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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BALSAM VENTURES, INC.
(Name of small business issuer in its charter)
NEVADA 52-2219056
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
SEC File No.: 000-1103092
BALSAM VENTURES, INC.
12 - 5880 Hampton Place
Vancouver, British Columbia V6T 2E9
Tel: (604) 222-2657
(NAME, ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICE)
--------------------------------
ROBERT SMITH, PRESIDENT
12 - 5880 Hampton Place
Vancouver, British Columbia, Canada V6T 2E9
Tel: (604) 222-2657
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
--------------------------------
COPIES OF COMMUNICATIONS TO:
MICHAEL A. CANE, ESQ.
101 Convention Center Dr., Suite 1200
Las Vegas, NV 89109
(702) 312-6255
--------------------------------
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |__|
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. |__|
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------
TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT (1) PRICE (2) FEE (2)
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Common Stock 5,100,000 shares $0.20 $1,020,000 $270
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(1) Based on last sales price on December 31, 1999
(2) Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
BALSAM VENTURES, INC.
5,100,000 SHARES
COMMON STOCK
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The selling shareholders named in this prospectus are offering all of
the shares of our common stock offered through this prospectus. See the
section entitled "Selling Shareholders." The shares were acquired by
the selling shareholders directly from us in two private offerings that
were exempt from registration under the US securities laws. See the
section entitled "Description of Securities."
Our common stock is presently not traded on any market or securities
exchange.
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The purchase of the securities offered through this prospectus involves
a high degree of risk. See section entitled "Risk Factors" on pages 4
- - 7.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
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The Date Of This Prospectus Is: March 20, 2000
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TABLE OF CONTENTS
PAGE
Summary ........................................................ 3
Risk Factors ................................................... 4
Use of Proceeds ................................................ 8
Determination of Offering Price ................................ 8
Dilution ....................................................... 8
Selling Shareholders ........................................... 8
Plan of Distribution ........................................... 12
Legal Proceedings .............................................. 13
Directors, Executive Officers, Promoters and Control Persons ... 13
Security Ownership of Certain Beneficial Owners and Management . 14
Description of Securities ...................................... 14
Interests of Named Experts and Counsel ......................... 15
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities ................................... 15
Organization Within Last Five Years ............................ 15
Description of Business ........................................ 16
Plan of Operation .............................................. 21
Description of Property ........................................ 22
Certain Relationships and Related Transactions ................. 22
Market for Common Equity and Related Stockholder Matters ....... 22
Executive Compensation ......................................... 23
Independent Public Accountants.................................. 24
Financial Statements ........................................... 24
Changes in and Disagreements with Accountants .................. 25
Available Information .......................................... 25
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SUMMARY
The following summary is only a shortened version of the more detailed
information, exhibits and financial statements appearing elsewhere in
this prospectus. Prospective investors are urged to read this
prospectus in its entirety.
Balsam Ventures, Inc.
Our plan is to develop and market a web site on the Internet at
www.usacitizenship.net designed to provide information on the process
of immigrating into the United States from foreign countries. Our
target users are citizens of foreign countries seeking to work or
immigrate to the United States. Our objective is to become a leading
web site for information on the process of immigrating into the United
States. Once development of our USA citizenship web site is complete,
we plan to sell advertising on the site to generate income.
We were incorporated on August 17, 1999 under the laws of the state of
Nevada. We acquired the domain name for our www.usacitizenship.net
Internet web site in October 1999.
We have not begun any business operations. We have only recently
commenced the development of our web site which is in a conceptual
stage and will require substantial development before it can be offered
on a commercial basis. Accordingly, our business is in the start-up
phase and we have not earned any revenues to date.
OFFERING
Securities Being Offered Up to 5,100,000 shares of common stock. See
section entitled "Description of Securities to
be Registered."
Securities Issued 10,100,000 shares of common stock were issued
And to be Issued and outstanding as of the date of this
prospectus. All of the common stock to be sold
under this prospectus will be sold by existing
shareholders. See section entitled "Description
of Securities to be Registered."
Use of Proceeds We will not receive any proceeds from the sale
of the common stock by the selling shareholders.
See section entitled "Use of Proceeds."
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below and the other
information in this prospectus and any other filings we may make with
the United States Securities and Exchange Commission in the future
before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock could decline
due to any of these risks, and you may lose all or part of your
investment.
Risks Related To Our Financial Condition And Business Model
If We Do Not Obtain Additional Financing, Our Business Will Fail
We had cash in the amount of $70,872 as of December 31, 1999. Our
business plan calls for significant expenses in connection with the
development and marketing of our web site. In addition, we anticipate
that revenues from operations will not be realized until sometime after
the development of our web site is complete. We anticipate that we
will require additional financing in order to complete development and
marketing of our web site. We do not currently have any arrangements
for financing and we can provide no assurance that we will be able to
find such financing when needed. Obtaining additional financing will
be subject to a number of factors, including:
(i) market conditions;
(ii) investor acceptance of our business plan; and
(iii) investor sentiment.
These factors may make the timing, amount, terms or conditions of
additional financing unavailable to us. If we are unsuccessful in
obtaining financing in an amount necessary to complete development
and marketing of our web site, then we will not be able to earn
revenues and our business will fail.
Because We Have Only Recently Commenced Business Operations, We Face A
High Risk of Business Failure
We were incorporated in August 1999. We acquired our domain name for
our web site in October 1999. We are presently in the process of
starting development of our web site. We have not yet earned any
revenues. Accordingly, we have no operating history for investors to
evaluate our business. An investor should consider the risks, expenses
and uncertainties that an early stage company like ours faces. These
risks include our ability to:
(i) develop a functioning and marketable web site focused on
United States immigration information;
(ii) attract users to our web site once development is complete;
(iii) successfully market our web site to advertisers once
development is complete;
(iv) respond effectively to competitive pressures;
(v) continue to develop and upgrade our web site once
development is complete.
If we are unsuccessful in addressing these risks, our business will
most likely fail.
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Because We Have Only Recently Commenced Business Operations, We Expect
to Incur Operating Losses For The Foreseeable Future
We have never been profitable. As of December 31, 1999, we had an
accumulated deficit of approximately $2,926. Prior to completion of our
web site, we anticipate that we will incur increased operating expenses
without realizing any revenues. We therefore expect to incur
significant losses into the foreseeable future and recognize that if we
are unable to generate significant revenues from the sale of
advertising on our web site, we will not be able to achieve
profitability or continue operations.
Risks Related To Our Market And Strategy
If The Internet Is Not Widely Accepted As A Medium For Advertising And
Commerce, Our Business May Fail
We expect to derive the majority of our revenue from Internet
advertising. Internet advertising constitutes a new and rapidly
evolving market. If the Internet is not accepted as a medium for
advertising, then we may not be able to generate revenues and our
business may fail. In addition, companies may choose not to advertise
on our web site if they do not perceive our audience demographic is
desirable for their products or that advertising on our web site is
effective for their sales.
If We Are Unable To Develop A Marketable Web Site, Then Our Business
Will Fail
Our web site is in its development stage. If we are unable to develop
an operating web site that is capable of attracting users and
convincing advertisers to pay for advertising, then we will not be able
to generate revenues. Our failure to earn a sufficient amount of
revenues in the projected time frame will most likely cause our
business to fail.
If We Are Unable To Hire And Retain Key Personnel, We May Not Be Able
To Implement Our Business Plan And Our Business Will Fail
Our success will be largely dependent on our ability to hire highly
qualified computer programmers, sales and technical personnel who can
develop the web site. These individuals are in high demand and we may
not be able to attract the staff we need. In addition, we may not be
able to afford the high salaries and fees demanded by qualified
personnel, or may lose such employees after they are hired. Currently,
we have hired any key personnel. Our failure to hire key personnel
when needed would have a significant negative effect on our business.
If We Are Not Able To Effectively Respond To Competitors, Our Business
May Fail
There are other companies who provide information similar to what we
propose to offer on our proposed web site. Competition for customers is
likely to be intense and is expected to increase significantly in the
future because of the growth of the Internet. Increased competition
could result in:
(i) lower than projected usage of our web site;
(ii) our inability to attract advertisers who are prepared to pay
for advertising;
(iii) decreased advertising rates that advertisers are
prepared to pay;
(iv) our inability to develop a web site with features and
usability sought by potential customers.
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Any one of these results could adversely affect our business, financial
condition and results of operations. In addition, our competitors may
develop competing web sites or traditional media products that achieve
greater market acceptance. It is also possible that new competitors may
emerge and acquire significant market share. Our inability to achieve
sales and revenue due to competition will have a adverse effect on our
business, financial condition and results of operations.
