UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SEURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12 (b)
or (g) OF THE SECURITIES EXCHANGE ACT OF 1934
Freedom Surf, Inc.
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(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
Nevada Applied For
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR
ORGANIZATION) IDENTIFICATION NO.)
3450 E Russell Rd, Las Vegas, Nevada 89120
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
(702) 214-4227
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(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12 (b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
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SECURITIES TO BE REGISTERED UNDER SECTION 12 (g) OF THE ACT:
Common Stock
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(TITLE OF CLASS)
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FORWARD LOOKING STATEMENTS
Freedom Surf, Inc., a developmental stage company ("Freedom Surf, Inc.," or the
"Company") cautions readers that certain important factors may affect the
Company's actual results and could cause such results to differ materially from
any forward-looking statements that may be deemed to have been made in this Form
10-SB or that are otherwise made by or on behalf of the Company. For this
purpose, any statements contained in the Form 10-SB that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the generality of the foregoing, words such as "may," "expect,"
"believe," "anticipate," "intend," "could," "estimate," "plans," or "continue"
or the negative or other variations thereof or comparable terminology are
intended to identify forward-looking statements. Factors that may affect the
Company's results include, but are not limited to, the Company's limited
operating history, its ability to produce additional products and services, its
dependence on a limited number of customers and key personnel, its possible need
for additional financing, its dependence on certain industries, and competition
from its competitors. With respect to any forward-looking statements contained
herein, the Company believes that it is subject to a number of risk factors,
including: the Company's ability to implement its product strategies to develop
its business in emerging markets; competitive actions; and, general economic and
business conditions. Any forward-looking statements in this report should be
evaluated in light of these important risk factors. The Company is also subject
to other risks detailed herein or set forth from time to time in the Company's
filings with the Securities and Exchange Commission.
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
TABLE OF CONTENTS
Part I 4
Item 1. Description of Business 4
Item 2. Management's Discussion and Analysis
or Plan of Operation 5
Item 3. Description of Property 12
Item 4. Security Ownership of Management and
Others and Certain Security Holders 12
Item 5. Directors, Executives, Officers and
Significant Employees 12
Item 6. Remuneration of Directors and
Executive Officers 14
Item 7. Interest of Management and Others in
Certain Transactions 15
Item 8. Legal Proceedings 15
Part II 15
Item 1. Market Price of and Dividends of the
Registrant's Common Equity and Other
Stockholder Matters 15
Item 2. Recent Sales of Unregistered Securities 15
Item 3. Description of Securities 15
Item 4. Indemnification of Directors and Officers 15
Part F/S 16
Item 1. Financial Statements 16
Item 2. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure 16
Part III 16
Item 1. Index to Exhibits 16
Item 2. Description of Exhibits 16
Signatures 16
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PART I
Item 1. Description of Business.
General
The Company was organized August 2, 1997(Date of Inception) under the laws of
the State of Delaware, as Interstate Capital Corporation The Company has no
operations and in accordance with SFAS #7, the Company is considered a
development stage company. On or about November 17, 1999, the Company caused a
Nevada corporation to be incorporated under the name of Freedom Surf, Inc.,
authorized to issued 20,000,000 shares of $.001 par value common stock, and
5,000,000 shares of $.001 par value preferred stock and merged with that
Corporation, for the purpose of changing its domicile to Nevada, in accordance
with Articles of Merger adopted on or about November 17, 1999, 1998.
On April 5, 1999, the Company completed a public offering that was exempt from
federal registration pursuant to Regulation D, Rule 504 of the Securities Act of
1933 as amended. The Company sold 5,000,000 shares of Common Stock at a price
of $.001 per share for a total amount raised of $5,000.00.
On or about December 10, 1999, the Company purchased certain assets valued at
$5,180,000.00 issuing 969,000 common shares of its $.001 par value stock and
assuming a long term liability in the amount of $335,000.00
Freedom Surf, Inc. ("FSI" or the "Company"), a Nevada corporation, was formed to
enter into the surf apparel and accessory products market, and consolidate and
manage an integrated network of companies in the surfing industry. The Company
will also manufacture and market surf suits and surf accessory products.
Surf apparel and suits are part of the recreational apparel business. This
industry is estimated to be a 2.15 Billion-dollar industry, with consistent,
dramatic increases over the past three years (Exhibit 1). Surfing wetsuits is a
$70 million-dollar segment of the industry in the USA. Worldwide, it is
estimated that 2.1 million people actively surfed (at least four times a year)
in 1998. Female participation has grown to 22% in 1998. This does not include
body-boarding, which has an estimated 3 million enthusiasts. Industry reports
document that a majority of surfers and body-boarders buy new wetsuits every two
years.
There are approximately 750 "core" surf shops and 4,500 surf related specialty
stores in the US. California claims the most with 40% of all shops, followed
closely by Florida with 18% and the Southern Atlantic states with 10%.
California is home to an estimated 45% of the nation's surfers, followed by
Hawaii with 20%, Florida with 20% and the rest of the country with 15%.
Surfing is also associated with skateboarding, wakeboarding, inline skating and
other sports characterized as "extreme sports. Extreme sports are becoming
increasingly accepted as mainstream sporting activities, aided by national
television coverage and sponsorship of events and athletes.
FSI targets teen/young-adults from the ages of 12-29. This young adult market is
composed of an estimated 45 million people and is expected to grow by an
additional 9 million persons by 2010. In 1998, this group wielded more than $100
billion dollars in purchasing power. This same group is leading the rush to the
Internet where Freedom Surf, Inc. will be offering products via its fully
interactive web site.
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At the present time the Company has one major product brand, "Freedom Wetsuits".
The Company also has secured exclusive marketing rights to a line of product
based on "Stitchfree" technology. The Company will incorporate this technology
into its "Freedom Wetsuits".
One new product is the Company's "Stitch Free" style wetsuit based on a patent
pending technology known as "Stitchfree" manufacturing. This process replaces
the standard manufacturing process with the "new" process. The Company
purchased exclusive marketing rights to the "Stitchfree" manufacturing process.
The Company's current products will be sold in over 400 retail outlets through
major marketing representatives. The Company's goal is to develop a distribution
channel to market its product line as well as future products throughout over
1600 retail outlets in the United States.
FSI utilizes top surfers to market its products. Freedom has the opportunity to
have the following surfers under marketing agreements: Chris Ward, Tim Curran,
and Brad Gerlach
FSI's strategy is to capitalize on its relationships with these athletes in all
areas of its marketing campaign. This will include print advertising, free
press, competition sponsorships, Internet sales, clinics and trade shows.
Due to the market initial response to its product line announcements, the
Company is seeking to expand its manufacturing and distribution as well as form
relationships with selected companies in the surf industry that will enhance the
companies market position.
Item 2.Management's Discussion and Analysis or Plan of Operation
Due to response to its promotional efforts related to its new "Stitchfree"
products, the Company is seeking capital to expand manufacturing and continue
and expand marketing for its Freedom Wetsuit line.
The plans for '2000' include the expansion into an additional 1200 retailers.
FSI will also continue to develop its international distribution channel. FSI
utilizes manufacturing and fulfillment facilities located in Oceanside,
California. Most manufacturing is done offshore with strategic, technology
related steps being done at the Company's facility. FSI has an array of wetsuit
manufacturing equipment and skilled manufacturing, marketing, financial and
sales personnel.
Management Team
FSI management team is made up of four key individuals, two of whom are ex-
Presidents of RipCurl, Inc., a $180 million dollar surf products company. These
two individuals have a combined experience of over 35 years in the surf
industry. Through established relations with most major surf retailers, Freedom
Surf, Inc. is positioned to take a leading position in wetsuit surf industry.
Manufacturing
Wetsuit and accessory products are designed using CAD software and integrated
into the manufacturing process via integrated production planning and control
software system. Labor-intensive processes are sub-contracted to stable,
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offshore suppliers. Only final stages of assembly are performed in house. The
in house portion of manufacturing is a strategic decision to maintain
proprietary processes information in house.
Opportunities
Freedom Surf, Inc. has the opportunity to expand into clothing, watches,
sunglasses and other sport related accessories that experience "cross-over"
sales success in other sporting markets such as skiing, diving, snowboarding,
wakeboarding, skating and more.
Freedom Surf, Inc. has also developed a number of proprietary products that are
opportunities for private label manufacturing for other major surf brands (such
as surf gloves and booties). It is Freedom Surf, Inc. intent to manufacture
other products under license and on behalf of other surf companies.
In addition Freedom Surf, Inc. will continue to be on the seek relationships
that offer strategic advantages to its core business.
Competition
Major competitors include RipCurl, O'Neill, Quicksilver, Hurley and other major
surf lifestyle groups. A major disadvantage of most of the competition is the
market perception that these brands are outdated. The youth market is very
sensitive to new and exciting products. Freedom Surf, Inc.'s new technology and
high tech approach to the core surf market has enhances its position the 13-29
year old marketplace.
Marketing Strategy
Freedom Surf, Inc. 's major marketing strategy has been and will continue to be
securing and employing the endorsement of world-class surfers including the
major surf publications.
