2000 0-28853 n/a
Rome in a Day, Inc. Nevada n/a n/a n/a
Solco International, Inc. Nevada 12/02/1999 0-28337 n/a
Tridex Investing Inc. Nevada 01/14/2000 0-28905 n/a
Troiler USA, Inc. Nevada 01/25/2000 0-29117 n/a
Two Sisters Enterprises, Inc. Nevada n/a n/a n/a
Visionary Media, Inc. Nevada n/a n/a n/a
Zenger, Inc. Nevada n/a n/a n/a
Horse Tooth Ventures, Inc. Wyoming n/a n/a n/a
Owl Canyon Ventures, Inc. Wyoming n/a n/a n/a
Table Mountain Resources, Inc. Wyoming n/a n/a n/a
Snake River Resourses, Inc. Wyoming n/a n/a n/a
High peak Ventures, inc. Wyoming n/a n/a n/a
Grassy Pond Properties, Inc. Wyoming n/a n/a n/a
Expert Investing, Inc. Wyoming n/a n/a n/a
Chinook Winds, Inc. Wyoming n/a n/a n/a
Diamond Opportunities, Inc. Wyoming n/a n/a n/a
Crystal River Resources Wyoming n/a n/a n/a
Platte Holding Company Wyoming n/a n/a n/a
Sharp Spur Financial Corporation Wyoming n/a n/a n/a
Blue Mountains, Inc. Wyoming n/a n/a n/a
Shell Canyon Ventures Wyoming n/a n/a n/a
Sunnyside Investments, Inc. Wyoming n/a n/a n/a
Crow Creek Financial Services, Inc. Wyoming n/a n/a n/a
Ponderosa Properties, Inc. Wyoming n/a n/a n/a
Action Investments, Inc. Wyoming n/a n/a n/a
Medicine Bow Investments, Inc. Wyoming n/a n/a n/a
Lonesome Pine Investments, Inc. Wyoming n/a n/a n/a
Tribeworks, Inc. (fka Pan World Corp) Nevada Non-Reporting n/a See details below (8)
Kestrel Equity Corporation Arizona 12/17/1999 0-28553 See details below (9)
Avaterra.com, Inc. (fka Pockets Hldng) Arizona Non-Reporting n/a See details below (10)
Netmeasure Techn. (fka Powertech, Inc) Nevada 10/15/1999 0-27675 See details below (11)
Landstar, Inc. Nevada 01/04/2000 1-15597 See details below (12)
Hyaton Corporation Nevada 10/28/1999 0-27853 See details below (13)
Phileo Management Company Nevada Non-Reporting n/a See details below (14)
ImuMed Int'l (fka Viper Resources, Inc. Nevada Non-Reporting n/a See details below (15)
Upland Properties, Inc. Nevada Non-Reporting n/a See details below (16)
Solomon Alliance Group, Inc. Nevada 03/16/2000 0-29973 See details below (17)
Pioneer Spirit 2000, Inc. Nevada Non-Reporting n/a See details below (18)
Merendon International, Inc. Nevada Non-Reporting n/a See details below (19)
</TABLE>
(1) Deerwood, Inc. The filing with the SEC erroneously included incorrect data.
The filing will be withdrawn and resubmitted.
(2) Cerritos Holdings, Inc. Mr. Hodges relinquished control of the company
through a resignation of his positions and sale of the control block of issued
and outstanding stock held by him (800,000 shares) back to the treasury of the
company for cancellation. He received an amount of $150,000 in cash for the
combination of stock sold and fees owed to him by the company. Subsequent to Mr.
Hodges resignation, the company began operations in the entertainment industry
in Vancouver, B.C. to provide studio, production and set services for TV and
major motion pictures. Mr. Hodges has no affiliation or ties to the current
company, nor has he, since the date of his resignation on January 8, 2000. The
company trades under the symbol CERH.
(3) H&L Investments, Inc. Mr. Hodges relinquished control of the company
through a resignation of his positions and sale of the control block of issued
and outstanding stock held by him (800,000 shares) back to the new board
chairman for cancellation. He received an amount of $100,000 in cash for the
combination of stock sold and fees owed to him by the company. Subsequent to Mr.
Hodges resignation, the company began operations in the Internet industry by
merging with Asia4Sale.com, Inc. and changed its name. Mr. Hodges has no
affiliation or ties to the current company, nor has he, since the date of his
resignation on December 20, 1999. The company now trades under the symbol AFSI.
(4) Interlock Services, Inc. Mr. Hodges relinquished control of the company
through a resignation of his positions and sale of the control block of issued
and outstanding stock held by him (800,000 shares) back to the treasury of the
company for cancellation. He received an amount of $110,000 in cash for the
combination of stock sold and fees owed to him by the company. Subsequent to Mr.
Hodges resignation, the company began operations in the Internet industry by
merging with 2DoBusiness.com, Inc. and changed its name. Mr. Hodges has no
affiliation or ties to the current company, nor has he, since the date of his
resignation on December 21, 1999. The company now trades under the symbol DOBZ.
(5) Laredo Investments, Inc. Mr. Hodges relinquished control of the company
through a resignation of his positions and sale of the control block of issued
and outstanding stock held by him (800,000 shares) back to the treasury of the
company for cancellation. He received an amount of $100,000 in cash for the
combination of stock sold and fees owed to him by the company. Subsequent to Mr.
Hodges' resignation, the company announced on March 3, 2000 that it intends to
acquire 100% of the stock of GFR Nutritionals, Ltd. which is engaged in the
manufacture and sale of health industry products. Mr. Hodges has no affiliation
or ties to the current company, nor has he, since the date of his resignation on
January 5, 2000. The company trades under the symbol LRDI.
(6) Morenci Corp. Mr. Hodges relinquished control of the company through a
resignation of his positions and sale of the control block of issued and
outstanding stock held by him (800,000 shares) back to the treasury of the
company for cancellation. He received an amount of $150,000 in cash for the
combination of stock sold and fees owed to him by the company. Subsequent to Mr.
