U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
0
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
PARPUTT ENTERPRISES, INC.
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(Name of Small Business Issuer in its charter)
Nevada 88-0446188
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2851 S. Parker Road
Suite 720
Aurora, Colorado 80014
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(Address of principal executive offices) (Zip code)
Issuer's telephone number: (303) 671-8920
Securities to be registered pursuant to Section 12(b) of the Act:
none
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
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(Title of Class)
Page One of Seventy One Pages
Exhibit Index is Located at Page Thirty Eight
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TABLE OF CONTENTS
Page
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PART I
Item 1. Description of Business . . . . . . . . . . . . . 3
Item 2. Plan of Operation. . . . . . . . . . . . . . . . . 8
Item 3. Description of Property. . . . . . . . . . . . . . 14
Item 4. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . 14
Item 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . 15
Item 6. Executive Compensation . . . . . . . . . . . . . . 20
Item 7. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . 21
Item 8. Description of Securities. . . . . . . . . . . . . 22
PART II
Item 1. Market for Common Equities and Related Stockholder
Matters . . . . . . . . . . . . . .. . . . . . . 24
Item 2. Legal Proceedings. . . . . . . . . . . . . . . . . 25
Item 3. Changes in and Disagreements with Accountants. . . 26
Item 4. Recent Sales of Unregistered Securities. . . . . . 26
Item 5. Indemnification of Directors and Officers. . . . . 27
PART F/S
Financial Statements . . . . . . . . . . . . . . . 27
PART III
Item 1. Index to Exhibits. . . . . . . . . . . . . . . . . 38
Item 2. Description of Exhibits. . . . . . . . . . . . . . 40
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PART I
Item 1. Description of Business
Parputt Enterprises, Inc. (the "Company") was incorporated on November 4,
1996, under the laws of the State of Nevada to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions.
The Company has been in the developmental stage since inception and has no
operations to date. Other than issuing shares to its original shareholders, the
Company never commenced any operational activities. As such, the Company can be
defined as a "shell" company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity. The Board of Directors
of the Company has elected to commence implementation of the Company's principal
business purpose, described below under "Item 2 - Plan of Operation."
The Company is filing this Registration Statement on a voluntary basis
because the primary attraction of the Company as a merger partner or acquisition
vehicle will be its status as a public company. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities or undertake any offering of the
Company's securities, either debt or equity, until such time as the Company has
successfully implemented its business plan described herein. Relevant thereto,
each shareholder of the Company has executed and delivered a "lock-up" letter
agreement, affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has successfully
consummated a merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that no trading
will occur in the Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who will
not release these respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully consummated.
However, while management believes that the procedures established to preclude
any sale of the Company's securities prior to closing of a merger or acquisition
will be sufficient, there can be no assurances that the procedures established
relevant herein will unequivocally limit any shareholder's ability to sell their
respective securities before such closing.
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The Company's business is subject to numerous risk factors, including the
following:
The Company has no operating history or revenue and minimal assets. The
Company's financial statements accompanying this Registration Statement have
been prepared assuming that the Company will continue as a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The financial statements do not include any
adjustment that might result from the outcome of this uncertainty. The Company
has had no operating history nor any revenues or earnings from operations. The
Company has no significant assets or financial resources. The Company will
sustain operating expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in the Company incurring
a net operating loss which will increase continuously until the Company can
consummate a business combination with a profitable business opportunity. There
is no assurance that the Company can identify such a business opportunity and
consummate such a business combination.
The Company's proposed operations are speculative. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. The Company may not be successful in locating candidates with
established profitable operations. In the event the Company completes a business
combination, the success of the Company's operations may be dependent upon
management of the successor firm or venture partner firm and numerous other
factors beyond the Company's control.
There is a scarcity of possible merger or acquisition candidates which will
be available to the Company. Many similar companies have greater resources than
the Company. The Company is and will continue to be an insignificant participant
in the business of seeking mergers with, joint ventures with and acquisitions of
small private and public entities. A large number of established and
well-financed entities, including venture capital firms, are active in mergers
and acquisitions of companies which may be desirable target candidates for the
Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company and,
consequently, the Company will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a business
combination. Moreover, the Company will also compete in seeking merger or
acquisition candidates with numerous other small public companies.
There is no current agreement between the Company and any other entity to
enter into any transaction and there are no standards for a business
combination. The Company has no
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arrangement, agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, a private or public entity. The
Company may not be successful in identifying and evaluating suitable business
opportunities or in concluding a business combination. Management has not
identified any particular industry or specific business within an industry for
evaluation by the Company. The Company may not be able to negotiate a business
combination on terms favorable to the Company. The Company has not established a
specific length of operating history or a specified level of earnings, assets,
net worth or other criteria which it will require a target business opportunity
to have achieved, and without which the Company would not consider a business
combination in any form with such business opportunity. Accordingly, the Company
may enter into a business combination with a business opportunity having no
significant operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.
Management intends to devote only limited time to the business of the
Company. While seeking a business combination, each member of management
anticipates devoting up to twenty hours per month to the business of the
Company. None of the Company's officers has entered into a written employment
agreement with the Company and none is expected to do so in the foreseeable
future. The Company has not obtained key man life insurance on any of its
officers or directors. Loss of the services of any of these individuals would
adversely affect development of the Company's business and its continuing
operations. See "Item 5 - Directors, Executive Officers, Promoters and Control
Persons."
Management may participate in other similar businesses to that of the
Company. Officers and directors of the Company may in the future participate in
business ventures which could be deemed to compete directly with the Company.
Additional conflicts of interest and non-arms length transactions may also arise
in the future in the event the Company's officers or directors are involved in
the management of any firm with which the Company transacts business. Management
has adopted a policy that the Company will not seek a merger with, or
acquisition of, any entity in which management serve as officers, directors or
partners, or in which they or their family members own or hold any ownership
interest.
Time and costs associated with a business combination may delay or
eliminate some potential candidates. Sections 13 and 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") require companies subject thereto to
provide certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two, or three
years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to prepare such
statements may significantly delay or essentially
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preclude consummation of an otherwise desirable acquisition by the Company.
Acquisition prospects that do not have or are unable to obtain the required
audited statements may not be appropriate for acquisition so long as the
reporting requirements of the 1934 Act are applicable.
The Company does not have a marketing organization, nor does it intend to
use any market research. The Company has neither conducted, nor have others made
available to it, results of market research indicating that market demand exists
for the transactions contemplated by the Company. Moreover, the Company does not
have, and does not plan to establish, a marketing organization. Even in the
event demand is identified for a merger or acquisition contemplated by the
Company, the Company may not be successful in completing any such business
combination.
Upon closing of a business combination, the Company may be subject to
economic fluctuations. The Company's proposed operations, even if successful,
will result in the Company engaging in a business combination with a business
opportunity. Consequently, the Company's activities may be limited to those
engaged in by business opportunities which the Company merges with or acquires.
The Company's inability to diversify its activities into a number of areas may
subject the Company to economic fluctuations within a particular business or
industry and therefore increase the risks associated with the Company's
operations.
The Company may be regulated by Investment Company Act of 1940. Although
the Company will be subject to regulation under the Securities Exchange Act of
1934, management believes the Company will not be subject to regulation under
the Investment Company Act of 1940, insofar as the Company will not be engaged
in the business of investing or trading in securities. In the event the Company
engages in business combinations which result in the Company holding passive
investment interests in a number of entities, the Company could be subject to
regulation under the Investment Company Act of 1940. In such event, the Company
would be required to register as an investment company and could be expected to
incur significant registration and compliance costs. The Company has obtained no
formal determination from the Securities and Exchange Commission as to the
status of the Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act would subject the Company to additional
reporting requirements, which in turn will result in the Company incurring
additional costs of compliance with such additional regulations.
Control and management will probably change upon consummation of a business
combination. A business combination involving the issuance of the Company's
Common Shares will result in shareholders of a private company obtaining a
controlling interest in the Company. Any such business combination may require
management of the Company to sell or transfer all or a portion of the Company's
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Common Shares held by them, or resign as members of the Board of Directors of
the Company. The resulting change in control of the Company could result in
removal of one or more present officers and directors of the Company and a
corresponding reduction in or elimination of their participation in the future
affairs of the Company.
Shareholders percentage of ownership will decrease following a business
combination. The Company's primary plan of operation is based upon a business
combination with a private concern which would result in the Company issuing
securities to shareholders of any such private company. The issuance of
previously authorized and unissued Common Shares of the Company would result in
reduction in percentage of shares owned by present and prospective shareholders
of the Company and may result in a change in control or management of the
Company.
There are disadvantages associated with a blank check offering. The Company
may enter into a business combination with an entity that desires to establish a
public trading market for its shares. A business opportunity may attempt to
avoid what it deems to be adverse consequences of undertaking its own public
offering by seeking a business combination with the Company. Such consequences
may include, but are not limited to, time delays of the registration process,
significant expenses to be incurred in such an offering, loss of voting control
to public shareholders and the inability or unwillingness to comply with various
federal and state laws enacted for the protection of investors.
It is important to structure an acquisition or merger as a "tax free"
transaction. Federal and state tax consequences will be major considerations in
any business combination the Company may undertake. Currently, such transactions
may be structured so as to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company intends to
structure any business combination so as to minimize the federal and state tax
consequences to both the Company and the target entity; however, a business
combination may not meet the statutory requirements of a tax-free reorganization
or the parties may not obtain the intended tax-free treatment upon a transfer of
stock or assets. A non-qualifying reorganization could result in the imposition
of both federal and state taxes which may have an adverse effect on both parties
to the transaction.
There is a requirement that a business opportunity provide audited
financial statements, which may disqualify some business opportunities.
Management of the Company believes that any potential business opportunity must
provide audited financial statements for review, for the protection of all
parties to the business combination. One or more attractive business
opportunities may choose to forego the possibility of a business
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combination with the Company, rather than incur the expenses associated with
preparing audited financial statements.
Item 2. Plan of Operation
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for its
securities. The Company has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between the Company and
such other company as of the date of this Registration Statement.
The Company has no full time employees. The Company's President and
Secretary/Treasurer have agreed to allocate up to 20 hours per month of their
time to the activities of the Company, without compensation. These officers
anticipate that the business plan of the Company can be implemented by their
devoting such minimal time per month to the business affairs of the Company and,
consequently, conflicts of interest may arise with respect to the limited time
commitment by such officers. See "Item 5 - Directors, Executive Officers,
Promoters and Control Persons - Resumes."
The Company's officers and directors were formerly involved with other
"blank check" companies. The Company's officers and directors may, in the
future, become involved with other companies who have a business purpose similar
to that of the Company. As a result, additional potential conflicts of interest
may arise in the future. If such a conflict does arise and an officer or
director of the Company is presented with business opportunities under
circumstances where there may be a doubt as to whether the opportunity should
belong to the Company or another "blank check" company they are affiliated with,
they will disclose the opportunity to all such companies. If a situation arises
in which more than one company desires to merge with or acquire that target
company and the principals of the proposed target company has no preference as
to which company will merger or acquire such target company, the company which
first filed a registration statement with the Securities and Exchange Commission
will be entitled to proceed with the proposed transaction. See "Item 5 -
Directors, Executive Officers, Promoters and Control Persons - Prior 'Blank
Check' Experience."
The Articles of Incorporation of the Company provides that the Company
shall possess and may indemnify officers and/or directors of the Company for
liabilities, which can include liabilities arising under the securities laws.
Therefore, assets of the Company could be used or attached to satisfy any
liabilities
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subject to such indemnification. See "Part II - Item 5 - Indemnification of
Directors and Officers."