Risks Related To Legal Uncertainty
If We Become Subject To Burdensome Government Regulation Or Other Legal
Uncertainties, Our Business Will Be Negatively Effected
To date, governmental regulations have not materially restricted use of
the Internet. However, the legal and regulatory environment that
pertains to the Internet is uncertain and may change. Uncertainty and
new regulations could increase our costs of doing business and prevent
us from operating or marketing our web site. The growth of the Internet
may also be significantly slowed. This could delay growth in potential
demand for our web site information and limit our ability to generate
revenues. In addition to new laws and regulations being adopted,
existing laws may be applied to the Internet that have not as yet been
applied. New and existing laws may cover issues which include:
(i) sales and other taxes;
(ii) user privacy;
(iii) pricing controls;
(iv) characteristics and quality of products and services;
(v) consumer protection;
(vi) cross-border commerce;
(vii) libel and defamation;
(viii)copyright, trademark and patent infringement; and
(ix) other claims based on the nature and content of Internet materials.
These new laws may increase our cost of doing business which the
results that our financial condition and operating results may be
harmed.
If We Are Required To Qualify To Do Business In Multiple Jurisdictions,
Our Business May Be Harmed
Because we may sell advertising for our web site in a number of states
and foreign countries, we may be subject to the laws and the court
systems of multiple jurisdictions. Such jurisdictions may claim that we
are required to qualify to do business as a foreign company. This
process of qualifying to do business can be costly and time consuming
and will generally have a negative effect on our ability to show a
profit from operations. Failure to qualify as a foreign company in a
jurisdiction where required to do so could subject us to taxes and
penalties.
Because We Will Providing Information To Users on Our Site, We May Be
Subject To Legal Claims Based On Inaccurate Information
If we are successful in developing and marketing our web site, we may
become subject to claims from our users based on allegations of
inaccurate information. Although we plan to carry general liability
insurance when we commence marketing our web site, our insurance may
not cover all potential claims
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to which we are exposed or may not be adequate to indemnify us for all
liability. Any imposition of liability that is not covered by insurance or is
in excess of
insurance coverage could have an adverse effect on our business, financial
condition and results of operations. In addition, we can provide no assurance
that we will be able to obtain general liability insurance coverage for our
business.
Risks Related To This Offering
Because A Single Stockholder Owns a Majority of Our Outstanding Common
Stock, Investors May Find That Future Corporate Decisions Are
Controlled By This Stockholder
Mr. Robert S. Smith, our sole director and President, owns
approximately 49.5% of the outstanding shares of our common stock.
Accordingly, he will have a significant influence in determining the
outcome of all corporate transactions or other matters, including
mergers, consolidations and the sale of all or substantially all of our
assets, and also the power to prevent or cause a change in control. The
interests of Mr. Smith may differ from the interests of the other
stockholders.
If A Market For Our Common Stock Does Develop, Our Stock Price May Be
Volatile.
There is currently no market for our common stock and we can provide no
assurance that a market will develop. If a market develops, we
anticipate that the market price of our common stock will be subject to
wide fluctuations in response to several factors, including:
(i) actual or anticipated variations in our results of
operations;
(ii) our ability or inability to generate new revenues;
(iii) increased competition; and
(iv) conditions and trends in the Internet and electronic commerce
industries.
Further, if our common stock is traded on the Nasdaq over the counter
bulletin board, our stock price may be impacted by factors that are
unrelated or disproportionate to our operating performance. The
trading prices of many technology companies' stocks are at or near
historical highs and reflect price earnings ratios substantially above
historical levels. These market fluctuations, as well as general
economic, political and market conditions, such as recessions, interest
rates or international currency fluctuations may adversely affect the
market price of our common stock.
We can provide no assurance that our common stock will be traded on the
Bulletin Board.
If Our Stock Price Drops Significantly, We May Become Subject To
Securities Litigation That Would Result In A Harmful Diversion Of Our
Resources
In the past, following periods of volatility in the market price of a
particular company's stock, securities class action litigation has been
brought against that company. Any litigation arising from the
volatility in the price of our common stock could have a adverse effect
upon our business, financial condition and results of operations.
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks
and uncertainties. We use words such as "anticipate," "believe,"
"plan," "expect," "future," "intend" and similar expressions to
identify such forward-looking statements. You should not place too
much reliance on these forward-looking statements. Our actual results
could differ materially from those anticipated in these forward-looking
statements for many reasons, including the risks faced by us described
in the "Risk Factors" section and elsewhere in this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
We will not determine the offering price of the common stock. The
offering price will be determined by market factors and the independent
decisions of the selling shareholders. See section entitled "Selling
Shareholders".
DILUTION
The common stock to be sold by the selling shareholders is common stock
that is currently issued and outstanding. Accordingly, there will be
no dilution to our existing shareholders.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock.
We currently intend to retain future earnings, if any, to finance the
expansion of our business. As a result, we do not anticipate paying any
cash dividends in the foreseeable future.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering all of
the 5,100,000 shares of common stock offered through this prospectus.
The shares include the following:
(A) 5,000,000 shares of our common stock that the selling
shareholders acquired from us in an offering that was exempt
from registration under Regulation S of the Securities Act of
1933 and completed on October 29, 1999;
(B) 100,000 shares of our common stock that the selling
shareholders acquired from us in an offering that was exempt
from registration under Regulation D of the Securities Act of
1933 and completed on December 24, 1999.
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The following table provides as of March 15, 2000, information
regarding the beneficial ownership of our common stock held by each of
the selling shareholders, including:
(A) the number of shares owned by each prior to this offering;
(B) the total number of shares that are to be offered for each;
(C) the total number of shares that will be owned by each upon
completion of the offering;
(D) the percentage owned by each; and
(E) the identity of the beneficial holder of any entity that owns
the shares.
Total Total Percent
Number Of Shares Owned
Shares To To Be Upon
Shares Be Offered Owned Upon Completion
Owned Prior For Selling Completion Of This
Name and Address To This Shareholders Of This Offering
Of Selling Stockholder Offering (1) Account (2) Offering (3) (4)
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Thomas J. Brady 400,000 400,000 NIL NIL
1106 - 1100 Harwood
Street
Vancouver, BC V6E 1R7
Deanna Centanni 450,000 450,000 NIL NIL
503 - 7321 Halifax Street
Burnaby, BC V5A 4R5
Cyrus Driver 450,000 450,000 NIL NIL
#1220 - 701 West
Georgia Street
P.O. Box 10123
Vancouver, BC V7Y 1C6
Dalton Dupasquier 350,000 350,000 NIL NIL
601 - 431 Pacific Street
Vancouver, BC V6Z 2P6
Paul A. Dumas 420,000 420,000 NIL NIL
1579 Jamestown
Ormstown, Quebec
J0S 1K0
Gail Ginnetti 375,000 375,000 NIL NIL
7547 Lindrick Court
North Burnaby, BC
Terri Harper 450,000 450,000 NIL NIL
3424 Tunnah Road
Nanaimo, BC V9T 2V9
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- -Table continued-
Total Total Percent
Number Of Shares Owned
Shares To To Be Upon
Shares Be Offered Owned Upon Completion
Owned Prior For Selling Completion Of This
Name and Address To This Shareholders Of This Offering
Of Selling Stockholder Offering (1) Account (2) Offering (3) (4)
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Jack Gilmour Morgan 450,000 450,000 NIL NIL
Box 55 Station A
Nanaimo, BC
Robert Morgan 450,000 450,000 NIL NIL
5435 Mildmay Road
Nanaimo, BC V9T 4Z3
Wayne Morgan 450,000 450,000 NIL NIL
#407 - 1128 Quebec
Street
Vancouver, BC V6A 4E1
Karen Woodburn 400,000 400,000 NIL NIL
1516 Price Road,
Box 255
Errington, BC V0R 1V0
James Worrall 355,000 355,000 NIL NIL
#406, 7272 Kingsway
Burnaby, BC
Michael J. Chikites 12,500 12,500 NIL NIL
2261 McBain Avenue
Vancouver, BC V6L 3B2
Wendy Furlan-Morgan 2,500 2,500 NIL NIL
4259 Clubhouse Drive
Nanaimo, BC V9T 4H8
Robert Dean 5,000 5,000 NIL NIL
3699 Hamond Bay Road
Nanaimo, BC
Brad Baker 2,500 2,500 NIL NIL
1002 - 3707 West
7th Avenue
Vancouver, BC V6Z 1W7
William Ban 5,000 5,000 NIL NIL
1315 Jordan Street
Coquitlam, BC V3B 6X5
Brenda Prebushewski 2,500 2,500 NIL NIL
#34 - 6380 121st Street
Surrey, BC V3X 1Y6
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- -Table continued-
Total Total Percent
Number Of Shares Owned
Shares To To Be Upon
Shares Be Offered Owned Upon Completion
Owned Prior For Selling Completion Of This
Name and Address To This Shareholders Of This Offering
Of Selling Stockholder Offering (1) Account (2) Offering (3) (4)
- ----------------------------------------------------------------------------
Chris Ahern 10,000 10,000 NIL NIL
3348 Tenyson Crescent
North Vancouver, BC
V7K 2A8
Robert A. Ginnetti 10,000 10,000 NIL NIL
1328 Glen Abbey Drive
Burnaby, BC V5A 3Y4
Martyn Element 10,000 10,000 NIL NIL
24th Fl., 1177 W.