Hodges resignation, the company began operations in the Internet industry by
merging with esportsbike.com, Inc. Mr. Hodges has no affiliation or ties to the
current company, nor has he, since the date of his resignation on January 8,
2000. The company trades under the symbol MORN.
(7) PSM Corp. Mr. Hodges relinquished control of the company through a
resignation of his positions and sale of the control block of issued and
outstanding stock held by him (800,000 shares) back to the treasury of the
company for cancellation. He received an amount of $100,000 in cash for the
combination of stock sold and fees owed to him by the company. Subsequent to Mr.
Hodges resignation, the company began operations in the service industry by
merging with Mentor on Call, Inc. Mr. Hodges has no affiliation or ties to the
current company, nor has he, since the date of his resignation on December 21,
1999. The company trades under the symbol MNOC.
(8) Tribeworks, Inc. (fka Pan World Corp.) Mr. Hodges relinquished control of
the company through a resignation of his positions and sale of the control block
of issued and outstanding stock held by him (950,000 shares) back to the
treasury of the company for cancellation. He received an amount of $60,000 in
cash for the combination of stock sold and fees owed to him by the company.
Subsequent to Mr. Hodges resignation, the company began operations in the
entertainment industry by merging with Tribeworks, Inc. and changed its name.
Mr. Hodges has no affiliation or ties to the current company, nor has he, since
the date of his resignation March 23, 1999. The company trades under the symbol
TRWX.
(9) Kestrel Equity Corp. Mr. Hodges relinquished control of the company through
a resignation of his positions and sale of the control block of issued and
outstanding stock held by him (950,000 shares) back to the treasury of the
company for cancellation. He received an amount of $75,000 in cash for the
combination of the stock sold and fees owed to him by the company. Subsequent to
Mr. Hodges resignation, the company began operations in the entertainment
industry by merging with StereoVision Entertainment, Inc. and changed its name.
Mr. Hodges has no affiliation or ties to the current company, nor has he, since
the date of his resignation on September 24, 1999. The company trades under the
symbol KSEQ.
(10) Avaterra.com, Inc. (fka Pockets Holding Corp.) Mr. Hodges relinquished
control of the company when it was known as Pockets Holding Corp., through a
resignation of his positions and sale of the control block of issued and
outstanding stock held by him (950,000 shares) back to the treasury of the
company for cancellation. He received an amount of $50,000 in cash for the
combination of the stock sold and fees owed to him by the company. Subsequent to
Mr. Hodges resignation, the company began operations in the entertainment
industry by merging with Avaterra.com, Inc. and changed its name. Mr. Hodges has
no affiliation or ties to the current company, nor has he, since the date of his
resignation on February 15, 1999. The company trades under the symbol AVAR.
(11) NetMeasure Technology, Inc. (fka Powertech, Inc. NV) Mr. Hodges resigned
his positions with the company on December 9, 1998. Concurrent with his
resignation, Mr. Hodges transferred his stock to the new management of the
company. He received no compensation for the stock or for the services owed to
him by the company. Subsequent to Mr. Hodges resignation, the company began
operations in the Internet security industry by merging with NetSentry, Inc. Mr.
Hodges has no affiliation or ties to the current company, nor has he, since the
date of his resignation. The company trades under the symbol PTCD.
(12) Landstar, Inc. Mr. Hodges relinquished control of the company through a
resignation of his positions and sale of the control block of issued and
outstanding stock held by him (500,000 shares) back to the treasury of the
company for cancellation. He received an amount of $80,000 in cash for the
combination of the stock sold and fees owed to him by the company. Mr. Hodges
has no affiliation or ties to the current company, nor has he, since the date of
his resignation on November 15, 1998. The company trades under the symbol LDSR.
(13) Hyaton Organics, Inc. (fka Hyaton Company, Inc.) Mr. Hodges relinquished
control of the company through a resignation of his positions and sale of the
control block of issued and outstanding stock held by him (500,000 shares) back
to the treasury of the company for cancellation. He received an amount of
$60,000 in cash for the combination of the stock sold and fees owed to him by
the company. Mr. Hodges has no affiliation or ties to the current company, nor
has he, since the date of his resignation on October 27, 1998. The company
trades under the symbol HYTN.
(14) Phileo Management Company, Inc. Mr. Hodges relinquished control of the
company through a resignation of his positions and sale of the control block of
issued and outstanding stock held by him (500,000 shares) back to the treasury
of the company for cancellation. He received an amount of $60,000 in cash for
the combination of the stock sold and fees owed to him by the company. Mr.
Hodges has no affiliation or ties to the current company, nor has he, since the
date of his resignation on January 18, 1999. The company trades under the symbol
HYTN.
(15) ImuMed International, Inc. (fka Viper Resources, Inc.) Mr. Hodges
relinquished control of the company through a resignation of his positions and
sale of the stock held by him (500,000 shares) back to the treasury of the
company for cancellation. He received an amount of $75,000 in cash for the
combination of the stock sold and fees owed to him by the company. Mr. Hodges
has no affiliation or ties to the current company, nor has he, since the date of
his resignation on December 15, 1998. The company trades under the symbol IMED.
(16) Upland Properties, Inc. Mr. Hodges resigned his positions with the company
and sold the stock held by him (250,000 shares) back to the treasury of the
company for cancellation. He received an amount of $50,000 in cash for the
combination of the stock sold and fees owed to him by the company. Mr. Hodges
has no affiliation or ties to the current company, nor has he, since the date of
his resignation on September 5, 1998.
(17) Solomon Alliance Group, Inc. Mr. Hodges relinquished control of the company
through a resignation of his positions and sale of the stock held by him
(500,000 shares) back to the treasury of the company for cancellation. He
received an amount of $85,000 in cash for the combination of the stock sold and
fees owed to him by the company. Mr. Hodges has no affiliation or ties to the
current company, nor has he, since the date of his resignation on November 12,
1998. The company trades under the symbol SAGE.
(18) Pioneer Spirit 2000, Inc. Mr. Hodges relinquished control of the company
through a resignation of his positions on Feb. 20, 2000 and the sale of the
stock held by him (950,000 shares) back to the treasury of the company for
cancellation. He received an amount of $110,000 in cash for the stock sold and
fees owed to him by the company. Mr. Hodges has no affiliation or ties to the
current company, nor has he, since the date of his resignation. The company is
cleared to trade under the symbol PSPR.