General Business Plan
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. The Company will not restrict its search to
any specific business, industry, or geographical location and the Company may
participate in a business venture of virtually any kind or nature. This
discussion of the proposed business is purposefully general and is not meant to
be restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities. Management anticipates that it may
be able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources. See "Part F/S -
Financial Statements." This lack of diversification should be considered a
substantial risk to shareholders of the Company because it will not permit the
Company to offset potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes) for all shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes the Company will be able to offer owners of
acquisition candidates the
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opportunity to acquire a controlling ownership interest in a publicly registered
company without incurring the cost and time required to conduct an initial
public offering. The owners of the business opportunities will, however, incur
significant legal and accounting costs in connection with acquisition of a
business opportunity, including the costs of preparing Form 8-K's, 10-K's or
10-KSB's, agreements and related reports and documents. The Securities Exchange
Act of 1934 (the "34 Act") specifically requires that any merger or acquisition
candidate comply with all applicable reporting requirements, which include
providing audited financial statements to be included within the numerous
filings relevant to complying with the 34 Act. Nevertheless, the officers and
directors of the Company have not conducted market research and are not aware of
statistical data which would support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company, none of whom is a
professional business analyst. Management intends to concentrate on identifying
preliminary prospective business opportunities which may be brought to its
attention through present associations of the Company's officers and directors,
or by the Company's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the perceived public recognition of acceptance of products, services, or trades;
name identification; and other relevant factors. Officers and directors of the
Company expect to meet personally with management and key personnel of the
business opportunity as part of their investigation. To the extent possible, the
Company intends to utilize written reports and personal investigation to
evaluate the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be obtained within a
reasonable period of time after closing of the proposed transaction.
Management of the Company, while not especially experienced in matters
relating to the new business of the Company, shall rely upon their own efforts
and, to a much lesser extent, the efforts of the Company's shareholders, in
accomplishing the business purposes of the Company. It is not anticipated that
any outside consultants or advisors will be utilized by the Company to
effectuate its business purposes described herein. However, if the Company does
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retain such an outside consultant or advisor, any cash fee earned by such party
will need to be paid by the prospective merger/ acquisition candidate, as the
Company has no cash assets with which to pay such obligation. There have been no
contracts or agreements with any outside consultants and none are anticipated in
the future.
The Company will not restrict its search for any specific kind of firms,
but may acquire a venture which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status of any business in
which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. However, the Company
does not intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. Because the Company has no
capital with which to pay these anticipated expenses, present management of the
Company will pay these charges with their personal funds, as interest free loans
to the Company. However, the only opportunity which management has to have these
loans repaid will be from a prospective merger or acquisition candidate.
Management has agreed among themselves that the repayment of any loans made on
behalf of the Company will not impede, or be made conditional in any manner, to
consummation of a proposed transaction.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, the Company's
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of the Company's shareholders or may
sell their stock in the Company. Any terms of sale of the shares presently held
by officers and/or directors of the Company will be also afforded to all other
shareholders of the Company on similar terms and conditions. Any and all such
sales will only be made in compliance with the securities laws of the United
States and any applicable state.
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It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has successfully consummated a merger or acquisition and the Company is no
longer considered a "shell" company. Until such time as this occurs, the Company
will not attempt to register any additional securities. The issuance of
substantial additional securities and their potential sale into any trading
market which may develop in the Company's securities may have a depressive
effect on the value of the Company's securities in the future, if such a market
develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company, would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis of verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise. The manner in which the
Company participates in an opportunity will depend on the nature of the
opportunity, the respective needs and desires of the Company and other parties,
the management of the opportunity and the relative negotiation strength of the
Company and such other management.
With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of the Company which the
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage ownership may be subject to
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significant reduction in the event the Company acquires a target company with
substantial assets. Any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of shares held
by the Company's then shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The Company
is subject to all of the reporting requirements included in the 34 Act. Included
in these requirements is the affirmative duty of the Company to file independent
audited financial statements as part of its Form 8-K to be filed with the
Securities and Exchange Commission upon consummation of a merger or acquisition,
as well as the Company's audited financial statements included in its annual
report on Form 10-K (or 10-KSB, as applicable). If such audited financial
statements are not available at closing, or within time parameters necessary to
insure the Company's compliance with the requirements of the 34 Act, or if the
audited financial statements provided do not conform to the representations made
by the candidate to be acquired in the closing documents, the closing documents
will provide that the proposed transaction will be voidable, at the discretion
of the present management of the Company. If such transaction is voided, the
agreement will also contain a provision providing for the acquisition entity to
reimburse the Company for all costs associated with the proposed transaction.
Competition
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors. In the event the
Company is competing with another entity similar to that of the Company with the
exception for the
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fact that the other company has assets to offer any merger or acquisition
candidate, it is doubtful that the Company will be able to successfully
consummate such a transaction.
Item 3. Description of Property
The Company has no properties and at this time has no agreements to acquire
any properties. The Company intends to attempt to acquire assets or a business
in exchange for its securities which assets or business is determined to be
desirable for its objectives.
The Company operates from its offices at 2851 S. Parker Road, Suite 720,
Aurora, Colorado 80014. This space is provided to the Company on a rent free
basis by Andrew I. Telsey, an officer, director and a principal shareholder of
the Company, and it is anticipated that this arrangement will remain until such
time as the Company successfully consummates a merger or acquisition. Management
believes that this space will meet the Company's needs for the foreseeable
future.
Item 4. Security Ownership of Certain Beneficial Owners and
Management
The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as the securities of the Company
beneficially owned by all directors and officers of the Company. Unless
otherwise indicated, the shareholders listed possess sole voting and investment
power with respect to the shares shown.
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
- -------------- ----- ----- -----
Common Andrew I. Telsey 260,000 52%
6198 S. Moline Ct.
Englewood, CO 80111
Common Darlene D. Kell 20,000 4%
2851 S. Parker Rd.
Suite 720
Aurora, CO 80014
Common All Officers and 280,000 56%
Directors as a
Group (2 person)
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The balance of the Company's outstanding Common Shares are held by 11
persons.
(b) Security Ownership of Management.
The following table sets forth the beneficial ownership for each class of
equity securities of the Company beneficially owned by all directors and
officers of the Company.
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
- -------------- ----- ----- --------
Common Andrew I. Telsey 260,000 52%
6198 S. Moline Ct.
Englewood, CO 80111
Common Darlene D. Kell 20,000 4%
2851 S. Parker Rd.
Suite 720
Aurora, CO 80014
Common All Officers and 280,000 56%
Directors as a
Group (2 persons)
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
The directors and officers of the Company are as follows:
Name Age Position
---- --- --------
Andrew I. Telsey 46 President and Director
Darlene D. Kell 54 Secretary/Treasurer and
Director
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly elected
and qualified. Vacancies in the existing Board of Directors are filled by
majority vote of the remaining Directors. Officers of the Company serve at the
will of the Board of Directors. There is no family relationship between any
executive officer and director of the Company.
Resumes
Andrew I. Telsey, President and Director. Mr. Telsey has held his positions
with the Company since its inception. From 1984 through the present, Mr. Telsey
has been employed by Andrew I.
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Telsey, P.C., Aurora, Colorado, a professional corporation engaged in the
practice of law, emphasizing securities law, mergers, acquisitions and general
business matters. This firm is also legal counsel to the Company. In addition,
Mr. Telsey is also a director and principal shareholder of Cavion Technologies,
Inc., a publicly held Colorado corporation, which completed its initial public
offering in November 1999, and an officer, director and principal shareholder of
Mully Corp., a Colorado corporation, which is also a reporting company pursuant
to the Securities Exchange Act of 1934, as amended and whose principal business
is similar to that of the Company. Mr. Telsey received a Juris Doctor degree
from Syracuse University College of Law in 1979 and a Bachelor of Arts degree
from Ithaca College in 1975. He devotes only such time as necessary to the
business of the Company, which time is expected to be nominal.
Darlene D. Kell, Secretary, Treasurer and Director. Ms. Kell has held her
position with the Company since its inception. Since September 1994, Ms. Kell
has been employed as a paralegal and office manager for Andrew I. Telsey, P.C.,
Aurora, Colorado. Prior, from October 1993 to August 1994, Ms. Kell was employed
as a paralegal/office manager for Wherry & Wherry, P.C., a law firm located in
Denver, Colorado. From May 1993 to September 1993, Ms. Kell was self-employed,
offering free-lance secretarial, paralegal and bookkeeping services in Denver,
Colorado. Prior thereto, from January 1993 through May 1993, Ms. Kell was
employed as a paralegal/office manager for A. Thomas Tenenbaum, P.C., Denver,
Colorado and with Dihle & Co., P.C., Denver, Colorado, from July 1991 through
December 1992. She devotes only such time as necessary to the business of the
Company, which time is expected to be nominal.
Prior "Blank Check" Experience
Mr. Telsey is currently the sole officer and director of Mully Corporation,
a Colorado corporation ("Mully") which is also a "blank check" public reporting
company. Mully filed a Registration Statement on Form 10-SB in March 1999, which
became effective in June 1999, wherein it registered its common stock pursuant
to Section 12(g) of the Securities Exchange Act of 1934, as amended. As of the
date of this registration statement, Mully is reviewing a variety of possible
merger or acquisition candidates, but no definitive agreement has been reached
with any third party.
Mr. Telsey and Ms. Kell were officers and director of Mathy Corporation
("Mathy"), a "blank check" public reporting company. Mathy filed a Registration
Statement on Form 10-SB in June 1998, which became effective in August 1998,
wherein it registered its common stock pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended. Effective May 7, 1999, pursuant to
a definitive agreement (the "Mathy Agreement"), Mathy acquired all of the issued
and outstanding securities of the Cooper Memphis Group,
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Inc. ("Cooper"), a California corporation. The terms of the transaction involved
Mathy undertaking a forward split of its issued and outstanding common stock
whereby 2.5 shares of common stock were issued in exchange for every share of
common stock outstanding immediately prior to the closing of the transaction in
order to establish the number of issued and outstanding common shares of Mathy
at closing to be 1,250,000. Thereafter, Mathy issued an aggregate of 11,250,000
shares of its "restricted" common stock to the former shareholders of Cooper in
exchange for all of their stock in Cooper. Cooper did not survive the
transaction. Mathy also changed its name to "DrivingAmerica.com, Inc." ("DAI").
Pursuant to the terms of the Mathy Agreement, Mr. Telsey and Ms. Kell resigned
their respective positions in Mathy at closing of the aforesaid transaction.
DAI's principal business is as a marketer of database information related
to automotive marketing under the name "Automotive Consumer Services." The
initial database is comprised of new vehicle information, including
specifications and dealer vehicle costs, which are sold to consumers in the form
of printed vehicle reports. In turn, the consumers who purchase the reports,
along with their behavioral characteristics, become the source of a secondary,
marketed database of consumer information to several manufacturers of
automobiles, local dealer referral programs and affinity groups. DAI is based in
Irvine, California.
DAI intends to expand operations into other logically related and lucrative
services related to the acquisition of an automobile. At the same time, it
expects to develop Internet technology to facilitate the expansion of the list
of services to include other auto-related financial services. As of the date of
this Registration Statement, DAI has filed an application to list its common
stock for trading on the OTC Bulletin Board operated by the National Association
of Securities Dealers, Inc. There can be no assurances that the DAI's
application will be approved.
Mr. Telsey and Ms. Kell were also formerly officers and directors of Tarcyn
Corporation ("Tarcyn"), a "blank check" public reporting company. Tarcyn filed a
Registration Statement on Form 10-SB in May 1997, which became effective in July
1997, wherein it registered its common stock pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended. Effective February 16, 1999,
pursuant to a definitive agreement, Tarcyn acquired all of the issued and
outstanding securities of CreditCo, Inc. ("Creditco"), a Delaware corporation.
The terms of the transaction involved Tarcyn undertaking a forward split of its
issued and outstanding common stock whereby 3.5 shares of common stock were
issued in exchange for every share of common stock outstanding immediately prior
to the closing of the transaction in order to establish the number of issued and
outstanding common shares of Tarcyn at closing to be 1,750,000. Thereafter,
Tarcyn issued an aggregate of 15,750,000 shares of its "restricted" common stock
to
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the former shareholders of Creditco in exchange for all of their stock in
Creditco. Creditco did not survive the transaction. Tarcyn also changed its name
to "MerchantOnline.com, Inc." ("MOL"). Mr. Telsey and Ms. Kell resigned their
positions with Tarcyn upon closing of the aforesaid transaction.