Freedom Surf, Inc. through its association with strategic business relationships
is about to have the following surfers under : Chris Ward, Tim Curran, and Brad
Gerlach.
Freedom Surf, Inc.'s strategy is to promote its products through its
relationships with these athletes throughout its marketing campaign. This
includes print advertising, free press, competition sponsorships, Internet
sales, clinics and trade shows.
Retail Sales Strategy
Freedom Surf, Inc. has relationships through marketing representatives with
major retail stores to sell its products through 150 of the top surf shops
across the US. Management has elected to offer "exclusives" to certain area
shops due to their local reputations and willingness to commit to annual orders.
As the company continues to grow, it is anticipated that many non-cyclical
products such as clothing, watches and non surf-exclusive lines will be accepted
by more mainstream.
Internet Sales
Web surfers need a reason to return to a site again and again. Freedom Surf,
Inc. has contracted with high quality graphic design and HTML programmers to
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develop an interactive site with features above and beyond any competitor's
site.
Electronic Commerce Industry
Three years ago, industry analysts only hinted at the vast growth that commerce
on the Internet would experience. One of the largest sectors of Internet access
growth is in the home - consumers are just now beginning to tap into the vast
worldwide markets that are relatively inaccessible by any other means.
Internet commerce involves the sales of products and services to consumers or
businesses over the Internet. The categories in this Internet commerce layer
include:
E-tailers (e.g., Amazon.com, eToys.com)
Manufacturers selling online (e.g., Cisco, Dell, IBM)
Fee/Subscription-based companies (e.g., thestreet.com,
WSJ.com)
Airlines selling online tickets
Online entertainment and professional services
It is important to note that many companies are players at multiple layers. For
instance, Microsoft and IBM are important players at the Internet
infrastructure, applications, and Internet commerce layers, while AOL (before
the acquisition of Netscape) is a key player in the infrastructure, intermediary
and commerce layers. Similarly Cisco and Dell are key players at the
infrastructure and commerce layers [Internet Indicators].
Companies that embrace the Internet as a commerce channel experience far greater
amounts of growth than like companies which do not utilize e-commerce
technologies. In particular, the mating of e-commerce channels in the consumer
sales market is particularly promising.
Small businesses that use the Internet have grown 46% faster than those that do
not (American City Business Journals).
Forty-four percent of U.S. companies are selling online. An additional 36%
affirm that they will do so by the end of 1999.
Internet advertisement revenues topped $1.92 billion in 1998, resulting in a
100% growth factor from the previous year.
The Small and Home Office (SOHO) Industry expended over $51 billion online
purchasing technology goods.
Countries outside of the United States have traditionally fallen behind the
nation that built the Internet, but Internet access outside the United States is
expanding on a dramatic basis. To this point, there were more Internet users in
the United States than in all other countries combined. By the end of 1999, this
characteristic is projected to change, as the growth of Internet access within
the U.S. lessens, while other countries' access growth is project to increase
substantially. Again, the largest sector of this Internet access growth is in
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the home, exposing people around the globe to the power and simplicity of e-
commerce.
Positioning
To be successful over the long term, Freedom Surf, Inc. has taken the "best
product" approach to marketing and product development. Satisfaction of its
customer's quality needs will require the company to maintain a "leading edge"
in product design and technology as well as in its ability to get educate its
customer base.
Pricing
Reduced manufacturing costs and a strong demand by the youth market for the
latest technology allows Freedom to demand a higher price than the competition.
Pricing will remain high while Freedom maintains it's unique technology position
and strong consumer demand. Freedom has capacity to move quickly and maintain
profitability.
Advertising and Promotion
Freedom has secured permanent inside back cover location in SURFER magazine, the
leading surf publication in the world. This is based on the reputation of the
founders of Freedom Surf and their relationships to strategic business
relationships. Magazine advertising combined with top surfer endorsements
comprises most of Freedoms advertising budget.
Freedom also participates in key regional trade shows such as the Action Sports
Retail show in San Diego where new products are released and key alliances are
made. An effort is made to attend most of the major surf competitions and
distribute stickers and T-shirts to the attendees.
Risk Factors
1. Conflicts of Interest. Certain conflicts of interest exist between the
Company and its officers and director. They have other business interests to
which they devotes attention, and they may be expected to continue to do so
although management time should be devoted to the business of the Company. As a
result, conflicts of interest may arise that can be resolved only through
exercise of such judgment as is consistent with their fiduciary duties to the
Company.
2. Possible Need for Additional Financing. The Company has very limited funds,
and such funds may not be adequate to take advantage of any available business
opportunities. Even if the Company's funds prove to be sufficient to acquire an
interest in, or complete a transaction with, a business opportunity, the Company
may not have enough capital to exploit the opportunity. The ultimate success of
the Company may depend upon its ability to raise additional capital. The
Company has not investigated the availability, source, or terms that might
govern the acquisition of additional capital and will not do so until it
determines a need for additional financing. If additional capital is needed,
there is no assurance that funds will be available from any source or, if
available, that they can be obtained on terms acceptable to the Company. If not
available, the Company's operations will be limited to those that can be
financed with its modest capital.
3. Regulation of Penny Stocks. The Company's securities, when available for
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trading, will be subject to a Securities and Exchange Commission rule that
imposes special sales practice requirements upon broker-dealers who sell such
securities to persons other than established customers or accredited investors.
For purposes of the rule, the phrase "accredited investors" means, in general
terms, institutions with assets in excess of $5,000,000, or individuals having a
net worth in excess of $1,000,000 or having an annual income that exceeds
$200,000 (or that, when combined with a spouse's income,
exceeds $300,000). For transactions covered by the rule, the broker-dealer must
make a special suitability determination for the purchaser and receive the
purchaser's written agreement to the transaction prior to the sale.
Consequently, the rule may affect the ability of broker-dealers to sell the
Company's securities and also may affect the ability of purchasers in this
offering to sell their securities in any market that might develop therefore.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-
2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-7 under the Securities Exchange Act of
1934, as amended. Because the securities of the Company may constitute "penny
stocks" within the meaning of the rules, the rules would apply to the Company
and to its securities. The rules may further affect the ability of owners of
Shares to sell the securities of the Company in any market that might develop
for them.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i)
control of the market for the security by one or a few broker-dealers that are
often related to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and misleading press
releases; (iii) "boiler room" practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons; (iv) excessive
and undisclosed bid-ask differentials and markups by selling broker-dealers; and
(v) the wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a
position to dictate the behavior of the market or of broker-dealers who
participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to the Company's securities.
4. No Operating History. The Company was formed in August of 1997 for
implementing a legal business opportunity. The Company has no operating
history, revenues from operations, or assets. The Company faces all of the
risks of a new business and the special risks inherent in the investigation,
acquisition, or involvement in a new business opportunity. The Company must be
regarded as a new or "start-up" venture with all of the unforeseen costs,
expenses, problems, and difficulties to which such ventures are subject.
5. No Assurance of Success or Profitability. There is no assurance that the
Company will acquire a favorable business opportunity. Even if the Company
should become involved in a business opportunity, there is no assurance that it
will generate revenues or profits, or that the market price of the Company's
Common Stock will be increased thereby.
6. Impracticability of Exhaustive Investigation. The Company's limited funds
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and the lack of full-time management will likely make it impracticable to
conduct a complete and exhaustive investigation and analysis of a business
opportunity before the Company commits its capital or other resources thereto.
Management decisions, therefore, will likely be made without detailed
feasibility studies, independent analysis, market surveys and the like which, if
the Company had more funds available to it, would be desirable. The Company
will be particularly dependent in making decisions upon information provided by
the promoter, owner, sponsor, or others associated with the business opportunity
seeking the Company's participation. A significant portion of the Company's
available funds may be expended for investigative expenses and other expenses
related to preliminary aspects of completing an acquisition transaction, whether
or not any business opportunity investigated is eventually acquired.
7. Lack of Diversification. Because of the limited financial resources that
the Company has, it is unlikely that the Company will be able to diversify its
acquisitions or operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to economic
fluctuations within its target industry and therefore increase the risks
associated with the Company's operations.
8. Other Regulation. An acquisition made by the Company may be of a business
that is subject to regulation or licensing by federal, state, or local
authorities. Compliance with such regulations and licensing can be expected to
be a time-consuming, expensive process and may limit other investment
opportunities of the Company.
9. Dependence upon Management; Limited Participation of Management.
The Company currently has several key individuals who are serving as its
officers and directors. The Company will be heavily dependent upon their
skills, talents, and abilities to implement its business plan, and may, from
time to time, find that the inability of the officers and directors to devote
full time attention to the business of the Company results in a delay in
progress toward implementing its business plan. Because investors will not be
able to evaluate the merits of possible business opportunities by the Company,
they should critically assess the information concerning the Company's officers
and directors.
10. Lack of Continuity in Management. The Company does not have an employment
agreement with its officers and directors, and as a result, there is no
assurance that they will continue to manage the Company in the future.