Hastings St.
Vancouver, BC V6E 2K3
Ian G. Watson 5,000 5,000 NIL NIL
2259 Ash Street
Vancouver, BC V5Z 4J8
Brian Dorman 5,000 5,000 NIL NIL
2496 Pirary Road
Nanaimo, BC V9R 5K3
Ted Harris 7,500 7,500 NIL NIL
4884 Fillinger
Crescent, Box 865
Nanaimo, BC V9R 5N2
Bruce H. Campbell 2,500 2,500 NIL NIL
Box 16, Suite 404 - 595
Howe Street
Vancouver, BC V6C 2T5
Karen Woodburn 10,000 10,000 NIL NIL
1516 Price Road
Errington, BC V0R 1V0
Basilios Pantages 10,000 10,000 NIL NIL
Penthouse,
2033 Beach Avenue
Vancouver, BC V6G 1Z3
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(1) Except as otherwise noted, the named party beneficially owns and
has sole voting and investment power over all shares or rights to
these shares.
(2) Assumes that none of the selling shareholders sells shares of
common stock not being offered hereunder or purchases additional
shares of common stock.
(3) Assumes that all shares offered are sold.
(4) Based on 10,100,000 shares outstanding on March 15, 2000.
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Except as noted above, none of the selling shareholders or their
beneficial owners:
(i) has had a material relationship with the Company other than
as a shareholder as noted above at any time within the past
three years; or
(ii) has ever been an officer or directors of the Company.
PLAN OF DISTRIBUTION
The selling shareholders have not informed us of how they plan to sell
their shares. However, they may sell some or all of their common stock
in one or more transactions, including block transactions:
(i) on such public markets or exchanges as the common stock may
from time to time be trading;
(ii) in privately negotiated transactions;
(iii) through the writing of options on the common stock;
(iv) in short sales; or
(v) in any combination of these methods of distribution.
The sales price to the public may be:
(i) the market price prevailing at the time of sale;
(ii) a price related to such prevailing market price; or
(iii) such other price as the selling shareholders determine from
time to time.
The shares may also be sold in compliance with the Securities and
Exchange Commission's Rule 144.
The selling shareholders may also sell their shares directly to market
makers acting as principals or brokers or dealers, who may act as agent
or acquire the common stock as a principal. Any broker or dealer
participating in such transactions as agent may receive a commission
from the selling shareholders, or, if they act as agent for the
purchaser of such common stock, from such purchaser. The selling
shareholders will likely pay the usual and customary brokerage fees for
such services. Brokers or dealers may agree with the selling
shareholders to sell a specified number of shares at a stipulated price
per share and, to the extent such broker or dealer is unable to do so
acting as agent for the selling shareholders, to purchase, as
principal, any unsold shares at the price required to fulfill the
respective broker's or dealer's commitment to the selling shareholders.
Brokers or dealers who acquire shares as principals may thereafter
resell such shares from time to time in transactions in a market or on
an exchange, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices, and in
connection with such re-sales may pay or receive commissions to or from
the purchasers of such shares. These transactions may involve cross and
block transactions that may involve sales to and through other brokers
or dealers. If applicable, the selling shareholders also may have
distributed, or may distribute, shares to one or more of their partners
who are unaffiliated with us. Such partners may, in turn, distribute
such shares as described above. We can provide no assurance that all or
any of the common stock offered will be sold by the selling
shareholders.
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We are bearing all costs relating to the registration of the common
stock. Any commissions or other fees payable to brokers or dealers in
connection with any sale of the common stock, however, will be borne by
the selling shareholders or other party selling such common stock.
The selling shareholders must comply with the requirements of the
Securities Act of 1933 and the Securities Exchange Act of 1934 in the
offer and sale of their common stock. In particular, during such times
as the selling shareholders may be deemed to be engaged in a
distribution of the common stock, and therefore be considered to be an
underwriter, they must comply with applicable law and may, among other
things:
(i) not engage in any stabilization activities in connection with
our common stock;
(ii) furnish each broker or dealer through which common stock may
be offered, such copies of this prospectus, as amended from
time to time, as may be required by such broker or dealer;
and
(iii) not bid for or purchase any of our securities or attempt to
induce any person to purchase any of our securities other
than as permitted under the Securities Exchange Act.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our sole executive officer and director and his respective age as of
March 15, 2000 is as follows:
Directors:
Name of Director Age
- ---------------------- -----
Robert S. Smith 54
Executive Officers:
Name of Officer Age Office
- -------------------- ----- -------
Robert S. Smith 54 President, Secretary and Treasurer
Set forth below is a brief description of the background and business
experience of Mr. Smith for the past five years.
Mr. Robert S. Smith is our President, Secretary and Treasurer and is
the sole member of our board of directors. Mr. Smith has been our
President, Secretary and Treasurer and a director since August 17,
1999. Mr. Smith has been a pilot with Air B.C., an airline with
operations in British Columbia, Canada, since 1994. Mr. Smith was also
employed by Air B.C. from 1986 to 1992. Mr. Smith was employed by a
private airline during the period from 1992 to 1994. Mr. Smith
commenced his aviation career as a pilot in 1975. Mr. Smith served
with the Canadian Armed Forces from 1964 to 1972. Mr.
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Smith graduated from Prince of Wales College of St. Johns,
Newfoundland, Canada in 1963. Mr. Smith is also a partner in a private
boat building company.
Term of Office
Our Directors are elected for one-year terms, to hold office until the
next annual general meeting of the shareholders, or until removed from
office in accordance with our bylaws. Our officers are appointed by
our board of directors and hold office until removed by the board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person
known to us to own more than 5% of our outstanding common stock as of
March 15, 2000, and by the officers and directors, individually and as
a group. Except as otherwise indicated, all shares are owned directly.
Amount of
Name and address beneficial Percent
Title of class of beneficial owner ownership of class (1)
- -------------- ------------------- ---------- ------------
Common Stock Robert S. Smith 5,000,000 shares 49.5%
Director, President
Secretary and Treasurer
Common Stock All Officers and Directors 5,000,000 shares 49.5%
as a Group (1 person)
- --------------------------------------------------------------------------
(1) Based on 10,100,000 shares of common stock issued and
outstanding as of March 15, 2000.
DESCRIPTION OF SECURITIES
General
Our authorized capital stock consists of 100,000,000 shares of common
stock at a par value of $0.001 per share.
The following description of our capital stock is not complete and is
subject to and qualified in its entirety by our articles of
incorporation and bylaws, which are included as exhibits to the
registration statement of which this prospectus forms a part, and by
the provisions of applicable Nevada law.
Common Stock
As of March 15, 2000, there were 10,100,000 shares of our common stock
issued and outstanding that were held by approximately 28 stockholders
of record.
Holders of our common stock are entitled to one vote for each share on
all matters submitted to a stockholder vote. Holders of common stock
do not have cumulative voting rights. Therefore, holders of a majority
of the shares of common stock voting for the election of directors can
elect all of the directors. Holders of our common stock representing a
majority of the voting power of our capital stock issued and outstanding
and entitled to vote, represented in person or by proxy,
are necessary to
14
<PAGE>
constitute a quorum at any meeting of our
stockholders. A vote by the holders of a majority of our outstanding
shares is required to effectuate certain fundamental corporate changes
such as a liquidation, merger or an amendment to our Articles of
Incorporation.
Holders of common stock are entitled to share in all dividends that the
board of directors, in its discretion, declares from legally available
funds. In the event of a liquidation, dissolution or winding up, each
outstanding share entitles its holder to participate pro rata in all
assets that remain after payment of liabilities and after providing for
each class of stock, if any, having preference over the common stock.
Holders of our common stock have no pre-emptive rights, no conversion
rights and there are no redemption provisions applicable to our common
stock.