MOL's principal business is to provide a diverse selection of services
which it has developed to allow Internet merchants to quickly and easily
establish a method of conducting business on the Internet with a minimal initial
investment and with low transaction costs. MOL intends to attempt to take
advantage of the anticipated enormous growth of the Internet by providing an
electronic payment solution for merchants that market and sell their products
and services on the Internet. The electronic commerce services ("E- commerce")
provided by MOL include allowing merchants to accept credit cards, debit cards
and online checks from customers in a secure, technologically advanced
environment. MOL is currently a single source of customer service which offers a
variety of Internet services including electronic shopping carts, web site
development and hosting, merchant accounts and real-time credit card processing
in a single package for one installation fee and only one, combined monthly
billing.
During 1998, its initial year of operations, Creditco generated revenues of
approximately $507,000, with a net loss of approximately $225,000. As of the
date of this Registration Statement, MOL has its common stock listed for trading
on the OTC Bulletin Board.
Mr. Telsey and Ms. Kell were also officers and directors of Euro-Tel, Inc.
("ETI"), a "blank check" public reporting company. ETI filed a Registration
Statement on Form 10-SB in December 1996, which became effective in February
1997, wherein it registered its common stock pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended. In June 1997, ETI consummated a
merger with PharmaSystems Cost Containment Corp., a Florida corporation
("Pharma"), engaged in the delivery of pharmacy contract services, including
mail service and retail pharmacy networks. The terms of this transaction
included ETI undertaking a forward split of its issued and outstanding Common
Stock, whereby 4 shares of Common Stock were issued in exchange for each share
of Common Stock then issued and outstanding and, thereafter, the Pharma
shareholders exchanged all of the issued and outstanding Pharma Stock owned by
them for an aggregate of 18,000,000 "restricted" Common Shares of ETI (post
forward split), with ETI emerging as the surviving company and Pharma being
dissolved by operation of law. As of the date of this Registration Statement
management of Pharma has caused the Company to become non-reporting under the
Securities Exchange Act of 1934, as amended, and subsequent thereto, did file a
petition pursuant to the US Bankruptcy Code with the US Federal Bankruptcy Court
under Chapter 7.
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Mr. Telsey and Ms. Kell were also officers and/or directors of SDT Holding
Corporation ("SDT"), a "blank check" public reporting company. SDT filed a
Registration Statement on Form 10-SB in July 1994, which became effective in
December 1994, wherein it registered its common stock pursuant to Section 12(g)
of the Securities Exchange Act of 1934, as amended. Effective October 30, 1996,
SDT successfully consummated a share exchange agreement with European Business
Group (UK), Plc., an English corporation ("EBG") with its principal place of
business located in Surrey, England. The terms of the transaction involved SDT
undertaking a forward split of its issued and outstanding common shares whereby
8 shares of common stock were issued in exchange for every one (1) share of
common stock and, thereafter, SDT issued an aggregate of 18,000,000 shares of
its "restricted" common stock (post forward split) to the former shareholders of
EBG in exchange for all of the issued and outstanding stock of EBG. EBG remained
in existence as a wholly owned foreign subsidiary of SDT.
To the best knowledge of Mr. Telsey and Ms. Kell, EBG is a leasing company
doing business through 16 wholly owned subsidiary companies. For purposes
herein, all references to EBG shall include EBG and its subsidiaries. EBG's
business is centered around two specific segments of the leasing industry,
including (i) marine containers; and (ii) the sale of licensing rights to city
information billboards worldwide (primarily in the U.S.). Based upon management
of the Company's review of available SEC filings undertaken by current
management of SDT, it appears that SDT has ceased filing reports pursuant to the
Securities Exchange Act of 1934, as amended and as a result, no current
financial information relating to SDT is readily available. As of the date of
this Registration Statement, there is no active market for SDT's securities.
Mr. Telsey was also formerly an officer and director of Ashland Capital
Group, Inc. ("Ashland"), a public reporting company. Ashland obtained
effectiveness of a registration statement filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, in May 1989.
Ashland successfully closed its initial public offering on February 16, 1990,
whereby 5,000,000 units were sold to the public at a price of $.01 per unit.
Ashland derived approximately $41,000 in net proceeds as a result of the
offering.
On October 9, 1990, pursuant to a definitive agreement, Ashland acquired
all of the issued and outstanding shares of Visual Presentation Products, Inc.,
a Florida corporation ("VPP"), in exchange for the issuance of common stock
equal to approximately 80% of Ashland's issued and outstanding common shares. At
the closing of the transaction, Ashland had available approximately $37,000 in
cash, remaining from the proceeds derived from its initial public offering. Mr.
Telsey resigned his positions with Ashland upon the closing of this agreement
and was replaced by the
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then management of VPP pursuant to the affirmative vote of the Ashland
shareholders.
After closing of the transaction with VPP, Ashland changed its name to
"Visual Design Industries, Inc." ("VDI"). VDI subsequently filed a registration
statement with the SEC, undertaking a secondary offering of its securities.
Prior to effectiveness of the registration statement, VDI's underwriter, Nutmeg
Securities, Inc., abandoned the proposed offering. To date, no market in VDI's
securities has ever developed.
Additionally, Mr. Telsey's practice of law emphasizes corporate and
securities transactions, including mergers and acquisitions. As a result, Mr.
Telsey has had additional experience in identifying private merger candidates.
Other than as disclosed hereinabove, no other member of the Company's management
has had any experience in identifying and examining private business candidates.
The foregoing is a complete description of all "blank check" companies with
whom management of the Company has been, or is, involved.
Item 6. Executive Compensation.
None of the Company's officers and/or directors receive any compensation
for their respective services rendered unto the Company, nor have they received
such compensation in the past. They all have agreed to act without compensation
until authorized by the Board of Directors, which is not expected to occur until
the Company has generated revenues from operations after consummation of a
merger or acquisition. As of the date of this Registration Statement, the
Company has no funds available to pay directors. Further, none of the directors
are accruing any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of the Company's management for the purposes
of providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
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Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this Registration Statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
Item 7. Certain Relationships and Related Transactions.
Conflicts of Interest
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.
The officers and directors of the Company are now and may in the future
become shareholders, officers or directors of other companies which may be
formed for the purpose of engaging in business activities similar to those
conducted by the Company. Accordingly, additional direct conflicts of interest
may arise in the future with respect to such individuals acting on behalf of the
Company or other entities. As of the date of this Registration Statement, Mr.
Telsey is also an officer and/or director of Mully Corporation, a Colorado
corporation. While the aforesaid company has commenced implementation of its
business plan, which plan is identical to that of the Company, no definitive
agreement has been reached with any potential merger or acquisition candidate.
In order to attempt to resolve this conflict of interest, in the event a
potential merger or acquisition candidate is brought to Mr. Telsey's attention,
the company whose registration statement first satisfied all of the SEC's
comments will be provided the initial
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opportunity to engage in the relevant transaction. In effect, the Company will
have to wait until Mully Corp. has completed a merger or acquisition opportunity
if generated by Mr. Telsey before the Company can undertake any opportunity
brought by Mr. Telsey.
Moreover, additional conflicts of interest may arise with respect to
opportunities which come to the attention of the Company's management in the
performance of their duties or otherwise. The Company does not currently have a
right of first refusal pertaining to opportunities that come to management's
attention insofar as such opportunities may relate to the Company's proposed
business operations.
The officers and directors are, so long as they are officers or directors
of the Company, subject to the restriction that all opportunities contemplated
by the Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director. If the Company or
the companies in which the officers and directors are affiliated with both
desire to take advantage of an opportunity, then said officers and directors
would abstain from negotiating and voting upon the opportunity. However, all
directors may still individually take advantage of opportunities if the Company
should decline to do so. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
Other
The Company's principal place of business is provided to the Company on a
rent free basis by Andrew I. Telsey, an officer and director and a principal
shareholder of the Company. In addition, it is anticipated that the Company will
become indebted to Mr. Telsey if and when obligations arise in the future, as
the Company has insufficient financial resources to tender any outstanding
payment.
There are no other related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
Item 8. Description of Securities.
The Company's authorized capital stock consists of 125,000,000 shares, of
which 25,000,000 shares are Preferred Shares, par value $0.001 per share, and
100,000,000 are Common Shares, par value $0.0001 per share. There are 500,000
Common Shares issued and outstanding as of the date of this filing. There are no
preferred shares issued or outstanding.
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Common Stock. All shares of Common Stock have equal voting rights and, when
validly issued and outstanding, are entitled to one vote per share in all
matters to be voted upon by shareholders. The shares of Common Stock have no
preemptive, subscription, conversion or redemption rights and may be issued only
as fully-paid and nonassessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any. All shares of the Company's Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of the Common Stock are entitled to share
pro rata in dividends and distributions with respect to the Common Stock, as may
be declared by the Board of Directors out of funds legally available therefor.
Preferred Shares. Shares of Preferred Stock may be issued from time to time
in one or more series as may be determined by the Board of Directors. The voting
powers and preferences, the relative rights of each such series and the
qualifications, limitations and restrictions thereof shall be established by the
Board of Directors, except that no holder of Preferred Stock shall have
preemptive rights. The Company has no shares of Preferred Stock outstanding, and
the Board of Directors does not plan to issue any shares of Preferred Stock for
the foreseeable future, unless the issuance thereof shall be in the best
interests of the Company.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein. Relevant thereto,
each shareholder of the Company has executed and delivered a "lock-up" letter
agreement, affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has successfully
consummated a merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that no trading
will occur in the Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who will
not release these respective certificates until such time as legal counsel has
confirmed that a merger or
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acquisition has been successfully consummated. However, while management
believes that the procedures established to preclude any sale of the Company's
securities prior to closing of a merger or acquisition will be sufficient, there
can be no assurances that the procedures established relevant herein will
unequivocally limit any shareholder's ability to sell their respective
securities before such closing.
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters.
There is no trading market for the Company's Common Stock at present and
there has been no trading market to date. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities and management does not intend to initiate any such
discussions until such time as the Company has consummated a merger or
acquisition. There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
a. Market Price. The Company's Common Stock is not quoted at the present
time.
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the
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securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Management intends to strongly consider undertaking a transaction with any
merger or acquisition candidate which will allow the Company's securities to be
traded on a national exchange. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its securities for
listing on NASDAQ or some other national exchange, or be able to maintain the
maintenance criteria necessary to insure continued listing. The failure of the
Company to qualify its securities or to meet the relevant maintenance criteria
after such qualification in the future may result in the discontinuance of the
inclusion of the Company's securities on a national exchange. In such event,
trading, if any, in the Company's securities may then continue in the OTC
Bulletin Board operated by the NASD or another low volume market, presuming that
such a listing is approved, of which there can be no assurance. As a result, a
shareholder may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's securities.
b. Holders. There are thirteen (13) holders of the Company's Common Stock.
In November 1996, the Company issued 500,000 of its Common Shares at $0.001 per
share for an aggregate of $500. All of the issued and outstanding shares of the
Company's Common Stock were issued in accordance with the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933.
As of the date of this Registration Statement, 500,000 shares of the
Company's Common Stock are eligible for sale under Rule 144 promulgated under
the Securities Act of 1933, as amended, subject to certain limitations included
in said Rule. In general, under Rule 144, a person (or persons whose shares are
aggregated), who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two-year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.
c. Dividends. The Company has not paid any dividends to date and has no
plans to do so in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the Company.
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Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of said accountants.
Item 4. Recent Sales of Unregistered Securities.