11. Indemnification of Officers and Directors. The Company's Articles of
Incorporation provide for the indemnification of its directors, officers,
employees, and agents, under certain circumstances, against attorney's fees and
other expenses incurred by them in any litigation to which they become a party
arising from their association with or activities on behalf of the Company. The
Company will also bear the expenses of such litigation for any of its directors,
officers, employees, or agents, upon such person's promise to repay the Company
therefore if it is ultimately determined that any such person shall not have
been entitled to indemnification. This indemnification policy could result in
substantial expenditures by the Company which it will be unable to recoup.
12. Director's Liability Limited. The Company's Articles of Incorporation
exclude personal liability of its directors to the Company and its stockholders
for monetary damages for breach of fiduciary duty except in certain specified
circumstances. Accordingly, the Company will have a much more limited right of
action against its directors than otherwise would be the case. This provision
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does not affect the liability of any director under federal or applicable state
securities laws.
13. Dependence upon Outside Advisors. To supplement the business experience of
its officers and directors, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants or advisors. The
selection of any such advisors will be made by the Company's President without
any input from stockholders. Furthermore, it is anticipated that such persons
may be engaged on an "as needed" basis without a continuing fiduciary or other
obligation to the Company. In the event the President of the Company considers
it necessary to hire outside advisors, they may elect to hire persons who are
affiliates, if they are able to provide the required services.
14. Leveraged Transactions. There is a possibility that any acquisition of a
business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.
15. Competition. The search for potentially profitable business opportunities
is intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company.
16. No Foreseeable Dividends. The Company has not paid dividends on its Common
Stock and does not anticipate paying such dividends in the foreseeable future.
17. Loss of Control by Present Management and Stockholders. The Company may
consider an acquisition in which the Company would issue as consideration for
the business opportunity to be acquired an amount of the Company's authorized
but un-issued Common Stock that would, upon issuance, represent the great
majority of the voting power and equity of the Company. The result of such an
acquisition would be that the acquired company's stockholders and management
would control the Company, and the Company's management could be replaced by
persons unknown at this time. Such a merger would result in a greatly reduced
percentage of ownership of the Company by its current shareholders. In addition,
the Company's President could sell his control block of stock at a premium price
to the acquired company's stockholders.
18. No Public Market Exists. There is no public market for the Company's
common stock, and no assurance can be given that a market will develop or that a
shareholder ever will be able to liquidate his investment without considerable
delay, if at all. If a market should develop, the price may be highly volatile.
Factors such as those discussed in this "Risk Factors" section may have a
significant impact upon the market price of the securities offered hereby.
Owing to the low price of the securities, many brokerage firms may not be
willing to effect transactions in the securities. Even if a purchaser finds a
broker willing to effect a transaction in these securities, the combination of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not
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permit the use of such securities as collateral for any loans.
19. Blue Sky Considerations. Because the securities registered hereunder have
not been registered for resale under the blue sky laws of any state, the holders
of such shares and persons who desire to purchase them in any trading market
that might develop in the future, should be aware that there may be significant
state blue-sky law restrictions upon the ability of investors to sell the
securities and of purchasers to purchase the securities. Accordingly, investors
should consider the secondary market for the Company's securities to be a
limited one.
Item 3. Description of Property.
The Company neither owns or leases any real or personal property. Office
services are provided without charge by a director. Such costs are immaterial
to the financial statements and, accordingly, have not been reflected therein.
It does currently maintain a mailing address at 3450 Russell Road, Las Vegas,
89121, which is the office address of its resident agent. The Company pays no
rent for the use of this mailing address.
Item 4. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of the date of this Registration Statement,
the number of shares of Common Stock owned of record and beneficially by
executive officers, directors and persons who hold 5.0% or more of the
outstanding Common Stock of the Company. Also included are the shares held by
all executive officers and directors as a group.
Number of
Shares Owned
Name and Address Beneficially
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Kelland Financial 250,000
Pacific Standard Financial Group 960,000
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and executive officers currently serving the Company are as
follows:
Name Age Positions Held and Tenure
- ------ ----- -------------------------
Raece Richardson 36 President and Director since
August, 1997
David McKenzie 40 Vice President/Secretary
Martin Gilcrest 42 Chief Operating Officer
The directors named above will serve until the first annual meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year
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terms at the annual stockholders' meeting. Officers will hold their positions at
the pleasure of the board of directors, absent any employment agreement, of
which none currently exists or is contemplated. There is no arrangement or
understanding between the directors and officers of the Company and any other
person pursuant to which any director or officer was or is to be selected as a
director or officer.
The directors and officers of the Company will devote time to the Company's
affairs on an "as needed" basis. As a result, the actual amount of time which
they will devote to the Company's affairs is unknown and is likely to vary
substantially from month to month.
Biographical Information
Raece Richardson, President/CEO
Raece Richardson's professional experience is extensive and ideally suited to
the management of Freedom Surf. He was President of RipCurl and has an
extensive background in the retail surf industry. He has developed and operated
many successful businesses associated with the surf industry, including Icon
Trading, a company specializing in the strategic acquisition of businesses in
the surf, skate and snow apparel/accessory industries. The primary advantage
Raece brings to Freedom is a track record of success and respect within the surf
industry.
David McKenzie, Vice President/Secretary
Having held many senior managerial positions in multinational firms, David
McKenzie brings extensive international business experience and contacts to
Freedom. David was general manager for a communications-engineering firm with
manufacturing plants in Sri Lanka and Costa Rica. He was the Business
Development Manager for a $120 million membrane technology company located in
Sydney, Australia, where he resided for 5 years. He participated in the
evaluation of companies for merger or acquisition. He has personally
established and managed distributors in over 42 countries. David is fluent in
Spanish and English.
Marty Gilchrist, COO
In the 20 years prior to joining Freedom, Marty held numerous important
positions, including that of President, at RipCurl, a $180 million surf company.
Marty's experience is broad and varied. He is an exceptional wetsuit designer
and has set up and operated a turnkey manufacturing plant in Mexico for RipCurl,
a plant that still operates today. Marty is on a first name basis with
virtually all of the top management in the surf retail industry, including the
top 250 surf shops in North America. His surfing pals include the Curran family
and other top 20 surfers of note where he regularly tests his new products.
Marty, and others within Freedom, have strong computer skills and make extensive
use of manufacturing software, which helps in maintaining high quality and
maintains cost and quality controls, efficiently.
Louise Friedman, CFO/Treasurer
Louise has extensive accounting experience related to manufacturing and job
costing. She has strong computer and software skills having utilized software
such as Mass 90, Peachtree and custom MRP modular software systems. She has
been through the arduous task of SEC and governmental audits associated with
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contractual compliance on governmental contracting or regulatory issues. Louise
has invaluable small business "turn-around" experience and holds the important
position within Freedom of establishing and maintaining the financial controls
so necessary to attain success.
Director's and Officer's Liability
A director or officer of the Corporation shall not be personally liable to this
Corporation or its stockholders for damages for breach of fiduciary duty as a
director or officer, but this Article shall not eliminate or limit the liability
of a director or officer for (i) acts or omissions which involve international
misconduct, fraud or a knowing violation of the law or (ii) the unlawful payment
of dividends. Any repeal or modification of the Article by 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 of omissions prior to such repeal of modification.
Indemnity
Every person who was or is a party to, or is threatened to be made a party to,
or is involved in any such action, suit or proceeding, whether civil, criminal,
administrative or investigative, by the reason of the fact that he or she or a
person with whom he or she is a legal representative, is or was a director of
the Corporation, or who is serving at the request of the Corporation as a
director or officer of another corporation, or is a representative in a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless to the fullest extent legally permissible under the laws of the
State of Nevada from time to time against all expenses, liability and loss
(including attorney's fees, judgments, fines, and amounts paid or to be paid in
a settlement) reasonably incurred or suffered by him or her in connection
therewith. Such right of indemnification shall be a contract right and which
may be enforced in any manner desired by such person. The expenses of officers
and directors incurred in defending a civil suit or proceeding must be paid by
the Corporation as incurred and in advance of the final disposition of the
action, suit, or proceeding, under receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he or she is not entitled to be indemnified
by the Corporation. Such right of indemnification shall not be exclusive of any
other right of such directors, officers or representatives may have or hereafter
acquire, and without limiting the generality of such statement, they shall be
entitled to their respective rights of indemnification under any bylaw,
agreement, vote of stockholders, provision of law, or otherwise, as well as
their rights under this article.
Item 6. Remuneration of Directors and Executive Officers
Annual
Name: Comp.
- ----- -------
Raece Richardson, CEO $50,000
David McKensie, VP $50,000
Martin Gilcrist, VP $100,000
14
<PAGE>
Item 7. Interest of Management and Others in Certain
Transactions
Office services are provided without charge by a director. Such costs are
immaterial to the financial statements and, accordingly, have not been reflected
therein. The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
Item 8. Legal Proceedings
There is no litigation pending at this time.
PART II
Item 1. Market Price and Dividends on the Registrant's Common
Equity and Other Shareholder Matters
No public trading market exists for the Company's securities. No dividends have
been paid to date and the Company's Board of Directors does not anticipate
paying dividends in the foreseeable future.
Item 2. Recent Sales of Unregistered Securities
None.