All shares offered by the selling stockholders are validly issued,
fully paid and non-assessable shares of our capital stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion upon
the validity of the securities being registered or upon other legal
matters in connection with the registration or offering of the common
stock was employed on a contingency basis, or had, or is to receive, in
connection with the offering, a substantial interest, direct or
indirect, in the registrant or any of its parents or subsidiaries. Nor
was any such person connected with the registrant or any of its parents
or subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
Michael A. Cane of Cane & Company, LLC, our independent counsel, has
provided an opinion on the validity of our common stock.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Our directors and officers are indemnified as provided by the Nevada
Revised Statutes (the "NRS") and our Bylaws. We have been advised that
in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is
against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by one of our directors, officers,
or controlling persons in connection with the securities being
registered, we will, unless in the opinion of our legal counsel the
matter has been settled by controlling precedent, submit the question
of whether such indemnification is against public policy to a court of
appropriate jurisdiction. We will then be governed by the court's
decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on August 17, 1999 under the laws of the state of
Nevada. We acquired the domain name, www.usacitizenship.net, in
October 1999.
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<PAGE>
DESCRIPTION OF BUSINESS
Our business plan is to develop and market a free immigration
information service on the Internet from our "www.usacitizenship.net"
web site. We will design our web site to provide information on the
process of immigrating to the United States from foreign countries.
Our target users will be persons who are citizens of foreign countries
seeking to work in or immigrate to the United States. Our objective is
to become a leading web site for information on the process of
immigrating into the United States.
Once development of our web site is complete, we plan to sell
advertising. We plan to solicit advertisers whose target market
includes the users of our web site.
Our web site is still in a conceptual stage of development and will
require substantial development before we are able to operate it on a
commercial basis. Accordingly, our business operations are in a start-
up phase and we have not earned any revenues to date.
Industry Background
Growth of the Internet and the World Wide Web
The Internet and the World Wide Web are experiencing dramatic growth in
terms of the number of users. The growth in the number of web users and
the amount of time users spend on the web is being driven by the
increasing importance of the Internet as a communications medium and an
information resource and a sales and distribution channel. As Internet
usage continues to grow, advertisers and electronic commerce marketers
are increasingly using the web to locate customers, advertise and
facilitate transactions.
Growth of Online Electronic Commerce
The Internet is dramatically affecting the methods by which consumers
and businesses are buying and selling goods and services. Electronic
commerce offers the opportunity to establish new competitive standards
by expanding distribution channels, integrating internal and external
processes and offering a cost-effective method of providing products
and services. The Internet provides online merchants with the ability
to reach a global audience, operate with minimal infrastructure,
reduced overhead and increase economies of scale, while providing
consumers and businesses with a broad selection, increased pricing
power and convenience. As a result, a growing number of parties are
transacting business on the web.
Advertising on the Internet
The Internet allows advertisers to more precisely target desired
audiences while tracking impression levels, user demographics and the
effectiveness of the advertising. As a result, a growing number of
businesses are marketing their products and services on the Internet.
Immigration to the United States
The United States continues to be attractive to immigrants due to its
high standard of living, quality of life and employment opportunities.
People wishing to immigrate to the United States are faced with the
difficult task of finding information on the process and applying it.
These people have traditionally
16
<PAGE>
relied on a variety of information
sources, including the United States Department of Immigration and
Naturalization, lawyers and immigration advisers.
Developing the Web Site
Our basic plan is to develop a free web site that provides a reliable
source of information on immigration into the United States in order to
draw users to the site so that we can sell and generate revenues from
the sale of web site advertisements. We believe that the an Internet
web site which offers free information on the process of immigrating
into the United States would attract substantial usage. We believe
that if we are successful in attracting people to our web site, we will
be able to generate revenues from advertisers who are interested in the
demographics of our web site users
Features of the Web Site
We plan to design our web site to be an exciting, interactive and easy
to use information source on how to immigrate into the United States.
We plan to incorporate the following features into our Web site in
order to accomplish this objective:
(i) We will include information which is current and relevant on
the process of immigrating to the United States;
(ii) We will present this immigration information in a clear and
easy to understand format;
(iii) We will include immigration information in four
principal languages, in addition to English: Chinese, Hindi,
French and Japanese;
(iv) We will include an on-line five-stage seminar on how to
immigrate;
(v) We will include links to the necessary forms required to be
submitted during the process of immigration;
(vi) We will list addresses and contact information for national
and overseas United States Immigration and Naturalization
Service's offices;
(vii) We will list names, address and contact information of
legal counsel who specialize in immigration into the United
States;
(viii)We will provide a list of links to organizations that
can assist in the process of immigration.
(ix) We will design the web site in order to allow the easy
addition or modification of content and advertisements in
order to reduce our long term operating cots.
Advertising Revenues
We plan to sell advertising space on the web site in the form of pay-
per-click advertising on banners, buttons and links. We will design
the web site so that it can have as many as 30 advertisers at one time.
However, we will ensure that any one page on our Web site will be
limited to two advertisers in order to ensure that advertisers and
their products get the proper exposure.
Pay-per-click advertising is advertising for which we will earn revenue
each time an advertisers button or banner is clicked on by a visitor.
We plan to sell pay-per-click advertising in prepaid lots ranging from
500 clicks to 20,000 plus clicks. We plan to only sell in lots in
order to attract only serious advertisers. The price charged for each
button or banner advertisement will vary based on the number of clicks
bought and the positioning of the button or banner on the site. The
premium position on our Web site and the most expensive for
advertisements will be our home page.
17
<PAGE>
For companies that are not comfortable with the pay-per-click method,
we plan to also offer advertising based on a weekly flat rate fee. For
advertising on a flat rate fee, the cost of each button or banner will
also vary based on the positioning of the advertisement within the web
site.
We plan to retain the services of a secured counter and tracking
company that will provide independent verification on the number of
click-throughs that occur. This independent verification will assist
in marketing our web site to advertisers.
Marketing
Our objective will be to commence marketing of the web site upon
completion of its development. This marketing strategy is subject to
our having sufficient funding to carry out our plan which should
include the following elements:
(i) A banner advertising program whereby we would pay for
advertising of the web site on other Internet web sites where
we feel exposure would help to increase traffic on our web
site.
(ii) An e-mail program whereby advertisements for our web site
would be delivered to potential users and potential
advertisers.
(iii) Strategic listing of our web site with major search
engines in order to increase the visibility of our web site
when users enter applicable keywords, such as "immigration",
with major search engines. We believe that many of the
people looking for information concerning immigration into
the United States will enter keywords such as "immigration",
"USA" and "United States" with major search engines in order
to find relevant web sites. Our objective will be to ensure
that our site is frequently cited by major search engines
when these keywords are searched.
(iv) Reciprocal click-through agreements with complementary web
sites who are prepared to allow us to place links to our web
site on their web sites in consideration for us permitting a
reciprocal link to their web site on our web site.
(v) We plan to make contact with many of the immigrant
communities across the United States to promote our web site
and also establish contacts for the web site. Many of those
who want to immigrate have relatives in the United States and
look to those relatives for assistance. We may use
traditional advertising media, such as newspaper
advertisements and flyers, to reach this market. We would
target our advertising through advertising in community
newspapers and flyers to neighborhoods with high populations
of immigrant communities.
The exact nature of our marketing plan will depend on a number of
factors, including the availability of funds to implement our marketing
plan and Internet marketing conditions and practices at the time we
complete development of our web site. We may pursue different
marketing strategies from the marketing strategies listed above.
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<PAGE>
Operations
While we have formulated our business plan for the development of our
web site, we have not yet commenced the development of our web site.
This development work will consist of three components:
(i) the gathering of information on immigration for posting on
our Web site;
(ii) web site design and programming;
(iii) input of information on immigration into our web site.
Once this development work is complete, we will be able to commence
operations of our web site on the Internet.
We anticipate that we will purchase a computer server that will host
our web site on the Internet. We also anticipate that we will enter
into an agreement with an Internet service provider for the hosting of
our web site on the Internet. We will operate our web site and
computer server using commercially available computer software programs
and operating systems.
For more information on our plan of operations, see section entitled
"Plan of Operations".
Competition
We will compete with others, including:
(A) at least eight (8) web sites which are currently providing
information on the process of immigrating into the United
States, including:
(1) U.S. Immigration and Naturalization Office -
www.ins.usdoj.gov
(2) Canada Small Business Service Center -
www.sb.gov.bc.ca/smallbus
(3) www.visalaw.com
(4) www.burnslaw.com
(5) www.immigrationquide.com
(6) www.sirtech.com
(7) www.4immigration.com
(8) www.citizenshipvideo.com
(B) Law firms and immigration specialists who provide information
on immigration to the United States, sometimes over the
Internet on their own web sites.
The presence of established competitors could adversely affect our
ability to successfully implement our business plan and sell
advertising. If we are not successful in implementing our business
plan, then our business may fail.
