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U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
NATIONAL ASSET ACQUISITION, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1514795
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1745 Wazee, Suite 2D, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (303) 295-7594
Securities to be registered under Section 12(b) of the Act:
Title of each class
Name of each exchange on which to be so registered each class is to be
registered
Not Applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock (Title of class)
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PART I
Item 1. Description of Business.
General
National was incorporated under the laws of the State of Colorado on
August 6, 1999. National is in the early developmental and
promotional stages. To date National's only activities have been
organizational ones, directed at developing its business plan and
raising its initial capital. National has not commenced any
commercial operations. National has no employees and owns no real
estate. National 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.
As part of its business plan, this Company is filing this registration
statement on Form 10-SB on a voluntary basis in order to become a
"public" company by virtue of being subject to the reporting
requirements of the Securities Exchange Act of 1934.
Another aspect of its business plan which National intends to implement
after this registration statement becomes effective, is to seek to
facilitate the eventual creation of a public trading market in its
outstanding securities. National's business plan is to seek,
investigate, and, if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value.
The acquisition of a business opportunity may be made by purchase,
merger, exchange of stock, or otherwise, and may encompass assets or a
business entity, such as a corporation, joint venture, or partnership.
National has very limited capital, and it is unlikely that National
will be able to take advantage of more than one such business
opportunity.
National intends to seek opportunities demonstrating the potential of
long-term growth as opposed to short-term earnings. At the present time
National has not identified any business opportunity that it plans to
pursue, nor has National reached any agreement or definitive
understanding with any person concerning an acquisition.
It is anticipated that National's sole officer and director will
contact broker-dealers and other persons with whom she is acquainted
who are involved in corporate finance matters to advise them of
National's existence and to determine if any companies or businesses
they represent have an interest in considering a merger or acquisition
with National. No assurance can be given that National will be
successful in finding or acquiring a desirable business opportunity,
given the limited funds that are expected to be available for
acquisitions, or that any acquisition that occurs will be on terms that
are favorable to National or its stockholders.
National's search will be directed toward small and medium-sized
enterprises which have a desire to become public corporations and which
are able to satisfy, or anticipate in the reasonably near future being
able to satisfy, the minimum asset requirements in order to qualify
shares for trading on NASDAQ or on a stock exchange (See "Investigation
and Selection of Business Opportunities").
National anticipates that the business opportunities presented to it
will (i) be recently organized with no operating history, or a history
of losses attributable to under-capitalization or other factors; (ii)
be experiencing financial or operating difficulties; (iii) be in need
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of funds to develop a new product or service or to expand into a new
market; (iv) be relying upon an untested product or marketing concept;
or (v) have a combination of the characteristics mentioned in (i)
through (iv).
National intends to concentrate its acquisition efforts on properties
or businesses that it believes to be undervalued. Given the above
factors, investors should expect that any acquisition candidate may
have a history of losses or low profitability. National does not
propose to restrict its search for investment opportunities to any
particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of its limited resources. This
includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical,
communications and others.
National's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities,
economic conditions, and other factors. As a consequence of this
registration of its securities, any entity, which has an interest in
being acquired by, or merging into National, is expected to be an
entity that desires to become a public company and establish a public
trading market for its securities. In connection with such a merger or
acquisition, it is highly likely that an amount of stock constituting
control of National would be issued by National or purchased from the
current principal shareholders of National by the acquiring entity or
its affiliates.
If stock is purchased from the current shareholders, the transaction is
very likely to result in substantial gains to them relative to their
purchase price for such stock. In National's judgment, its sole officer
and director would not thereby become an "underwriter" within the
meaning of the Section 2(11) of the Securities Act of 1933, as amended.
The sale of a controlling interest by certain principal shareholders of
National could occur at a time when the other shareholders of National
remain subject to restrictions on the transfer of their shares.
Depending upon the nature of the transaction, the current officer and
director of National may resign her management position with National
in connection with National's acquisition of a business opportunity.
See "Form of Acquisition," below, and "Risk Factors - National - Lack
of Continuity in Management."
In the event of such a resignation, National's current management would
not have any control over the conduct of National's business following
National's combination with a business opportunity. It is anticipated
that business opportunities will come to National's attention from
various sources, including its officer and director, its other
stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the
financial community, and others who may present unsolicited proposals.
National has no plans, understandings, agreements, or commitments with
any individual for such person to act as a finder of opportunities for
National. National does not foresee that it would enter into a merger
or acquisition transaction with any business with which its officers or
directors are currently affiliated. Should National determine in the
future, contrary to the foregoing expectations, that a transaction with
an affiliate would be in the best interests of National and its
stockholders, National is in general permitted by Colorado law to enter
into such a transaction if:
1. The material facts as to the relationship or interest of
the affiliate and as to the contract or transaction are
disclosed or are known to the Board of Directors, and the Board
in good faith authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested directors,
even though the disinterested directors constitute less than a
quorum; or
2. The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and
the contract or transaction is specifically approved in good
faith by vote of the stockholders; or
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3. The contract or transaction is fair as to National as of the
time it is authorized, approved or ratified, by the Board of
Directors or the stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of
the other company's management and personnel, the anticipated
acceptability of new products or marketing concepts, the merit of
technological changes, the perceived benefit National will derive from
becoming a publicly held entity, and numerous other factors which are
difficult, if not impossible, to analyze through the application of any
objective criteria.
In many instances, it is anticipated that the historical operations of
a specific business opportunity may not necessarily be indicative of
the potential for the future because of the possible need to shift
marketing approaches substantially, expand significantly, change
product emphasis, change or substantially augment management, or make
other changes. National will be dependent upon the owners of a business
opportunity to identify any such problems which may exist and to
implement, or be primarily responsible for the implementation of,
required changes.
Because National may participate in a business opportunity with a newly
organized firm or with a firm which is entering a new phase of growth,
it should be emphasized that National will incur further risks, because
management in many instances will not have proved its abilities or
effectiveness, the eventual market for such company's products or
services will likely not be established, and such company may not be
profitable when acquired.
It is anticipated that National will not be able to diversify, but will
essentially be limited to one such venture because of National's
limited financing. This lack of diversification will not permit
National to offset potential losses from one business opportunity
against profits from another, and should be considered an adverse
factor affecting any decision to purchase National's securities. It is
emphasized that management of National may effect transactions having a
potentially adverse impact upon National's shareholders pursuant to the
authority and discretion of National's management to complete
acquisitions without submitting any proposal to the stockholders for
their consideration.
Holders of National's securities should not anticipate that National
necessarily will furnish such holders, prior to any merger or
acquisition, with financial statements, or any other documentation,
concerning a target company or its business. In some instances,
however, the proposed participation in a business opportunity may be
submitted to the stockholders for their consideration, either
voluntarily by such directors to seek the stockholders' advice and
consent or because state law so requires. The analysis of business
opportunities will be undertaken by or under the supervision of
National's President, who is not a professional business analyst. See
"Management."
Although there are no current plans to do so, National's management
might hire an outside consultant to assist in the investigation and
selection of business opportunities, and might pay a finder's fee.
Since National's management has no current plans to use any outside
consultants or advisors to assist in the investigation and selection of
business opportunities, no policies have been adopted regarding use of
such consultants or advisors, the criteria to be used in selecting such
consultants or advisors, the services to be provided, the term of
service, or regarding the total amount of fees that may be paid.
However, because of the limited resources of National, it is likely
that any such fee National agrees to pay would be paid in stock and not
in cash. Otherwise, National anticipates that it will consider, among
other things, the following factors:
1. Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
2. National's perception of how any particular business
opportunity will be received by the investment community and by
National's stockholders;
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3. Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a
significant prospect in the foreseeable future of becoming
sufficient to enable the securities of National to qualify for
listing on an exchange or on a national automated securities
quotation system, such as NASDAQ, so as to permit the trading
of such securities to be exempt from the requirements of a Rule
15g-9 adopted by the Securities and Exchange Commission. See
"Risk Factors - National - Regulation of Penny Stocks."
4. Capital requirements and anticipated availability of
required funds, to be provided by National or from operations,
through the sale of additional securities, through joint
ventures or similar arrangements, or from other sources;
5. The extent to which the business opportunity can be
advanced;
6. Competitive position as compared to other companies of
similar size and experience within the industry segment as well
as within the industry as a whole;
7. Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;
8. The cost of participation by National as compared to the
perceived tangible and intangible values and potential; and
9. The accessibility of required management expertise,
personnel, raw materials, services, professional assistance,
and other required items. In regard to the possibility that the
shares of National would qualify for listing on NASDAQ, the
current standards include the requirements that the issuer of
the securities that are sought to be listed have total assets
of at least $4,000,000 and total capital and surplus of at
least $2,000,000, and proposals have recently been made to
increase these qualifying amounts. Many, and perhaps most, of
the business opportunities that might be potential candidates
for a combination with National would not satisfy the NASDAQ
listing criteria. No one of the factors described above will be
controlling in the selection of a business opportunity, and
management will attempt to analyze all factors appropriate to
each opportunity and make a determination based upon reasonable
investigative measures and available data. 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.
Potential investors must recognize that, because of National's
limited capital available for investigation and management's
limited experience in business analysis, National may not
discover or adequately evaluate adverse facts about the
opportunity to be acquired. National is unable to predict when
it may participate in a business opportunity. It expects,
however, that the analysis of specific proposals and the
selection of a business opportunity may take several months or
more.
Prior to making a decision to participate in a business opportunity,
National will generally request that it be provided with written
materials regarding the business opportunity containing such items as a
description of products, services and company history; management
resumes; financial information; available projections, with related
assumptions upon which they are based; an explanation of proprietary
products and services; evidence of existing patents, trademarks, or
services marks, or rights thereto; present and proposed forms of
compensation to management; a description of transactions between such
company and its affiliates during relevant periods; a description of
present and required facilities; an analysis of risks and competitive
conditions; a financial plan of operation and estimated capital
requirements; audited financial statements, or if they are not
available, unaudited financial statements, together with reasonable
assurances that audited financial statements would be able to be
produced within a reasonable period of time not to exceed 60 days
following completion of a merger transaction; and other information
deemed relevant.
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As part of National's investigation, National's sole officer and
director may meet personally with management and key personnel, may
visit and inspect material facilities, obtain independent analysis or
verification of certain information provided, check references of
management and key personnel, and take other reasonable investigative
measures, to the extent of National's limited financial resources and
management expertise. It is possible that the range of business
opportunities that might be available for consideration by National
could be limited by the impact of Securities and Exchange Commission
regulations regarding purchase and sale of "penny stocks." The
regulations would affect, and possibly impair, any market that might
develop in National's securities until such time as they qualify for
listing on NASDAQ or on another exchange which would make them exempt
from applicability of the "penny stock" regulations. See "Risk Factors"
Regulation of Penny Stocks
National's management believes that various types of potential merger
or acquisition candidates might find a business combination with
National to be attractive. These include acquisition candidates
desiring to create a public market for their shares in order to enhance
liquidity for current shareholders, acquisition candidates which have
long-term plans for raising capital through the public sale of
securities and believe that the possible prior existence of a public
market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of
development of a public market for their securities will be of
assistance in that process. Acquisition candidates which have a need
for an immediate cash infusion are not likely to find a potential
business combination with National to be an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which National may
participate in a business opportunity. Specific business opportunities
will be reviewed as well as the respective needs and desires of
National and the promoters of the opportunity and, upon the basis of
that review and the relative negotiating strength of National and such
promoters, the legal structure or method deemed by management to be
suitable will be selected. Such structure may include, but is not
limited to leases, purchase and sale agreements, licenses, joint
ventures and other contractual arrangements. National may act
directly or indirectly through an interest in a partnership,
corporation or other form of organization. Implementing such
structure may require the merger, consolidation or reorganization of
National with other corporations or forms of business organization, and
although it is likely, there is no assurance that National would be the
surviving entity. In addition, the present management and stockholders
of National most likely will not have control of a majority of the
voting shares of National following a reorganization transaction. As
part of such a transaction, National's existing directors may resign
and new directors may be appointed without any vote by stockholders. It
is likely that National will acquire its participation in a business
opportunity through the issuance of Common Stock or other securities of
National.
Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for
determining whether or not an acquisition is a so-called "tax free"
reorganization under the Internal Revenue Code of 1986, depends upon
the issuance to the stockholders of the acquired company of a
controlling interest (i.e. 80% or more) of the common stock of the
combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions
rather than other "tax free" provisions provided under the Internal
Revenue Code, National's current stockholders would retain in the
aggregate 20% or less of the total issued and outstanding shares. This
could result in substantial additional dilution in the equity of those
who were stockholders of National prior to such reorganization. Any
such issuance of additional shares might also be done simultaneously
with a sale or transfer of shares representing a controlling interest
in National by the current officers, directors and principal
shareholders. (See "Description of Business - General").
It is anticipated that any new securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available, from
registration under applicable federal and state securities laws. In
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some circumstances, however, as a negotiated element of the
transaction, National may agree to register such securities either at
the time the transaction is consummated, or under certain conditions or
at specified times thereafter. The issuance of substantial additional
securities and their potential sale into any trading market that might
develop in National's securities may have a depressive effect upon such
market. National will participate in a business opportunity only after
the negotiation and execution of a written agreement.
Although the terms of such agreement cannot be predicted, generally
such an agreement would require specific representations and warranties
by all of the parties thereto, specify certain events of default,
detail the terms of closing and the conditions which must be satisfied
by each of the parties thereto prior to such closing, outline the
manner of bearing costs if the transaction is not closed, set forth
remedies upon default, and include miscellaneous other terms. As a
general matter, National anticipates that it, and/or its officers and
principal shareholders will enter into a letter of intent with the
management, principals or owners of a prospective business opportunity
prior to signing a binding agreement. Such a letter of intent will set
forth the terms of the proposed acquisition but will not bind any of
the parties to consummate the transaction. Execution of a letter of
intent will by no means indicate that consummation of an acquisition is
probable. Neither National nor any of the other parties to the letter
of intent will be bound to consummate the acquisition unless and until
a definitive agreement concerning the acquisition as described in the
preceding paragraph is executed. Even after a definitive agreement is
executed, it is possible that the acquisition would not be consummated
should any party elect to exercise any right provided in the agreement
to terminate it on specified grounds. It is anticipated that the
investigation of specific business opportunities and the negotiation,
drafting and execution of relevant agreements, disclosure documents and
other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others.
If a decision is made not to participate in a specific business
opportunity, the costs theretofore incurred in the related
investigation would not be recoverable. Moreover, because many
providers of goods and services require compensation at the time or
soon after the goods and services are provided, the inability of
National to pay until an indeterminate future time may make it
impossible to procure goods and services.
Investment Company Act and Other Regulation
National may participate in a business opportunity by purchasing,
trading or selling the securities of such business. National does not,
however, intend to engage primarily in such activities.
Specifically, National intends to conduct its activities so as to avoid
being classified as an "investment company" under the Investment
Company Act of 1940 (the "Investment Act"), and therefore to avoid
application of the costly and restrictive registration and other
provisions of the Investment Act, and the regulations promulgated
thereunder. Section 3(a) of the Investment Act contains the definition
of an "investment company," and it excludes any entity that does not
engage primarily in the business of investing, reinvesting or trading
in securities, or that does not engage in the business of investing,
owning, holding or trading "investment securities" (defined as "all
securities other than government securities or securities of majority-
owned subsidiaries") the value of which exceeds 40% of the value of its
total assets (excluding government securities, cash or cash items).
National intends to implement its business plan in a manner which will
result in the availability of this exception from the definition of
"investment company." Consequently, National's participation in a
business or opportunity through the purchase and sale of investment
securities will be limited.
National's plan of business may involve changes in its capital
structure, management, control and business, especially if it
consummates a reorganization as discussed above. Each of these areas is
regulated by the Investment Act, in order to protect purchasers of
investment company securities. Since National will not register as an
investment company, stockholders will not be afforded these
protections.
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Any securities which National might acquire in exchange for its Common
Stock may be "restricted securities" within the meaning of the
Securities Act of 1933, as amended (the "Act"). If National elects to
resell such securities, such sale cannot proceed unless a registration
statement has been declared effective by the Securities and Exchange
Commission or an exemption from registration is available. Section 4(1)
of the Act, which exempts sales of securities not involving a
distribution, would in all likelihood be available to permit a private
sale. Although the plan of operation does not contemplate resale of
securities acquired, if such a sale were to be necessary, National
would be required to comply with the provisions of the Act to effect
such resale. An acquisition made by National may be in an industry
which is regulated or licensed by federal, state or local authorities.
Compliance with such regulations can be expected to be a time-consuming
and expensive process. Competition National expects to encounter
substantial competition in its efforts to locate attractive
opportunities, primarily from business development companies, venture
capital partnerships and corporations, venture capital affiliates of
large industrial and financial companies, small investment companies,
and wealthy individuals. Many of these entities will have significantly
greater experience, resources and managerial capabilities than National
and will therefore be in a better position than National to obtain
access to attractive business opportunities. National also will
experience competition from other public "blind pool" companies, many
of which may have more funds available than does National.
Employees
National is a development stage company and currently has no employees.
Management of National expects to use consultants, attorneys and
accountants as necessary, and does not anticipate a need to engage any
full-time employees so long as it is seeking and evaluating business
opportunities. The need for employees and their availability will be
addressed in connection with the decision whether or not to acquire or
participate in specific business opportunities.
Although there is no current plan with respect to its nature or amount,
remuneration may be paid to or accrued for the benefit of, National's
officers prior to, or in conjunction with, the completion of a business
acquisition. See "Executive Compensation."
Risk Factors
1. Conflicts of Interest. Certain conflicts of interest exist between
National and its officers and directors. They have other business
interests to which they devote their attention, and they may be
expected to continue to do so although management time should be
devoted to the business of National. As a result, conflicts of interest
may arise that can be resolved only through their exercise of such
judgment as is consistent with their fiduciary duties to National. See
"Management," and "Conflicts of Interest."
2. Possible Need for Additional Financing. National has very limited
funds, and such funds may not be adequate to take advantage of any
available business opportunities. Even if National's funds prove to be
sufficient to acquire an interest in, or complete a transaction with, a
business opportunity, National may not have enough capital to exploit
the opportunity. The ultimate success of National may depend upon its
ability to raise additional capital. National has not investigated the
availability, source, or terms that might govern the acquisition of
additional capital and will not do so until it determines a need for
additional financing. If additional capital is needed, there is no
assurance that funds will be available from any source or, if
available, that they can be obtained on terms acceptable to National.
If not available, National's operations will be limited to those that
can be financed with its modest capital.
3. Regulation of Penny Stocks. National's securities, when available
for trading, will be subject to a Securities and Exchange Commission
rule that imposes special sales practice requirements upon broker-
dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with
assets in excess of $5,000,000, or individuals having a net worth in
excess of $1,000,000 or having an annual income that exceeds $200,000
(or that, when combined with a spouse's income, exceeds $300,000). For
transactions covered by the rule, the broker- dealer must make a
special suitability determination for the purchaser and receive the
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purchaser's written agreement to the transaction prior to the sale.
Consequently, the rule may affect the ability of broker- dealers to
sell National's securities and also may affect the ability of
purchasers in this offering to sell their securities in any market that
might develop therefor. In addition, the Securities and Exchange
Commission has adopted a number of rules to regulate "penny stocks."
Because the securities of National may constitute "penny stocks" within
the meaning of the rules, the rules would apply to National and to its
securities. The rules may further affect the ability of owners of
Shares to sell the securities of National in any market that might
develop for them. Shareholders should be aware that, according to
Securities and Exchange Commission Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and
abuse. Such patterns include (i) control of the market for the security
by one or a few broker-dealers that are often related to the promoter
or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii)
"boiler room" practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons; (iv)
excessive and undisclosed bid-ask differentials and markups by selling
broker- dealers; and (v) the wholesale dumping of the same securities
by promoters and broker-dealers after prices have been manipulated to a
desired level, along with the resulting inevitable collapse of those
prices and with consequent investor losses. National's management is
aware of the abuses that have occurred historically in the penny stock
market. Although National does not expect to be in a position to
dictate the behavior of the market or of broker- dealers who
participate in the market, management will strive within the confines
of practical limitations to prevent the described patterns from being
established with respect to National's securities.
4. No Operating History. National was formed in June 5, 1987 for the
purpose of acquiring a business opportunity. National has no
operating history, revenues from operations, or assets other than cash
from private sales of stock. National faces all of the risks of a new
business and the special risks inherent in the investigation,
acquisition, or involvement in a new business opportunity. National
must be regarded as a new or "start-up" venture with all of the
unforeseen costs, expenses, problems, and difficulties to which such
ventures are subject.
5. No Assurance of Success or Profitability. There is no assurance that
National will acquire a favorable business opportunity. Even if
National should become involved in a business opportunity, there is no
assurance that it will generate revenues or profits, or that the market
price of National's Common Stock will be increased thereby.
6. Possible Business - Not Identified and Highly Risky. National has
not identified and has no commitments to enter into or acquire a
specific business opportunity and therefore can disclose the risks and
hazards of a business or opportunity that it may enter into in only a
general manner, and cannot disclose the risks and hazards of any
specific business or opportunity that it may enter into. An investor
can expect a potential business opportunity to be quite risky.
National's acquisition of or participation in a business opportunity
will likely be highly illiquid and could result in a total loss to
National and its stockholders if the business or opportunity proves to
be unsuccessful. See Item 1 "Description of Business."
7. Type of Business Acquired. The type of business to be acquired may
be one that desires to avoid effecting its own public offering and the
accompanying expense, delays, uncertainties, and federal and state
requirements which purport to protect investors. Because of National's
limited capital, it is more likely than not that any acquisition by
National will involve other parties whose primary interest is the
acquisition of control of a publicly traded company. Moreover, any
business opportunity acquired may be currently unprofitable or present
other negative factors.
8. Impracticability of Exhaustive Investigation. National's limited
funds and the lack of full-time management will likely make it
impracticable to conduct a complete and exhaustive investigation and
analysis of a business opportunity before National commits its capital
or other resources thereto. Management decisions, therefore, will
likely be made without detailed feasibility studies, independent
analysis, market surveys and the like which, if National had more funds
available to it, would be desirable. National will be particularly
dependent in making decisions upon information provided by the
promoter, owner, sponsor, or others associated with the business
<PAGE>11
opportunity seeking National's participation. A significant portion
of National's available funds may be expended for investigative
expenses and other expenses related to preliminary aspects of
completing an acquisition transaction, whether or not any business
opportunity investigated is eventually acquired
. 9. Lack of Diversification. Because of the limited financial
resources that National has, it is unlikely that National will be able
to diversify its acquisitions or operations. National's probable
inability to diversify its activities into more than one area will
subject National to economic fluctuations within a particular business
or industry and therefore increase the risks associated with National's
operations.