(19) Merendon International, Inc. Mr. Hodges relinquished control of the company
through a resignation of his positions and sale of the stock held by him
(1,800,000 shares) back to the treasury of the company for cancellation. He
received an amount of $100,000 in cash for the stock sold and fees owed to him
by the company. Mr. Hodges has no affiliation or ties to the current company,
nor has he, since the date of his resignation on January 25, 2000. The company
is cleared to trade under the symbol MERI.
Executive Compensation
No employment compensation is paid or anticipated to be paid by K & L. K & L has
no understandings or agreements, preliminary or otherwise, in regard to
executive compensation. Its sole director and officer, Mr. Hodges, does not
receive any compensation for his duties. On January 4, 1998, K & L issued 800
shares (800,000 shares after giving effect to a forward stock-split) of common
stock as compensation to Mr. Hodges in connection with services rendered and
fees paid by him at the time of the formation of K & L. Mr. Hodges has not
received any other compensation for his services rendered to K & L and is not
accruing compensation. As of the date of this prospectus, K & L has no funds
available to pay officers and directors.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by K & L for the benefit of any
employees.
Employment Agreements
K & L has no employment agreements with any persons.
Principal Shareholders
The following table presents certain information regarding beneficial ownership
of K & L's Common Stock as of January 14, 2000, by (i) each person known by K &
L to be the beneficial owner of more than 5% of the outstanding shares of Common
Stock, (ii) each director and executive officer of K & L, and (iii) all
directors and executive officers as a group. Unless otherwise indicated, each
person in the table has sole voting and investment power as to the shares shown.
Name and Address Amount of Beneficial
Title of Class of Beneficial Owner Owner Percent of Class
Common Daniel L. Hodges 800,000 shares 80%
President and Director
2102 N. Donner Avendue
Tuscon, AZ 85749
CERTAIN TRANSACTIONS
On January 4, 1998, K & L issued a total of 1,000 shares of its common stock in
the following manner. In consideration of Mr. Hodges contributing $450 toward
the organizational expenses of K & L and for $350 in services rendered, K & L
issued Mr. Hodges 800 shares of its common stock. See "Selling Shareholders." On
October 20, 1999, the outstanding shares were forward split 1,000 to 1 and the
par value was changed to $.001, resulting in a total of 1,000,000 shares
outstanding, 800,000 of which are owned by Mr. Hodges.
Under Rule 405 promulgated under the Securities Act of 1933, Mr. Hodges may be
deemed to be a promoter of K & L. No other persons are known to management that
would be deemed to be promoters.
DESCRIPTION OF SECURITIES
Each shareholder of common stock, either in person or by proxy, may cast one
vote per share of common stock held on all matters to be voted on. The presence,
in person or by proxy, of the holders of a majority of the total number of
shares entitled to vote constitutes a quorum for the transaction of business.
Assuming that a quorum is present, the affirmative vote of a majority of the
shares of K & L present in person or represented by proxy is required. K & L's
articles of incorporation do not provide for cumulative voting or preemptive
rights.
There are no outstanding options or warrants of any kind for K & L's common
stock.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under the Nevada Business Associations Act (the "Business Associations Act")
Title 7, Chapter 78, the articles of incorporation may contain a provision
eliminating or limiting the personal liability of a director or officer to the
corporation or its shareholders for damages for breach of fiduciary duty. If
this type of limiting provision is included in articles of incorporation, such a
provision cannot eliminate or limit the liability of a director or officer for
(a) acts or omissions that involve intentional misconduct, fraud or a knowing
violation of law or (b) the payment of an unlawful distribution to shareholders.
K & L's Articles of Incorporation contain the provision that no director or
officer of K & L shall be personally liable to K & L or any of its shareholders
for damages for breach of fiduciary duty as a director or officer involving any
act or omission of any such director or officer; provided, however, that the
foregoing provision shall not eliminate or limit the liability of a director or
officer (i) for acts or omissions which involve intentional misconduct, fraud or
a knowing violation of law, or (ii) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes.
K & L's By-Laws provide that K & L shall indemnify any and all of its directors
and officers, and its former directors and officers, or any person who may have
served at K & L's request as a director or officer of another corporation in
which it owns shares of capital stock or of which it is a creditor, against
expenses actually and necessarily incurred by them in connection with the
defense of any action, suit or proceeding in which they, or any of them, are
made parties, or a party, by reason of being or having been director(s) or
officer(s) except, in relation to matters as to which the director or officer or
former director or officer or person shall be adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in the performance of duty.
Such indemnification shall not be deemed exclusive of any other rights to which
those indemnified may be entitled, under By-Law, agreement, vote of shareholders
or otherwise.
TRANSFER AGENT, WARRANT AGENT AND REGISTRAR
The transfer agent, warrant agent and registrar for the Common Stock is Holladay
Stock Transfer, 2939 67th Place, Scottsdale, AZ 85251.
SHARES ELIGIBLE FOR FUTURE SALE
Upon the effectiveness of this registration statement, K & L will have 1,000,000
shares of common stock outstanding and registered for resale by the Selling
Shareholders in accordance with the Securities Act of 1933.
Prior to this offering, no public trading market has existed for K & L's shares
of common stock. The sale, or availability for sale, of substantial amounts of
common stock in the public trading market could adversely affect the market
prices for K & L's common stock.
PLAN OF DISTRIBUTION
To our knowledge, none of the Selling Shareholders has made any arrangement with
any brokerage firm for the sale of the shares. We have been advised by the
Selling Shareholders that they presently intend to dispose of the shares through
broker-dealers in ordinary brokerage transactions at market prices prevailing at
the time of the sale.
Any broker-dealers or agents who act in connection with the sale of the shares
may be deemed to be underwriters. Any discounts, commissions or concessions
received by any broker-dealers or agents may be deemed to be underwriting
discounts and commissions under the Securities Act.
K & L has not registered its shares for resale under the securities or "blue
sky" laws of any state and has no plans to register or qualify its shares in any
state. Current shareholders and persons who desire to purchase the shares in any
trading market that may 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 trading market. Under federal law, non-issuer trading or resale of K &
L's common stock may be exempt from most state registration or qualification
requirements. However, some states may continue to restrict the ability to
register or qualify K & L's common stock for both initial sale and secondary
trading by regulations prohibiting or imposing limitations on the sale of
securities of blank check issuers. See "RISK FACTORS - THERE ARE STATE
REGULATIONS WHICH MIGHT AFFECT THE TRANSFERABILITY OF K & L's SHARES."