We plan to differentiate our web sites from the competition by
including information which is not only accurate and up-to-date but
which is presented in an easy to use and understand format. We also
believe we will be the first to target advertisers who are seeking to
market products and services to people who are attempting to immigrate
to the United States. In order to sell to advertisers, we may offer
special rates that are below our cost.
19
<PAGE>
We have limited financial, marketing, technical and other resources
that are necessary to implement our business plan. Many of our current
and potential competitors have significantly greater financial,
marketing, technical and other resources than we do. Our competitors
will most likely be able to devote greater resources to the
development, promotion and sale of their web sites that we can. In
addition, our competitors may be able to offer the information we are
planning to offer, thereby reducing our ability to earn revenue.
Government Regulation
Due to the increasing popularity and use of the Internet, it is
possible that a number of laws and regulations may be adopted with
respect to the Internet generally, covering issues such as user
privacy, pricing, and characteristics and quality of products and
services. Similarly, the growth and development of the market for
Internet commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies
conducting business over the Internet. The adoption of any additional
laws or regulations may decrease the growth of commerce over the
Internet, increase our cost of doing business or otherwise have a
harmful effect on our business.
To date, governmental regulations have not materially restricted use of
the Internet. However, the legal and regulatory environment that
pertains to the Internet is uncertain and may change. New and existing
laws may cover issues which include:
(i) sales and other taxes;
(ii) user privacy;
(iii) pricing controls;
(iv) characteristics and quality of products and services;
(v) consumer protection;
(vi) cross-border commerce;
(vii) libel and defamation;
(viii) copyright, trademark and patent infringement; and
(ix) other claims based on the nature and content of Internet
materials.
These new laws may impact on the information we are able to post on our
web site and our ability to market and sell advertising on our web site
in accordance with our business plans.
We may have to qualify to do business in other jurisdictions. If we
achieve sales of advertising for our web site, we anticipate that our
sales and our customers will be in multiple states and foreign
countries. Such jurisdictions may claim that we are required to
qualify to do business as a foreign company. Failure to qualify as a
foreign company in a jurisdiction where required to do so could subject
us to taxes and penalties.
We are not aware of any environmental laws that will be applicable to
the operation of our Internet business.
Research and Development Expenditures
We have spent $170 on start-up and development expenses since the
commencement of our business in October 1999. These start-up and
development expenses have consisted of expenses associated with
20
<PAGE>
acquisition of the domain name and the web site and a business plan for
the development of the web site. We have paid for all start-up and
development expenses incurred.
Employees
We have no full-time employees and one (1) part-time employee. Our
part-time employee is Mr. Robert S. Smith, our President, Secretary and
Treasurer. We plan to conduct our business primarily through
agreements with consultants and arms-length third parties.
PLAN OF OPERATIONS
Our plan of operations for the twelve months following the date of this
Registration Statement is to complete the following objectives within
the time period specified, subject to our obtaining financing for the
development and marketing of our web site:
(i) Complete development of the web site. We anticipate that
this development will be completed by August 2000. We
anticipate that the cost of this development will be
approximately $5,000.
(ii) Complete research of information on immigration into the
United States for posting on our web site. We anticipate
that this research will be completed by April 2000. We
anticipate that the costs of this development expense will be
approximately $5,000.
(iii) We plan to undertake an advertising and marketing
campaign once the development of our web site is complete.
We anticipate that the cost of these marketing expenses will
be approximately $15,000.
(iv) We anticipate spending approximately $10,000 on ongoing
operating and administrative expenses. We anticipate that
our monthly operating costs of our Web site will be
approximately $1,000 per month. We also anticipate spending
approximately $500 per month on maintaining the accuracy of
the immigration information on our web site.
We anticipate that we will be spending approximately $35,000 over the
next twelve month period pursuing this plan of operations. Of these
anticipated expenditures, we anticipate that $10,000 will be spent on
our plan of operations in the next six months. Our cash position as of
December 31, 1999 was $70,872. Accordingly, we may require additional
financing in order to pursue our business plan. We anticipate that if
we are successful in completing a financing, that the financing would
be an equity financing achieved through the sale of our common stock.
We do not have any arrangement in place for any debt or equity
financing. If we are successful in completing an equity financing,
existing shareholders will experience dilution of their interest in our
company.
Our actual expenditures and business plan may differ from the one
stated above. Our board of directors may decide not to pursue this
plan. In addition, we may modify the plan based on available
financing.
In the event we are not successful in selling our common stock, we may
not be able to proceed with our business plan for the development and
marketing of the web site. Due to our lack of operating history and
present inability to generate revenues, there exits substantial doubt
about our ability to continue as a going concern.
21
<PAGE>
We anticipate continuing operating losses in the foreseeable future.
We base this expectation in part on the fact that we will incur
substantial operating expenses in completing our stated plan of
operations before we will have the opportunity to earn revenues. Our
future financial results are also uncertain due to a number of factors,
many of which are outside our control. These factors include, but are
not limited to:
(i) our ability to develop a commercially marketable Internet web
site with information and features sought by Internet users
desiring information on immigration to the United States;
(ii) our ability to successfully market our web site to our
potential users;
(iii) our ability to successfully market our web site to
advertisers who are prepared to pay for advertising on our
site;
(iv) the introduction of competing.
We believe the above statements to be forward-looking statements. Our
actual results and our actual plan of operations may differ materially
from what is stated above. Factors that may cause our actual results
or our actual plan of operations to vary include, among other things,
decisions of our board of directors not to pursue a specific course of
action based on its re-assessment of the facts or new facts, changes in
the Internet business or general economic conditions and those other
factors identified in this prospectus.
DESCRIPTION OF PROPERTY
We do not lease or own any real property.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None of the following parties has, since our date of incorporation, had
any material interest, direct or indirect, in any transaction with us
or in any presently proposed transaction that has or will materially
affect us:
(i) Any of our directors or officers;
(ii) Any person proposed as a nominee for election as a director;
(iii) Any person who beneficially owns, directly or
indirectly, shares carrying more than 10% of the voting
rights attached to our outstanding shares of common stock;
(iv) Any of our promoters;
(v) Any relative or spouse of any of the foregoing persons who
has the same house as such person.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Present Public Market
There is presently no public market for our common stock. We
anticipate applying for trading of our stock with the Over the Counter
Bulletin Board upon the effectiveness of the registration statement of
22
<PAGE>
which this prospectus forms a part. However, we can provide no
assurance that our shares will be traded on the OTC Bulletin Board or
if traded, that a public market will materialize.
Holders of Our Common Stock
As of the date of this registration statement, we had twenty-eight (28)
registered shareholders.
Registration Rights
We have not granted registration rights to the selling shareholders or
to any other persons.
Dividends
There are no restrictions in our articles of incorporation or bylaws
that restrict us from declaring dividends. The Nevada Revised
Statutes, however, do prohibit us from declaring dividends where, after
giving effect to the distribution of the dividend:
(i) we would not be able to pay our debts as they become due in
the usual course of business; or
(ii) our total assets would be less than the sum of our total
liabilities, plus the amount that would be needed to satisfy
the rights of shareholders who have preferential rights
superior to those receiving the distribution.
We have not declared any dividends. We do not plan to declare any
dividends in the foreseeable future.
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes the compensation earned for services
rendered for the fiscal year ended December 31, 1999 by our chief
executive officer. Note that the company only has one executive officer
and director.
Annual Compensation Long Term Compensation
------------------- ----------------------
Other Restricted
Annual Stock Options/* LTIP All
Name Title Year Salary Bonus Compen- Awarded SARs (#) pay- Other
sation outs($) Compen-
sation
- ---- ----- ----- ------ ----- ------ ---------- ------- ------- -------
Robert Pres- 1999 $0 0 0 0 0 0 0
S. ident,
Smith CEO
and
Director
Stock Option Grants
We did not grant any stock options to any executive officers or
directors during our most recent fiscal year ended December 31,1999.
We have not granted any stock options to any executive officers or
directors since December 31, 1999.
23
<PAGE>
Employment Agreements
We do not have an employment or consultant agreement with Mr. Robert S.
Smith, our President, Secretary and Treasurer and sole director. Mr.
Smith provides his services to us on a part-time basis. We do not pay
any salary or consulting fee to Mr. Smith. For more information on Mr.
Smith, see the Section entitled "Directors, Executive Officers and
Significant Employees".
INDEPENDENT PUBLIC ACCOUNTANTS
Our balance sheet as of December 31, 1999 and the related statements of
loss and deficit, stockholders deficiency, cash flows for the period
ending December 31, 1999, appearing elsewhere in this prospectus, have
been included herein in reliance on the report of Morgan & Company,
Chartered Accountants, given on the authority of said firm as experts
in accounting and auditing.