In November 1996, the Company issued 500,000 shares of its common stock to
13 persons at a price of $.001 per share. These shares were issued pursuant to
exemption from the registration requirements included under the Securities Act
of 1933, as amended, including but not necessarily limited to Section 4(2) of
said Act. Each shareholder was either an "accredited investor" (as that term is
defined in the 1933 Act), or were provided all information necessary in order to
allow each investor to exercise their respective business judgment as to the
merits of the investment. All of the shares of Common Stock of the Company
previously issued have been issued for investment purposes in a "private
transaction" and are "restricted" shares as defined in Rule 144 under the
Securities Act of 1933, as amended (the "Act"). These shares may not be offered
for public sale except under Rule 144, or otherwise, pursuant to the Act.
As of the date of this Registration Statement, all of the issued and
outstanding shares of the Company's Common Stock are eligible for sale under
Rule 144 promulgated under the Securities Act of 1933, as amended, subject to
certain limitations included in said Rule. However, all of the shareholders of
the Company have executed and delivered a "lock-up" letter agreement which
provides that each such shareholder shall not sell their respective securities
until such time as the Company has successfully consummated a merger or
acquisition. Further, each shareholder has placed their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who has
agreed not to release any of the certificates until the Company has closed a
merger or acquisition. Any liquidation by the current shareholders after the
release from the "lock-up" selling limitation period may have a depressive
effect upon the trading prices of the Company's securities in any future market
which may develop.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.
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Item 5. Indemnification of Directors and Officers.
The Company's Articles of Incorporation incorporate the provisions of the
Nevada Revised Statutes providing for the indemnification of officers and
directors and other persons against expenses, judgments, fines and amounts paid
in settlement in connection with threatened, pending or completed suits or
proceedings against such persons by reason of serving or having served as
officers, directors or in other capacities, except in relation to matters with
respect to which such persons shall be determined not to have acted in good
faith and in the best interests of the Company. With respect to matters as to
which the Company's officers and directors and others are determined to be
liable for misconduct or negligence, including gross negligence in the
performance of their duties to the Company, Nevada law provides for
indemnification only to the extent that the court in which the action or suit is
brought determines that such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to officers, directors or persons controlling the Company pursuant
to the foregoing, the Company has been informed that in the opinion of the U.S.
Securities and Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act, and is therefore unenforceable.
PART F/S
Financial Statements.
The audited financial statements for the fiscal years ended September 30,
1999 and 1998 of the Company are attached to this Registration Statement and
filed as a part hereof. See page 28.
1) Table of Contents - Financial Statements
2) Independent Auditors' Report
3) Balance Sheet
4) Statement of Operations
5) Statement of Cash Flows
6) Statement of Shareholders' Equity
7) Notes to Financial Statements
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PARPUTT ENTERPRISES, INC.
Audited Financial Statements
For the Years Ended September 30, 1999 and 1998
and the Period November 5, 1996 (Inception)
through September 30, 1999
28
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PARPUTT ENTERPRISES, INC.
TABLE OF CONTENTS
Page
----
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Operations 3
Statement of Cash Flows 4
Statement of Changes in Stockholders' Equity 5
Notes to Financial Statements 6 to 8
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HORTON & COMPANY
Certified Public Accountants and Business Consultants, L.L.C.
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Parputt Enterprises, Inc.
Aurora, Colorado
We have audited the accompanying balance sheet of Parputt Enterprises, Inc. (a
development stage company) as of September 30, 1999, and the related statements
of operations, stockholders' equity and cash flows for the years ended September
30, 1999 and 1998 and for the period November 4, 1996 (inception) through
September 30, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Parputt Enterprises, Inc. (a
development stage company) as of September 30, 1999, and the results of its
operations and its cash flows for the years ended September 30, 1999 and 1998,
and for the period November 4, 1996 (inception) through September 30, 1999, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company has suffered losses from operations and has a
lack of net capital that raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 5. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
s/Horton & Company, LLC
HORTON & COMPANY, L.L.C.
Wayne, New Jersey
December 23, 1999
1680 ROUTE 23, SUITE 110, WAYNE, NEW JERSEY 07470
TEL: 973-305-9800, FAX: 973-305-8213
A Member of the Division for CPA firms; American
Institute of Certified Public Accountants
F-1
30
<PAGE>
<TABLE>
Parputt Enterprises, Inc.
(A Development Stage Company)
Balance Sheet
- ------------------------------------------------------------------------------
<CAPTION>
September
30, 1999
--------
<S> <C>
ASSETS $ 0
========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES - Accounts Payable 0
--------
SHAREHOLDERS' EQUITY
Preferred Stock, $.001 Par Value
Authorized 25,000,000 Shares; Issued 0
And Outstanding -0- Shares
Common Stock, $.0001 Par Value
Authorized 100,000,000 Shares; Issued
And Outstanding 500,000 Shares 50
Additional Paid In Capital On Common Stock 450
Deficit Accumulated During The Development Stage (500)
--------
TOTAL SHAREHOLDERS' EQUITY 0
--------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 0
========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
</TABLE>
F-2
31
<PAGE>
<TABLE>
Parputt Enterprises, Inc.
(A Development Stage Company)
Statement Of Operations
- ------------------------------------------------------------------------------
<CAPTION>
November
4, 1996
(Inception)
Through
September September September
30, 1999 30, 1998 30, 1999
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
-------- -------- --------
Expenses:
Office 0 0 500
-------- -------- --------
Total 0 0 500
-------- -------- --------
Net (Loss) $ 0 $ 0 $ (500)
======== ======== ========
Basic (Loss) Per Common Share $ 0.00 $ 0.00 $ (0.00)
======== ======== ========
Basic Common Shares Outstanding 500,000 500,000 500,000
======== ======== ========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
</TABLE>
F-3
32
<PAGE>
<TABLE>
Parputt Enterprises, Inc.
(A Development Stage Company)
Statement Of Cash Flows
- ------------------------------------------------------------------------------
<CAPTION>
November
4, 1996
(Inception)
Through
September September September
30, 1999 30, 1998 30, 1999
-------- -------- --------
<S> <C> <C> <C>
Net (Loss) Accumulated During
The Development Stage $ 0 $ 0 $ (500)
Issuance Of Common Stock For
Cash Advances & Services 0 0 500
-------- -------- --------
Cash Flows From Operations 0 0 0
-------- -------- --------
Cash Flows From Financing
Activities:
Issuance Of Common Stock 0 0 0
-------- -------- --------
Cash Flows From Financing 0 0 0
-------- -------- --------
Net Increase In Cash 0 0 0
Cash At Beginning Of Period 0 0 0
-------- -------- --------
Cash At End Of Period $ 0 $ 0 $ 0
======== ======== ========
Non - Cash Activities:
Stock Issued For Cash Advances
and Services $ 0 $ 0 $ 500
======== ======== ========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
</TABLE>
F-4
33
<PAGE>
<TABLE>
Parputt Enterprises, Inc.
(A Development Stage Company)
Statement Of Shareholders' Equity
- -----------------------------------------------------------------------------------------------
<CAPTION>
Deficit
Accumulated
Number Of Number Of Additional During The
Common Preferred Common Preferred Paid-In Development
Shares Shares Stock Stock Capital Stage Total
------- ------ ------ ----- ------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance At
November 4, 1996 0 0 0 $ 0 $ 0 $ 0 $ 0
Issuance Of Common Stock:
November 4, 1996 for
Services & Cash Advances
Made on Behalf of the
Company at $.001 Per
Share 500,000 0 $ 50 0 450 0 500
Net (Loss) (500) (500)
------- ------ ------ ----- ------- ------ -----
Balance At September 30,
1997, 1998 and 1999 500,000 0 $ 50 $ 0 $ 450 $ (500) $ 0
======= ====== ====== ===== ======= ====== =====
The Accompanying Notes Are An Integral Part Of These Financial Statements.
</TABLE>
F-5
34
<PAGE>
Parputt Enterprises, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Fiscal Years Ended September 30, 1999 and 1998
- -----------------------------------------------------
Note 1 - Organization and Summary of Significant Accounting Policies
- --------------------------------------------------------------------
Organization:
On November 4, 1996, Parputt Enterprises, Inc. (the "Company") was incorporated
under the laws of Nevada to engage in any lawful business or activity for which
corporations may be organized under the laws of the State of Nevada.
Development Stage:
The Company entered the Development stage in accordance with SFAS No. 7 on
November 4, 1996. Its purpose is to evaluate, structure and complete a merger
with, or acquisition a privately owned corporation.
Statement of Cash Flows:
For the purpose of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Cash paid for interest in fiscal years ended September 30, 1999 and 1998 was
$-0-. Cash paid for income taxes in fiscal years ended September 30, 1999 and
1998 was $-0-.
Basic (Loss) per Common Share:
Basic (Loss) per common share is computed by dividing the net loss for the
period by the weighted average number of shares outstanding at September 30,
1999 and September 30, 1998. (See Note 6)
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts. Actual results could differ from those estimates.
F-6
35
<PAGE>
Parputt Enterprises, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Fiscal Years Ended September 30, 1999 and 1998
- -----------------------------------------------------
Note 2 - Capital Stock and Capital in Excess of Par Value
- ---------------------------------------------------------
The Company has authorized 100,000,000 shares of $.0001 par value common stock
and 25,000,000 shares of $.001 par value preferred stock. On November 4, 1996,
the Company issued 500,000 shares of common stock for services valued at $350
and for cash advances paid on behalf of the Company of $150 for a total of $500.
Note 3 - Related Party Events
- -----------------------------
The Company maintains a mailing address at an officer's place of business. This
address is located at 2851 S Parker Road, Suite 720, Aurora, Colorado. At this
time the Company has no need for an office. As of September 30, 1999, management
has incurred a minimal amount of time and expense on behalf of the Company.
Note 4 - Income Taxes
- ---------------------
At September 30, 1999, the Company had net operating loss carryforwards
available for financial statement and Federal income tax purposes of
approximately $500 which, if not used, will expire in the year 2011.
The Company follows Financial Accounting Standards Board Statement No. 109,
"Accounting for Income Taxes" (SFAS #109), which requires, among other things,
an asset and liability approach to calculating deferred income taxes. As of
September 30, 1999, the Company has a deferred tax asset of $10 primarily for
its net operating loss carryforward which has been fully reserved through a
valuation allowance. The change in the valuation allowance for 1998 is $-0-.
Note 5 - Basis of Presentation
- ------------------------------
In the course of its development activities the Company has sustained continuing
losses and expects such losses to continue for the foreseeable future. The
Company's management plans on advancing funds on an as needed basis and in the
longer term, revenues from the operations of a merger candidate, if found. The
Company's ability to continue as a going concern is dependent on these
additional management advances, and, ultimately, upon achieving profitable
operations through a merger candidate.
F-7
36
<PAGE>
Parputt Enterprises, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Fiscal Years Ended September 30, 1999 and 1998
- -----------------------------------------------------
Note 6 - New Accounting Pronouncement
- -------------------------------------
In February 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share ("SFAS No. 128").
SFAS No. 128 specifies the computation, presentation, and disclosure
requirements of earnings per share and supersedes Accounting Principles Board
Opinion No. 15, Earnings Per Share. SFAS No. 128 requires dual presentation of
basic and diluted earnings per share. Basic earnings per share, which excludes
the impact of common stock equivalents, replaces primary earnings per share.
Diluted earnings per share, which utilizes the average market price per share as
opposed to the greater of the average market price per share or ending market
price per share when applying the treasury stock method in determining common
stock equivalents, replaces fully-diluted earnings per share. SFAS No. 128 is
effective for the Company for periods ending after September 15, 1998. However,
the Company has a simple capital structure for the periods presented and
therefore, there is no affect on the earnings per share presented due to the
Company's adoption of SFAS No. 128.
Note 7 - Subsequent Events
- --------------------------
The Company will be filing a Form 10-SB with the Securities and Exchange
Commission to become a 34 Act reporting company.
F-8
37
<PAGE>
PART III
Item 1. Exhibit Index
No. Sequential
- --- Page No.