K & L's selling efforts, and any secondary trading market which may develop, may
only be conducted in those jurisdictions where an applicable exemption is
available or where the shares have been registered. K & L has no current plan to
register its shares for offer and sale within any state. K & L does not
anticipate that a secondary trading market for the shares will develop in any
state until after the consummation of a merger or acquisition, if at all.
However, investors should be aware that state law limitations might affect the
transferability or the ability to resell the shares. K & L has not taken, and
does not contemplate taking, any steps to ensure compliance with state
securities laws.
K & L does not have lock-up agreements with its shareholders affirming that they
will not sell their respective shares until such time as K & L has successfully
consummated a merger or acquisition and K & L is no longer classified as a blank
check company.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for K & L by
Robert H. Domico, Esquire, Attorney-at-Law, 3200 Baffetto Court, Henderson,
Nevada 89052.
EXPERTS
The Financial Statements and schedules of K & L as of December 31, 1999 and 1998
included in this prospectus and elsewhere in the Registration Statement have
been audited by Robinson, Hill & Co., independent public accountants for K & L,
as set forth in its report herein, and are included in reliance upon such
report, given upon the authority of such firm as experts in accounting and
auditing.
ADDITIONAL INFORMATION
K & L has filed with the Securities and Exchange Commission ("SEC") a
registration statement on Form SB-2 under Securities Act of 1933, as amended,
with respect to the shares. This prospectus, which forms a part of the
registration statement, does not contain all of the information set forth in the
registration statement as permitted by applicable SEC rules and regulations.
Statements in this prospectus about any contract, agreement or other document
are not necessarily complete. With respect to each such contract, agreement, or
document filed as an exhibit to the registration statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement is qualified in its entirety by this reference.
The registration statement may be inspected without charge and copies may be
obtained at prescribed rates at the SEC's public reference facilities at
Judiciary Plaza, 450 Fifth Street NW, Room 1024, Washington, DC 20549, or on the
Internet at http://www.sec.gov.
K & L will furnish to its shareholders annual reports containing audited
financial statements reported on by independent public accountants for each
fiscal year and make available quarterly reports containing unaudited financial
information for the first three quarters of each fiscal year.
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
K & L ELECTRONICS PHOTO AND SUPPLY CO.
Independent Auditor's Report ................................................F-1
Balance Sheets
December 31, 1999 and 1998 .................................................F-2
Statements of Operations
For the Years Ended December 31, 1999 and 1998 .............................F-3
Statements of Changes in Stockholders' Equity
For the Years Ended December 31, 1999 and 1998 .............................F-4
Statements of Cash Flows
For the Years Ended December 31, 1999 and 1998 .............................F-5
Notes to Consolidated Financial Statements ..................................F-6
<PAGE>
INDEPENDENT AUDITOR'S REPORT
K & L Electronics Photo and Supply Co.
(A Development Stage Company)
We have audited the accompanying balance sheets of K & L Electronics Photo
and Supply Co. (a development stage company) as of December 31, 1999 and 1998,
and the related statements of operations and cash flows for the two years ended
December 31, 1999 and the statement of stockholder's equity from December 31,
1997 (inception) to December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our 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 financial statements referred to above present fairly,
in all material respects, the financial position of K & L Electronics Photo and
Supply Co. (a development stage company) as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the two years ended
December 31, 1999 in conformity with generally accepted accounting principles.
Respectfully submitted
/s/ ROBISON, HILL & CO.
Certified Public Accountants
Salt Lake City, Utah
January 4, 2000
F-1
<PAGE>
K & L ELECTRONICS PHOTO AND SUPPLY CO.
(A Development Stage Company)
BALANCE SHEETS
December 31,
1999 1998
Assets ...................................... $ - $ -
Liabilities - Accounts Payable .............. $ - $ 100
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 1,000,000 shares at December 31, 1,000 1,000
Paid-In Capital ......................... 250 -
Retained Deficit ........................ (1,100) (1,100)
Deficit Accumulated During the .......... (150) -
Total Stockholders' Equity ........... - (100)
Total Liabilities and
Stockholders' Equity ................ $ - $ -
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
K & L ELECTRONICS PHOTO AND SUPPLY CO.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the Cumulative
Year Ended Since October 20, 1999
December 31, Inception of
Development
1999 1998 Stage
Revenues: $ - $ - $ -
Expenses: 150 1,100 150
Net Loss $(150) $(1,100) $(150)
Basic & Diluted loss per share $ - $ -
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
K & L ELECTRONICS PHOTO AND SUPPLY CO.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
SINCE DECEMBER 31, 1997 (INCEPTION) TO DECEMBER 31, 1999
Deficit
Accumulated
Since
October 20,
1999
Inception of
Common Stock Paid-In Retained Development
Shares Par Value Capital Deficit Stage
Balance at December 31, 1997
(inception) - $ - $ - $ - $ -
January 4, 1998 Issuance of
Stock for Services and
payment of Accounts Payable 1,000 1,000 - - -
Net Loss - - - (1,100) -
Balance at December 31, 1998
As Originally Reported 1,000 1,000 - (1,100) -
Retroactive adjustment for
1,000 to 1 stock split
October 20, 1999 999,000 - - - -
Restated balance
January 1, 1999 1,000,000 1,000 - (1,100) -
Capital contributed by
Shareholder - - 250 - -
Net Loss - - - - (150)
Balance at
December 31, 1999 1,000,000 $1,000 $250 $(1,100) $(150)
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
K & L ELECTRONICS PHOTO AND SUPPLY CO.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
since October
20, 1999
For the years ended Inception of
December 31, Development
1999 1998 Stage
CASH FLOWS FROM
OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net Loss ........................................... $(150) $(1,100) $(150)
Issuance of Stock for Services & Expenses .......... - 1,000 -
Increase (Decrease) in Accounts Payable ............ (100) 100 (100)
Net Cash Used in operating activities ............ (250) -(250)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by
investing activities ............................. - - -
CASH FLOWS FROM FINANCING
ACTIVITIES:
Capital contributed by shareholder 250 - 250
Net Cash Provided by
Financing Activities 250 - 250
Net (Decrease) Increase in
Cash and Cash Equivalents - - -
Cash and Cash Equivalents
at Beginning of Period - - -
Cash and Cash Equivalents
at End of Period $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ - $ -
Franchise and income taxes $ 200 $ - $ 200
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: None
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
K & L ELECTRONICS PHOTO AND SUPPLY CO.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for K & L Electronics Photo and Supply
Co. is presented to assist in understanding the Company's financial statements.