INDEX TO FINANCIAL STATEMENTS
1. Report of Independent Accountants
2. Audited Financial Statements:
a. Balance Sheet as of December 31, 1999
b. Statement of Loss and Deficit for the period ending December
31, 1999
c. Statement of Stockholders Equity for the period ending December
31, 1999
d. Statement of Cash Flows for the period ending December 31, 1999
e. Notes to Audited Financial Statements
3. Consent of Morgan & Company to use its Report on Audited Financial
Statements
24
<PAGE>
BALSAM VENTURES INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Stated in U.S Dollars)
<PAGE>
-------------------------------------
Morgan & Company
-------------------------------------
Chartered Accountants
-------------------------------------
P.O. Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
-------------------------------------
AUDITORS' REPORT
To the Sole Director
Balsam Ventures Inc.
We have audited the balance sheet of Balsam Ventures Inc. (a
development stage company) as at December 31, 1999 and the
statements of loss and deficit accumulated during the development
stage, cash flows and stockholders' equity for the period then
ended. 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 United States and
Canadian generally accepted auditing standards. Those standards
require that we plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the Company as at
December 31, 1999 and the results of its operations and the cash
flows for the period then ended in accordance with United States
generally accepted accounting principles.
Vancouver, B.C. /s/ Morgan & Company
February 2, 2000 Chartered Accountants
<PAGE>
BALSAM VENTURES INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1999
(Stated in U.S. Dollars)
- -------------------------------------------------------------------------
ASSETS
Current
Cash $ 70,872
=========================================================================
LIABILITIES
Current
Accounts payable $ 1,298
SHAREHOLDER'S EQUITY
Share Capital
Authorized:
100,000,000 common shares, par value with
$0.001 per share
Issued and outstanding
10,100,000 common shares 10,100
Additional paid in capital 64,900
Less: subscriptions receivable (2,500)
Deficit Accumulated During The Development Stage (2,926)
----------
69,574
----------
$ 70,872
======================================================================
Approved by the Sole Director:
- --------------------------------
<PAGE>
BALSAM VENTURES INC.
(A Development Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
- ----------------------------------------------------------------------
PERIOD FROM
DATE OF
ORGANIZATION INCEPTION
AUGUST 17, AUGUST 17,
1999 1999
TO DECEMBER 31, TO DECEMBER 31,
1999 1999
- ----------------------------------------------------------------------
Expenses
Consulting services $ 100 $ 100
Domain registration 70 70
Professional fees 2,703 2,703
Office and sundry 53 53
----------------------------------
Net Loss For The Period 2,926 $ 2,926
===============
Deficit Accumulated During
The Development Stage,
Beginning Of Period -
---------------
Deficit Accumulated During
The Development Stage,
End Of Period $ 2,926
===============
Net Loss Per Share $0.01
===============
Weighted Average Number Of
Shares Outstanding 7,316,176
===============
<PAGE>
BALSAM VENTURES INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
- ----------------------------------------------------------------------
PERIOD FROM
DATE OF
ORGANIZATION INCEPTION
AUGUST 17, AUGUST 17,
1999 1999
TO DECEMBER 31, TO DECEMBER 31,
1999 1999
- ----------------------------------------------------------------------
Cash Flows From Operating
Activities
Net loss for the period $ (2,926) $ (2,926)
Adjustments To Reconcile Net
Loss To Net Cash Used By
Operating Activities
Change in accounts payable 1,298 1,298
----------------------------------
(1,628) (1,628)
----------------------------------
Cash Flow From Financing Activities
Share capital 75,000 75,000
Subscriptions receivable (2,500) (2,500)
----------------------------------
72,500 72,500
----------------------------------
Increase In Cash 70,872 70,872
Cash, Beginning Of Period - -
----------------------------------
Cash, End Of Period $ 70,872 $ 70,872
======================================================================
<PAGE>
BALSAM VENTURES INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
DECEMBER 31, 1999
(Stated in U.S. Dollars)
Common Stock
Additional
Paid-in
Shares Amount Capital Deficit Total
--------------------------------------------
Shares issued for cash @
$0.001 5,000,000 $ 5,000 $ - $ - $ 5,000
Shares issued for cash @
$0.01 5,000,000 5,000 45,000 - 50,000
Shares issued for cash @
$0.20 100,000 100 19,900 - 20,000
Less: subscriptions
receivable - (12) (2,488) - (2,500)
Net loss for the period - - - (2,926) (2,926)
---------------------------------------------
Balance
December 31, 1999 10,100,000 $10,088 $62,412 $(2,926)$69,574
=============================================
<PAGE>
BALSAM VENTURES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A.
on August 17, 1999.
b) Development Stage Activities
The Company plans to launch a free information Website to
assist and attract the people wanting information on
immigration to the USA. The Company plans to use the Website
to earn income from companies who are prepared to pay to
have Web advertising in the form of a button or banners on
the Website selling their products or services. The Company
plans to solicit advertisers are targeting sales of their
products and services at people using the Company's website.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States. Because a precise determination of many assets
and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using
careful judgement.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
a) Development Stage Company
The Company is a developed stage company as defined in the
Statements of Financial Accounting Standards No. 7. The
Company is devoting substantially all of its present efforts
to establish a new business and none of its planned
principal operations have commenced. All losses accumulated
since inception have been considered as part of the
Company's development stage activities.
b) Income Taxes
The Company has adopted Statement of Financial Accounting
Standards No. 109 -
"Accounting for Income Taxes" (SFAS 109). This standard
requires the use of an asset and liability approach for
financial accounting and reporting on income taxes. If it is
more likely than not that some portion or all if a deferred
tax asset will not be realized, a valuation allowance is
recognized.
<PAGE>
BALSAM VENTURES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
a) Financial Instruments
The Company's financial instruments consist of cash and
accounts payable.
Unless otherwise noted, it is management's opinion that this
Company is not exposed to significant interest or credit
risks arising from these financial instruments. The fair
value of these financial instruments approximate their
carrying values, unless otherwise noted.
b) Net Loss Per Share
Net loss per share is based on the weighted average number
of common shares outstanding during the period plus common
share equivalents, such as options, warrants and certain
convertible securities. This method requires primary
earnings per share to be computed as if the common share
equivalents were exercised at the beginning of the period or
at the date of issue and as if the funds obtained thereby
were used to purchase common shares of the Company at its
average market value during the period.
3. NEW ACCOUNTING STANDARDS
a) Effective December 15, 1995, Statement of Financial
Accounting Standards No. 123 ("SFAS-123") "Accounting for
Stock-based Compensation" was adopted for United States GAAP
purposes. SFAS-123 enables a company to elect to adopt a
fair value methodology for accounting for stock based
compensation. The Company has determined that the fair value
of stock options is similar to the issue price at the time of
granting. The Company does not expect to elect to adopt the
fair value methodology, although the pro forma results of
operations and earnings per share determined as if the fair
value methodology had been applied will be disclosed as
required under SFAS-123 in future years.
b) In March, 1995, Statement of Financial Accounting
Standards No. 121 (SFAS-121) "Accounting for Impairment of
long-lived assets and for long-lived assets to be disposed
of" was issued. Certain long-lived assets held by the
Company must be reviewed for impairment whenever events or
changes in circumstances indicate the carrying amount of an
asset may not be recoverable. Accordingly, the impairment
loss is recognized in the period it is determined. The
Company has adopted these standards. There was no material
effect on its financial position or results of operations of
the Company from its adoption.
<PAGE>
BALSAM VENTURES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Stated in U.S. Dollars)
4. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems
use two digits rather than four to identify a year. Date-
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using year
2000 dates is processed. In addition, similar problems may
arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the
Year 2000 Issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on
operations and financial reporting may range from minor errors
to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue
affecting the entity, including those related to the efforts
of customers, suppliers, or other third parties, will be fully
resolved.
<PAGE>
-------------------------------------
Morgan & Company
-------------------------------------
Chartered Accountants
-------------------------------------
P.O. Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
-------------------------------------
CONSENT OF MORGAN & COMPANY, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions
"Independent Public Accountants", and to the use of our report
dated February 2, 2000 in the Registration Statement (Form SB-2)
and the related Prospectus of Balsam Ventures, Inc.
Vancouver, B.C. /s/ Morgan & Company
March 20, 2000 Chartered Accountants
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no changes in or disagreements with our accountants since
our incorporation in August, 1999.