10. Possible Reliance upon Unaudited Financial Statements. National
generally will require audited financial statements from companies that
it proposes to acquire. No assurance can be given, however, that
audited financials will be available to National. In cases where
audited financials are unavailable, National will have to rely upon
unaudited information received from target companies' management that
has not been verified by outside auditors. The lack of the type of
independent verification which audited financial statements would
provide, increases the risk that National, in evaluating an acquisition
with such a target company, will not have the benefit of full and
accurate information about the financial condition and operating
history of the target company. This risk increases the prospect that
the acquisition of such a company might prove to be an unfavorable one
for National or the holders of National's securities. Moreover,
National will be subject to the reporting provisions of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and thus will be
required to furnish certain information about significant acquisitions,
including audited financial statements for any business that it
acquires. Consequently, acquisition prospects that do not have, or
are unable to provide reasonable assurances that they will be able to
obtain, the required audited statements would not be considered by
National to be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
Should National, during the time it remains subject to the reporting
provisions of the Exchange Act, complete an acquisition of an entity
for which audited financial statements prove to be unobtainable,
National would be exposed to enforcement actions by the Securities and
Exchange Commission (the "Commission") and to corresponding
administrative sanctions, including permanent injunctions against
National and its management. The legal and other costs of defending a
Commission enforcement action are likely to have material, adverse
consequences for National and its business. The imposition of
administrative sanctions would subject National to further adverse
consequences. I n addition, the lack of audited financial statements
would prevent the securities of National from becoming eligible for
listing on NASDAQ, the automated quotation system sponsored by the
National Association of Securities Dealers, Inc., or on any existing
stock exchange. Moreover, the lack of such financial statements is
likely to discourage broker-dealers from becoming or continuing to
serve as market makers in the securities of National. Without audited
financial statements, National would almost certainly be unable to
offer securities under a registration statement pursuant to the
Securities Act of 1933, and the ability of National to raise capital
would be significantly limited until such financial statements were to
become available.
<PAGE>12
11. Other Regulation. An acquisition made by National may be of a
business that is subject to regulation or licensing by federal, state,
or local authorities. Compliance with such regulations and licensing
can be expected to be a time-consuming, expensive process and may limit
other investment opportunities of National.
12. Dependence upon Management; Limited Participation of Management.
National currently has only one individual who is serving as its sole
officer and director. National will be heavily dependent upon her
skills, talents, and abilities to implement its business plan, and may,
from time to time, find that the inability of the sole officer and
director to devote her full time attention to the business of National
results in a delay in progress toward implementing its business plan.
Furthermore, since Ms. Signer is serving as the sole officer and
director of National, it will be entirely dependent upon her experience
in seeking, investigating, and acquiring a business and in making
decisions regarding National's operations. See "Management." Because
investors will not be able to evaluate the merits of possible business
acquisitions by National, they should critically assess the information
concerning National's officers and directors.
13. Lack of Continuity in Management. National does not have an
employment agreement with its sole officer and director, and as a
result, there is no assurance that she will continue to manage National
in the future. In connection with acquisition of a business
opportunity, it is likely the current officers and directors of
National may resign. A decision to resign will be based upon the
identity of the business opportunity and the nature of the transaction,
and is likely to occur without the vote or consent of the stockholders
of National.
14. Indemnification of Officers and Directors. National's Articles of
Incorporation provide for the indemnification of its directors,
officers, employees, and agents, under certain circumstances, against
attorney's fees and other expenses incurred by them in any litigation
to which they become a party arising from their association with or
activities on behalf of National. National will also bear the expenses
of such litigation for any of its directors, officers, employees, or
agents, upon such person's promise to repay National therefor if it is
ultimately determined that any such person shall not have been entitled
to indemnification. This indemnification policy could result in
substantial expenditures by National, which it will be unable to
recoup.
15. Director's Liability Limited. National's Articles of Incorporation
exclude personal liability of its directors to National and its
stockholders for monetary damages for breach of fiduciary duty except
in certain specified circumstances. Accordingly, National will have a
much more limited right of action against its directors than otherwise
would be the case. This provision does not affect the liability of any
director under federal or applicable state securities laws.
16. Dependence upon Outside Advisors. To supplement the business
experience of its sole officer and director, National may be required
to employ accountants, technical experts, appraisers, attorneys, or
other consultants or advisors. The selection of any such advisors will
be made by National's President without any input from stockholders.
Furthermore, it is anticipated that such persons may be engaged on an
"as needed" basis without a continuing fiduciary or other obligation to
National. In the event the President of National considers it necessary
to hire outside advisors, she may elect to hire persons who are
affiliates, if they are able to provide the required services.
17. Leveraged Transactions. There is a possibility that any acquisition
of a business opportunity by National may be lever- aged, i.e.,
National may finance the acquisition of the business opportunity by
borrowing against the assets of the business opportunity to be
acquired, or against the projected future revenues or profits of the
business opportunity. This could increase National's exposure to larger
losses. A business opportunity acquired through a leveraged transaction
is profitable only if it generates enough revenues to cover the related
debt and expenses. Failure to make payments on the debt incurred to
purchase the business opportunity could result in the loss of a portion
or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate
sufficient revenues to cover the related debt and expenses.
<PAGE>13
18. Competition. The search for potentially profitable business
opportunities is intensely competitive. National expects to be at a
disadvantage when competing with many firms that have substantially
greater financial and management resources and capabilities than
National. These competitive conditions will exist in any industry in
which National may become interested.
19. No Foreseeable Dividends. National has not paid dividends on its
Common Stock and does not anticipate paying such dividends in the
foreseeable future.
20. Loss of Control by Present Management and Stockholders. National
may consider an acquisition in which National would issue as
consideration for the business opportunity to be acquired an amount of
National's authorized but unissued Common Stock that would, upon
issuance, represent the great majority of the voting power and equity
of National. The result of such an acquisition would be that the
acquired company's stockholders and management would control National,
and National's management could be replaced by persons unknown at this
time. Such a merger would result in a greatly reduced percentage of
ownership of National by its current shareholders. In addition,
National's President could sell her control block of stock at a premium
price to the acquired company's stockholders.
21. No Public Market Exists. There is no public market for National's
common stock, and no assurance can be given that a market will develop
or that a shareholder ever will be able to liquidate his investment
without considerable delay, if at all. If a market should develop, the
price may be highly volatile. Factors such as those discussed in this
"Risk Factors" section may have a significant impact upon the market
price of the securities offered hereby. Owing to the low price of the
securities, many brokerage firms may not be willing to effect
transactions in the securities. Even if a purchaser finds a broker
willing to effect a transaction in these securities, the combination of
brokerage commissions, state transfer taxes, if any, and any other
selling costs may exceed the selling price. Further, many lending
institutions will not permit the use of such securities as collateral
for any loans.
22. Rule 144 Sales. All of the outstanding shares of Common Stock
held by present stockholders are "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933, as amended. As
restricted shares, these shares may be resold only pursuant to an
effective registration statement or under the requirements of Rule 144
or other applicable exemptions from registration under the Act and as
required under applicable state securities laws. Rule 144 provides in
essence that a person who has held restricted securities for a
prescribed period may, under certain conditions, sell every three
months, in brokerage transactions, a number of shares that does not
exceed the greater of 1.0% of a company's outstanding common stock or
the average weekly trading volume during the four calendar weeks prior
to the sale. As a result of revisions to Rule 144 which will become
effective on or about April 29, 1997, there will be no limit on the
amount of restricted securities that may be sold by a nonaffiliate
after the restricted securities have been held by the owner for a
period of two years. A sale under Rule 144 or under any other
exemption from the Act, if available, or pursuant to subsequent
registrations of shares of Common Stock of present stockholders, may
have a depressive effect upon the price of the Common Stock in any
market that may develop.
23. Blue Sky Considerations. Because the securities registered
hereunder have not been registered for resale under the blue sky laws
of any state, the holders of such shares and persons who desire to
purchase them in any trading market that might develop in the future,
should be aware that there may be significant state blue-sky law
restrictions upon the ability of investors to sell the securities and
of purchasers to purchase the securities. Some jurisdictions may not
under any circumstances allow the trading or resale of blind-pool or
"blank-check" securities. Accordingly, investors should consider the
secondary market for National's securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
Liquidity and Capital Resources
National remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources.
National's balance sheet as of October 1999, reflects a current
<PAGE>14
asset value of $0, and a total asset value of $13,500 in the form of
deferred offering costs. National will carry out its plan of business
as discussed above. National cannot predict to what extent its
liquidity and capital resources will be diminished prior to the
consummation of a business combination or whether its capital will be
further depleted by the operating losses (if any) of the business
entity which National may eventually acquire.
Results of Operations
During the period from June 5, 1987 (inception) through September 30,
1999, National has engaged in no significant operations other than
organizational activities, acquisition of capital and preparation for
registration of its securities under the Securities Exchange Act of
1934, as amended. No revenues were received by National during this
period.
For the current fiscal year, National anticipates incurring a loss as a
result of expenses associated with registration under the Securities
Exchange Act of 1934, and expenses associated with locating and
evaluating acquisition candidates. National anticipates that until a
business combination is completed with an acquisition candidate, it
will not generate revenues other than interest income, and may continue
to operate at a loss after completing a business combination, depending
upon the performance of the acquired business.
Need for Additional Financing
National believes that its existing capital will not be sufficient to
meet National's cash needs, including the costs of compliance with the
continuing reporting requirements of the Securities Exchange Act of
1934, as amended, for a period of approximately one year. Accordingly,
in the event National is able to complete a business combination during
this period, it anticipates that its existing capital will not be
sufficient to allow it to accomplish the goal of completing a business
combination. National will depend on additional advances from
stockholders. There is no assurance, however, that the available
funds will ultimately prove to be adequate to allow it to complete a
business combination, and once a business combination is completed,
National's needs for additional financing are likely to increase
substantially. No commitments to provide additional funds have been
made by management or other stockholders. Accordingly, there can be no
assurance that any additional funds will be available to National to
allow it to cover its expenses. Irrespective of whether National's cash
assets prove to be inadequate to meet National's operational needs,
National might seek to compensate providers of services by issuances of
stock in lieu of cash. For information as to National's policy in
regard to payment for consulting services, see "Certain Relationships
and Transactions."
Item 3. Description of Property.
National currently maintains a mailing address at 1745 Wazee, Suite 2D,
Denver, Colorado, phone number is (303) 295-7594. Other than this
mailing address, National does not currently maintain any other office
facilities, and does not anticipate the need for maintaining office
facilities at any time in the foreseeable future. National pays no rent
or other fees for the use of this mailing address.
Item 4. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of the date of this Registration
Statement, the number of shares of Common Stock owned of record and
beneficially by executive officers, directors and persons who hold 5.0%
or more of the outstanding Common Stock of National. Also included are
the shares held by all executive officers and directors as a group.
Name and Address Number of Percentage
Shares Outstanding of Shares
Outstanding
Rayna Signer 775,000 75.61%
1745 Wazee, Suite 2D
Denver, Colorado 80202
(1)Rayna Signer is an officer and director of National
<PAGE>15
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The sole director and executive officer currently serving National is
as follows:
Name Position Term of office
Rayna M. Signer President/Treasurer Inception to
Secretary/Director present
The sole director named above will serve until the next annual meeting
of National's stockholders. The sole officer will hold her position
at the pleasure of the board of directors, absent any employment
agreement, of which none currently exists or is contemplated.
There is no arrangement or understanding between the directors and
officers of National and any other person pursuant to which any
director or officer was or is to be selected as a director or officer.
The directors and officer of National will devote their time to
National's affairs on an "as needed" basis. As a result, the actual
amount of time which they will devote to National's affairs is unknown
and is likely to vary substantially from month to month.
Biographical Information
Rayna Signer - From 1993 to 1997, Ms. Signer was the office programs
manager at the Nature Conservancy, an environmental protection
organization. From 1997, Ms. Signer has worked as an independent
contractor for various non-profit organizations such as Environment
Defense and the Dairy Center for The Arts. Ms. Signer received a
Bachelor of Science in Environmental Science from Colorado State
University in 1980.