Item 3. Description of Securities
The aggregate number of shares which the Corporation shall have authority to
issue shall consist of 20,000,000 shares of Common Stock having a $.001 par
value, and 5,000,000 shares of Preferred Stock having a $.001 par value. The
Common Stock and/or Preferred Stock of the Company may be issued from time to
time without prior approval by the stockholders. The Common Stock and/or
Preferred Stock may be issued for such consideration as may be fixed from time
to time by the Board of Directors. The Board of Directors may issue such shares
of Common and/or Preferred Stock in one or more series, with such voting powers,
designations, preferences and rights or qualifications, limitations or
restrictions thereof as shall be stated in the resolution of resolutions.
Item 4. Indemnification of Directors and Officers
The Articles of Incorporation and the Bylaws of the Company,
filed as Exhibits and , respectively, provide that the Company
will indemnify its officers and directors for costs and expenses
incurred in connection with the defense of actions, suits, or
proceedings where the officer or director acted in good faith and in a
manner he reasonably believed to be in the Company's best interest
and is a party by reason of his status as an officer or director, absent
a finding of negligence or misconduct in the performance of duty.
15
<PAGE>
Part F/S
Item 1. Financial Statements
The audited financial statements of the Company and related notes which are
included in this offering have been examined by James E. Slayton, CPA, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.
The following documents are filed as part of this report:
a) Freedom Surf, Inc.
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 15, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET - ASSETS F-2
BALANCE SHEET - LIABILITIES AND SHAREHOLDER'S EQUITY F-3
STATEMENT OF OPERATIONS F-4
STATEMENT OF STOCKHOLDERS' EQUITY F-5
STATEMENT OF CASH FLOWS F-6
NOTES TO FINANCIAL STATEMENTS F-7
<PAGE>
James E. Slayton, CPA
3867 WEST MARKET STREET
SUITE 208
AKRON, OHIO 44333
INDEPENDENT AUDITORS' REPORT
Board of Directors December 16, 1999
Freedom Surf, Inc. (The Company)
Las Vegas, Nevada 89109
I have audited the Balance Sheet of Freedom Surf, Inc. (A Development
Stage Company) formerly known as Interstate Capital Corporation as of December
15, 1999, and the related Statements of Operations, Stockholders' Equity and
Cash Flows for the period August 2, 1997 (Date of Inception) to December 15,
1999. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis evidence
supporting the amounts and disclosures in the financial statement presentation.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Freedom Surf, Inc., (A
Development Stage Company), as of December 15, 1999, and the results of its
operations and cash flows for the period August 2, 1997 (Date of Inception) to
December 15, 1999, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has had limited operations and has not
generated significant revenues from planned principal operations. This raises
substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is also described in Note 3. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty..
/s/ James E. Slayton
- -------------------------
James E. Slayton, CPA
Ohio License ID# 04-1-15582
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS AT
December 15, 1999
ASSETS
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash 0.00
-------------
Total Current Assets 0.00
PROPERTY AND EQUIPMENT
Property and Equipment(net of depreciation 5,180,000.00
-------------
Total Property and Equipment 0.00
OTHER ASSETS
Other Assets 0.00
-------------
Total Other Assets 0.00
-------------
TOTAL ASSETS 5,180,000.00
-------------
-------------
</TABLE>
See accompanying notes to financial statements
F-2
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS AT
December 15, 1999
LIABILITIES & EQUITY
<TABLE>
<S> <C>
CURRENT LIABILITES
Accounts Payable 1,490.00
-------------
Total Current Liabilities 1,490.00
OTHER LIABILITIES
Noncurrent Liabilities 335,000.00
-------------
Total Other Liabilities 335,000.00
-------------
Total Liabilities 336,490.00
EQUITY
Common Stock, $0.001 par value, authorized 20,000,000
shares; issued and outstanding at 12/15/1999,
5,969,000 common shares 5,969.00
Additional Paid in Capital 4,844,031
Donated Capital 0.00
Retained Earnings (Deficit accumulated during development stage) (6,490.00)
-------------
Total Stockholders' Equity 4,843,510
-------------
TOTAL LIABILITIES & OWNER'S EQUITY $5,180,000
-------------
-------------
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR PERIOD
November 17, 1999 (Date of Inception) to December 15, 1999
<TABLE>
<S> <C>
REVENUE
Services 0.00
COSTS AND EXPENSES
Selling, General and Administrative 6,490.00
-------------
Total Costs and Expenses 6,490.00
-------------
Net Ordinary Income or (Loss) (6,490.00)
-------------
-------------
Weighted average number of common
shares outstanding 5,107,667
Net Loss Per Share (0.001)
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR PERIOD
November 17, 1999 (Date of Inception) to December 15, 1999
<TABLE>
<CAPTION>
Deficit
accumulated
Common Additional during Total
Stock paid-in Donated development Stockholder's
Shares Amount capital Capital stage Equity
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
April 5, 1999 5,000,000 5,000.00 0.00 0.00 5,000.00
Issued for cash
December 10, 1999 969,000 969.29 4,844,031 4,845,000
Issued as part of
purchase agreement
Net loss (6,490.00) (6,490.00)
(inception) to
December 15, 1999
------------ ------------ ------------ ------------ ------------ ------------
Balances as at
December 15, 1999 969,000 $969.00 $4,844,031.00 $50.00 ($6,490.00)$4,843,510.00
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR PERIOD
November 17, 1999 (Date of Inception) to December 15, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) from operations ($6,490.00)
Adjustments to reconciled net income
to net cash provided
Depreciation Expense 0.00
Increase in accounts payable 1,490.00
-------------
Net cash flow provided by operating activities (5,000.00)
CASH FLOWS FROM INVESTING ACTIVITIES
Investing Activities 0.00
-------------
Net cash used by investing activities 0.00
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock 5,000.00
-------------
Net cash provided by financing activities 5,000.00
Net increase (decrease) in cash 0.00
Balances as at end of period 0.00
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized August , 2, 1997(Date of Inception) under the laws
of the State of Delaware, as Interstate Capital Corporation (The Company) has
no operations and in accordance with SFAS #7, the Company is considered a
development stage company. On or about November 15, 1999, the Company caused a
Nevada corporation to be incorporated under the name of Freedom Surf, Inc.,
authorized to issued 20,000,000 shares of $.001 par value common stock, and
5,000,000 shares of $.001 par value preferred stock and merged with that
Corporation, for the purpose of changing its domicile to Nevada, in accordance
with Articles of Merger adopted on or about November 15, 1999, 1998.
On April 5, 1999, the Company completed a public offering that was exempt from
federal registration pursuant to Regulation D, Rule 504 of the Securities Act
of 1933 as amended. The Company sold 5,000,000 shares of Common Stock at a
price of $..001 per share for a total amount raised of $5,000.00.
On or about December 10, 1999, the Company purchased certain assets valued at
$5,180,000.00 issuing 969,000 common shares of its $.001 par value stock and
assuming a long term liability in the amount of $335,000.00
There have been no other issuances of equity or Common Stock.
The Statement of Stockholder's equity and Notes to Financial Statements
reflects changes in par value and common stock splits retroactively.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting policies and procedures have not been determined except as follows:
1. The Company uses the accrual method of accounting.
2. The cost of organization was expensed when incurred.
3. Basic earnings per share is computed using the weighted average number of
shares of common stock outstanding.
4. The Company has not yet adopted any policy regarding payment of dividends.
No dividends have been paid since inception.
5. The cost of equipment is depreciated over the estimated useful life of the
equipment utilizing the straight line method of depreciation. The amount of
depreciation recorded during this period was $0.00.
F-7
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES - CONTINUED
6. The Company experienced losses for its first operating period August 2,
1997 (Date of inception) to December 15, 1999. The Company will review its
need for a provision for federal income tax after each operating quarter and
each period for which a statement of operations is issued.
7. The Company has adopted December 31 as its fiscal year end.
8. The Company records its inventory at cost.
9. The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions which affect the reported amounts of assets and liabilities as at
the date of the financial statements and revenues and expenses for the period
reported. Actual results may differ from these estimates.
10. The Company's Statement of Cash Flows is reported utilizing cash(currency
on hand and demand deposits) and cash equivalents( short-term, highly liquid
investments). The Company's Statement of Cash Flows is reported utilizing the
indirect method of reporting cash flows.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not generated significant revenues from its
planned principal operations. Without realization of additional capital, it
would be unlikely for the Company to continue as a going concern.
NOTE 4 - RELATED PARTY TRANSACTION
Office services are provided without charge by a director. Such costs are
immaterial to the financial statements and, accordingly, have not been
reflected therein. The officers and directors of the Company are involved in
other business activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
F-8
<PAGE>
Freedom Surf, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 15, 1999
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares
of common stock.
NOTE 6 - YEAR 2000 ISSUE
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise in
systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 issue may be experienced before on, or
after January 1, 2000 and if not addressed, the impact on operations and
financial reporting may range from minor errors to significant systems failure
which could affect an entity's ability to conduct normal business operations.