The accounting policies conform to generally accepted accounting principles and
have been consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on
December 31, 1997. The Company ceased all operating activities during the period
from December 31, 1997 to October 20, 1999 and was considered dormant. Since
October 20, 1999, the Company is in the development stage, and has not commenced
planned principal operations.
Nature of Business
The Company has no products or services as of December 31, 1999. The
Company was organized as a vehicle to seek merger or acquisition candidates. The
Company intends to acquire interests in various business opportunities, which in
the opinion of management will provide a profit to the Company.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
F-6
<PAGE>
K & L ELECTRONICS PHOTO AND SUPPLY CO.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Loss per Share
The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
Per-Share
Income Shares Amount
(Numerator) (Denominator)
For the year ended December 31, 1999
Basic Loss per Share
Loss to common shareholders $(150) 1,000,000 $ -
For the year ended December 31, 1998
Basic Loss per Share
Loss to common shareholders $(1,100) 1,000,000 $ -
The effect of outstanding common stock equivalents would be anti-dilutive
for December 31, 1999 and 1998 and are thus not considered.
NOTE 2 - INCOME TAXES
As of December 31, 1999, the Company had a net operating loss carryforward
for income tax reporting purposes of approximately $1,000 that may be offset
against future taxable income through 2011. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount.
F-7
<PAGE>
K & L ELECTRONICS PHOTO AND SUPPLY CO.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(Continued)
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS
As of December 31, 1999 all activities of the Company have been conducted
by corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the company for the use of these
facilities and there are no commitments for future use of the facilities.
NOTE 5 - STOCK SPLIT
On October 20, 1999 the Board of Directors authorized 1,000 to 1 stock
split, changed the authorized number of shares to 100,000,000 shares and the par
value to $.001 for the Company's common stock. As a result of the split, 999,000
shares were issued. All references in the accompanying financial statements to
the number of common shares and per-share amounts for 1999 and 1998 have been
restated to reflect the stock split.
F-8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Nevada Business Associations Act (the "Business Associations Act")
Title 7, Chapter 78, the articles of incorporation may contain a provision
eliminating or limiting the personal liability of a director or officer to the
corporation or its stockholders for damages for breach of fiduciary duty. If
this type of limiting provision is included in articles of incorporation, such a
provision cannot eliminate or limit the liability of a director or officer for
(a) acts or omissions that involve intentional misconduct, fraud or a knowing
violation of law or (b) the payment of an unlawful distribution to stockholders.
The Company's Articles of Incorporation contain the provision that no Director
or Officer of the Company shall be personally liable to the Company or any of
its stockholders for damages for breach of fiduciary duty as a director or
officer involving any act or omission of any such director or officer; provided,
however, that the foregoing provision shall not eliminate or limit the liability
of a director or officer (i) for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law, or (ii) the payment of
dividends in violation of Section 78.300 of the Nevada Revised Statutes. The
Company's By-Laws provide that the Company shall indemnify any and all of its
Directors and Officers, and its former Directors and Officers, or any person who
may have served at the Company's request as a director or officer of another
corporation in which it owns shares of capital stock or of which it is a
creditor, against expenses actually and necessarily incurred by them in
connection with the defense of any action, suit or proceeding in which they, or
any of them, are made parties, or a party, by reason of being or having been
director(s) or officer(s) of the Company, or of such other corporation, except,
in relation to matters as to which any such Director or Officer or former
Director or Officer or person shall be adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in the performance of duty.
Such indemnification shall not be deemed exclusive of any other rights to which
those indemnified may be entitled, under By-Law, agreement, vote of shareholders
or otherwise.
ITEM 25. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION
The Registrant estimates that expenses in connection with the Offering described
in this Registration Statement (other than the underwriting discount and
commissions and reasonable expense allowance) will be as follows:
<PAGE>
SEC registration fee................................................... $ 100
Printing and engraving expenses........................................$ 2,000*
Accounting fees and expenses...........................................$ 1,000*
Legal fees and expenses (other than Blue Sky)..........................$15,000*
Blue sky fees and expenses (including legal and filing fees)...........$ 1,000*
Miscellaneous..........................................................$ 1,000*
Total..............................................................$20,100*
*Estimated Amounts.
All expenses of the registration of the shares will be borne by the Company.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following securities were issued by the Company within the past three years
and were not registered under the Securities Act.
In connection with organizing the Company, on January 4, 1998, 29 persons
(consisting of its officer and director, Mr. Hodges, and other individuals) were
issued a total of 1,000 shares of Common Stock, pursuant to the exemption from
registration contained within Section 4(2) of the Securities Act of 1933, to
company officers, directors, and individuals with a relationship to Company
officers and directors. On October 20, 1999, the outstanding shares were forward
split 1,000 to 1 and the par value was changed to $.001, resulting in a total of
1,000,000 shares outstanding.
ITEM 27. EXHIBITS
(a) The following exhibits are filed as part of this Registration Statement:
EXHIBIT
NUMBER DESCRIPTION
------- -----------------------------------------------------
3.1 Articles of Incorporation of the Company
3.2 Amendment to Articles of Incorporation of the Company
3.3 By-Laws
4.1 Form of Common Stock Certificate
*5.1 Opinion of Robert H. Domico, Esquire
*23.1 Consent of Robinson, Hill & Co.
*23.2 Consent of Robert H. Domico, Esquire
(included as part of Exhibit 5.1)
*27.1 Financial Data Schedule
* To be filed by amendment.
ITEM 28. UNDERTAKINGS
(a) The undersigned Company hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a post
effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
Registration Statement.