--------
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation 40
3.2 Bylaws 49
(4) Instruments Defining the Rights of Holders
4.1 Form of Lock-up Agreements Executed
by the Company's Shareholders 68
(27) Financial Data Schedule
27.1 Financial Data Schedule 70
38
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
PARPUTT ENTERPRISES, INC.
(Registrant)
Date: January 12, 2000
By: s/Andrew I. Telsey
-----------------------------------------
Andrew I. Telsey,
President
39
<PAGE>
PARPUTT ENTERPRISES, INC.
----------------------------
EXHIBIT 3.1
----------------------------
ARTICLES OF INCORPORATION
----------------------------
40
<PAGE>
FILED ARTICLES OF INCORPORATION Filing fee:
IN THE OFFICE OF THE (Pursuant to NRS 78) Receipt #:
SECRETARY OF STATE OF THE STATE OF NEVADA
STATE OF NEVADA Secretary of State
NOV - 4 1996
No. C 22 726-96
-----------
s/Dean Heller
DEAN HELLER, SECRETARY OF STATE
(For filing office use) (For filing office use)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
IMPORTANT: Read instructions on reverse side before completing this form.
TYPE OR PRINT (BLANK INK ONLY)
1. NAME OF CORPORATION: Parputt Enterprises, Inc.
------------------------------------------------------
2. RESIDENT AGENT:(designated resident agent his STREET ADDRESS in Nevada where
process may be served)
Name of Resident Agent: State Agent & Transfer Syndicate, Inc.
---------------------------------------------------
Street Address: 318 North Carson Street, Suite 214, Carson City, Nevada 89701
-----------------------------------------------------------
Street No. Street Name City Zip
3. SHARES:(number of shares the corporation is authorized to issue)
Number of shares with par value: 100,000,000 Common Par Value: .0001
25,000,000 Preferred .001
------------------------ ------
Number of shares without par value: _______________________________________
4. GOVERNING BOARD: shall be styled as (check one): X Directors Trustees
---- ---
The FIRST BOARD OF DIRECTORS shall consist of 3 members and the names and
addresses are as follows (attach additional pages if necessary):
Andrew I. Telsey 2851 S. Parker Road, Suite 720, Aurora, Colorado 80014
------------------- ------------------------------------------------------
Name Address
R. Michel Perlmutter 13693 E. Iliff Avenue, Suite 112, Aurora, Colorado 80014
Brad Weiman 821 17th Street, Suite 300, Denver, Colorado 80202
------------------- ------------------------------------------------------
Name Address
5. PURPOSE (optional-see reverse side): The purpose of the corporation shall be:
---------------------------------------------------------------------------
6. OTHER MATTERS: This form includes the minimal statutory requirements to
incorporate under NRS 78. You may attach additional information pursuant to
NRS 78.037 or any other information you deem appropriate. If any of the
additional information is contradictory to this form it cannot be filed and
will be returned to you for correction. Number of pages attached 6 .
--------
7. SIGNATURES OF INCORPORATORS: The names and addresses of each of the
incorporators signing the articles: (Signatures must be notarized) (Attach
additional pages if there are more than two incorporators.)
Andrew I. Telsey
---------------------------------- -------------------------------------
Name (print) Name (print)
2851 S. Parker Road, Suite 720,
Aurora, CO 80014
---------------------------------- -------------------------------------
Address City/State/Zip Address City/State/Zip
s/Andrew I. Telsey
---------------------------------- -------------------------------------
Signature Signature
41
<PAGE>
State of Colorado State of ____________________________
County of Arapahoe County of ___________________________
This instrument was acknowledged This instrument was acknowledged
before me on before me on
October 25 19 96 , by
----------------------- --- -------------------------------------
Andrew I. Telsey
---------------------------------- -------------------------------------
Name of Person Name of Person
as incorporator as incorporator
of Parputt Enterprises, Inc. of
-------------------------------- -----------------------------------
(name of party on behalf of whom (name of party on behalf of whom
instrument was executed) instrument was executed)
s/Darlene D. Kell
---------------------------------- -------------------------------------
Darlene D. Kell
Notary Public Signature Notary Public Signature
(affix notary stamp or seal) (affix notary stamp or seal)
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I, State Agent & Transfer Syndicate, Inc. hereby accept appointment as
-----------------------------------------------
Resident Agent for the above named corporation.
s/John A. McQuirk 10-28-96
- -------------------------------------- --------------------------
Signature of Resident Agent Date
42
<PAGE>
ARTICLES OF INCORPORATION
OF
PARPUTT ENTERPRISES, INC.
The undersigned, being the original incorporator herein named, for the
purpose of forming a corporation to do business both within and without the
State of Nevada, and in pursuance of the corporation laws of the State of
Nevada, being Chapter 78 of the Nevada Revised Statutes, do make and file these
Articles of Incorporation hereby declaring and certifying that the facts herein
stated are true:
1. The name of the corporation is PARPUTT ENTERPRISES, INC.
2. Its principal office in the County of Independent City, State of Nevada,
is located at 318 North Carson Street, Suite 214, Carson City, Nevada 89701. The
name of its Resident Agent is State Agent & Transfer Syndicate, Inc.
3. The purposes for which the corporation is organized are to engage in any
activity or business not in conflict with the laws of the State of Nevada or of
the United States of America, and without limiting the generality of the
foregoing, specifically:
A. To have and to exercise all the powers now or hereafter conferred
by the laws of the State of Nevada upon corporations organized pursuant to
the laws under which the corporation is organized and any and all acts
amendatory thereof and supplemental thereto.
B. To discount and negotiate promissory notes, drafts, bills of
exchange and other evidences of debt, and to collect for others money due
them on notes, checks, drafts, bills of exchange, commercial paper or other
evidence of indebtedness.
C. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage, pledge, or otherwise dispose of, to guarantee,
to invest, trade, and deal in and with personal property of every class and
description.
D. To enter into any kind of contract or agreement, cooperative or
profit sharing plan with its officers or employees that the corporation may
deem fit.
E. To purchase, lease, or otherwise acquire, in whole or in part, the
business, goodwill, rights, franchises and property of every kind, and to
undertake the whole or any part of the assets or liabilities, of any
person, firm, association, non-profit or profit corporation, or own
property necessary or suitable for its purposes, and to pay the same in
cash, in the stocks or bonds of the corporation or otherwise, to hold or in
any manner dispose of the whole or any part of the business or property so
acquired and to exercise all of the powers necessary or incidental to the
conduct of such business.
1
43
<PAGE>
F. To lend or borrow money and to negotiate and make loans, either on
its own account or as agent or broker for others.
G. To enter into, make, perform and carry out contracts of every kind
and for any lawful purpose, without limit as to amount with any person,
firm, association, cooperative, profit or non-profit corporation,
municipality, state or government or any subdivision, district or
department thereof.
H. To buy, sell, exchange, negotiate, or otherwise deal in, or
hypothecate securities, stocks, bonds, debentures, mortgages, notes or
other collateral or securities, created or issued by any corporation
wherever organized including this corporation, within such limits as may be
provided by law, and while owner of any such stocks or other collateral to
exercise all rights, powers and privileges of ownership, including the
right to vote the same, and to subscribe for stock of any corporation to be
organized, other than to promote the organization thereof.
I. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage, pledge, license or otherwise dispose of any
letters, patents, copyrights, or trademarks of every class and description.
J. To do any and all other such acts, things, business or businesses
in any manner connected with or necessary, incidental, convenient or
auxiliary to do any of these objectives hereinbefore enumerated, or
calculated, directly or indirectly, to promote the interest of the
corporation; and in carrying on its purposes, or for the purpose of
obtaining or furthering any of its businesses, to do any and all acts and
things, and to exercise any and all other powers which a natural person
could do or exercise, and which now or hereafter may be authorized by law,
here and in any other part of the world.
K. The several clauses contained in this statement of powers shall be
construed in each of these clauses and shall be in no way limited or
restricted by reference to or inference from the terms of any other
clauses, but shall be regarded as independent purposes and powers; and no
recitation, expression or declaration of specific or special powers or
purposes herein enumerated shall be deemed to be exclusive, but is hereby
expressly declared that all other lawful powers not inconsistent herewith
are hereby included.
4. The total number of shares of all classes which the corporation shall
have authority to issue is 125,000,000 of which 25,000,000 shall be Preferred
Shares, par value $.001 per share, and 100,000,000 shall be Common Shares, par
value $.0001 per share, and the designations, preferences, limitations and
relative rights of the shares of each class are as follows:
A. Preferred Shares. The corporation may divide and issue the
Preferred Shares in series. Preferred Shares of each series when issued
shall be designated to distinguish it from the shares of all other series.
The Board of Directors is hereby expressly vested with authority to divide
the class of Preferred Shares into series and to fix and determine the
relative rights and preferences of the shares of any such series so
2
44
<PAGE>
established to the full extent permitted by these Articles of Incorporation
and the laws of the State of Nevada in respect to the following:
(1) The number of shares to constitute such series, and the
distinctive designations thereof;
(2) The rate and preference of dividends, if any, the time of
payment of dividends, whether dividends are cumulative and the date
from which any dividend shall accrue;
(3) Whether shares may be redeemed and, if so, the redemption
price and the terms and conditions of redemption;
(4) The amount payable upon shares in event of involuntary
liquidation;
(5) The amount payable upon shares in event of voluntary
liquidation;
(6) Sinking fund or other provisions, if any, for the redemption
or purchase of shares;
(7) The terms and conditions on which shares may be converted, if
the shares of any series are issued with the privilege of conversion;
(8) Voting powers, if any; and
(9) Any other relative rights and preferences of shares of such
series, including, without limitation, any restriction on an increase
in the number of shares of any series theretofore authorized and any
limitation or restriction of rights or powers to which shares of any
further series shall be subject.
B. Common Shares.
(1) The rights of holders of Common Shares to receive dividends
or share in the distribution of assets in the event of liquidation,
dissolution or winding up of the affairs of the corporation shall be
subject to the preferences, limitations and relative rights of the
Preferred Shares fixed in the resolution or resolutions which may be
adopted from time to time by the Board of Directors or the corporation
providing for the issuance of one or more series of the Preferred
Shares.
(2) The holders of the Common Shares shall be entitled to one
vote for each share of Common Shares held by them of record at the
time for determining the holders thereof entitled to vote.
No holder of shares of the corporation of any class shall have any
preemptive or preferential right in or preemptive or preferential right to
subscribe to or for or acquire any new
3
45
<PAGE>
or additional shares, or any subsequent issue of shares, or any unissued or
treasury shares of the corporation, whether now or hereafter authorized, or any
securities convertible into or carrying a right to subscribe to or for or
acquire any such shares, whether nor or hereafter authorized.
All shares are to be non-assessable.
5. The governing board shall be styled "directors" and the number of
directors of the corporation shall be fixed by the bylaws, or if the bylaws fail
to fix such a number, then by resolution adopted from time to time by the board
of directors, provided that the number of directors shall not be more than seven
(7) nor less than one (1). Three (3) directors shall constitute the initial
board of directors.
The names and addresses of the first Board of Directors are as follows:
Name Address
---- -------
Andrew I. Telsey 2851 S. Parker Road, Suite 720, Aurora, Colorado 80014
R. Michel Perlmutter 13693 E. Iliff Avenue, Suite 112, Aurora, Colorado 80014
Brad Weiman 821 17th Street, Suite 300, Denver, Colorado 80202
6. The name and address of the incorporator of the corporation is as
follows:
Name Address
---- -------
Andrew I. Telsey 2851 S. Parker Road, Suite 720, Aurora, Colorado 80014
7. The period of the corporation's duration is perpetual.
8. The corporation may:
A. Indemnify any person who was or is a party to or is
threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the
corporation), by reason of the fact that he is or was a director,
officer, employee, fiduciary or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
employee, fiduciary or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including
attorney fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action,
suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in the best interest of the corporation and,
with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct as unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent, shall
not of itself create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in the best
interest of the corporation and, with respect to any criminal action or
proceeding, had reasonable cause to believe his conduct was unlawful.