It is not possible to be certain that all aspects of the Year 2000 issue
affecting the entity, including those related to the efforts of customers,
suppliers, or other third parties will be fully resolved.
NOTE 7 - LONG TERM COMMITMENTS
The Company neither owns or leases any real or personal property. Office
services are provided without charge by a director. Such costs are immaterial
to the financial statements and, accordingly, have not been reflected therein.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
F-9
<PAGE>
James E. Slayton, CPA
3867 WEST MARKET STREET
SUITE 208
AKRON, OHIO 44333
To Whom It May Concern: December 16, 1999
The firm of James E. Slayton, Certified Public Accountant consents to the
inclusion of my report of December 15, 1999, on the Financial Statements of
Freedom Surf, Inc. from the inception date of August 2, 1997 through December
15, 1999, in any filings that are necessary now or in the near future to be
filed with the U. S. Securities and Exchange Commission.
Professionally,
/s/ James E. Slayton
- -------------------------
James E. Slayton, CPA
Ohio License ID # 04-1-15582
Item 2. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure
None.
Part III
Item 1. Index to Exhibits
Exhibit
Number Title
- -------- ------
3.1 Nevada Article of Incorporation
3.2 Nevada By Laws
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Freedom Surf, Inc.
(Registrant)
Date: January 3, 2000 By: /s/ Raece Richardson
-----------------------
Raece Richardson
President
Item 2. Description of Exhibits
16
BY-LAWS
of
FREEDOM SURF, INC.
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the
Corporation may be held, pursuant to any relevant statute under Nevada
Revised Statutes, at its office in the City of Las Vegas, Clark County,
Nevada, at 5:30 o'clock P.M. on the 24th day of October in each year,
if not a legal holiday, and if a legal holiday, then on the next
succeeding day not a legal holiday, for the purpose of electing
Directors of the Corporation to serve during the ensuing year and for
the transaction of such other business as may be brought before the
meeting.
At least five days written notice specifying the time and place,
when and where, the annual meeting shall be convened, shall be mailed
in a United States Post Office addressed to each of the stockholders of
record at the time of issuing the notice at his or her, or its last
known address, as the same appears on the books of the Corporation.
SECTION 2. Special meetings of the stockholders may be held at
the office of the Corporation in the State of Nevada, or elsewhere,
whenever called by the President, or by the Board of Directors, or by
vote of, or by an instrument in writing signed by the holders of 50
percent (50%) of the issued and outstanding capital stock of the
Corporation. At least ten days written notice of such meeting,
specifying the day and hour and place, when such meeting shall be
convened, and objects for calling the same, shall be mailed in a United
States Post Office, addressed to each of the stockholders of record at
the time of issuing the notice, at his address last known, as the same
appears on the books of the Corporation.
SECTION 3. If all the stockholders of the Corporation shall waive
notice of a meeting, no notice of such meeting shall be required, and
whenever all of the stockholders shall meet in person or by proxy, such
meeting shall be valued for all purposes without call or notice, and at
such meeting any corporate action may be taken.
The written certificate of the officer or officers calling any
meeting setting forth the substance of the notice, and the time and
place of the mailing of the same to the several stockholders, and the
respective addresses to which the same were mailed, shall be prima
facie evidence of the manner and fact of the calling and giving such
notice.
If the address of any stockholder does not appear upon the books
of the Corporation, it will be sufficient to address any notice to such
stockholder at the principal office of the Corporation.
1
<PAGE>
SECTION 4. All business lawful to be transacted by the
stockholders of the Corporation, may be transacted at any special
meeting or at any adjournment thereof. Only such business, however,
shall be acted upon at the special meeting of the stockholders as shall
have been referred to in the notice calling such meetings, but at any
stockholders' meeting at which all of the outstanding capital stock of
the Corporation is represented, either in person or by proxy, any
lawful business may be transacted, and such meeting shall be valid for
all purposes.
SECTION 5. At the stockholders' meeting the holders of fifty-one
percent (51%) in amount of the entire issued and outstanding capital
stock of the Corporation, shall constitute a quorum for all purposes of
such meetings.
If the holders of the amount of stock necessary to constitute a
quorum shall fail to attend, in person or by proxy, at the time and
place fixed by these By-laws for any annual meeting, or fixed by a
notice as above provided for a special meeting, a majority in interest
of the stockholders present in person or by proxy may adjourn from time
to time without notice other than by announcement at the meeting, until
holders of the amount of stock requisite to constitute a quorum shall
attend. At any such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been
transacted as originally called.
SECTION 6. At each meeting of the stockholders every stockholder
shall be entitled to vote in person or by his duly authorized proxy
appointed by instrument in writing subscribed by such stockholder or by
his duly authorized attorney. Each stockholder shall have one vote for
each share of stock standing registered in his name on the books of the
corporation, ten days preceding the day of such meeting. The votes for
directors, and upon demand by any stockholder, the votes upon any
question before the meeting, shall be viva voce.
At each meeting of the stockholders, a full, true and complete
list, in alphabetical order, of all the stockholders entitled to vote
at such meeting and indicating the number of shares held by each,
certified by the Secretary of the Corporation, shall be furnished,
which list shall be prepared at least ten days before such meeting, and
shall be open to the inspection of the stockholders, or their agents or
proxies, at the place where such meeting is to be held. The persons in
whose names shares of stock are registered on the books of the
Corporation for ten days preceding the date of such meeting, as
evidenced by the list of stockholders, shall be entitled to vote at
such meeting. Proxies and powers of Attorney to vote must be filed
with the Secretary of the Corporation before an election or a meeting
of the stockholders, or they cannot be used at such election or
meeting.
SECTION 7. At each meeting of the stockholders the polls shall be
opened and closed; the proxies and ballots issued, received, and be
taken in charge of, for the purpose of the meeting, and all questions
touching the qualifications of voters and the validity of proxies, and
the acceptance or rejection of votes, shall be decided by one
inspector. Such inspector shall
2
<PAGE>
be appointed at the meeting by the presiding officer of the meeting.
SECTION 8. At the stockholders' meetings, the regular order of
business shall be as follows:
1. Determination of Stockholders present and existence of quorum;
2. Reading and approval of the Minutes of previous meeting or
meetings;
3. Reports of the Board of Directors, the President, Vice-
President,
Treasurer and Secretary of the Corporation in the order named;
4. Reports of Committee;
5. Election of Directors;
6. Unfinished business;
7. New Business;
8. Adjournment.
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. Consistent with Article VI of the Articles of
Incorporation, the Board of Directors of the Corporation shall consist
of at least one (1) but no more than five (5) persons, unless modify by
an amendment to these Articles, who shall be chosen by the stockholders
annually, at the annual meeting of the Corporation, and who shall hold
office for one year, and until their successors are elected and
qualify.
SECTION 2. When any vacancy occurs among the Directors by death,
resignation, disqualification or other cause, the stockholders, at any
regular or special meeting, or at any adjourned meeting thereof, or the
remaining Directors, by the affirmative vote of a majority thereof,
shall elect a successor to hold office for the unexpired portion of the
term of the Director whose place shall have become vacant and until his
successor shall have been elected and shall qualify.
SECTION 3. Meeting of the Directors may be held at the principal
office of the Corporation in the State of Nevada or elsewhere, at such
place or places, in person or telephonically, as the Board of Directors
may, from time to time, determine.
3
<PAGE>
SECTION 4. Without notice or call, the Board of Directors shall
hold its first annual meeting for the year immediately after the annual
meeting of the stockholders or immediately after the election of
Directors at such annual meeting.
Regular meetings of the Board of Directors may be held at the
office of the Corporation during the first week of the month, at the
hour of 5:30 o'clock P.M. Notice of such regular meetings shall be
mailed to each Director by the Secretary at least three days previous
to the day fixed for such meetings, but no regular meeting shall be
held void or invalid if such notice is not given, provided the meeting
is held at the time and place fixed by these by-laws for holding such
regular meetings.
Special meetings of the Board of Directors may be held on the call
of the President or Secretary on at least three days notice by mail,
fax, e-mail or telegraph.
Any meeting of the Board, no matter where held, at which all of
the members shall be present, even though without or of which notice
shall have been waived by all absentees, provided a quorum shall be
present, shall be valid for all purposes unless otherwise indicated in
the notice calling the meeting or in the waiver of notice.
Any and all business may be transacted by any meeting of the Board
of Directors, either regular or special.
SECTION 5. A majority of the Board of Directors in office shall
constitute a quorum for the transaction of business, but if at any
meeting of the Board there be less than a quorum present for the
transaction of business, a majority of those present may adjourn from
time to time, until a quorum shall be present, and no notice of such
adjournment shall be required. The Board of Directors may prescribe
rules not in conflict with these By-laws for the conduct of its
business; provided, however, that in the fixing of salaries of the
officers of the corporation, the unanimous action of all of the
Directors shall be required.
SECTION 6. A Director need not be a Stockholder of the
Corporation.
SECTION 7. The Directors shall be allowed and paid all necessary
expenses incurred in attending any meeting of the Board, but shall not
receive any compensation for their services as Directors until such
time as the Corporation is able to declare and pay dividends on its
capital stock.