National's sole officer and director may elect, in the future, to form
one or more additional shell companies with a business plan similar or
identical to that of National. Any such additional shell companies
would also be in direct competition with National for available
business opportunities. There is no procedure in place that would allow
the sole officer and director to resolve potential conflicts in an
arms-length fashion. Accordingly, she will be required to use her
discretion to resolve them in a manner that she considers appropriate.
National's sole officer and director may actively negotiate or
otherwise consent to the purchase of a portion of her common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction.
It is anticipated that a substantial premium over the initial cost of
such shares may be paid by the purchaser in conjunction with any sale
of shares by National's sole officer and director which is made as a
condition to, or in connection with, a proposed merger or acquisition
transaction. The fact that a substantial premium may be paid to
National's sole officer and director to acquire her shares creates a
potential conflict of interest for her in satisfying her fiduciary
duties to National and its other shareholders. Even though such a sale
could result in a substantial profit to them, she would be legally
required to make the decision based upon the best interests of National
and National's other shareholders, rather than their own personal
pecuniary benefit.
Item 6. Executive Compensation.
Since inception, no compensation has been paid to the sole officer.
Although there is no current plan in existence, it is possible that
National will adopt a plan to pay or accrue compensation to its
officers and directors for services related to seeking business
opportunities and completing a merger or acquisition transaction.
National has no stock option, retirement, pension, or profit-sharing
programs for the benefit of directors, officers or other employees, but
the Board of Directors may recommend adoption of one or more such
programs in the future.
Item 7. Certain Relationships and Related Transactions.
No officer, director, promoter, or affiliate of National has or
proposes to have any direct or indirect material interest in any asset
proposed to be acquired by National through security holdings,
contracts, options, or otherwise. National has adopted a policy under
which any consulting or finder's fee that may be paid to a third party
for consulting services to assist management in evaluating a
<PAGE>16
prospective business opportunity would be paid in stock or in cash. Any
such issuance of stock would be made on an ad hoc basis. Accordingly,
National is unable to predict whether or in what amount such a stock
issuance might be made.
Although there is no current plan in existence, it is possible that
National will adopt a plan to pay or accrue compensation to its sole
officer and director for services related to seeking business
opportunities and completing a merger or acquisition transaction.
National maintains a mailing address at the office of its legal
counsel, but otherwise does not maintain an office. As a result, it
pays no rent and incurs no expenses for maintenance of an office and
does not anticipate paying rent or incurring office expenses in the
future. It is likely that National will establish and maintain an
office after completion of a business combination.
Although management has no current plans to cause National to do so, it
is possible that National may enter into an agreement with an
acquisition candidate requiring the sale of all or a portion of the
Common Stock held by National's current stockholders to the acquisition
candidate or principals thereof, or to other individuals or business
entities, or requiring some other form of payment to National's current
stockholders, or requiring the future employment of specified officers
and payment of salaries to them. It is more likely than not that any
sale of securities by National's current stockholders to an acquisition
candidate would be at a price substantially higher than that originally
paid by such stockholders. Any payment to current stockholders in the
context of an acquisition involving National would be determined
entirely by the largely unforeseeable terms of a future agreement with
an unidentified business entity.
Item 8. Description of Securities.
Common Stock
National's Articles of Incorporation authorize the issuance of
100,000,000 shares of Common Stock, par value $.001 and 10,000,000
shares of Preferred Stock, par value $.002. Each record holder of
Common Stock is entitled to one vote for each share held on all matters
properly submitted to the stockholders for their vote. Cumulative
voting for the election of directors is not permitted by the Articles
of Incorporation. Holders of outstanding shares of Common Stock are
entitled to such dividends as may be declared from time to time by the
Board of Directors out of legally available funds; and, in the event of
liquidation, dissolution or winding up of the affairs of National,
holders are entitled to receive, ratably, the net assets of National
available to stockholders after distribution is made to the preferred
stockholders, if any, who are given preferred rights upon liquidation.
Holders of outstanding shares of Common Stock have no preemptive,
conversion or redemptive rights. All of the issued and outstanding
shares of Common Stock are, and all unissued shares when offered and
sold will be, duly authorized, validly issued, fully paid, and
nonassessable. To the extent that additional shares of National's
Common Stock are issued, the relative interests of then existing
stockholders may be diluted.
The Preferred Stock may be issued from time to time in series. The
Board of Directors is authorized to establish such series, to fix and
determine the variation and the relative rights and preferences as
between series, and to thereafter issue such stock from time to time.
The Board of Directors is also authorized to allow for conversion of
the Preferred Stock to Common Stock under terms and conditions
determine by the Board of Directors.
National plans to furnish its stockholders with an annual report for
each fiscal year containing financial statements audited by its
independent certified public accountants. In the event National enters
into a business combination with another company, it is the present
intention of management to continue furnishing annual reports to
stockholders. Additionally, National may, in its sole discretion, issue
unaudited quarterly or other interim reports to its stockholders when
it deems appropriate. National intends to comply with the periodic
reporting requirements of the Securities Exchange Act of 1934 for so
long as it is subject to those requirements.
<PAGE>17
PART II
Item 1. Market Price and Dividends on the Registrant's Common Equity
and Other Shareholder Matters
No public trading market exists for National's securities and all of
its outstanding securities are restricted securities as defined in Rule
144. There were six (6) holders of record of National's common stock on
November 30, 1999. No dividends have been paid to date and National's
Sole Director does not anticipate paying dividends in the foreseeable
future.
Item 2. Legal Proceedings
National is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated. No director, officer or
affiliate of National, and no owner of record or beneficial owner of
more than 5.0% of the securities of National, or any associate of any
such director, officer or security holder is a party adverse to
National or has a material interest adverse to National in reference to
pending litigation
Item 3. Changes in and Disagreements with Accountants.
Not applicable.
Item 4. Recent Sales of Unregistered Securities.
At inception, National issued 775,000 Common Shares to its sole
officer and director for cash payment of .0026 per Common Share.
This issuance was made to a sophisticated investor in reliance upon
the exemption from registration offered by Section 4(2) of the
Securities Act of 1933, as amended and applicable state private
offering exemptions.
In September 1999, National issued 200,000 Common Shares to the
following individuals for cash payment at $.04 per Common Share:
Name Common Shares Amount Paid
Lise Mahanti 50,000 $2,000
Douglas L. Ray 50,000 $2,000
Gail Crowley 50,000 $2,000
Mike Anderson 50,000 $2,000
Each of the sales listed above was made for services. All of the
listed sales were made in reliance upon the exemption from
registration offered by Section 4(2) of the Securities Act of 1933,
as amended and applicable state private offering exemptions.
Based upon Subscription Agreements completed by each of the
shareholders and the pre-existing relationship between the
shareholders and National, National believes it had reasonable
grounds to believe immediately prior to making an offer to the
private investors, and did in fact believe, when such subscriptions
were accepted, that such purchasers (1) were purchasing for
investment and not with a view to distribution, and (2) had such
knowledge and experience in financial and business matters that they
were capable of evaluating the merits and risks of their investment
and were able to bear those risks. The purchasers had access to
pertinent information enabling them to ask informed questions. The
shares were issued without the benefit of registration. An
appropriate restrictive legend is imprinted upon each of the
certificates representing such shares, and stop-transfer
instructions have been entered in National's transfer records. All
such sales were effected without the aid of underwriters, and no
sales commissions were paid.
In September 1999, National issued 50,000 Common Shares to Jody
Walker as partial payment for legal services rendered on behalf of
National valued at $2,000.
The above issuance was made to a sophisticated investor in reliance
upon the exemption from registration offered by Section 4(2) of the
Securities Act of 1933, as amended and applicable state private
offering exemptions.
<PAGE>18
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification. National shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the
State of Colorado, any person made, or threatened to be made, a
party to an action or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he is or
was a director or officer of National, or served any other
enterprise as director, officer or employee at the request of
National. The Board of Directors, in its discretion, shall have the
power on behalf of National to indemnify any person, other than a
director or officer, made a party to any action, suit or proceeding
by reason of the fact that he/she is or was an employee of National.
Exclusion of Liability Pursuant to the Colorado Business Corporation
Act, National's Articles of Incorporation exclude personal liability
for its directors for monetary damages based upon any violation of
their fiduciary duties as directors, except as to liability for any
breach of the duty of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
acts in violation of Section 7-106-401 of the Colorado Business
Corporation Act, or any transaction from which a director receives an
improper personal benefit. This exclusion of liability does not limit
any right which a director may have to be indemnified and does not
affect any director's liability under federal or applicable state
securities laws.
Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of
National, National has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by National of
expenses incurred or paid by a director, officer or controlling
person of National in the successful defense of any action, suit or
proceedings) is asserted by such director, officer, or controlling
person in connection with any securities being registered, National
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issues.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE CORPORATION
FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO
BE AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION
AND IS THEREFORE UNENFORCEABLE.
<PAGE>19
PART F/S
The following financial statements required by Item 310 of
Regulation S-B are furnished below:
Independent Auditors' Report dated November 2, 1999
Balance Sheet dated September 30, 1999
Statement of Operations for the period from inception (August 6,
1999) to September 30, 1999
Statement of Stockholders' Equity for the period from inception
(August 6, 1999) to September 30, 1999
Statement of Cash Flows for the period from inception (August 6,
1999) to September 30, 1999
Notes to Financial Statements
<PAGE>20
Report of Independent Auditors
Board of Directors
National Asset Acquisition, Inc.
Denver, Colorado
We have audited the accompanying balance sheet of National Asset
Acquisition, Inc. (A Development Stage Company) as of September 30,
1999, and the related statements of operations, changes in
stockholders' equity, and cash flows for the period from inception
(August 6, 1999) 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 audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to in the first
paragraph present fairly, in all material respects, the financial
position of National Asset Acquisition, Inc., as of September 30,
1999, and the results of its operations and its cash flows for the
period then ended, in conformity with generally accepted accounting
principles.
Richey, May & Co., P.C.
Englewood, Colorado
November 2, 1999
<PAGE>21
NATIONAL ASSET ACQUISITION, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1999
ASSETS
-------
CURRENT ASSETS
Cash and cash equivalents $10,000
---------
TOTAL ASSETS $10,000
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITES $ 0
--------
STOCKHOLDERS' EQUITY
Preferred stock, $.002 par value, 10,000,000 shares
authorized, no shares issued or outstanding -
Common stock, $.001 par value; 100,000,000 shares
authorized, 1,025,000 shares issued and outstanding 1,025
Paid in capital 10,975
Deficit accumulated during the development stage (2,000)
--------
Total stockholders' equity 10,000
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,000
========
The accompanying notes are an integral part
of these financial statements
<PAGE>22
NATIONAL ASSET ACQUISITION, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION
(AUGUST 6, 1999) THROUGH SEPTEMBER 30, 1999
REVENUE $NONE
-------
EXPENSES
Legal fees 2,000
-------
LOSS BEFORE INCOME TAXES (2,000)
INCOME TAXES None
-------
NET LOSS $(2,000)
=======
The accompanying notes are an integral part
of these financial statements
<PAGE>23
NATIONAL ASSET ACQUISITION, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION
(AUGUST 6, 1999) THROUGH SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Preferred Stock Common Stock During the
----------------- ---------------- Paid In Development
Shares Amount Shares Amount Capital Stage Totals
------ ------ ------ ------ ------- ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Initial cash capital
contribution - $ - 975,000 $975 $9,025 $ - $10,000
Issuane of common
stock in exchange for
legal services 50,000 50 1,950 - 2,000
Net loss - - - - - (2,000) (2,000)
------ ------ ------- ---- ----- ------- -------
Balance, September 30,
1999 - $ - 1,025,000 $1,025 $10,975 $(2,000) $10,000
====== ====== ========= ====== ======= ======= =======
</TABLE>
The accompanying notes are an integral part
of these financial statements
<PAGE>24
NATIONAL ASSET ACQUISITION, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION
(AUGUST 6, 1999) THROUGH SEPTEMBER 30, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(2,000)
Non-cash items
Legal services rendered for common stock 2,000
--------
Net cash provided by operating activities None
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 10,000
--------
Net cash provided by financing activities 10,000
--------
NET INCREASE IN CASH AND EQUIVALENTZ 10,000
CASH AND EQUIVALENTS, BEGINNING OF PERIOD None
-------
CASH AND EQUIVALENTS, END OF PERIOD $10,000
=======
The accompanying notes are an integral part
of these financial statements
<PAGE>25
NATIONAL ASSET ACQUISITION, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Organization
- ------------
National Asset Acquisition, Inc. (the "Company") was incorporated
under the laws of the State of Colorado on August 6, 1999. The
Company is a development stage company organized to engage in all
lawful businesses.