4
46
<PAGE>
B. The corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending,
or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee, or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
employee, fiduciary or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorney
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in the best interest of
the corporation; but no indemnification shall be made in respect of any
claim, issue, or matter as to which such person has been adjudged to be
liable for negligence or misconduct in the performance of his duty to
the corporation unless and only to the extent that the court in which
such action or suit was brought determines upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnification for such expenses which such court deems
proper.
C. To the extent that a director, officer, employee,
fiduciary, or agent of the corporation has been successful on the
merits in defense of any action, suit, or proceeding referred to in
subparagraph A or B of this Article 8, or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses
(including attorney fees) actually and reasonably incurred by him in
connection therewith.
D. Any indemnification under subparagraph A or B of this
Article 8 (unless ordered by a court) and as distinguished from
subparagraph C of this Article shall be made by the corporation only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee, fiduciary or agent
is proper in the circumstances because he has met the applicable
standard of conduct set forth in subparagraph A or B above. Such
determination shall be made by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit, or proceeding, or, if the Board of Directors so direct,
by independent legal counsel in a written opinion, or by the
shareholders.
E. Expenses (including attorney fees) incurred in defending a
civil or criminal action, suit, or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit,
or proceeding as authorized in subparagraph C or D of this Article 8
upon receipt of an undertaking by or on behalf of the director,
officer, employee, fiduciary or agent to repay such amount unless it is
ultimately determined that he is entitled to be indemnified by the
corporation as authorized in this Article 8.
F. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee,
fiduciary or agent of the corporation, or who is or was serving at the
request of the corporation as a director, officer, employee, fiduciary
or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his status as
such, whether or not the corporation would have the power to indemnify
him against such liability under the provisions of this Article 8.
9. Provisions for the regulation of the internal affairs of the corporation
are contained in the Bylaws of this corporation.
5
47
<PAGE>
DATED this 25th day of October, 1996.
s/Andrew I. Telsey
-----------------------------------------
Andrew I. Telsey
STATE OF COLORADO )
: ss.
COUNTY OF ARAPAHOE )
On this 25th day of October, 1996, personally appeared before me, a
Notary Public, Andrew I. Telsey, who acknowledged that he executed the above
instrument.
Witness my hand and official seal.
My commission expires: March 3, 1998.
s/Darlene D. Kell
----------------------------------------
Darlene D. Kell
6
48
<PAGE>
PARPUTT ENTERPRISES, INC.
---------------------------
EXHIBIT 3.2
---------------------------
BYLAWS
---------------------------
49
<PAGE>
INDEX TO THE BYLAWS OF
PARPUTT ENTERPRISES, INC.
ARTICLE 1 - OFFICES.......................................................... 1
SECTION 1.1 PRINCIPAL OFFICE........................................... 1
SECTION 1.2 REGISTERED OFFICE.......................................... 1
ARTICLE 2 - SHAREHOLDERS..................................................... 1
SECTION 2.1 ANNUAL MEETING............................................. 1
SECTION 2.2 SPECIAL MEETINGS........................................... 1
SECTION 2.3 PLACE OF MEETINGS.......................................... 1
SECTION 2.4 NOTICE OF MEETING ......................................... 2
SECTION 2.5 MEETING OF ALL SHAREHOLDERS ............................... 2
SECTION 2.6 CLOSING OF TRANSFER BOOKS OR
FIXING OF RECORD DATE.............................................. 2
SECTION 2.7 VOTING RECORD.............................................. 2
SECTION 2.8 QUORUM..................................................... 3
SECTION 2.9 MANNER OF ACTING........................................... 3
SECTION 2.10 PROXIES................................................... 3
SECTION 2.11 VOTING OF SHARES.......................................... 3
SECTION 2.12 VOTING OF SHARES BY CERTAIN SHAREHOLDERS.................. 3
SECTION 2.13 INFORMAL ACTION BY SHAREHOLDERS........................... 4
SECTION 2.14 VOTING BY BALLOT.......................................... 4
SECTION 2.15 CUMULATIVE VOTING......................................... 4
ARTICLE 3 - BOARD OF DIRECTORS............................................... 4
SECTION 3.1 GENERAL POWERS............................................. 4
SECTION 3.2 PERFORMANCE OF DUTIES...................................... 4
SECTION 3.3 NUMBER, TENURE AND QUALIFICATIONS.......................... 5
SECTION 3.4 REGULAR MEETINGS........................................... 5
SECTION 3.5 SPECIAL MEETINGS........................................... 5
SECTION 3.6 NOTICE..................................................... 5
SECTION 3.7 QUORUM..................................................... 6
SECTION 3.8 MANNER OF ACTING........................................... 6
SECTION 3.9 INFORMAL ACTION BY DIRECTORS............................... 6
SECTION 3.10 PARTICIPATION BY ELECTRONIC MEANS......................... 6
SECTION 3.11 VACANCIES................................................. 6
SECTION 3.12 RESIGNATION............................................... 6
SECTION 3.13 REMOVAL................................................... 6
SECTION 3.14 COMMITTEES................................................ 7
SECTION 3.15 COMPENSATION.............................................. 7
SECTION 3.16 PRESUMPTION OF ASSENT..................................... 7
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ARTICLE 4 - OFFICERS......................................................... 7
SECTION 4.1 NUMBER..................................................... 7
SECTION 4.2 ELECTION AND TERM OF OFFICE................................ 7
SECTION 4.3 REMOVAL.................................................... 7
SECTION 4.4 VACANCIES.................................................. 8
SECTION 4.5 PRESIDENT.................................................. 8
SECTION 4.6 VICE PRESIDENT............................................. 8
SECTION 4.7 SECRETARY.................................................. 8
SECTION 4.8 TREASURER.................................................. 8
SECTION 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS............. 9
SECTION 4.10 BONDS..................................................... 9
SECTION 4.11 SALARIES.................................................. 9
ARTICLE 5 - CONTRACTS, LOANS, CHECKS AND DEPOSITS............................ 9
SECTION 5.1 CONTRACTS.................................................. 9
SECTION 5.2 LOANS...................................................... 9
SECTION 5.3 CHECKS, DRAFTS, ETC........................................ 9
SECTION 5.4 DEPOSITS................................................... 9
ARTICLE 6 - SHARES, CERTIFICATES FOR SHARES AND TRANSFER OF
SHARES..................................................... 10
SECTION 6.1 REGULATION................................................. 10
SECTION 6.2 CERTIFICATES FOR SHARES.................................... 10
SECTION 6.3 CANCELLATION OF CERTIFICATES............................... 10
SECTION 6.4 LOST, STOLEN OR DESTROYED CERTIFICATES..................... 10
SECTION 6.5 TRANSFER OF SHARES......................................... 11
ARTICLE 7 - FISCAL YEAR...................................................... 11
ARTICLE 8 - DIVIDENDS........................................................ 11
ARTICLE 9 - CORPORATE SEAL................................................... 11
ARTICLE 10 - WAIVER OF NOTICE................................................ 11
ARTICLE 11 - AMENDMENTS...................................................... 11
ARTICLE 12 - EXECUTIVE COMMITTEE............................................. 12
SECTION 12.1 APPOINTMENT............................................... 12
SECTION 12.2 AUTHORITY................................................. 12
SECTION 12.3 TENURE AND QUALIFICATIONS................................. 12
SECTION 12.4 MEETINGS.................................................. 12
SECTION 12.5 QUORUM.................................................... 12
SECTION 12.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE.................... 12
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SECTION 12.7 VACANCIES................................................. 13
SECTION 12.8 RESIGNATIONS AND REMOVAL.................................. 13
SECTION 12.9 PROCEDURE................................................. 13
ARTICLE 13 - INDEMNIFICATION................................................. 13
SECTION 13.1 INDEMNIFICATION........................................... 13
SECTION 13.2 RIGHT TO INDEMNIFICATION.................................. 14
SECTION 13.3 GROUPS AUTHORIZED TO MAKE INDEMNIFICATION
DETERMINATION...................................................... 14
SECTION 13.4 PAYMENT AND ADVANCE OF EXPENSES........................... 14
CERTIFICATE.................................................................. 15
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BYLAWS
OF
PARPUTT ENTERPRISES, INC.
ARTICLE 1 - OFFICES
SECTION 1.1 PRINCIPAL OFFICE
The initial principal office of the corporation in the state of Nevada
shall be located in Carson City. The corporation may have such other offices,
either within or outside of the state of Nevada as the board of directors may
designate, or as the business of the corporation may require from time to time.
SECTION 1.2 REGISTERED OFFICE
The registered office of the corporation, required by Chapter 78 of the
Nevada Revised Statutes to be maintained in the state of Nevada, may be, but
need not be, identical with the principal office in the state of Nevada, and the
address of the registered office may be changed from time to time by the board
of directors.
ARTICLE 2 - SHAREHOLDERS
SECTION 2.1 ANNUAL MEETING
The annual meeting of the shareholders shall be held on the 4th day of
November of each year, commencing with the year 1997, at the hour of 10:00 a.m.,
or at such other time on such other day as shall be fixed by the board of
directors for the purpose of electing directors and for the transaction of such
other business as may come before the meeting. If the day fixed for the annual
meeting shall be a legal holiday in the state of Nevada, such meeting shall be
held on the next succeeding business day. If the election of directors shall not
be held on the day designated herein for any annual meeting of the shareholders,
or at any adjournment thereof, the board of directors shall cause the election
to be held at a special meeting of the shareholders as soon thereafter as may be
convenient.
SECTION 2.2 SPECIAL MEETINGS
Special meetings of the shareholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the president or by the board
of directors, and shall be called by the president at the request of the holders
of not less than one-tenth of all outstanding shares of the corporation entitled
to vote at the meeting.
SECTION 2.3 PLACE OF MEETINGS
The board of directors may designate any place, either within or outside of
the state of Nevada, as the place of meeting for any annual meeting or for any
special meeting called by the board of directors. If no
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designation is made, or if a special meeting be otherwise called, the place of
meeting shall be the principal office of the corporation in the state of Nevada.
SECTION 2.4 NOTICE OF MEETING
Written notice stating the place, day and hour of the meeting of
shareholders and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall, unless otherwise prescribed by statute, be
delivered not less than ten nor more than sixty days before the date of the
meeting, either personally or by mail, by or at the direction of the president,
or the secretary, or the officer or other persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his or her address as it appears on the stock
transfer books of the corporation, with postage thereon prepaid.
SECTION 2.5 MEETING OF ALL SHAREHOLDERS
Except as provided by law, if a majority of the shareholders meet at any
time and place, either within or outside of the state of Nevada, and consent to
the holding of a meeting at such time and place, such meeting shall be valid
without call or notice, and at such meeting any corporate action may be taken.
SECTION 2.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE
For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other purpose, the board of directors of the corporation
may provide that the share transfer books shall be closed for a stated period
but not to exceed, in any case, sixty days. If the share transfer books shall be
closed for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for at least ten
days immediately preceding such meeting. In lieu of closing the share transfer
books, the board of directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than sixty days and, in case of a meeting of shareholders, not less than ten
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the share transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the board of directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this Section, such determination shall apply to any adjournment thereof.
SECTION 2.7 VOTING RECORD
The officer or agent having charge of the stock transfer books for shares
of the corporation shall make, at least ten days before such meeting of
shareholders, a complete record of the shareholders entitled to vote at each
meeting of shareholders or any adjournment thereof, arranged in alphabetical
order, with the address of and the number of shares held by each. The record,
for a period of ten days prior to such meeting, shall be kept on file at the
principal office of the corporation, whether within or outside of the state of
Nevada, and shall be subject to inspection by any shareholder for any purpose
germane to the meeting at any time during usual business hours. Such record
shall be produced and kept open at the time and place of the meeting and shall
be subject to the inspection of any shareholder during the whole time of the
meeting for the purposes thereof.