SECTION 8. The Board of Directors shall make a report to the
Stockholders at any annual meetings of the Stockholders of the
condition of the Corporation, and shall, when requested, furnish each
of the Stockholders with a true copy thereof.
The Board of Directors in its discretion may submit any contract
or act for approval or ratification at any annual meeting of the
stockholders called for the purpose of considering any such contract or
act, which, if approved, or ratified by the vote of the holders of a
majority of
4
<PAGE>
the capital stock of the Corporation represented in person or by proxy
at such meeting, provided that a lawful quorum of stockholders be there
represented in person or by proxy, shall be valid and binding upon the
Corporation and upon all the stockholders thereof, as if it had been
approved or ratified by every stockholder of the Corporation.
SECTION 9. The Board of Directors shall have the power from time
to time to provide for the management of the offices of the Corporation
in such manner as they see fit, and in particular from time to time to
delegate any of the powers of the Board in the course of the current
business of the Corporation to any standing or special committee or to
any officer or agent and to appoint any persons to be agents of the
Corporation with such powers (including the power to sub-delegate), and
upon such terms as may be deemed fit.
SECTION 10. The Board of Directors is vested with the complete
and unrestrained authority in the management of all the affairs of the
Corporation, and is authorized to exercise for such purpose as the
General Agent of the Corporation, its entire corporate authority.
SECTION 11. The regular order of business at meetings of the
Board of Directors shall be as follows:
1. Determination of members present and existence of quorum;
2. Reading and approval of the Minutes of previous meeting or
meetings;
3. Reports of Officers and Committeemen;
4. Election of Officers;
5. Unfinished business;
6. New Business;
7. Adjournment.
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first and after each
meeting after the annual meeting of stockholders, shall elect a
President, a Secretary, and a Treasurer to hold office for one year
next coming, and until their successors are elected and qualify. The
Board of Directors may, at its discretion, elect a Vice-President to
hold office for one (1) year and until its successor is elected and
qualifies. The offices of the President, Vice-President (if any),
Secretary and Treasurer may be held by one person.
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Any vacancy in any of said offices may be filled by the Board of
Directors.
The Board of Directors may from time to time, by resolution,
appoint such additional Assistant Secretaries, Assistant Treasurers and
Transfer Agents of the Corporation as it may deem advisable; prescribe
their duties, and fix their compensation, and all such appointed
officers shall be subject to removal at any time by the Board of
Directors. All officers, agents, and factors of the Corporation shall
be chosen and appointed in such manner and shall hold their office for
such terms as the Board of Directors may by resolution prescribe.
SECTION 2. The President shall be the executive officer of the
Corporation and shall have the supervision and, subject to the control
of the Board of Directors, the direction of the Corporation's affairs,
with full power to execute all resolutions and orders of the Board of
Directors not especially entrusted to some other officer of the
Corporation. He shall be a member of the Executive Committee, (if any)
and the Chairman thereof; he shall preside at all meetings of the Board
of Directors, and at all meetings of the stockholders, and shall sign
the Certificates of Stock issued by the Corporation, and shall perform
such other duties as shall be prescribed by the Board of Directors.
SECTION 3. The Vice-President (if any) shall be vested with all
the powers and perform all the duties of the President in his absence
or inability to act, including the signing of the Certificates of Stock
issued by the Corporation, and he shall so perform such other duties as
shall be prescribed by the Board of Directors.
SECTION 4. The Treasurer shall have the custody of all the funds
and securities of the Corporation. When necessary or proper he shall
endorse on behalf of the Corporation for collection checks, notes and
other obligations; he shall deposit all monies to the credit of the
Corporation in such bank or banks or other depository the Board of
Directors may designate; he shall sign all receipts and vouchers for
payments made by the Corporation, except as herein otherwise provided.
He shall sign with the President all bills of exchange and promissory
notes of the Corporation; he shall also have the care and custody of
the stocks, bonds, certificates, vouchers, evidence of debts,
securities, and such other property belonging to the Corporation as the
Board of Directors shall designate; he shall sign all papers required
by law or by those By-laws or the Board of Directors to be signed by
the Treasurer. Whenever required by the Board of Directors, he shall
render a statement of his cash account; he shall enter regularly in the
books of the Corporation to be kept by him for the purpose, full and
accurate accounts of all monies received and paid by him on account of
the Corporation. He shall at all reasonable times exhibit the books of
account to any Director of the Corporation during business hours, and
he shall perform all acts incident to the position of Treasurer subject
to the control of the Board of Directors.
The Treasurer shall, if required by the Board of Directors, give
bond to the Corporation conditioned for the faithful performance of all
his duties as Treasurer in such sum, and with such security as shall be
approved by the Board of Directors, with expense of
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<PAGE>
such bond to be borne by the Corporation.
SECTION 5. The Board of Directors may appoint an Assistant
Treasurer who shall have such powers and perform such duties as may be
prescribed for him by the Treasurer of the Corporation or by the Board
of Directors, and the Board of Directors shall require the Assistant
Treasurer of the Corporation to give a bond to the Corporation in such
sum and with such security as it shall approve, as conditioned for the
faithful performance of his duties as Assistant Treasurer, the expense
of such bond to be borne by the Corporation.
SECTION 6. The Secretary shall keep the Minutes of all meetings
of the Board of Directors and the Minutes of all meetings of the
stockholders and of the Executive Committee (if any) in books provided
for that purpose. He shall attend to the giving and serving of all
notices of the Corporation; he may sign with the President or Vice-
President, in the name of the Corporation, all contracts authorized by
the Board of Directors or Executive Committee (if any); he shall affix
the corporate seal of the Corporation thereto when so authorized by the
Board of Directors or Executive committee; he shall have the custody of
the corporate seal of the Corporation; he shall affix the corporate
seal to all certificates of stock duly issued by the Corporation; he
shall have charge of Stock Certificate Books, Transfer books and Stock
Ledgers, and such other books and papers as the Board of Directors or
the Executive committee (if any) may direct, all of which shall at all
reasonable times be open to the examination of any Director upon
application at the office of the Corporation during business hours, and
he shall, in general, perform all duties incident to the office of the
Secretary.
SECTION 7. The Board of Directors may appoint an Assistant
Secretary who shall have such powers and perform such duties as may be
prescribed for him or her by the Secretary of the Corporation or by the
Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of Directors,
the President shall have full power and authority in behalf of the
Corporation to attend and to act and to vote at any meetings of the
stockholders of any corporation in which the Corporation may hold
stock, and at any such meetings, shall possess and may exercise any and
all rights and powers incident to the ownership of such stock, and
which as the new owner thereof, the Corporation might have possessed
and exercised if present. The Board of Directors, by resolution, from
time to time, may confer like powers on any person or persons in place
of the President to represent the Corporation for the purposes in this
section mentioned.
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the Corporation shall be issued
in such manner and at such times and upon such conditions as shall be
prescribed by the Board of Directors.
SECTION 2. Ownership of stock in the Corporation shall be
evidenced by certificates
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of stock in such forms as shall be prescribed by the Board of
Directors, and shall be under the seal of the Corporation and signed by
the President or the Vice-President and also by the Secretary or by an
Assistant Secretary.
All certificates shall be consecutively numbered, the name of the
person owning the shares represented thereby with the number of such
shares, designation, if any, of class or series of shares represented
and the date of issue shall be entered on the Corporate books.
No certificate shall be valid unless it is signed by the President
or Vice-President and by the Secretary or Assistant Secretary.
All certificates surrendered to the Corporation shall be canceled
and no new certificate shall be issued until the former certificate for
the same number of shares shall have been surrendered or canceled.
SECTION 3. No transfer of stock shall be valid as against the
Corporation except on surrender and cancellation of the certificate
therefor, accompanied by an assignment or transfer by the owner
therefor, made either in person or under assignment, a new certificate
shall be issued therefor.
Whenever any transfer shall be expressed as made for collateral
security and not absolutely, the same shall be so expressed in the
entry of said transfer on the books of the Corporation.
SECTION 4. The Board of Directors shall have power and authority
to make all such rules and regulations not inconsistent herewith as it
may deem expedient concerning the issue, transfer and registration of
certificates for shares of the capital stock of the Corporation.
The Board of Directors may appoint a transfer agent and a
registrar of transfers and may require all stock certificates to bear
the signature of such transfer agent and such registrar of transfer.
SECTION 5. The Stock Transfer Books shall be closed for all
meetings of the stockholders for the period of ten days prior to such
meetings and shall be closed for the payment of dividends during such
periods as from time to time may be fixed by the Board of Directors and
during such periods no stock shall be transferable.
SECTION 6. Any person or persons applying for a certificate of
stock in lieu of one alleged to have been lost or destroyed, shall make
affidavit or affirmation of the fact, and shall deposit with the
Corporation an affidavit. Whereupon, at the end of six months after
the deposit of said affidavit and upon such person or persons giving
Bond of Indemnity to the Corporation with surety to be approved by the
Board of Directors in double the current value
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of stock against any damage, loss or inconvenience to the Corporation,
which may or can arise in consequences of a new or duplicate
certificate being issued in lieu of the one lost or missing, the Board
of Directors may cause to be issued to such person or persons a new
certificate, or a duplicate of the certificate, or a duplicate of the
certificate so lost or destroyed. The Board of Directors may, in its
discretion refuse to issue such new or duplicate certificate save upon
the order of some court having jurisdiction in such matter, anything
herein to the contrary notwithstanding.