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, each post-effective
amendment shall be treated as a new registration statement of the securities
offered, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or a controlling person of the Company
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of competent
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the city of Tucson,
state of Arizona, on APRIL 7, 2000.
K & L ELECTRONICS PHOTO AND SUPPLY CO.
BY: /s/ DANIEL L. HODGES
Daniel L. Hodges,
President/Secretary/Director
In accordance with the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
SIGNATURE TITLE DATE
/s/ DANIEL L. HODGES President/ April 7, 2000
Daniel L. Hodges Secretary/Director
EXHIBIT 3.1
ARTICLES OF INCORPORATION
K & L ELECTRONICS PHOTO AND SUPPLY CO.
FIRST. The name of the corporation is:
K & L ELECTRONICS PHOTO AND SUPPLY CO.
SECOND. Its registered office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706 that this Corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada
THIRD. The objects for which this Corporation is formed are: To engage in
any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred upon
corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers, when not
inconsistent with the purposes and objects for which this corporation is
organized.
18102
(C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and when no
period is limited, perpetually, or until dissolved and its affairs wound up
according to law.
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal estate
and to mortgage or lease any such real and personal estate with its franchises.
The power to hold real and personal estate shall include the power to take the
same by devise or bequest in the State of Nevada, or in any other state,
territory or country.
(G) Shall have power to appoint such officers and agents as the affairs of
the corporation shall require, and to allow them suitable compensation.
(H) Shall have power to make By-Laws not inconsistent with the constitution
or laws of the United States, or of the State of Nevada, for the management,
regulation and government of its affairs and property, the transfer of its
stock, the transaction of its business, and the calling and holding of meetings
of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and alter the
same at pleasure. The use of a seal or stamp by the corporation on any corporate
documents is not necessary. The corporation may use a seal or stamp, if it
desires, but such use or nonuse shall not in any way affect the legality of the
document.
(K) Shall have power to borrow money and contract debts when necessary for
the transaction of its business, or for the exercise of its corporate rights,
privileges or franchises, or for any other lawful purpose of its incorporation;
to issue bonds, promissory notes, bills of exchange, debentures, and other
obligations and evidences of indebtedness, payable at a specified time or times,
or payable upon the happening of a specified event or events, whether secured by
mortgage, pledge or otherwise, or unsecured, for money borrowed, or in payment
for property purchased, or acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the capital stock of, or
any bonds, securities or evidences of the indebtedness created by, any other
corporation or corporations of the State of Nevada, or any other state or
government, and, while owners of such stock, bonds, securities or evidences of
indebtedness, to exercise all the rights, powers and privileges of ownership,
including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its own
capital stock, and use therefor its capital, capital surplus, surplus, or other
property or fund.
(N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State of
Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any foreign
countries.
(O) Shall have power to do all and everything necessary and proper for the
accomplishment of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the corporation, and, in general, to carry on any
lawful business necessary or incidental to the attainment of the objects of the
corporation, whether or not such business is similar in nature to the objects
set forth in the certificate or articles of incorporation of the corporation, or
any amendment thereof.
(P) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities, as may be allowed by
law.
FOURTH. That the total number of common stock authorized that may be issued
by the Corporation is TWENTY FIVE THOUSAND (25,000) shares of stock without
nominal par value and no other class of stock shall be authorized. Said shares
may be issued by the corporation from time to time for such considerations as
may be fixed by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as directors,
and the number of directors may from time to time be increased or decreased in
such manner as shall be provided by the By-Laws of this Corporation, providing
that the number of directors shall not be reduced to fewer than one (1).
The name and post office address of the first board of Directors shall be
one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
Brent Buscay 2533 North Carson Street
Carson City, Nevada 89706
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the debts
of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the
Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
Brent Buscay 2533 North Carson Street
Carson City, Nevada 89706
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this
corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make, alter
or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one (1)
or more committees, each committee to consist of one or more of the Directors of
the Corporation, which, to the extent provided in the resolution, or in the
By-Laws of the Corporation, shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the Corporation.
Such committee, or committees, shall have such name, or names, as may be stated
in the By-Laws of the Corporation, or as may be determined from time to time by
resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the Stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a Stockholders meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock issued
and outstanding, the Board of Directors shall have power and authority at any
meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions -as its board of Directors deems expedient and for the best
interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct, fraud or a knowing violation of
law, or (ii) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes. Any repeal or modification of this Article by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation for acts or omissions prior to such repeal or
modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed by statute, or by the Articles of Incorporation, and
all rights conferred upon Stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 31st day of December, 1997.
/s/ Brent Buscay
Brent Buscay
STATE OF NEVADA )
) SS:
CARSON CITY )
On this 31st day of December, 1997 in Carson City, Nevada, before me, the
undersigned, a Notary Public in and for Carson City, State of Nevada, personally
appeared:
Brent Buscay
Known to me to be the person whose name is subscribed to the foregoing document
and acknowledged to me that he executed the same.
/s/ H. D. Baughman
Notary Public
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the previously
named Corporation.
December 31, 1997 /s/ Brent Buscay
Date Vice President
EXHIBIT 3.2
CERTIFICATE AMENDING ARTICLES OF INCORPORATION
OF
K & L ELECTRONICS PHOTO AND SUPPLY CO.
The undersigned, being the President and Secretary K & L ELECTRONICS PHOTO
AND SUPPLY CO., a Nevada Corporation, hereby certify that by majority vote of
the Board of Directors and majority vote of the stockholders at a meeting held
on the 20th day of October, 1999, it was agreed by unanimous vote that this
CERTIFICATE AMENDING ARTICLES OF INCORPORATION be filed.
The undersigned further certify that the original Articles of Incorporation
of K & L ELECTRONICS PHOTO AND SUPPLY CO., WERE FILED WITH THE SECRETARY OF
State of Nevada on the 31 day of December, 1997, herein is amended to read as
follows:
ARTICLE FOURTH
That the total number of authorized shares be issued by the Corporation in
ONE HUNDRED MILLION (100,000,000) common stock with a par value of ONE TENTH OF
A CENT ($0.001), no other class of stock shall be authorized.
The undersigned hereby certify that they have on this 20th day of October, 1999,
executed this Certificate Amending the original Articles of Incorporation
heretofore filed with the Secretary of State of Nevada.