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The original stock transfer books shall be the prima facie evidence as to
who are the shareholders entitled to examine the record or transfer books or to
vote at any meeting of shareholders.
SECTION 2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, except as otherwise provided by Chapter 78 of the Nevada Revised
Statutes and the Articles of Incorporation. In the absence of a quorum at any
such meeting, a majority of the shares so represented may adjourn the meeting
from time to time for a period not to exceed sixty days without further notice.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
during such meeting of that number of shareholders whose absence would cause
there to be less than a quorum.
SECTION 2.9 MANNER OF ACTING
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders, unless the vote of a greater proportion or number
or voting by classes is otherwise required by statute or by the Articles of
Incorporation or these bylaws.
SECTION 2.10 PROXIES
At all meetings of shareholders a shareholder may vote in person or by
proxy executed in writing by the shareholder or by a duly authorized
attorney-in-fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
six months from the date of its execution, unless otherwise provided in the
proxy.
SECTION 2.11 VOTING OF SHARES
Unless otherwise provided by these bylaws or the Articles of Incorporation,
each outstanding share entitled to vote shall be entitled to one vote upon each
matter submitted to vote at a meeting of shareholders, and each fractional share
shall be entitled to a corresponding fractional vote on each such matter.
SECTION 2.12 VOTING OF SHARES BY CERTAIN SHAREHOLDERS
Shares standing in the name of another corporation may be voted by such
officer, agent or proxy as the bylaws of such corporation may prescribe, or, in
the absence of such provision, as the board of directors of such other
corporation may determine.
Shares standing in the name of a deceased person, a minor ward or an
incompetent person, may be voted by an administrator, executor, court appointed
guardian or conservator, either in person or by proxy without a transfer of such
shares into the name of such administrator, executor, court appointed guardian
or conservator. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his or her name.
Shares standing in the name of a receiver may be voted by such receiver and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into the trustee name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
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A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither shares of its own stock belonging to this corporation, nor shares
of its own stock held by it in a fiduciary capacity, nor shares of its own stock
held by another corporation if the majority of shares entitled to vote for the
election of directors of such corporation is held by this corporation may be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time.
Redeemable shares which have been called for redemption shall not be
entitled to vote on any matter and shall not be deemed outstanding shares on and
after the date on which written notice of redemption has been mailed to
shareholders and a sum sufficient to redeem such shares has been deposited with
a bank or trust company with irrevocable instruction and authority to pay the
redemption price to the holders of the shares upon surrender of certificates
therefor.
SECTION 2.13 INFORMAL ACTION BY SHAREHOLDERS
Except as provided by law, any action required or permitted to be taken at
a meeting of the shareholders may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by a majority of the
shareholders entitled to vote with respect to the subject matter thereof.
SECTION 2.14 VOTING BY BALLOT
Voting on any question or in any election may be by voice vote unless the
presiding officer shall order or any shareholder shall demand that voting be by
ballot.
SECTION 2.15 CUMULATIVE VOTING
Cumulative voting shall not be permitted in the election of officers or
directors, or in any other matter.
ARTICLE 3 - BOARD OF DIRECTORS
SECTION 3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by its board
of directors.
SECTION 3.2 PERFORMANCE OF DUTIES
A director of the corporation shall perform his or her duties as a
director, including his or her duties as a member of any committee of the board
upon which he or she may serve, in good faith, in a manner he or she reasonably
believes to be in the best interests of the corporation, and with such care as
an ordinarily prudent person in a like position would use under similar
circumstances. In performing his or her duties, a director shall be entitled to
rely on information, opinions, reports, or statements, including financial
statements and other financial data, in each case prepared or presented by
persons and groups listed in paragraphs A, B, and C of this Section 3.2; but he
or she shall not be considered to be acting in good faith if he or she has
knowledge concerning the matter in question that would cause such reliance to be
unwarranted. A person who so performs his or her duties shall not have any
liability by reason of being or having been a director of the corporation. Those
persons and groups on whose information, opinions, reports, and statements a
director is entitled to rely upon are:
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A. One or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matter presented;
B. Counsel, public accountants, or other persons as to matters which the
director reasonably believes to be within such persons' professional or expert
competence; or
C. A committee of the board upon which he or she does not serve, duly
designated in accordance with the provision of the Articles of Incorporation or
the bylaws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
SECTION 3.3 NUMBER, TENURE AND QUALIFICATIONS
The number of directors of the corporation shall be fixed from time to time
by resolution of the board of directors, but in no instance shall there be less
than one director or that number otherwise required by law. Each director shall
hold office until the next annual meeting of shareholders or until his or her
successor shall have been elected and qualified. Directors need not be residents
of the state of Nevada nor shareholders of the corporation.
There shall be a chairman of the board, who has been elected from among the
directors. He or she shall preside at all meetings of the stockholders and of
the board of directors. He or she shall have such other powers and duties as may
be prescribed by the board of directors.
SECTION 3.4 REGULAR MEETINGS
A regular meeting of the board of directors shall be held without other
notice than this bylaw immediately after, and at the same place as, the annual
meeting of shareholders. The board of directors may provide, by resolution, the
time and place, either within or without the state of Nevada, for the holding of
additional regular meetings without other notice than such resolution.
SECTION 3.5 SPECIAL MEETINGS
Special meetings of the board of directors may be called by or at the
request of the president or any two directors. The person or persons authorized
to call special meetings of the board of directors may fix any place, either
within or without the state of Nevada, as the place for holding any special
meeting of the board of directors called by them.
SECTION 3.6 NOTICE
Written notice of any special meeting of directors shall be given as
follows:
By mail to each director at his or her business address at least three days
prior to the meeting; or
By personal delivery or telegram at least twenty-four hours prior to the
meeting to the business address of each director, or in the event such notice is
given on a Saturday, Sunday or holiday, to the residence address of each
director. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail, so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive notice of
any meeting. The attendance of a director at any meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice of such
meeting.
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SECTION 3.7 QUORUM
A majority of the number of directors fixed by or pursuant to Section 3.2
of this Article 3 shall constitute a quorum for the transaction of business at
any meeting of the board of directors, but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice.
SECTION 3.8 MANNER OF ACTING
Except as otherwise required by law or by the Articles of Incorporation,
the act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the board of directors.
SECTION 3.9 INFORMAL ACTION BY DIRECTORS
Any action required or permitted to be taken by the board of directors or
by a committee thereof at a meeting may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by all of the
directors or all of the committee members entitled to vote with respect to the
subject matter thereof.
SECTION 3.10 PARTICIPATION BY ELECTRONIC MEANS
Any members of the board of directors or any committee designated by such
board may participate in a meeting of the board of directors or committee by
means of telephone conference or similar communications equipment by which all
persons participating in the meeting can hear each other at the same time. Such
participation shall constitute presence in person at the meeting.
SECTION 3.11 VACANCIES
Any vacancy occurring in the board of directors may be filled by the
affirmative vote of a majority of the remaining directors though less than a
quorum of the board of directors. A director elected to fill a vacancy shall be
elected for the unexpired term of his or her predecessor in office. Any
directorship to be filled by reason of an increase in the number of directors
may be filled by election by the board of directors for a term of office
continuing only until the next election of directors by the shareholders.
SECTION 3.12 RESIGNATION
Any director of the corporation may resign at any time by giving written
notice to the president or the secretary of the corporation. The resignation of
any director shall take effect upon receipt of notice thereof or at such later
time as shall be specified in such notice; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective. When one or more directors shall resign from the board, effective at
a future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective.
SECTION 3.13 REMOVAL
Any director or directors of the corporation may be removed at any time,
with or without cause, in the manner provided in Chapter 78 of the Nevada
Revised Statutes.
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SECTION 3.14 COMMITTEES
By resolution adopted by a majority of the board of directors, the
directors may designate two or more directors to constitute a committee, any of
which shall have such authority in the management of the corporation as the
board of directors shall designate and as shall be prescribed by Chapter 78 of
the Nevada Revised Statutes.
SECTION 3.15 COMPENSATION
By resolution of the board of directors and irrespective of any personal
interest of any of the members, each director may be paid his or her expenses,
if any, of attendance at each meeting of the board of directors, and may be paid
a stated salary as director or a fixed sum for attendance at each meeting of the
board of directors or both. No such payment shall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
SECTION 3.16 PRESUMPTION OF ASSENT
A director of the corporation who is present at a meeting of the board of
directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless his or her dissent shall be entered in
the minutes of the meeting or unless he or she shall file his or her written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
ARTICLE 4 - OFFICERS
SECTION 4.1 NUMBER
The officers of the corporation shall be a president, a secretary and a
treasurer, each of whom shall be elected by the board of directors. Such other
officers and assistant officers as may be deemed necessary may be elected or
appointed by the board of directors. Any two or more offices may be held by the
same person.
SECTION 4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation to be elected by the board of directors
shall be elected annually by the board of directors at the first meeting of the
board of directors held after the annual meeting of the shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as practicable. Each officer shall hold office until his
or her successor shall have been duly elected and shall have qualified or until
his or her death or until he or she shall resign or shall have been removed in
the manner hereinafter provided.
SECTION 4.3 REMOVAL
Any officer or agent may be removed by the board of directors whenever in
its judgment the best interests of the corporation will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent shall not of
itself create contract rights.
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SECTION 4.4 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the board of directors for the
unexpired portion of the term.
SECTION 4.5 PRESIDENT
The president shall be the chief executive officer of the corporation and,
subject to the control of the board of directors, shall in general supervise and
control all of the business and affairs of the corporation. He or she shall,
when present, and in the absence of a chairman of the board, preside at all
meetings of the shareholders and of the board of directors. He or she may sign,
with the secretary or any other proper officer of the corporation thereunto
authorized by the board of directors, certificates for shares of the corporation
and deeds, mortgages, bonds, contracts, or other instruments which the board of
directors has authorized to be executed, excepted in cases where the signing and
execution thereof shall be expressly delegated by the board of directors or by
these bylaws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in general shall perform
all duties incident to the office of president and such other duties as may be
prescribed by the board of directors from time to time.
SECTION 4.6 VICE PRESIDENT
If elected or appointed by the board of directors, the vice president (or
in the event there be more than one vice president, the vice presidents in the
order designated at the time of their election, or in the absence of any
designation, then in the order of their election) shall, in the absence of the
president or in the event of his or her death, inability or refusal to act,
perform all duties of the president, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the president. Any vice
president may sign, with the treasurer or an assistant treasurer or the
secretary or an assistant secretary, certificates for shares of the corporation;
and shall perform such other duties as from time to time may be assigned to him
or her by the president or by the board of directors.
SECTION 4.7 SECRETARY
The secretary shall: (a) keep the minutes of the proceedings of the
shareholders and of the board of directors in one or more books provided for
that purpose; (b) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation and see that the seal of
the corporation is affixed to all documents the execution of which on behalf of
the corporation under its seal is duly authorized; (d) keep a register of the
post office address of each shareholder which shall be furnished to the
secretary by such shareholder; (e) sign with the chairman or vice chairman of
the board of directors, or the president, or a vice president, certificates for
shares of the corporation, the issuance of which shall have been authorized by
resolution of the board of directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general perform all duties
incident to the office of secretary and such other duties as from time to time
may be assigned to him or her by the president or by the board of directors.
SECTION 4.8 TREASURER
The treasurer shall: (a) have charge and custody of and be responsible for
all funds and securities of the corporation; (b) receive and give receipts for
moneys due and payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such banks, trust
companies or other depositories as shall be selected in accordance with the
provisions of Article 5 of these bylaws; and (c) in general
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perform all of the duties incident to the office of treasurer and such other
duties as from time to time may be assigned to him or her by the president or by
the board of directors.
SECTION 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS
The assistant secretaries, when authorized by the board of directors, may
sign with the chairman or vice chairman of the board of directors or the
president or a vice president certificates for shares of the corporation the
issuance of which shall have been authorized by a resolution of the board of
directors. The assistant secretaries and assistant treasurers, in general, shall
perform such duties as shall be assigned to them by the secretary or the
treasurer, respectively, or by the president or the board of directors.