The Company's activities to date have included raising $10,000 in
capital and preparing the necessary legal documents to register the
Company publicly. Once registered, the Company plans to solicit
potential acquisition candidates. The Company currently has no
candidates and has no assurance that it will attract any acquisition
candidates.
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 of assets and
liabilities and revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Statement of Cash Flows
- -----------------------
For purposes of reporting cash flows, cash and cash equivalents
include cash and lightly liquid investments with original maturities
less than ninety days.
Income Taxes
- ------------
An income tax provision is provided for the tax effect of
transactions reported in the financial statements. The provision
consists of taxes currently due plus deferred taxes related to
differences between the basis of assets and liabilities for
financial and income tax reporting. The deferred taxes represent
the future tax return consequences of the differences, which will be
either taxable or deductible when the related assets or liabilities
are recovered or settled. A valuation allowance is provided for
deferred tax assets not expected to be realized.
B. INCOME TAXES
- -----------------
The tax effect of significant temporary differences which gave rise
to the Company's deferred tax assets and liabilities are as follows
at September 30, 1999. A full valuation allowance has been
provided for the Company's net deferred tax asset since it has no
past operating experience and accordingly, the realization of the
asset is not assured.
Amount
--------
Deferred Tax Assets-
Net operating loss carryforward $2,000
Valuation allowance
Net Deferred Tax Asset (2,000)
-------
$None
=======
The components of income tax expense are as follows for the period
ended September 30, 1999:
Amount
--------
Deferred income Taxes (Benefit) $(2,000)
Current income Taxes None
Valuation Allowance 2,000
-------
$None
=======
<PAGE>26
PART III
ITEM 1. INDEX TO EXHIBITS
(3) Charter and By-Laws
(4) Instruments defining the rights of security holders
(27) Financial Data Schedule
ITEM 2. DESCRIPTION OF EXHIBITS
(3.1) Articles of Incorporation
(3.2) Bylaws
(4) Common Stock Certificate
(27) Financial Data Schedule
<PAGE>27
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
National Asset Acquisition, Inc.
Date: December 6, 1999 /s/ Rayna M. Signer
-------------------------
By: Rayna M. Signer, President
<PAGE>29
ARTICLES OF INCORPORATION
OF
NATIONAL ASSET ACQUISITION, INC.
The undersigned natural person of the age of eighteen years or more,
acting as incorporator of a corporation under the provisions of the
Title 7 of the Colorado Revised Statutes, adopts the following Articles
of Incorporation for such corporation.
ARTICLE I
NAME
The name of the corporation is National Asset Acquisition, Inc.
ARTICLE II
EXISTENCE AND DURATION
The period of duration of this corporation is perpetual.
ARTICLE III
PURPOSES AND POWERS
The purpose for which this corporation is organized is to engage in all
lawful business for which corporations may be incorporated pursuant to
the Colorado Revised Statutes. In furtherance of its lawful purposes,
the corporation shall have and may exercise all rights, powers and
privileges now or hereafter exercisable by corporations organized under
the laws of Colorado. In addition, it may do everything necessary,
suitable, convenient or proper for the accomplishment of any of its
corporate purposes.
ARTICLE IV
CAPITALIZATION
(a) Authorized Shares. The aggregate number of shares which
the corporation shall have the authority to issue is 100,000,000
shares. One Hundred Million (100,000,000) shares shall be designated
"Common Stock", and shall have a par value of $.001. Ten Million
(10,000,000) shares shall be designated "Preferred Stock", and shall
have a par value of $.002 per share, and shall be issued for such
consideration, expressed in dollars, as the Board of Directors may,
from time to time, determine.
(b) Consideration for Shares. All shares of Common Stock and
Preferred Stock shall be issued by the corporation for cash, property
or services actually performed, for no less than the par value of $.001
for Common Stock and $.002 for Preferred Stock. All shares shall be
fully paid and non-assessable.
(c) Issuance of Preferred Stock. The Preferred Stock authorized by
this Certificate of Incorporation may be issued from time to time in
series. The Board of Directors of the corporation is authorized to
establish such series, to fix and determine the variations and the
relative rights and preferences as between series, and to thereafter
issue such stock from time to time. The Board of Directors is also
authorized to allow for conversion of the Preferred Stock to Common
Stock under terms and conditions as determined by the Board of
Directors.
(d) Dividends. Dividends in cash, property or share of the
corporation may be paid upon the Common and Preferred Stock, as and
when declared by the Board of Directors, out of funds of the
corporation to the extent, and in the manner permitted by law.
(e) Voting Rights & Cumulative Voting. Each outstanding share of
Common Stock shall be entitled to one vote, and each fractional share
of Common Stock shall be entitled to a corresponding fractional vote on
each matter submitted to a vote of shareholders. The voting rights of
Preferred Stock, if any, shall be established by the Board of Directors
at the time such stock is issued in series. Cumulative voting shall
not be allowed in the election of directors of the corporation.
<PAGE>30
(f) Denial of Preemptive Rights. No holder of any shares of the
corporation, whether now or hereafter authorized, shall have any
preemptive or preferential right to acquire any shares or securities of
the corporation, including shares or securities held in the treasury of
the corporation.
(g) Dissolution or Liquidation. Upon any dissolution or
liquidation, whether voluntary or involuntary, the holders of preferred
shares shall be entitled to receive out of the assets of the
Corporation, whether such assets are capital or surplus, the sum
initially paid per share and a further amount equal to any dividend
thereon declared and unpaid to the date of such distribution, before
any payment shall be made or any assets distributed to the common stock
shareholders. Upon any dissolution or liquidation, whether voluntary
or involuntary, if the assets thus distributed among the holders of
preferred shares are insufficient to permit the payment to such
shareholder of the full preferential amounts, then the entire assets of
the Corporation to be distributed shall be distributed ratably among
the holders of preferred shares and after payment to the preferred
shareholders of such preferential amounts, the holders of common shares
shall be entitled to receive ratably all the remaining assets. A
merger or consolidation of this corporation with or into any other
corporation or corporations shall not be deemed to be a dissolution or
liquidation within the meaning of this provision.
ARTICLE V
INITIAL OFFICE AND AGENT
The address of this corporation's initial registered office is 1745
Wazee, Suite 2D, Denver, Colorado 80202 and the name of its initial
registered agent is Rayna M. Signer.
ARTICLE VI
PRINCIPAL OFFICE
The address of the principal office of the corporation is 1745 Wazee,
Suite 2D, Denver, Colorado 80202. The corporation may maintain such
other offices, either within or out of the State of Colorado, as the
Board of Directors may from time to time determine or the business of
the corporation may require.
ARTICLE VII
INITIAL BOARD OF DIRECTORS
The number of directors constituting the initial board of directors of
this corporation is one. The number of directors of this corporation
shall be not less than three; except there need be only as many
directors as there are shareholders in the event that the outstanding
shares are, or initially will be, held of record by fewer than three
shareholders. The name and address of the person who is to serve as
director until the first annual meeting of shareholders or until his
successors are elected and qualified are:
Rayna M. Signer
1745 Wazee, Suite 2D
Denver, Colorado 80202
ARTICLE VIII
INDEMNIFICATION
As the Board of Directors may from time to time provide in the By-Laws
or by resolution, the corporation may indemnify its officers,
directors, agents and other persons to the full extent permitted by the
laws of the State of Colorado.
ARTICLE IX
INCORPORATOR
The name and address of the incorporator is:
Rayna M. Signer
1745 Wazee, Suite 2D
Denver, Colorado 80202
<PAGE>31
Dated this 6th day of August, 1999
The undersigned Rayna M. Signer, consents to the appointment as the
initial registered agent of National Asset Acquisition, Inc.
/s/ Rayna M. Signer
- -----------------------------------
Rayna M. Signer, Incorporator
STATE OF COLORADO )
)ss.
COUNTY OF DENVER )
I, Janet Bellanger, a Notary Public, hereby certify that Rayna M.
Signer, known to me to be the person whose name is subscribed to the
annexed and foregoing Articles of Incorporation, appeared before me
this 6th day of November, 1999, in person and being by me first duly
sworn, acknowledged that she signed said Articles of Incorporation as
his free and voluntary act and deed for the uses and purposes therein
set forth and that statements therein contained are true.
My Commission Expires: October 12, 1999.
/s/Janet L. Bellanger
----------------------------
Notary Public, State of Colorado
1365 Columbine #507
----------------------------
Address
Denver, CO 80206
-----------------------------
SEAL
<PAGE>32
BYLAWS OF
NATIONAL ASSET ACQUISITION, INC.
A COLORADO CORPORATION
ARTICLE I
OFFICES
Section 1.01 Registered Office and Agent. The name of the registered
agent and the location of the registered office of the Corporation in
the State of Colorado shall be 1745 Wazee, Suite 2D, Denver, Colorado
80202, and such information shall be filed in the appropriate office of
the State of Colorado pursuant to applicable provisions of law.
Section 1.02 Corporate Offices. The Corporation may have such
corporate offices within and outside the State of Colorado as the board
of directors from time to time may direct or the Corporation may
require. The principal office of the Corporation may be fixed and so
designated from time to time by the board of directors, but the
location or residence of the Corporation in Colorado shall be deemed
for all purposes to be in the county in which its principal office in
Colorado is maintained. The location of the principal office of the
Corporation shall be 1745 Wazee, Suite 2D, Denver, Colorado 80202.
Section 1.03 Records. The Corporation shall keep correct and
complete books and records of account, minutes of proceedings of its
shareholders and board of directors, and such other or additional
records as may be required by law. The Corporation shall keep at its
registered office or principal place of business, or at the office of
its transfer agent or registrar, either within or outside Colorado, a
record of its shareholders, giving the names and addresses of all
shareholders and the number and class of the shares held by each.
ARTICLE II
SHAREHOLDERS' MEETINGS
Section 2.01 Place of Meeting. All meetings of the shareholders
shall be held at the principal office of the Corporation, unless the
board of directors designates some other place either within or outside
the State of Colorado. Unless specifically prohibited by law any
meeting may be held at any place and at any time and for any purpose if
consented to in writing by all of the shareholders entitled to vote at
such meeting.
Section 2.02 Annual Meetings. An annual meeting of the shareholders
shall be held on the 1st day of August of each year, unless notified of
an alternate date in accordance with the provisions of these bylaws, at
3:00 p.m. for the purpose of electing directors and for the transaction
of such other business as may properly come before it. If such day is
a legal holiday, the meeting shall be on the next business day.
Section 2.03 Special Meetings. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute,
may be called by the president, secretary or by the board of directors,
and shall be called by the president at the request of holders of not
less than 10% of all the outstanding shares of the Corporation entitled
to vote at the meeting. No business other than that specified in the
notice of the meeting shall be transacted at any such special meeting.