/s/ Daniel L. Hodges /s/ Daniel L. Hodges
President Secretary
EXHIBIT 3.3
BYLAWS
OF
K & L ELECTRONICS PHOTO AND SUPPLY, CO.
(A NEVADA CORPORATION)
ARTICLE I
MEETINGS OF SHAREHOLDERS
1. Shareholders' Meetings shall be held in the office of the corporation, or at
such other place or places as the Directors shall, from time to time, determine.
2. The annual meeting of the shareholders of this corporation shall be held once
each year beginning in 1998, or at such other time or place as the Board of
Directors shall appoint, at which time there shall be elected by the
shareholders of the corporation a Board of Directors for the ensuing year, and
the shareholders shall transact such other business as shall properly come
before them. If the day fixed for the annual meeting shall be a legal holiday
such meeting shall be held on the next succeeding business day.
3. A notice signed by any Officer of the corporation or by any person designated
by the Board of Directors, which sets forth the place of the annual meeting,
shall be personally delivered to each of the shareholders of record, or mailed
postage prepaid, at the address as appears on the stock book of the corporation,
or if no such address appears in the stock book of the corporation, to his last
known address, at least ten (10) days prior to the annual meeting. Whenever any
notice whatever is required to be given under any article of these By-Laws, a
waiver thereof in writing, signed by the person or persons entitled to the
notice, whether before or after the time of the meeting of the shareholders,
shall be deemed equivalent to proper notice.
4. A majority of the shares issued and outstanding, either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of the shareholders.
5. If a quorum is not present at the annual meeting, the shareholders present,
in person or by proxy, may adjourn to such future time as shall be agreed upon
by them, and notice of such adjournment shall be mailed, postage prepaid, to
each shareholder of record at least ten (10) days before such date to which the
meeting was adjourned; but if a quorum is present, they may adjourn from day to
day as they see fit, and no notice of such adjournment need be given.
6. Special meetings of the shareholders may be called at anytime by the
President; by all of the Directors provided there are no more than three, or if
more than three, by any three Directors; or by the holder of a majority share of
the capital stock of the corporation. The Secretary shall send a notice of such
called meeting to each shareholder of record at least ten (10) days before such
meeting, and such notice shall state the time and place of the meeting, and the
object thereof. No business shall be transacted at a special meeting except as
stated in the notice to the shareholders, unless by unanimous consent of all
shareholders present, either in person or by proxy, all such shares being
represented at the meeting.
7. Each shareholder shall be entitled to one vote for each share of stock in his
own name on the books of the corporation, whether represented in person or by
proxy.
8. At all meetings of shareholders, a shareholder may vote by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact. Such
proxy shall be filed with the Secretary of the corporation before or at the time
of the meeting.
9. The following order of business shall be observed at all meetings of the
shareholders so far as is practicable
a. Call the roll;
b. Reading, correcting, and approving of the minutes of the previous meeting;
c. Reports of Officers;
d. Reports of Committees;
e. Election of Directors;
f. Unfinished business; and
g. New business.
10. Unless otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be taken at a meeting
of the shareholders, may be taken without a meeting if a consent in writing,
setting forth the action to be taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof.
11. The officer or agent having charge of the stock transfer books for shares of
the corporation, or the corporation's transfer agent, shall make, at least ten
(10) days before each meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the addresses and number of shares held by
each, which list, for a period of ten (10) days prior to such meeting, shall be
kept on file at the principle office of the corporation and shall be subject to
inspection by any stockholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any stockholder during the whole time of
the meeting. The original stock transfer book shall be prime facie evidence as
to who are the stockholders entitled to examine such list or transfer books or
to vote at the meeting of stockholders.
ARTICLE II
STOCK
1. Certificates of stock shall be in a form adopted by the Board of Directors
and shall be signed by the President and Secretary of the corporation.
2. All certificates shall be consecutively numbered; the name of the person
owning the shares represented thereby, with the number of such shares and the
date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsement thereon shall be
surrendered by cancellation and new certificates issued to the purchaser or
assignee.
4. Upon surrender to the corporation or the transfer agent of the corporation of
a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, and
cancel the old certificate; every such transfer shall be entered on the transfer
book of the corporation.
5. The corporation shall be entitled to treat the holder of record of any share
as the holder in fact thereof, and, accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such share on the part of any
other person whether or not it shall have express or other notice thereof,
except as expressly provided by the laws of this state.
ARTICLE III
DIRECTORS
1. A Board of Directors, consisting of at least one (1) person shall be chosen
annually by the shareholders at their meeting to manage the affairs of the
corporation. The Directors' term of office shall be one (1) year, and Directors
may be re-elected for successive annual terms.
2. Vacancies on the Board of Directors by reason of death, resignation or other
causes shall be filled by the remaining Director or Directors choosing a
Director or Directors to fill the unexpired term.
3. Regular meetings of the Board of Directors shall be held at the conclusion of
the regular annual shareholders meeting of each year beginning in 1998 at the
office of the company, or at such other time or place as the Board of Directors
shall appoint; special meetings may be called by the President or any Director
giving ten (10) days notice to each Director. Special meetings may also be
called by execution of the appropriate waiver of notice and called when executed
by a majority of the Directors of the company. A majority of the Directors shall
constitute a quorum.
4. The Directors shall have the general management and control of the business
and affairs of the corporation and shall exercise all the powers that may be
exercised or performed by the corporation, under the statutes, the Articles of
Incorporation, and the By-Laws. Such management will be by equal vote of each
member of the Board of Directors with each Board member having an equal vote.
5. The act of the majority of the Directors present at a meeting at which a
quorum is present shall be the act of the Directors.
6. A resolution, in writing, signed by all or a majority of the members of the
Board of Directors, shall constitute action by the Board of Directors to effect
therein expressed, with the same force and effect as though such resolution had
been passed at a duly convened meeting; and it shall be the duty of the
Secretary to record every such resolution in the Minute Book of the corporation
under its proper date.
7. Any or all of the Directors may be removed for cause by vote of the
shareholders or by action of the Board. Directors may be removed without cause
only by vote of the shareholders.