AVAILABLE INFORMATION
We have filed a registration statement on Form SB-2 under the Act with
the Securities and Exchange Commission with respect to the shares of
our common stock offered by this prospectus. This prospectus is filed
as a part of the registration statement and does not contain all of the
information contained in the registration statement and exhibits and
reference is hereby made to such omitted information. Statements made
in this registration statement are summaries of the terms of these
referenced contracts, agreements or documents and are not necessarily
complete. Reference is made to each exhibit for a more complete
description of the matters involved and these statements shall be
deemed qualified in their entirety by the reference. You may inspect
the registration statement and exhibits and schedules filed with the
Securities and Exchange Commission at the Securities and Exchange
Commission's principle office in Washington, D.C. Copies of all or any
part of the registration statement may be obtained from the Public
Reference Section of the Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Securities and Exchange
Commission also maintains a web site (http://www.sec.gov) that contains
reports, proxy statements and information regarding registrants that
file electronically with the Commission. For further information
pertaining to us and our common stock offered by this prospectus,
reference is made to the registration statement.
25
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada
Revised Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it
is specifically limited by a company's articles of incorporation which
is not the case with our articles of incorporation. Excepted from that
immunity are:
(i) a willful failure to deal fairly with the company or its
shareholders in connection with a matter in which the
director has a material conflict of interest;
(ii) a violation of criminal law (unless the director had
reasonable cause to believe that his or her conduct was
lawful or no reasonable cause to believe that his or her
conduct was unlawful);
(iii) a transaction from which the director derived an improper
personal profit; and
(iv) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to
the fullest extent not prohibited by Nevada law; provided, however,
that we may modify the extent of such indemnification by individual
contracts with our directors and officers; and, provided, further, that
we shall not be required to indemnify any director or officer in
connection with any proceeding (or part thereof) initiated by such
person unless:
(i) such indemnification is expressly required to be made by law;
(ii) the proceeding was authorized by our Board of Directors;
(iii) such indemnification is provided by us, in our sole
discretion, pursuant to the powers vested us under Nevada
law; or
(iv) such indemnification is required to be made pursuant to the
bylaws.
Our bylaws provide that we will advance to any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or
was a director or officer, of the Company, or is or was serving at the
request of the Company as a director or executive officer of another
company, partnership, joint venture, trust or other enterprise, prior
to the final disposition of the proceeding, promptly following request
therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by or on
behalf of such person to repay said amounts if it should be determined
ultimately that such person is not entitled to be indemnified under our
bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer of
the Company --except by reason of the fact that such officer is or was
a director of the Company in which event this paragraph shall not
apply-- in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and
promptly made: (i) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to the proceeding;
or (ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by
26
<PAGE>
independent legal
counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made
demonstrate clearly and convincingly that such person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Company.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of the offering are as follows:
Securities and Exchange Commission registration fee(*) $270
Federal Taxes $NIL
State Taxes and Fees $NIL
Transfer Agent Fees $500
Accounting fees and expenses $2,000
Legal fees and expenses $20,000
Blue Sky fees and expenses $NIL
Miscellaneous $NIL
----------
Total $22,770
==========
- -------------------------------------------------------------------------
(*) All amounts are estimates other than the Commission's registration
fee.
We will pay all expenses of the offering listed above. No portion of
these expenses will be borne by the selling shareholders
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
We issued 5,000,000 shares of our common stock on September 24, 1999 at
a price of $0.001 per share to Mr. Robert S. Smith. Mr. Smith is our
President, Secretary and Treasurer and a director of
the Company. These shares were issued pursuant to Section 4(2) of the
Securities Act of 1933 are "restricted" shares, as defined in the Act.
We completed an offering of 5,000,000 shares of our common stock to
twelve (12) purchasers at a price of $0.01 per share on October 29,
1999. We completed the offering pursuant to Regulation S of the Act.
Each purchaser represented to the Company that he was a "Non-U.S.
Person" as defined in the regulation. We did not engage in a
distribution of this offering in the United States. Each purchaser
represented his intention to acquire the securities for investment only
and not with a view toward distribution. Appropriate legends were
affixed to the stock certificate issued to each purchaser in accordance
with Regulation S. Each investor was given adequate access to
sufficient information about us to make an informed investment
decision. None of the securities were sold through an underwriter and
accordingly, there were no underwriting discounts or commissions
involved. No registration rights were granted to any of the
purchasers.
We completed the issue of 100,000 common shares to a total of fifteen
(15) purchasers at a price of $0.20 per share pursuant to Rule 504 of
Regulation D Act on December 24, 1999. Each purchaser represented
their intention to acquire the securities for investment only and not
with a view toward distribution. Appropriate legends were affixed to
the stock certificates issued in accordance with Regulation D. All
purchasers were given adequate access to sufficient information about
us to make an informed investment decision. None of the securities
were sold through an underwriter and
27
<PAGE>
accordingly, there were no
underwriting discounts or commissions involved. No registration rights
were granted to any of the purchasers.
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------------ --------------------
3.1 Articles of Incorporation
3.2 Amended By-Laws
4.1 Share Certificate
5.1 Opinion of Cane & Company, LLC, with consent to use
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(A) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement to:
(1) include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(2) reflect in the prospectus any facts or events arising
after the effective date of this registration statement,
or most recent post-effective amendment, which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement; and
(3) include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in the registration statement.
(B) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(C) To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which
remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons
pursuant to the provisions above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities, other than the payment by us
of expenses incurred or paid by one of our directors, officers, or
controlling persons in the successful defense of any action, suit or
proceeding, is asserted by one of our directors, officers, or
controlling persons in connection with the
28
<PAGE>
securities being registered,
we 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 is against
public policy as expressed in the Securities Act, and we will be
governed by the final adjudication of such issue.
29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1933,
the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing Form SB-2 and authorized
this registration statement to be signed on its behalf by the
undersigned in the City of Vancouver, Province of British Columbia on
March 20, 2000.
BALSAM VENTURES, INC.
/s/ Robert S. Smith
By: _________________________
Robert S. Smith, President
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints Robert S. Smith, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all pre- or post-effective amendments to
this Registration statement, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite or necessary to be done
in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any one of them, or their or his
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons
in the capacities indicated on March 20, 2000.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ Robert S. Smith President March 20, 2000
- --------------------- (Principal Executive Officer)
Robert S. Smith Secretary, Treasurer and Director
30
<PAGE>
FILED #C2034199 Articles of Incorporation
AUG 17 1999 (PURSUANT TO NRS 78)
IN THE OFFICE OF STATE OF NEVADA
DEAN HELLER Secretary of State
DEAN HELLER SECRETARY OF STATE
(For filing office use) (For filing office use)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
IMPORTANT: Read instructions on reverse side before completing this form.
TYPE OR PRINT (BLACK INK ONLY)
1. NAME OF CORPORATION: Balsam Ventures, Inc.
2. RESIDENT AGENT: (designated resident agent and his STREET
ADDRESS in Nevada where process may be served)
Name of Resident Agent: Michael A. Cane
Street Address: 101 Convention Center Dr., Suite 1200
Las Vegas, NV 89109
-------------------------------------------
Street No. Street Name City Zip
3. SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value: 100 Million Par value: $ .001
No. without par value: _________
4. GOVERNING BOARD: shall be styled as (check one):
X Directors ______ Trustees
The FIRST BOARD OF DIRECTORS shall consist of 1 member(s) and
the names and addresses are as follows:
Michael Cane 101 Convention Ctr., Ste 1200, Las Vegas, NV 89109
- -------------- --------------------------------------------------
Name Address City/State/Zip
- -------------- --------------------------------------------------
Name Address City/State/Zip
5. PURPOSE: (optional) : The purpose of the corporation shall be:
6. OTHER MATTERS: This form includes the minimal statutory
requirements to incorporate under NRS 78. You may attach
additional information pursuant to NRS 78.037 or any other
information you deem appropriate. If any of the additional
information is contradictory to this form it cannot be filed and
will be returned to you for correction. Number of pages attached
0 .
7. SIGNATURES OF INCORPORATORS: The names and addresses of each of
the incorporators signing the articles.
Michael Cane
____________________________________
Name (print) Name (print)
101 Convention Ctr., Ste #1200, Las Vegas, NV 89109
___________________________________________
Address City/State/Zip
Address City/State/Zip
___________________________________________
/s/ Michael Cane
___________________________________________
Signature Signature
State of Nevada County of Clark
State of _______________ County of _______________________
This instrument was acknowledged before me on
This instrument was acknowledged before me on
August 17, , 1999, by
__________________________________, 19___, by
Michael Cane
___________________________________________
Name of Person
Name of Person
as incorporator of Balsam Ventures, Inc.
as incorporator of
___________________________________________
/s/ Ann Marie Gibson
___________________________________________
Notary Public Signature Notary Public Signature
affix notary stamp or seal) (affix notary stamp or seal)
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT:
I, Michael A. Cane hereby accept appointment as Resident Agent
for the above named corporation.