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the Corporation, in Nevada
shall be located at 537 East Sahara Avenue #203, Las Vegas, Nevada
89104, and the Corporation may have a principal office in any other
state or territory as the Board of Directors may designate.
SECTION 2. The Stock and Transfer Books and a copy of the By-laws
and Articles of Incorporation of the Corporation shall be kept at the
office of the Corporation, for the inspection of all who are authorized
or have the right to see the same, and for the transfer of stock. All
other books of the Corporation shall be kept at such places as may be
prescribed by the Board of Directors.
ARTICLE VI
INDEMNITY
SECTION 1. Every person who was or is a party to, or is
threatened to be made a party to, or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative,
by reason of the fact that he, or a person of who he is the legal
representative, is or was a director or officer of the corporation, or
is or was serving at the request of the corporation as a director or
officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise, shall be
indemnified and held harmless to the fullest extent legally permissible
under the laws of the State of Nevada from time to time against all
expenses, liability and loss (including attorneys? fees, judgments,
fines and amounts paid or to be paid in settlement) reasonably incurred
or suffered by him in connection therewith. Such right of
indemnification shall be a contract right which may be enforced in any
manner desired by such person. The expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding
must be paid by the corporation as they are incurred and in advance of
the final disposition of the action, suit or proceeding, upon receipt
of an undertaking by or on behalf of the director or officer to repay
the amount if it is ultimately determined by a court of competent
jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall not be exclusive of
any other right which such directors, officers or representatives may
have or hereafter acquire, and, without limiting the generality of such
statement, they shall be entitled to their respective rights of
indemnification under
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any bylaw, agreement, vote of stockholders, provision of law, or
otherwise, as well as their rights under this Article.
SECTION 2. The Board of Directors may cause the corporation to
purchase and maintain insurance on behalf of any person who is or was a
director or officer of the corporation, or is or was serving at the
request of the corporation as a director or officer of another
corporation, or as its representative in a partnership, joint venture,
trust or other enterprise against any liability asserted against such
person and incurred in any such capacity or arising out of such status,
whether or not the corporation would have the power to indemnify such
person.
ARTICLE VII
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to reserve
over and above the capital stock paid in, such an amount in its
discretion as it may deem advisable to fix as a reserve fund, and may,
from time to time, declare dividends from the accumulated profits of
the Corporation in excess of the amounts so reserved, and pay the same
to the stockholders of the Corporation, and may also, if it deems the
same advisable, declare stock dividends of the unissued capital stock
of the Corporation.
SECTION 2. No agreement, contract or obligation (other than
checks in payment of indebtedness incurred by authority of the Board of
Directors) involving the payment of monies or the credit of the
Corporation for more than 500 Dollars ($500), for
contracts/obligations, shall be made without the authority of the Board
of Directors, or of the Executive Committee acting as such.
SECTION 3. Unless otherwise ordered by the Board of Directors,
all agreements and contracts shall be signed by the President and the
Secretary in the name and on behalf of the Corporation, and shall have
the corporate seal thereto attached.
SECTION 4. All monies of the Corporation shall be deposited when
and as received by the Treasurer in such bank or banks or other
depository as may from time to time be designated by the Board of
Directors, and such deposits shall be made in the name of the
Corporation.
SECTION 5. No note, draft, acceptance, endorsement or other
evidence of indebtedness shall be valid or against the Corporation
unless the same shall be signed by the President or a Vice-President,
and attested by the Secretary or an Assistant Secretary, or signed by
the Treasurer or an Assistant Treasurer, and countersigned by the
President, Vice-President, or Secretary, except that the Treasurer or
an Assistant Treasurer may, without countersignature, make endorsements
for deposit to the credit of the Corporation in all its duly authorized
depositories.
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SECTION 6. No loan or advance of money shall be made by the
Corporation to any stockholder or officer therein, unless the Board of
Directors shall otherwise authorize.
SECTION 7. No director nor executive officer of the Corporation
shall be entitled to any salary or compensation for any services
performed for the Corporation, unless such salary or compensation shall
be fixed by resolution of the Board of Directors, adopted by the
unanimous vote of all the Directors voting in favor thereof.
SECTION 8. The Corporation may take, acquire, hold, mortgage,
sell, or otherwise deal in stocks or bonds or securities of any other
corporation, if and as often as the Board of Directors shall so elect.
SECTION 9. The Directors shall have power to authorize and cause
to be executed, mortgages, and liens without limit as to amount upon
the property and franchise of this Corporation, and pursuant to the
affirmative vote, either in person or by proxy, of the holders of a
majority of the capital stock issued and outstanding; the Directors
shall have the authority to dispose in any manner of the whole property
of this Corporation.
SECTION 10. The Corporation shall have a corporate seal, the
design thereof being as follows:
SECTION 11. Proxies: Where written consents are given with
respect to any shares, it shall be given by and accepted from the
persons in whose names shares stand on the books of the Corporation at
the time such respective consents are given, or by their proxies,
provided that any shareholders giving a written consent, or his proxy,
or his transferred or personal representative, or their respective
proxies, may revoke the same prior to the time that written consents of
the number of shares required to authorize the proposed action have
been filed with the Secretary of the Corporation. The Secretary of the
Corporation may demand reasonable proof of the genuineness of any or
all proffered proxies, in default of which no such proxy need be
recognized. Persons entitled to vote or execute consents shall have
the right to do so either in person or by one or more agents authorized
by a written proxy executed by the person or his duly authorized agent
and filed with the Secretary of the Corporation, provided that the
proxy shall be valid only if executed in favor of another shareholder
of the Corporation, and further provided that no proxy shall be valid
after the expiration of six (6) months from the date of its execution.
SECTION 12. Voting Trusts: If a voting trust agreement is filed
in the Office of the Corporation, the Corporation shall take notice of
its terms and the limitations this agreement
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places on the authority of the trustees. The agreement shall be valid
only if voting power is vested in another shareholder of the
Corporation.
SECTION 13: Repurchase of Shares: This Corporation may
repurchase its outstanding shares without regard to any restriction
provided by law upon the repurchase of shares, provided only that one
voting share remains issued and outstanding.
SECTION 14. Shares of Deceased Shareholders: When this
Corporation shall have two or more shareholders and one of its
shareholders dies, his shares shall be sold and transferred to this
Corporation, or to one or more of the other shareholders of this
Corporation, in accordance with the applicable terms of Article 15 or
if the Shareholder and/or corporation have an agreement in effect said
agreement shall apply herein. Such sale shall not be later than three
(3) months after any such death unless otherwise agreed to by the
Shareholder. If no such agreement shall be in effect or, if in effect,
if such agreement shall be in dispute, in default or unperformed, then
upon the last day for the mandatory sale required by this Section 14
the Corporation may cancel all of such shares without the necessity of
the physical surrender of the certificates evidencing such shares and
such deceased Shareholder shall upon such cancellation cease to be a
Shareholder of this Corporation. Nothing in this Section 14 shall in
any way impair any of the rights of any representative of such deceased
shareholder to claim just compensation for the fair value of his
shares.
SECTION 15. Restrictions on Transfer: In the event there is no
other agreement currently in effect regarding the transfer of stock of
the Corporation, before there can be a valid sale or transfer of any of
the shares of the Corporation by any holder, he shall first offer these
shares to the Corporation and then to the other holders of shares in
the following manner:
(a) The offering Shareholder shall deliver a notice in writing, by
mail, or otherwise, to the Secretary of the Corporation stating the
price, terms, and conditions of the proposed sale or transfer, the
number of shares to be sold or transferred, and his intention so to
sell or transfer these shares. Within thirty (30) days thereafter, the
Corporation shall have the prior right to purchase all of the shares so
offered at the price and upon the terms and conditions stated in the
notice. Should the Corporation fail to purchase all of these shares,
at the expiration of said thirty (30) days period, or prior thereto,
upon the determination of the Corporation to purchase none or only a
portion of such shares so offered, the Secretary of the Corporation
shall, within five (5) days thereafter, mail or deliver to each of the
other shareholders a notice setting forth the particulars concerning
said shares not so purchased by the Corporation described in the notice
received from the offering Shareholder. The other Shareholders shall
have the right to purchase all of the shares specified in said
Secretary's notice by delivering to the Secretary by mail or otherwise
a written offer or offers to purchase all or any specified number of
such shares upon the terms so described in the Secretary's notice if
such offer or offers are so delivered to the Secretary within fifteen
(15) days after mailing or delivering such Secretary's notice to such
other shareholders. If the total number of shares
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specified in such offers so received within such period by the
Secretary exceeds the number of shares referred to in such Secretary's
notice, each offering shareholder shall be entitled to purchase such
proportion of the shares referred to in said notice to the Secretary as
the number of shares of this Corporation which he holds bears to the
total number of shares held by all such shareholders desiring to
purchase the shares referred to in said notice to the Secretary.