Section 2.04 Notice of Meetings. Written or printed notice stating
the place, day and hour of the meeting and, in case of a special
meeting, the purpose for which the meeting is called, shall be
delivered not less than ten days nor more than fifty days before the
date of the meeting, either personally or by mail, by or at the
direction of the board of directors, the president, the secretary, or
the officer or person calling the meeting to each shareholder of record
entitled to vote at such meeting; except that, if the authorized shares
are to be increased at least thirty days' notice shall be given.
Section 2.05 Fixing Record Date and Closing Transfer Books. The
board of directors may fix a date not less than ten nor more than fifty
days prior to any meeting as the record date for the purpose of
determining shareholders entitled to notice of and to vote at such
meetings, of the shareholders. The transfer books may be closed by the
board of directors for a stated period not to exceed fifty days for the
purpose of determining shareholders entitled to receive payment of any
<PAGE>33
dividend or in order to make a determination of shareholders for any
other purpose. In the absence of any action by the board of directors,
the date upon which the board of directors adopts the resolution
declaring the dividend shall be the record date.
Section 2.06 Voting Lists. The officers or agent having charge of
the stock transfer books for shares of the corporation shall make, at
least ten days before each meeting of the shareholders, a complete
record of the shareholders entitled to vote at the meeting 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 before such meeting, shall be kept on file at the principal
office of the Corporation whether within or outside the State of
Colorado, and shall be subject to inspection by any shareholder for any
purpose germane to the meeting at any time during normal business
hours. Such record shall also be produced and kept open at the time
and place of any purpose germane to the meeting during the whole time
of the meeting. The original stock transfer book shall be prima facie
evidence as to the shareholders who are entitled to examine the record
or transfer books or to vote any meeting of shareholders.
Section 2.07 Quorum. The holders of a majority of the shares who are
entitled to vote at a shareholders meeting and who are present in
person or by proxy shall be necessary for and shall constitute a quorum
for the transaction of business at such meetings, except as otherwise
provided by statute, by the Articles of Incorporation or these Bylaws.
If a quorum is not present or represented at a meeting of the
shareholders, those present in person or represented by proxy shall
have the power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum is present or
represented. At an adjourned meeting where a quorum is present or
represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 2.08 Majority Vote; Withdrawal of Quorum. When a quorum is
present at a meeting, the vote of the holders of a majority of the
issued and outstanding shares having voting power, present in person or
represented by proxy, shall decide any question brought before the
meeting, unless the question is one which, by express provision of the
statutes, the Articles of Incorporation or these Bylaws, requires a
higher vote in which case the express provision shall govern. The
shareholders present at a duly constituted meeting may continue to
transact business until adjournment, despite the withdrawal of enough
shareholders holding, in the aggregate, issued and outstanding shares
having voting power to leave less than a quorum.
Section 2.09 Proxies. At all meetings of shareholders, a shareholder
may vote in person or by proxy executed in writing by the shareholder
or by his or her duly authorized attorney in fact. No proxy shall be
valid after eleven months from the date of its execution, unless
otherwise provided by the proxy. Each proxy shall be filed with the
secretary of the Corporation before or at the time of the meeting.
Section 2.10 Voting. Each issued and outstanding share is entitled
to its respective vote and each fractional share is entitled to a
corresponding fractional vote on each matter submitted to a vote at a
meeting of shareholders. The vote of a majority of the shares voting
on any matter at a meeting of shareholders at which a quorum is present
shall be the act of the shareholders on that matter, unless the vote of
a greater number is required by law, the Articles of Incorporation, or
these Bylaws. Voting on all matters except the election of directors
shall be by voice or by show of hands, unless the holders of one-tenth
of the shares represented at the meeting shall, prior to the voting on
any matter, demand a ballot vote on that particular matter.
(A) Neither treasury shares nor shares held by another Corporation
if the majority of the shares entitled to vote for the election of
directors of such other Corporation is held by the Corporation shall be
voted at any meeting or counted in determining the total number of
issued and outstanding shares at any given time.
(B) Shares standing in the name of another Corporation, domestic or
foreign, may be voted by such officer, agent or proxy as the Bylaws of
that Corporation may prescribe, or, in the absence of such provision,
as the board of directors of that Corporation may determine.
<PAGE>34
(C) Shares held by an administrator, executor, guardian, or
conservator may be voted by him or her, either in person or by proxy,
without the transfer of such shares into his name. Shares standing in
the name of a trustee may be voted by him or her, either in person or
by proxy, but no trustee shall be entitled to vote shares held by him
or her without a transfer of the shares into his or her name.
(D) 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 into his or
her name if authority to do so is contained in an appropriate order of
the court by which the receiver was appointed.
(E) 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 transferred.
(F) Redeemable shares which have been called for redemption shall
not be entitled to vote on any matter and shall not be deemed issued
and 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 corporation
with irrevocable instruction and authority to pay the redemption price
to the holders of the shares upon surrender of their certificates.
Section 2.11 Action Without Meeting. Any action required by statute
to be taken at a meeting of the shareholders, or any action which may
be taken at a meeting of the shareholders, may be taken without a
meeting if a consent in writing, setting forth the action so taken,
shall be signed by the holders of a majority of the securities entitled
to vote with respect to the subject matter thereof and such consent
shall have the same force and effect as a unanimous vote of the
shareholders. The consent may be in more than one counterpart so long
as each shareholder signs one of the counterparts. The signed consent,
or a signed copy shall be placed in the minutes book.
Section 2.12 Telephone and Similar Meetings. Shareholders may
participate in and hold a meeting by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in
such a meeting shall constitute presence in person at the meeting,
except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
Section 2.13 Order of Business at Meetings. The order of business at
annual meetings and so far as practicable at other meetings of
shareholders shall be as follows unless changed by the board of
directors: (a) call to order; (b) proof of due notice of meeting; (c)
determination of quorum and examination of proxies; (d) announcement of
availability of voting lists; (e) announcement of distribution of
annual statement; (f) reading and disposing of minutes of last meeting
of shareholders; (g) reports of officers and committees; (h) reports of
directors; (l) opening of polls for voting; (m) recess; (n)
reconvening, closing of polls; (o) report of voting inspectors; (p)
other business; and (q) adjournment.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01 General Powers. The business and affairs of the
Corporation shall be managed by its board of directors. The directors
shall in all cases act as a board of directors, and they may adopt such
rules and regulations for the conduct of their meetings and the
management of the Corporation as they deem proper. Such rules and
regulations may not be inconsistent with these Bylaws, the Articles of
Incorporation, and the laws of Colorado.
Section 3.02 Number, Tenure and Qualifications. The number of
directors constituting the board of directors of this Corporation is
seven. The number of directors of this Corporation shall not be less
than three; except that there need by only as many directors as there
are shareholders in the event that the issued and outstanding shares
are held of record by fewer than three shareholders. A director shall
be elected by the shareholders to serve until the next annual meeting
<PAGE>35
of shareholders, or until his or her death, or resignation and his or
her successor is elected. A director must be at least eighteen years
of age but need not be a shareholder in the Corporation nor a resident
of the State of Colorado.
Section 3.03 Change in Number. The number of directors may be
increased or decreased from time to time by amendment to these Bylaws
but no decrease shall have the effect of shortening the term of any
incumbent director. Any directorship to be filled by reason of an
increase in the number of directors shall be filled by election at an
annual meeting or at a special meeting of shareholders called for that
purpose.
Section 3.04 Election of Directors. The directors shall be elected
at the annual meeting of shareholders and those persons who receive the
highest number of votes shall be deemed to have been elected. Election
of directors shall be by ballot.
Section 3.05 Cumulative Voting. Directors shall be elected by
majority vote. Cumulative voting shall not be permitted.
Section 3.06 Removal of Directors. A meeting called expressly for
the purpose of removing a director, the entire board of directors or
any lessor number may be removed, with or without cause, by a vote of
the holders of the majority of the shares then entitled to vote at an
election of directors. If any directors are so removed, new directors
may be elected at the same meeting.
Section 3.07 Resignation. Subject to Section 3.02, a director may
resign at any time by giving written notice to the board of directors,
the president, or the secretary of the Corporation and unless otherwise
specified in the notice, the resignation shall take effect upon receipt
thereof by the board of directors or such officer, and the acceptance
of the resignation shall not be necessary to make it effective.
Section 3.08 Vacancies. A 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
remains. 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 shall
be filled by election at an annual meeting of shareholders or at a
special meeting of the shareholders called for that purpose. A
director chosen to fill a position resulting from an increase in the
number of directors shall holder office until his or her successor(s)
shall have been qualified.
Section 3.09 Compensation. By resolution of the board of directors,
compensation may be paid to directors for their services. Also by
resolution of the board of directors, a fixed sum and expenses for
actual attendance at each regular or special meeting of the board of
directors may also be paid. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in any
other capacity and receiving compensation therefore. Members of the
executive committee or of special or standing committees may, by
resolution of the board of directors, be allowed like compensation for
attending committee meetings.
Section 3.10 First Meeting. The first meeting of a newly elected
board shall be held without further notice immediately following the
annual meeting of shareholders, and it shall be at the same place,
unless by unanimous consent of the directors then electing and serving,
the time or place is changed.
Section 3.11 Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and place as shall
from time to time be determined by the board of directors.
Section 3.12 Special Meetings. Special meetings of the board of
directors may be called by the president on three days notice to each
director, either personally or by mail or by telegram. Special
meetings shall be called in like manner and on like notice on the
written request of two directors. Except as otherwise expressly
provided by statute, the Articles of Incorporation or these Bylaws,
neither the business to be transacted at, nor the purpose of, any
special meeting need be specified in a notice or waiver of notice.
<PAGE>36
Section 3.13 Quorum; Majority Vote. At meetings of the board of
directors a majority of the number of directors fixed by these Bylaws
shall constitute a quorum for the transaction of business. The act of
a majority of the directors present at a meeting at which quorum is not
present at a meeting of the board of directors, the directors present
may adjourn the meeting from time to time, without notice other than
announcement at the meeting until, a quorum is present.
Section 3.14 Procedure. The board of directors shall keep regular
minutes of its proceedings. The minutes shall be placed in the minutes
book of the Corporation.
Section 3.15 Action Without Meeting. Any action required or
permitted to be taken at a meeting of the board of directors may be
taken without a meeting if a consent in writing, setting forth the
action so taken, is signed by all members of the board of directors.
Such consent shall have the same force and effect as a unanimous vote
at a meeting. The signed consent, or a signed copy, shall be placed in
the minutes book. The consent may be in more than one counterpart so
long as each director signs one of the counterparts.
Section 3.16 Telephone and Similar Meetings. Directors may
participate in and hold a meeting by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in
such a meeting shall constitute presence in person at the meeting,
except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
Section 3.17 Interested Directors and Officers.
(A) No contract or transaction between the
Corporation and one or more of its directors or officers, or any other
corporation, firm, association, partnership or entity in which one or
more of its directors or officers are directors or officers or are
financially interested shall be either void or voidable solely because
of such relationship or interest or solely because such directors or
officers are present at the meeting of the board of directors or a
committee thereof which authorizes, approves, or ratifies such contract
or transaction or solely because their votes are counted for such
purposes if:
(1) the fact of the common directorship or financial interest
is disclosed to or known by the board of directors or committee and
noted in the minutes, and the board or committee which authorizes,
approves, or ratifies the contract or transaction by a vote sufficient
for the purpose without counting the votes or consents of such
interested directors; or
(2) the material facts of such relationship or financial
interest is disclosed to or known by the shareholders entitled to vote
thereon and they authorize, approve or ratify such contract or
transaction in good faith by a majority vote or written consent of
shareholders holding a majority of the shares the votes of the common
or interested directors or officers shall be counted in any such vote
of shareholders; or
(3) the contract or transaction is fair and reasonable to the
Corporation.