SECTION 4.10 BONDS
If the board of directors by resolution shall so require, any officer or
agent of the corporation shall give bond to the corporation in such amount and
with such surety as the board of directors may deem sufficient, conditioned upon
the faithful performance of their respective duties and offices.
SECTION 4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the board
of directors and no officer shall be prevented from receiving such salary by
reason of the fact that he or she is also a director of the corporation.
ARTICLE 5 - CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 5.1 CONTRACTS
The board of directors may authorize any officer or officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances.
SECTION 5.2 LOANS
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the board of directors. Such authority may be general or confined to specific
instances.
SECTION 5.3 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the board of
directors.
SECTION 5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the board of directors may select.
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ARTICLE 6 - SHARES, CERTIFICATES FOR SHARES AND TRANSFER OF SHARES
SECTION 6.1 REGULATION
The board of directors may make such rules and regulations as it may deem
appropriate concerning the issuance, transfer and registration of certificates
for shares of the corporation, including the appointment of transfer agents and
registrars.
SECTION 6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be respectively
numbered serially for each class of shares, or series thereof, as they are
issued, shall be impressed with the corporate seal or a facsimile thereof, and
shall be signed by the chairman or vice-chairman of the board of directors or by
the president or a vice president and by the treasurer or an assistant treasurer
or by the secretary or an assistant secretary; provided that such signatures may
be facsimile if the certificate is counter-signed by a transfer agent, or
registered by a registrar other than the corporation itself or its employee.
Each certificate shall state the name of the corporation, the fact that the
corporation is organized or incorporated under the laws of the state of Nevada,
the name of the person to whom issued, the date of issue, the class (or series
of any class), the number of shares represented thereby and the par value of the
shares represented thereby or a statement that such shares are without par
value. A statement of the designations, preferences, qualifications,
limitations, restrictions and special or relative rights of the shares of each
class shall be set forth in full or summarized on the face or back of the
certificates which the corporation shall issue, or in lieu thereof, the
certificate may set forth that such a statement or summary will be furnished to
any shareholder upon request without charge. Each certificate shall be otherwise
in such form as may be prescribed by the board of directors and as shall conform
to the rules of any stock exchange on which the shares may be listed.
The corporation shall not issue certificates representing fractional shares
and shall not be obligated to make any transfers creating a fractional interest
in a share of stock. The corporation may, but shall not be obligated to, issue
scrip in lieu of any fractional shares, such scrip to have terms and conditions
specified by the board of directors.
SECTION 6.3 CANCELLATION OF CERTIFICATES
All certificates surrendered to the corporation for transfer shall be
canceled and no new certificates shall be issued in lieu thereof until the
former certificate for a like number of shares shall have been surrendered and
canceled, except as herein provided with respect to lost, stolen or destroyed
certificates.
SECTION 6.4 LOST, STOLEN OR DESTROYED CERTIFICATES
Any shareholder claiming that his or her certificate for shares is lost,
stolen or destroyed may make an affidavit or affirmation of that fact and lodge
the same with the secretary of the corporation, accompanied by a signed
application for a new certificate. Thereupon, and upon the giving of a
satisfactory bond of indemnity to the corporation not exceeding an amount double
the value of the shares as represented by such certificate (the necessity for
such bond and the amount required to be determined by the president and
treasurer of the corporation), a new certificate may be issued of the same tenor
and representing the same number, class and series of shares as were represented
by the certificate alleged to be lost, stolen or destroyed.
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SECTION 6.5 TRANSFER OF SHARES
Subject to the terms of any shareholder agreement relating to the transfer
of shares or other transfer restrictions contained in the Articles of
Incorporation or authorized therein, shares of the corporation shall be
transferable on the books of the corporation by the holder thereof in person or
by his or her duly authorized attorney, upon the surrender and cancellation of a
certificate or certificates for a like number of shares. Upon presentation and
surrender of a certificate for shares properly endorsed and payment of all taxes
therefor, the transferee shall be entitled to a new certificate or certificates
in lieu thereof. As against the corporation, a transfer of shares can be made
only on the books of the corporation and in the manner hereinabove provided, and
the corporation shall be entitled to treat the holder of record of any share as
the owner thereof and shall not be bound to recognize any equitable or other
claim to or interest in such share on the part of any other person, whether or
not it shall have express or other notice thereof, save as expressly provided by
the statutes of the state of Nevada.
ARTICLE 7 - FISCAL YEAR
The fiscal year of the corporation shall end on the last day of September
in each calendar year. The fiscal year of the corporation may be changed by the
affirmative vote of a majority of the board of directors.
ARTICLE 8 - DIVIDENDS
The board of directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Articles of Incorporation.
ARTICLE 9 - CORPORATE SEAL
The board of directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words "CORPORATE SEAL."
ARTICLE 10 - WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of these
bylaws or under the provisions of the Articles of Incorporation or under the
provisions of the Chapter 78 of the Nevada Revised Statutes, or otherwise, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the event or other circumstance requiring such
notice, shall be deemed equivalent to the giving of such notice.
ARTICLE 11 - AMENDMENTS
These bylaws may be altered, amended or repealed and new bylaws may be
adopted by a majority of the directors present at any meeting of the board of
directors of the corporation at which a quorum is present.
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ARTICLE 12 - EXECUTIVE COMMITTEE
SECTION 12.1 APPOINTMENT
The board of directors by resolution adopted by a majority of the full
board, may designate two or more of its members to constitute an executive
committee. The designation of such committee and the delegation thereto of
authority shall not operate to relieve the board of directors, or any member
thereof, of any responsibility imposed by law.
SECTION 12.2 AUTHORITY
The executive committee, when the board of directors is not in session,
shall have and may exercise all of the authority of the board of directors
except to the extent, if any, that such authority shall be limited by the
resolution appointing the executive committee and except also that the executive
committee shall not have the authority of the board of directors in reference to
amending the Articles of Incorporation, adopting a plan of merger or
consolidation, recommending to the shareholders the sale, lease or other
disposition of all or substantially all of the property and assets of the
corporation otherwise than in the usual and regular course of its business,
recommending to the shareholders a voluntary dissolution of the corporation or a
revocation thereof, or amending the bylaws of the corporation.
SECTION 12.3 TENURE AND QUALIFICATIONS
Each member of the executive committee shall hold office until the next
regular annual meeting of the board of directors following his or her
designation and until his or her successor is designated as a member of the
executive committee and is elected and qualified.
SECTION 12.4 MEETINGS
Regular meetings of the executive committee may be held without notice at
such time and places as the executive committee may fix from time to time by
resolution. Special meetings of the executive committee may be called by any
member thereof upon not less than one day's notice stating the place, date and
hour of the meeting, which notice may be written or oral, and if mailed, shall
be deemed to be delivered when deposited in the United States mail addressed to
the member of the executive committee at his or her business address. Any member
of the executive committee may waive notice of any meeting and no notice of any
meeting need be given to any member thereof who attends in person. The notice of
a meeting of the executive committee need not state the business proposed to be
transacted at the meeting.
SECTION 12.5 QUORUM
A majority of the members of the executive committee shall constitute a
quorum for the transaction of business at any meeting thereof, and action of the
executive committee must be authorized by the affirmative vote of a majority of
the members present at a meeting at which a quorum is present.
SECTION 12.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE
Any action required or permitted to be taken by the executive committee at
a meeting may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all of the directors entitled to vote
with respect to the subject matter thereof.
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SECTION 12.7 VACANCIES
Any vacancy in the executive committee may be filled by a resolution
adopted by a majority of the full board of directors.
SECTION 12.8 RESIGNATIONS AND REMOVAL
Any member of the executive committee may be removed at any time with or
without cause by resolution adopted by a majority of the full board of
directors. Any member of the executive committee may resign from the executive
committee at any time by giving written notice to the president or secretary of
the corporation, and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 12.9 PROCEDURE
The executive committee shall elect a presiding officer from its members
and may fix its own rules of procedure which shall not be inconsistent with
these bylaws. It shall keep regular minutes of its proceedings and report the
same to the board of directors for its information at the meeting thereof held
next after the proceedings shall have been taken.
ARTICLE 13 - INDEMNIFICATION
SECTION 13.1 INDEMNIFICATION
The corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct as unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe his conduct was unlawful.
The corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interest of the corporation. Indemnification may not be made for any
claim, issue or matter as to which such person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the corporation or for amounts paid in settlement to the corporation, unless
and only to the extent that the court in which the action or suit was brought or
other competent jurisdiction determines upon application that in view of all the
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<PAGE>
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
SECTION 13.2 RIGHT TO INDEMNIFICATION
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 13.1 and 13.2 of this
Article 13, or in defense of any claim, issue or matter therein, the corporation
shall indemnify him against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense.
SECTION 13.3 GROUPS AUTHORIZED TO MAKE INDEMNIFICATION DETERMINATION
Any indemnification under Sections 13.1 or 13.2 of this Article 13, unless
ordered by a court or advanced pursuant to Section 13.2, may be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made: (a) by the stockholders; (b) by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to the action, suit or proceeding; (c) if a majority vote
of a quorum consisting of directors who were not parties to the action, suite or
proceeding so orders, by independent legal counsel in a written opinion; or (d)
if a quorum consisting of directors who were not parties to the action, suit or
proceeding cannot be obtained, by independent legal counsel in a written
opinion.
SECTION 13.4 PAYMENT AND ADVANCE OF EXPENSES
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 such action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this Section do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
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CERTIFICATE
I hereby certify that the foregoing bylaws, consisting of 15 pages,
including this page, constitute the bylaws of PARPUTT ENTERPRISES, INC., adopted
by the board of directors of the corporation as of November 4, 1996.
s/Andrew I. Telsey
--------------------------------------
Andrew I. Telsey, Secretary
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<PAGE>
PARPUTT ENTERPRISES, INC.
---------------------------
EXHIBIT 4.1
---------------------------
FORM OF LOCK-UP
AGREEMENTS EXECUTED BY
THE COMPANY'S SHAREHOLDERS
---------------------------
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<PAGE>
, 2000
--------------------
Board of Directors
Parputt Enterprises, Inc.
2851 S. Parker Road
Suite 720
Aurora, Colorado 80014
Gentlemen:
The undersigned, a beneficial owner of the common stock of Parputt
Enterprises, Inc. (the "Company"), par value $.0001 per share (the "Common
Stock"), understands that the Company has filed with the U.S. Securities and
Exchange Commission a registration statement on Form 10-SB (File No. ) (the
"Registration Statement"), for the registration of the Company's Common Stock.
As part of the disclosure included in the Registration Statement, the Company
has affirmatively stated that there will be no trading of the Company's
securities until such time as the Company successfully implements its business
plan as described in such Registration Statement, consummating a merger or
acquisition.
In order to insure that the aforesaid disclosure is adhered to, the
undersigned agrees, for the benefit of the Company, that he/she will not offer
to sell, assign, pledge, hypothecate, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any shares of the Common Stock of
the Company owned by him/her, or subsequently acquired through the exercise of
any options, warrants or rights, or conversion of any other security, grant
options, rights or warrants with respect to any such shares of Common Stock,
until the Company successfully closes a merger or acquisition. Furthermore, the
undersigned will permit all certificates evidencing his/her shares to be
endorsed with the appropriate restrictive legends and will consent to the
placement of appropriate stop transfer orders with the transfer agent of the
Company.
Very truly yours,
- - - - - - - - - - - - - - - - - - - - -
[Signature of Holder]
----------------------------------------
[Please Print Name(s)]
----------------------------------------
[Number of Shares of Common Stock Owned]
69
<PAGE>
PARPUTT ENTERPRISES, INC.
---------------------------
EXHIBIT 27.1
---------------------------
FINANCIAL DATA SCHEDULE
---------------------------
70
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 50
<OTHER-SE> (50)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