(b) If all of the shares referred to in said notice to the
Secretary are not disposed of under such apportionment, each
shareholder desiring to purchase shares in a number in excess of his
proportionate share, as provided above, shall be entitled to purchase
such proportion of those shares which remain thus undisposed of, as the
total number of shares which he holds bears to the total number of
shares held by all of the shareholders desiring to purchase shares in
excess of those to which they are entitled under such apportionment.
(c) If none or only part of the shares referred to in said notice
to the Secretary are purchased, as aforesaid, by the Corporation or in
accordance with offers made by other shareholders within said fifteen
(15) day period, the shareholder desiring to sell or transfer shall not
be obligated to accept such offers from one or more of the other
shareholders and may dispose of all of the shares of stock referred to
in said notice, to any person or persons to whom such transfer is
lawful and under the applicable rules and statute; provided, however,
that he shall not sell or transfer such shares at a lower price or on
terms more favorable to the purchaser or transferee than those
specified in said notice to the Secretary.
(d) Within the limitations herein provided, this Corporation may
purchase the shares of the Corporation from any offering shareholder;
provided, however, that at no time shall this Corporation be permitted
to purchase all of its outstanding voting shares without a resolution
from the Board of Directors approved by a unanimous vote. Any sale or
transfer or purported sale or transfer of the shares of the Corporation
shall be null and void unless the terms, conditions and provisions of
this Section are strictly observed.
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ARTICLE VIII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments and changes of these By-laws may be made at
any regular or special meeting of the Board of Directors by a vote of
not less than fifty percent of the entire Board, or may be made by a
vote of, or a consent in writing signed by the holders of fifty-one
percent (51%) of the issued and outstanding capital stock.
KNOW ALL MEN BY THESE PRESENTS: That, the undersigned, being the
Directors of the above-named Corporation, do hereby consent to the
foregoing By-laws and adopt the same as and for the By-laws of said
Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
November, 1999.
ATTEST:
/s/Raece Richardson
- -------------------------------, President
/s/David McKenzie
- -------------------------------, Secretary
13
ARTICLES OF INCORPORTATION
OF
FREEDOM SURF, INC.
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, for the purpose of forming a
corporation under and by virtue of the laws of the State of
Nevada, do hereby adopt the following Articles of
Incorporation.
1. Name of Company:
FREEDOM SURF, INC.
2. Resident Agent:
The Resident Agent of the company is:
Globalwide Investment Company, LLC
Brian Dvorak, Member
3450 E. Russell Road
Las Vegas, NV 89121
3. Board of Directors:
The company shall initially have three (3) directors.
These individuals shall serves as directors until their
successor or successors have been elected and qualified. The
number of directors may be increased or decreased by a duly
adopted amendment to the By-Laws of the Corporation, and
without the necessity of amending these Articles of
Incorporation. A majority of the directors in office, present
at any meeting of the Board of Directors duly called, whether
physically or telephonically present, whether regular or
special, shall always constitute a quorum of the transaction
of business, unless the bylaws shall otherwise provide. The
names and mailing addresses of the initial directors are:
Raece Richardson 3450 E. Russell Road, Las Vegas, NV 89121
David McKenzie 3450 E. Russell Road, Las Vegas, NV 89121
Martin Gilcrest 3450 E. Russell Road, Las Vegas, NV 89121
Page 1 of 4
<PAGE>
4. Authorized Shares:
The aggregate number of shares which the Corporation
shall have authority to issue shall consist of 20,000,000
shares of Common Stock having a $.001 par value, and 5,000,000
shares of Preferred Stock having a $.001 par value. The
Common Stock and/or Preferred Stock of the Company may be
issued from time to time without prior approval by the
stockholders. The Common Stock and/or Preferred Stock may be
issued for such consideration as may be fixed from time to
time by the Board of Directors. The Board of Directors may
issue such shares of Common and/or Preferred Stock in one or
more series, with such voting powers, designations,
preferences and rights or qualifications, limitations or
restrictions thereof as shall be stated in the resolution of
resolutions.
5. Preemptive Rights and Assessment of Shares:
Holders of Common Stock or Preferred Stock of the
Corporation shall not have any preference, preemptive right or
right of subscription to acquire shares of the Corporation
authorized, issued, or sold, or to be authorized, issued or
sold, or to any obligations or shares authorized or issued or
to be authorized or issued or to be authorized or issued, and
convertible into shares of the Corporation, nor to any right
of subscription thereto, other than to the extent, if any, the
Board of Directors in its sole discretion, may determine from
time to time.
6. Director's and Officer's Liability:
A director or officer of the Corporation shall not be
personally liable to this Corporation or its stockholders for
damages for breach of fiduciary duty as a director or officer,
but this Article shall not eliminate or limit the liability of
a director or officer for (i) acts or omissions which involve
international misconduct, fraud or a knowing violation of the
law or (ii) the unlawful payment of dividends. Any repeal or
modification of the Article by 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 of omissions prior to such repeal
of modification.
7. Indemnity:
Every person who was or is a party to, or is threatened
to be made a party to, or is involved in any such action, suit
or proceeding, whether civil, criminal, administrative or
investigative, by the reason of the fact that he or she or a
person with whom he or she is a legal representative, is or
was a director of the Corporation, or who is serving at the
request of the Corporation as a director or officer of another
corporation, or is a representative in a partnership, joint
venture, trust or other enterprise, shall be indemnified and
held harmless to the fullest extent legally permissible under
the laws of the State of Nevada from time to time against all
expenses, liability and loss (including attorney's fees,
judgments, fines, and amounts paid or to be paid in a
settlement) reasonably incurred or suffered by him or her in
connection therewith. Such right of
Page 2 of 4
<PAGE>
indemnification shall be a contract right and which may be
enforced in any manner desired by such person. The expenses
of officers and directors incurred in defending a civil suit
or proceeding must be paid by the Corporation as incurred and
in advance of the final disposition of the action, suit, or
proceeding, under receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction
that he or she is not entitled to be indemnified by the
Corporation. Such right of indemnification shall not be
exclusive of any other right of such directors, officers or
representatives may have or hereafter acquire, and without
limiting the generality of such statement, they shall be
entitled to their respective rights of indemnification under
any bylaw, agreement, vote of stockholders, provision of law,
or otherwise, as well as their rights under this article
Without limiting the application of the foregoing, the
Board of Directors may adopt By-Laws from time to time without
respect to indemnification, to provide at all times the
fullest indemnification permitted by the laws of the State of
Nevada, and may cause the Corporation to purchase or maintain
insurance on behalf of any person who is or was a director or
officer.
8. Amendments:
Subject at all times to the express provisions of Section
4 on the Assessment of Shares, this Corporation reserves the
right to amend, alter, change, or repeal any provision
contained in these Articles of Incorporation or its By-Laws,
in the manner now or hereafter prescribed by statute or the
Articles of Incorporation of said By-Laws, and all rights
conferred upon shareholders are granted subject to this
reservation.
9. Power of Directors:
In furtherance, and not in limitation of those powers
conferred by statute, the Board of Directors is expressly
authorized:
(a) Subject to the By-Laws, is any adopted by the
shareholders, to make, alter or repeal the By-Laws of the
corporation;
(b) To authorize and cause to be executed mortgages and
lines, with our without limitations as to the amount, upon the
real and personal property of the corporation.
(c) To authorize the guaranty by the Corporation of the
securities, evidences of indebtedness and obligations of other
persons, corporations or business entities;
(d) To set apart out of any funds of the Corporation
available for dividends a reserve or reserves for any proper
purpose and to abolish any such reserve;
(e) By resolution adopted by the majority of the whole Board,
to designate one or more committees to consist of one or more
Directors or the Corporation, which, to the extent provided on
the resolution or in the By-Laws of the Corporation, shall
have and may authorize the seal of the Corporation to be
affixed to all papers which may require it. such committee or
committees shall have name and 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
Page 3 of 4
<PAGE>
All the corporate powers of the Corporation shall be
exercised by the Board of Directors except as otherwise herein
or in the By-Laws or by law.
IN WITNESS WHEREOF, I hereby set my hand on this ___ day
of November, 1999, hereby declaring and certifying that the
facts stated hereinabove are true.
Signature of Incorporator:
Name: Karla Reeder
Address: 3450 E. Russell Road
Las Vegas, NV 89121
Signature: /s/ Karla Reeder
--------------------
Karla Reeder, Incorporator
State of Nevada )
) ss:
County of Clark )
The foregoing instrument was acknowledged before me this
17th day of November, 1999.
/s/ B Dvorak
- ---------------- ---------------------------------
Notary Public of Official Seal
said county and state
Certificate of Acceptance of Appointment of Resident Agent:
I, Brian Dvorak, for Globalwide Investment Company, a
Nevada Limited Liability Company, hereby accepts appointment
as Resident Agent for the above-named corporation.
/s/ B Dvorak
- -----------------
Brian Dvorak
Globalwide Investment Company, LLC
Resident Agent
Page 4 of 4