(B) Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the board of directors or a
committee thereof which authorizes, approves or ratifies such contract
or transaction.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 4.01 Designation. The board of directors may from time to
time, by resolution adopted by a majority of the whole board, designate
an executive committee.
Section 4.02 Number; Qualification and Term. The executive committee
shall consist of one or more directors, one of whom shall be the
president of the executive committee. The executive committee shall
serve at the pleasure of the board of directors.
<PAGE>37
Section 4.03 Authority. The executive committee, to the extent
provided in such resolution, shall have and may exercise all of the
authority of the board of directors in the management of the business
and affairs of the Corporation, including authority over the use of the
corporate seal. However, the executive committee shall not have the
authority of the board of directors in reference to: (a) amending the
Articles of Incorporation; (b) approving a plan of merger or
consolidation; (c) recommending to the shareholders the sale, lease or
exchange of all or substantially all of the property and assets for the
corporation other than in the usual and regular course of its business;
(d) recommending to the shareholders a voluntary dissolution of the
Corporation or a revocation thereof; (e) amending, altering, or
repealing these Bylaws or adopting new Bylaws; (f) filling vacancies in
or removing members of the board of directors or of any committee
appointed by the board of directors; (g) electing or removing officers
or members of any such committee; (h) fixing the compensation of any
member of such committee; (i) altering or repealing any resolution of
the board of directors which by its terms provides that it shall not be
so amendable or repealable; (j) declaring a dividend; or (k)
authorizing the issuance of shares of the Corporation.
Section 4.04 Change in Number. The number of executive committee
members may be increased or decreased from time to time by resolution
adopted by a majority of the board of directors.
Section 4.05 Removal. Any member of the executive committee may be
removed by the board of directors by the affirmative vote of the
majority of the board of directors, whenever in its judgment the best
interests of the Corporation will be served thereby.
Section 4.06 Vacancies. A vacancy occurring in the executive
committee (by death, resignation, removal or otherwise) may be filled
by the board of directors in the manner providing for original
designation in Bylaw Section 4.01.
Section 4.07 Resignation. A committee member may resign by giving
written notice to the board of directors, the president or the
secretary of the Corporation. The resignation shall take effect at the
time specified in it, or immediately if no time is specified. Unless
it specifies otherwise, a resignation takes effect without being
accepted.
Section 4.08 Meetings. Time, place and notice (if any) of executive
committee meetings shall be determined by the executive committee.
Section 4.09 Quorum; Majority Vote. At meetings of the executive
committee, a majority of the number of members designated by the board
of directors shall constitute a quorum for the transaction of business.
The act of a majority of the members present at any meeting at which a
quorum is present shall be the act of the executive committee, except
as otherwise specifically provided by statute, the Articles of
Incorporation or these Bylaws. If a quorum is not present at a meeting
of the executive committee, the members present may adjourn the meeting
from time to time, without notice other than an announcement at the
meeting, until a quorum is present.
Section 4.10 Compensation. By resolution of the board of directors,
compensation may be paid to members of the executive committee for
their services. Also by resolution of the board of directors, a fixed
sum and expenses for actual attendance at each regular or special
meeting of the executive committee may also be paid.
Section 4.11 Procedure. The executive committee shall keep regular
minutes of its proceedings and report the same to the board of
directors when required. The minutes of the proceedings of the
executive committee shall be placed in the minutes book of the
Corporation.
Section 4.12 Action Without Meeting. Any action required or
permitted to be taken at a meeting of the executive committee may be
taken without a meeting if a consent in writing, setting forth the
action so taken, is signed by all the members of the executive
committee. Such consent shall have the same force and effect as a
unanimous vote at a meeting. The signed consent, or a signed copy,
shall be placed in the minutes book.
<PAGE>38
Section 4.13 Telephone and Similar Meetings. Members of the
executive committee may participate in and hold a meeting by means of
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
Participation in such a meeting shall constitute presence in person at
the meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 4.14 Responsibility. The designation of an executive
committee and the delegation of authority to it shall not operate to
relieve the board of directors, or any member thereof, of any
responsibility imposed upon it, him or her by law.
ARTICLE V
NOTICE
Section 5.01 Method. Whenever by statute, the Articles of
Incorporation, these Bylaws or otherwise, notice is required to be
given to a shareholder, director or committee member, and no provision
is made as to how the notice shall be given, it shall not be construed
to mean personal notice, but any such notice may be given: (a) in
writing, by United States mail, certified, return receipt requested,
postage prepaid, addressed to the shareholder, director or committee
member at the address appearing on the books of the Corporation; or (b)
in any other method permitted by law. Any notice required or permitted
to be given by mail shall be deemed given at the time when the same is
deposited in the United States mails.
Section 5.02 Waiver. Whenever by statute, the Articles of
Incorporation or these Bylaws, notice is required to be given to a
shareholder, committee member or director, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before
or after the time stated in such notice, shall be equivalent to the
giving of such notice. Attendance at a meeting shall constitute a
waiver of notice of such meeting, except where a person attends for the
express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
ARTICLE VI
OFFICERS AND AGENTS
Section 6.01 Number, Qualification; Election; Term.
(A) The Corporation shall have:
(1) a president, a vice president, a secretary and a treasurer; and
(2) such other officers (including a chairman of the board of
directors and additional Vice Presidents) and assistant officers and
agents as the board of directors may deem necessary.
(B) No officer or agent need be a shareholder, a director or a
resident of the state of incorporation.
(C) Officers named in Bylaw Section 6.01(A)(1) shall be elected by
the board of directors on the expiration of an officer's term or
whenever a vacancy exists. Officers and agents named in Bylaw Section
601(A)(2) may be elected by the Board of Directors at any meeting.
(D) Unless otherwise specified by the board of directors at the time
of election or appointment, or in an employment contract approved by
the board of directors, each officer's and agent's term shall end at
the first meeting of directors held after each annual meeting of the
shareholders. He shall serve until the end of his or her term, or if
earlier, until his or her death, resignation or removal.
(E) Any two or more offices may be held by the same person, except
that the president and the secretary shall not be the same person.
Section 6.02 Election and Term of Office. The officers of the
Corporation shall be elected annually by the board of directors at the
first meeting of the board of directors held after each 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
convenient. Each officer shall hold office until his or her successor
<PAGE>39
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 6.03 Resignation. Any officer may resign at any time by
delivering a written resignation either to the board of directors, the
president or the secretary of the Corporation. The resignation shall
take effect at the time specified therein or immediately if no time is
specified. Unless it specifies otherwise, a resignation takes effect
without being accepted.
Section 6.04 Removal. Any officer or agent elected or appointed by
the board of directors may be removed by the board of directors,
whenever, in its judgment, the best interest of the Corporation will be
served thereby, but such removal shall be without prejudice to the
contractual rights, if any, of the person so removed.
Section 6.05 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, creation of a new office, or
otherwise, may be filled by the board of directors for the unexpired
portion of the term.
Section 6.06 Salaries and Compensation. The salaries or other
compensation of the officers of the Corporation shall be fixed from
time to time by the board of directors, except that the board of
directors may delegate to any person or group of persons the duty of
fixing salaries or other compensation by reason of the fact that he or
she is also a director of the Corporation.
Section 6.07 Surety Bonds. In the event the board of directors shall
so require, any officer or agent of the Corporation shall execute to
the Corporation a bond in such sums and with such surety or sureties as
the board of directors may direct, conditioned upon the faithful
performance of his or her duties to the Corporation, including
responsibility for negligence and for the accounting for all property,
monies, or securities of the Corporation which may come into his or her
hands.
Section 6.08 President.
(A) The president shall be the chief executive and administrative
officer of the Corporation.
(B) The president shall preside at all meetings of the shareholders,
and, in the absence of the chairman of the board of directors, at
meetings of the board of directors.
(C) The president shall exercise such duties as customarily pertain
to the office of the president and shall have general and active
supervision over the property, business and affairs of the Corporation
and over its several officers.
(D) The president may appoint officers, agents, or employees other
than those appointed by the board of directors.
(E) The president may sign, execute and deliver in the name of the
Corporation powers of attorney, contracts, bonds and other obligations,
and shall perform such other duties as may be prescribed from time to
time by the board of directors or by the Bylaws.
Section 6.09 Vice President. The vice president(s) in the order of
their seniority, unless otherwise determined by the board of directors,
shall, in the absence or disability of the president, perform the
duties and have the authority and exercise the powers of the president.
They shall perform such other duties and have such other authority and
powers as the board of directors may from time to time prescribe or as
the president may from time to time delegate.
Section 6.10 Secretary.
(A) The secretary shall keep the minutes of all meetings of the
shareholders and of the board of directors and, to the extent ordered
by the board of directors or the president, the minutes of meetings of
all committees.
(B) The secretary shall cause notice to be given of meetings of
shareholders, of the board of directors, and of any committee appointed
by the board of directors.
<PAGE>40
(C) The secretary shall have custody of the corporate seal and
general charge of the records, documents and papers of the Corporation
not pertaining to the performance of the duties vested in other
officers, which shall at all reasonable times be open to the
examination of any director.
(D) The secretary may sign or execute contracts with the president in
the name of the Corporation and affix the seal of the Corporation
thereto.
(E) The secretary shall perform such other duties as may be
prescribed from time to time by the board of directors or the Bylaws.
Section 6.11 Assistant Secretary. The assistant secretaries in the
order of their seniority, unless otherwise determined by the board of
directors, shall, in the absence or disability of the secretary,
perform the duties and have the authority and exercise the powers of
the secretary. They shall perform other duties and have such other
powers as the board of directors may from time to time prescribe or as
the president may from time to time delegate.
Section 6.12 Treasurer.
(A) The treasurer shall have general custody of the collection and
disbursements of funds of the Corporation.
(B) The treasurer shall endorse on behalf of the Corporation for
collection, checks, notes and other obligations, and shall deposit the
same to the credit of the Corporation in such bank or banks or
depositories as the board of directors may direct.
(C) The treasurer may sign, for the president and other persons as
may be designated for the purpose by the board of directors, all bills
of exchange or promissory notes of the Corporation.
(D) The treasurer shall enter or cause to be entered regularly in the
books of the Corporation a full and accurate account of all monies
received and paid by him or her on account of the Corporation; shall at
all times exhibit his or her books and accounts to any director of the
Corporation upon application at the office of the Corporation during
business hours; and, whenever required by the board of directors or the
president, shall render statements of his or her accounts. The
treasurer shall perform such other duties as may be prescribed from
time to time by the board of directors or by the Bylaws.
(E) If the board of directors require, the treasurer shall give bond
for the faithful performance of his or her duties in such sum and with
or without such surety as shall be approved by the board of directors.
Section 6.13 Assistant Treasurer. The assistant treasurers in the
order of their seniority, unless otherwise determined by the board of
directors, shall, in the absence or disability of the treasurer,
perform the duties and have the authority and exercise the powers of
the treasurer. They shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe
or the president may from time to time delegate.
Section 6.14 Registered Agent. The Registered Agent shall serve as
the agent of the Corporation for purposes of receiving service of
process or any demand or notice authorized by law to be served on the
Corporation.
Section 6.15 Other Officers. Other officers shall perform such
duties and have such powers as may be assigned to them by the board of
directors or the president.
Section 6.16 Delegation of Duties. If any officer of the Corporation
is absent or unable to act for any other reason the board of directors
may deem sufficient, the board of directors may delegate, for a period
of time, some or all of the functions, duties, powers and
responsibilities of any officer to any other officer, agent or employee
of the Corporation or other responsible person, provided a majority of
the whole board of directors concurs therein.