8. A Director may resign at any time by giving written notice to the Board, the
President or the Secretary of the corporation. Unless otherwise specified in the
notice, the resignation shall take effect upon receipt thereof by the Board or
such Officer, and the acceptance of the resignation shall not be necessary to
make it effective.
9. A Director of the corporation who is present at a meeting of the Directors at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the Secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a Director who voted in favor of such action.
ARTICLE IV
OFFICERS
1. The Officers of this company shall consist of: a President, one or more Vice
Presidents, Secretary, Treasurer, and such other officers as shall, from time to
time, be elected or appointed by the Board of Directors.
2. The PRESIDENT shall preside at all meetings of the Directors and the
shareholders and shall have general charge and control over the affairs of the
corporation subject to the Board of Directors. He shall sign or countersign all
certificates, contracts and other instruments of the corporation as authorized
by the Board of Directors and shall perform all such other duties as are
incident to his office or are required by him by the Board of Directors.
3. The VICE PRESIDENT shall exercise the functions of the President during the
absence or disability of the President and shall have such powers and such
duties as may be assigned to him, from time to time, by the Board of Directors.
4. The SECRETARY shall issue notices for all meetings as required by the
By-Laws, shall keep a record of the minutes of the proceedings of the meetings
of the shareholders and Directors, shall have charge of the corporate books, and
shall make such reports and perform such other duties as are incident to his
office, or properly required of him by the Board of Directors. He shall be
responsible that the corporation complies with Section 78.105 of the Nevada
Revised Statutes and supplies to the Nevada Resident Agent or Registered Office
in Nevada, any and all amendments to the corporation's Articles of Incorporation
and any and all amendments or changes to the By-Laws of the corporation. In
compliance with Section 78.105, he will also supply to the Nevada Resident Agent
or Registered Office in Nevada, and maintain, a current statement setting out
the name of the custodian of the stock ledger or duplicate stock ledger, and the
present and complete Post Office address, including street and number, if any,
where such stock ledger or duplicate stock ledger is kept.
5. The TREASURER shall have the custody of all monies and securities of the
corporation and shall keep regular books of account. He shall disburse the funds
of the corporation in payment of the just demands against the corporation, or as
may be ordered by the Board of Directors, making proper vouchers for such
disbursements and shall render to the Board of Directors, from time to time, as
may be required of him, an account of all his transactions as Treasurer and of
the financial condition of the corporation. He shall perform all duties incident
to his office or which are properly required of him by the Board of Directors.
6. The RESIDENT AGENT shall be in charge of the corporation's registered office
in the State of Nevada, upon whom process against the corporation may be served
and shall perform all duties required of him by statute.
7. The salaries of all Officers shall be fixed by the Board of Directors and may
be changed, from time to time, by a majority vote of the Board.
8. Each of such Officers shall serve for a term of one (1) year or until their
successors are chosen and qualified. Officers may be re-elected or appointed for
successive annual terms.
9. The Board of Directors may appoint such other Officers and Agents, as it
shall deem necessary or expedient, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined,
from time to time, by the Board of Directors.
10. Any Officer or Agent elected or appointed by the Directors may be removed by
the Directors whenever in their judgment the best interests of the corporation
would be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
11. A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the Directors for the unexpired
portion of the term.
ARTICLE V
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The corporation shall indemnify any and all of its Directors and Officers, and
its former Directors and Officers, or any person who may have served at the
corporation's request as a Director or Officer of another corporation in which
it owns shares of capital stock or of which it is a creditor, against expenses
actually and necessarily incurred by them in connection with the defense of any
action, suit or proceeding in which they, or any of them, are made parties, or a
party, by reason of being or having been Director(s) or Officer(s) of the
corporation, or of such other corporation, except, in relation to matters as to
which any such Director or Officer or former Director or Officer or person shall
be adjudged in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty. Such indemnification shall not be deemed
exclusive of any other rights to which those indemnified may be entitled, under
By-Law, agreement, vote of shareholders or otherwise.
ARTICLE VI
DIVIDENDS
The Directors may, from time to time, declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE VII
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be given to
any shareholder or Director of the corporation under the provisions of these
By-Laws or under the provisions of the Articles of Incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
ARTICLE VIII
AMENDMENTS
1. Any of these By-Laws may be amended by a majority vote of the shareholders at
any annual meeting or at any special meeting called for that purpose.
2. The Board of Directors may amend the By-Laws or adopt additional By-Laws, but
shall not alter or repeal any By-Laws adopted by the shareholders of the
company.
CERTIFIED TO BE THE BY-LAWS OF:
K & L Electronics Photo and Supply, Co.
BY: /s/ Daniel L. Hodges
President, Secretary and Director
SPECIMEN OF COMMON STOCK CERTIFICATE
K & L ELECTRONICS PHOTO AND SUPPLY CO.
[________] NUMBER OF SHARES
OF K & L ELECTRONICS PHOTO AND SUPPLY CO.
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
(100,000,000 SHARES COMMON STOCK AUTHORIZED,
$.001 PAR VALUE COMMON STOCK)
CUSIP NUMBER
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT ________________________________________________________
IS THE RECORD HOLDER OF SHARES OF FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON
STOCK OF K & L ELECTRONICS PHOTO AND SUPPLY CO. TRANSFERABLE ON THE BOOKS OF THE
CORPORATION IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS
CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE AND THE SHARES REPRESENTED
HEREBY ARE SUBJECT TO THE LAWS OF THE STATE OF NEVADA, AND TO THE CERTIFICATE OF
INCORPORATION AND BYLAWS OF THE CORPORATION, AS NOW OR HEREAFTER AMENDED. THIS
CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT.
WITNESS the facsimile seal of the Corporation and the signature of its duly
authorized officers.
Dated: ________________
[SEAL OF K & L ELECTRONICS PHOTO AND SUPPLY CO.]
/s / DANIEL L. HODGES /s/ DANIEL L. HODGES
President Secretary
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ____Custodian____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors Act
of survivorship and not as tenants in common
________________________
(State)
Additional abbreviation may also be used though not in above list.
FOR VALUE RECEIVED, _________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
__________________________
__________________________
__________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Shares of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
__________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named
Corporation with full power of substitution in the premises.
Dated: __________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.
727150v.4