<PAGE>41
ARTICLE VII
CONTRACTS, LOANS, DEPOSITS AND CHECKS
Section 7.01 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 7.02 Loans. No loans or advances shall be contracted on
behalf of the Corporation; on negotiable paper or other evidence of its
obligation under any loan or advance shall be issued in its name, and
no property of the Corporation shall be mortgaged, pledged,
hypothecated, or transferred as security for the payment of any loan,
advance, indebtedness or liability of the Corporation unless and except
as authorized by the board of directors. Any such authorization may be
general or confined to specific instances.
Section 7.03 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, or as may be selected by an officer or
agent authorized to do so by the board of directors.
Section 7.04 Checks and Drafts. All notes, drafts, acceptances,
checks, endorsements, and evidences of indebtedness of the Corporation
shall be signed by such officer or officers, or such agent or agents of
the Corporation and in such manner as the board of directors from time
to time may determine.
ARTICLE VIII
CAPITAL STOCK
Section 8.01 Certificates. Certificates representing shares of the
Corporation shall be issued, in such form as the board of directors
shall determine, to every shareholder for the fully paid shares owned
by him. These certificates shall be signed by the president and the
secretary. They shall be consecutively numbered or otherwise
identified; and the name and address of the person to whom they are
issued, with the number of shares and the date of issue, shall be
entered on the stock transfer books of the Corporation.
Section 8.02 Issuance. Shares (both treasury and authorized but
unissued) may be issued for such consideration (not less than par
value) and to such persons as the board of directors may determine from
time to time. Shares may not be issued until the full amount of the
consideration, fixed as provided by law, has been paid.
Section 8.03 Payment of Shares.
(A) The consideration for the issuance of shares shall consist of
money paid, labor done (including the services actually performed for
the Corporation) or property (tangible or intangible) actually
received. Neither promissory notes nor the promise of future services
shall constitute payment for shares.
(B) In the absence of fraud in the transaction, the judgment of the
board of directors as to the value of consideration received shall be
conclusive.
(C) When consideration, fixed as provided by law, has been paid, the
shares shall be deemed to have been issued and shall be considered
fully paid and nonassessable.
(D) The consideration received for shares shall be allocated by the
board of directors, in accordance with law, between stated capital and
capital surplus accounts.
Section 8.04 Subscriptions. Unless otherwise provided in the
subscription agreement, subscriptions for shares, whether made before
or after organization of the Corporation, shall be paid in full at such
time or in such installments and at such times as shall be determined
by the board of directors. Any call made by the board of directors for
payment of subscriptions shall be uniform as to all shares of the same
series. In case of default in the payment on any installment or call
when payment is due, the Corporation may proceed to collect the amount
due in the same manner as any debt due the Corporation.
<PAGE>42
Section 8.05 Lien. For any indebtedness of a shareholder to the
Corporation, the Corporation shall have a first and prior lien on all
shares of its stock owned by him or her and on all dividends or other
distributions declared thereon.
Section 8.06 Lost, Stolen or Destroyed Certificates. The Corporation
shall issue a new certificate in place of any certificate for shares
previously issued if the registered owner of the certificate: (a)
makes proof in affidavit form that it has been lost, destroyed or
wrongfully taken; (b) requests the issuance of a new certificate before
the Corporation has notice that the certificate has been acquired by a
purchaser for value in good faith and without notice of an adverse
claim; (c) gives a bond in such form, and with such surety or sureties,
with fixed or open penalty, as the Corporation may direct, to indemnify
the Corporation (and its transfer agent and registrar, if any) against
any claim that may be made on account of the alleged loss, destruction
or theft of the certificate; and (d) satisfies any other reasonable
requirements imposed by the Corporation. When a certificate has been
lost, apparently destroyed or wrongfully taken, and the holder of
record fails to notify the Corporation within a reasonable time after
he or she has notice of it, and the Corporation registers a transfer of
the shares represented by the certificate before receiving such
notification, the holder of record is precluded from making any claim
against the Corporation for the transfer or for a new certificate.
Section 8.07 Registration of Transfer. The Corporation shall
register the transfer of a certificate for shares presented to it for
transfer if: (a) the certificate is properly endorsed by the registered
owner or by his or her duly authorized attorney; (b) the signature of
such person has been notarized and reasonable assurance is given that
such endorsements are effective; (c) the Corporation has no notice of
an adverse claim or has discharged any duty to inquire into such a
claim; (d) any applicable law relating to the collection of taxes has
been complied with; and (e) there is an opinion of counsel satisfactory
to counsel of the Corporation that such transfer is made in accordance
with all federal and state securities regulations.
Section 8.08 Registered Owner. Prior to due presentment for
registration of transfer of a certificate for shares, the Corporation
may treat the registered owner as the person exclusively entitled to
vote, to receive notices and otherwise to exercise all the rights and
powers of a shareholder.
Section 8.09 Transfer of Shares. Transfer of shares of the
Corporation shall be made only in the stock transfer books of the
Corporation by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney therein authorized by power of attorney
duly executed and filed with the secretary of the Corporation and on
surrender for cancellation of the certificate for such shares. The
person in whose name the shares stand on the books of the Corporation
shall be deemed by the Corporation to be the owner thereof for all
purposes by the stock transfer books shall be in the possession of the
secretary or transfer agent or clerk of the Corporation.
Section 8.10 Transfer Agent and Registrar. By resolution of the
board of directors, the Corporation may from time to time appoint a
transfer agent, and, if desired, a registrar, who will perform his or
her duties in accordance with the terms and conditions the board of
directors deems advisable; provided, however, that until and unless the
board of directors appoints some other person, firm or Corporation as
its transfer agent, the secretary of the Corporation shall act as
transfer agent without the necessity of any formal action of the board
of directors and he or she shall perform all of the duties thereof.
ARTICLE IX
INDEMNIFICATION
Section 9.01 Indemnification.
(A) No officer or director shall be personally liable for any
obligations of the Corporation or for any duties or obligation of the
Corporation or for any duties or obligations arising out of any actions
or conduct of such officer or director performed for or on behalf of
the Corporation.
<PAGE>43
(B) The Corporation shall and does hereby indemnify and hold
harmless each person and his or her heirs and administrators who shall
serve at any time hereafter as a director or officer of the Corporation
from and against any and all claims, judgments and liabilities to which
such person shall become subject by reason of his or her having
heretofore or hereafter been a director or officer of the Corporation
or by reason of any action alleged to have heretofore or hereafter been
taken or admitted to have been taken by him or her as such director or
officer, and shall reimburse each such person for all legal and other
expenses reasonably incurred by him or her in connection with any such
claim or liability, including power to defend such person from all
suits or claims as provided for under the laws of the State of
Colorado; provided, however, that no such person shall be indemnified
against, or be reimbursed for, any expense incurred in connection with
any claim or liability arising out of his or her negligence or willful
misconduct. The rights accruing to any person under the foregoing
provisions of this section shall not exclude any other right to which
he or she may lawfully be entitled, nor shall anything herein contained
restrict the right of the Corporation to indemnify or reimburse such
person in any proper case, even though not specifically herein
provided. The Corporation, its directors, officers, employees and
agents shall be fully protected in taking any action or making any
payment in reliance upon the advice of counsel.
Section 9.02 Other Indemnification. The indemnification herein
provided shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled under any Bylaw,
agreement, vote of shareholders, or disinterested directors, or
otherwise, both as to action in his or her official capacity and as to
action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent, and shall inure to the benefit of the heirs,
executors and administrators of such person.
Section 9.03 Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation or is or who 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 any liability asserted against him or her and
incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the Corporation would have the power
to indemnify him or her against liability under the provisions of this
section or of the laws of the State of Colorado.
Section 9.04 Settlement by Corporation. The right of any person to
be indemnified shall be subject always to the right of the Corporation
by its board of directors, in lieu of such indemnity, to settle any
claim, action, suit or proceeding at the expense of the Corporation by
the payment of the amount of such settlement and the cost and expense
incurred in connection therewith.
ARTICLE X
GENERAL PROVISIONS
Section 10.01 Dividends and Reserves.
(A) Subject to statute, the Articles of Incorporation and these
Bylaws, dividends may be declared by the board of directors at any
regular or special meeting and may be paid in cash, in property, or in
shares of the Corporation. The declaration and payment shall be at the
discretion of the board of directors.
(B) By resolution, the board of directors may create such reserve or
reserves out of the earned surplus of the Corporation as the directors
from time to time, in their discretion, think proper to provide for
contingencies, or to equalize dividends, or to repair or maintain any
property of the Corporation, or for any other purpose they think
beneficial to the Corporation. The directors may modify or abolish any
such reserve in the manner in which it was created.
Section 10.02 Books and Records. The Corporation shall keep correct
and complete books and records of account, shall keep minutes of the
proceedings of its shareholders and board of directors, and shall keep
at its registered office or principal place of business, or at the
office of its transfer agent or registrar, a record of its
shareholders, giving the names and addresses of all shareholders and
the number and class of shares held by each.
<PAGE>44
Section 10.03 Annual Statement. The board of directors shall mail to
each shareholder of record, at least ten days before each annual
meeting a full and clear statement of the business and condition of the
Corporation, including a reasonably detailed balance sheet, income
statement, surplus statement, and statement of changes in financial
position, for the last fiscal year and for the prior fiscal year, all
prepared in conformity with generally accepted accounting principals
applied on a consistent basis.
Section 10.04 Checks and Notes. Checks, demands for money and notes
of the Corporation shall be signed by officer(s) or other person(s)
designated from time to time by the board of directors.
Section 10.05 Fiscal Year. The fiscal year of the Corporation shall
be fixed by resolution of the board of directors.
Section 10.06 Seal. The corporate seal of the Corporation (of which
there may be one or more exemplars) shall contain the name of the
Corporation and the name of the state of incorporation. The seal may
be used by impressing it or reproducing a facsimile of it, or
otherwise.
Section 10.07 Amendment of Bylaws.
(A) These Bylaws may be altered, amended or repealed at any meeting
of the board of directors at which a quorum is present, by the
affirmative vote of a majority of the directors present at such
meeting, provided notice of the proposed alteration, amendment, or
repeal is contained in the notice of the meeting.
(B) These Bylaws may also be altered, amended or repealed at any
meeting of the shareholders at which a quorum is present or
represented, by the affirmative vote of the holders of a majority of
the shares present or represented at the meeting and entitled to vote
thereat, provided notice of the proposed alteration, amendment or
repeal is contained in the notice of the meeting.
Section 10.08 Construction. Whenever the context so requires, the
masculine shall include the feminine and neuter, and the singular shall
include the plural, and conversely. If any portion of these Bylaws
shall be invalid or inoperative, then, so far as is reasonable and
possible: (a) the remainder of these Bylaws shall be considered valid
and operative and (b) effect shall be given to the intent manifested by
the portion held invalid or inoperative.
Section 10.09 Table of Contents; Headings. The table of contents and
headings are for organization, convenience and clarity. In
interpreting these Bylaws, they shall be subordinated in importance to
the other written material.
Section 10.10 Relation to Articles of Incorporation. These Bylaws
are subject to and governed by the Articles of Incorporation.
Adopted by the directors on this 6th day of August, 1999.
/s/ Rayna M. Signer
- --------------------------------
Rayna M. Signer, Director
<PAGE>45
NUMBER SHARES
NATIONAL ASSET ACQUISITION, INC.
Incorporated Under the Laws of the State of Colorado
Common Stock Par Value $.001 CUSIP
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID and NONASSESSABLE Shares of National Asset Acquisition,
Inc., transferable only on the books of the Corporation by the holder
hereof in person or by duly authorized attorney upon surrender of
this Certificate properly endorsed. This certificate is not valid
unless countersigned and registered by the Transfer Agent and
Registrar
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Secretary President
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<PERIOD-END> SEP-30-1999
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<CURRENT-ASSETS> 10,000
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<COMMON> 1,025
0
0
<OTHER-SE> 8,975
<TOTAL-LIABILITY-AND-EQUITY> 10,000
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