/s/ Michael A. Cane
___________________________________________ 08-17-99
Signature of Resident Agent Date
ANN MARIE GIBSON
NOTARY PUBLIC - NEVADA
No. 99-40969-1
My appt. exp. Nov. 17, 2002
<PAGE>
BYLAWS
OF
BALSAM VENTURES, INC.
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Nevada shall be in the City of Las
Vegas, State of Nevada.
Section 2. Other Offices. The corporation shall also have
and maintain an office or principal place of business at such place
as may be fixed by the Board of Directors, and may also have
offices at such other places, both within and without the State of
Nevada as the Board of Directors may from time to time determine or
the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist
of a die bearing the name of the corporation and the inscription,
"Corporate Seal-Nevada." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Nevada, as may be designated from time to time
by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to
Section 2 hereof.
Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the
corporation, for the purpose of election of directors and for such
other business as may lawfully come before it, shall be held on
such date and at such time as may be designated from time to time
by the Board of Directors.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought
before the meeting. To be properly brought before an annual
meeting, business must be: (A) specified in the notice of meeting
(or any supplement thereto) given
<PAGE>
by or at the direction of the
Board of Directors, (B) otherwise properly brought before the
meeting by or at the direction of the Board of Directors, or (C)
otherwise properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not later than
the close of business on the sixtieth (60th) day nor earlier than
the close of business on the ninetieth (90th) day prior to the
first anniversary of the preceding year's annual meeting; provided,
however, that in the event that no annual meeting was held in the
previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time
of the previous year's proxy statement, notice by the stockholder
to be timely must be so received not earlier than the close of
business on the ninetieth (90th) day prior to such annual meeting
and not later than the close of business on the later of the
sixtieth (60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first
made by the corporation fewer than seventy (70) days prior to the
date of such annual meeting, the close of business on the tenth
(10th) day following the day on which public announcement of the
date of such meeting is first made by the corporation. A
stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they
appear on the corporation's books, of the stockholder proposing
such business, (iii) the class and number of shares of the
corporation which are beneficially owned by the stockholder, (iv)
any material interest of the stockholder in such business and (v)
any other information that is required to be provided by the
stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), in his capacity
as a proponent to a stockholder proposal. Notwithstanding the
foregoing, in order to include information with respect to a
stockholder proposal in the proxy statement and form of proxy for a
stockholder's meeting, stockholders must provide notice as required
by the regulations promulgated under the 1934 Act. Notwithstanding
anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b). The chairman of the
annual meeting shall, if the facts warrant, determine and declare
at the meeting that business was not properly brought before the
meeting and in accordance with the provisions of this paragraph
(b), and, if he should so determine, he shall so declare at the
meeting that any such business not properly brought before the
meeting shall not be transacted.
(c) Only persons who are confirmed in accordance with the
procedures set forth in this paragraph (c) shall be eligible for
election as directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors or by
any stockholder of the corporation entitled to vote in the election
of directors at the meeting who complies with the notice procedures
set forth in this paragraph (c). Such nominations, other than
those made by or at the direction of the Board of Directors, shall
be made pursuant to timely notice in writing to the Secretary of
the corporation in accordance with the provisions of paragraph (b)
of this Section 5. Such stockholder's notice shall set forth (i)
as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director: (A) the name,
age, business address and residence address of such person, (B) the
principal occupation or employment of such person, (c) the class
and number of shares of the
2
<PAGE>
corporation which are beneficially owned by such person,
(D) a description of all arrangements or understandings between
the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to
which the nominations are to be made by the stockholder, and (E)
any other information relating to such person that is required to
be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A
under the 1934 Act (including without limitation such person's
written consent to being named in the proxy statement, if any, as a
nominee and to serving as a director if elected); and (ii) as to
such stockholder giving notice, the information required to be
provided pursuant to paragraph (b) of this Section 5. At the
request of the Board of Directors, any person nominated by a
stockholder for election as a director shall furnish to the
Secretary of the corporation that information required to be set
forth in the stockholder's notice of nomination which pertains to
the nominee. No person shall be eligible for election as a
director of the corporation unless nominated in accordance with the
procedures set forth in this paragraph (c). The chairman of the
meeting shall, if the facts warrant, determine and declare at the
meeting that a nomination was not made in accordance with the
procedures prescribed by these Bylaws, and if he should so
determine, he shall so declare at the meeting, and the defective
nomination shall be disregarded.
(d) For purposes of this Section 5, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service
or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation
may be called, for any purpose or purposes, by (i) the Chairman of
the Board of Directors, (ii) the Chief Executive Officer, or (iii)
the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or
not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the
Board of Directors for adoption), and shall be held at such place,
on such date, and at such time as the Board of Directors, shall
determine.
(b) If a special meeting is called by any person or persons
other than the Board of Directors, the request shall be in writing,
specifying the general nature of the business proposed to be
transacted, and shall be delivered personally or sent by registered
mail or by telegraphic or other facsimile transmission to the
Chairman of the Board of Directors, the Chief Executive Officer, or
the Secretary of the corporation. No business may be transacted at
such special meeting otherwise than specified in such notice. The
Board of Directors shall determine the time and place of such
special meeting, which shall be held not less than thirty-five (35)
nor more than one hundred twenty (120) days after the date of the
receipt of the request. Upon determination of the time and place
of the meeting, the officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in
accordance with the provisions of Section 7 of these Bylaws. If
the notice is not given within sixty (60) days after the receipt of
the request, the person or persons requesting the meeting may set
the time and place of the meeting and give the notice. Nothing
contained in this paragraph (b) shall be construed as limiting,
fixing, or affecting the time when a meeting of stockholders called
by action of the Board of Directors may be held.
3
<PAGE>
Section 7. Notice of Meetings. Except as otherwise provided
by law or the Articles of Incorporation, written notice of each
meeting of stockholders shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting, such notice to
specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of
stockholders may be waived in writing, signed by the person
entitled to notice thereof, either before or after such meeting,
and will be waived by any stockholder by his attendance thereat in
person or by proxy, except when the stockholder attends a meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened. Any stockholder so waiving notice
of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given.
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Articles of
Incorporation, or by these Bylaws, the presence, in person or by
proxy duly authorized, of the holder or holders of not less than
one percent (1%) of the outstanding shares of stock entitled to
vote shall constitute a quorum for the transaction of business. In
the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting
or by vote of the holders of a majority of the shares represented
thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than a quorum. Except as otherwise provided by law,
the Articles of Incorporation or these Bylaws, all action taken by
the holders of a majority of the votes cast, excluding abstentions,
at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that directors
shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Where a separate vote by a
class or classes or series is required, except where otherwise
provided by the statute or by the Articles of Incorporation or
these Bylaws, a majority of the outstanding shares of such class or
classes or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that
vote on that matter and, except where otherwise provided by the
statute or by the Articles of Incorporation or these Bylaws, the
affirmative vote of the majority (plurality, in the case of the
election of directors) of the votes cast, including abstentions, by
the holders of shares of such class or classes or series shall be
the act of such class or classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings. Any
meeting of stockholders, whether annual or special, may be
adjourned from time to time either by the chairman of the meeting
or by the vote of a majority of the shares casting votes, excluding
abstentions. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting, the corporation may transact
any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days or
if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
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Section 10. Voting Rights. For the purpose of
determining those stockholders entitled to vote at any meeting of
the stockholders, except as otherwise provided by law, only persons
in whose names shares stand on the stock records of the corporation
on the record date, as provided in Section 12 of these Bylaws,
shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote shall have the right to do so either in
person or by an agent or agents authorized by a proxy granted in
accordance with Nevada law. An agent so appointed need not be a
stockholder. No proxy shall be voted after three (3) years from
its date of creation unless the proxy provides for a longer period.
Section 11. Joint Owners of Stock. If shares or other
securities having voting power stand of record in the names of two
(2) or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety, or
otherwise, or if two (2) or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to
voting shall have the following effect: (a) if only one (1) votes,
his act binds all; (b) if more than one (1) votes, the act of the
majority so voting binds all; (c) if more than one (1) votes, but
the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the
Nevada Court of Chancery for relief as provided in the General
Corporation Law of Nevada, Section 217(b). If the instrument filed
with the Secretary shows that any such tenancy is held in unequal
interests, a majority or even-split for the purpose of subsection
(c) shall be a majority or even-split in interest.
Section 12. List of Stockholders. The Secretary shall
prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote
at said meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered in
the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not specified, at
the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole
time thereof and may be inspected by any stockholder who is
present.
Section 13. Action Without Meeting. No action shall be
taken by the stockholders except at an annual or special meeting of
stockholders called in accordance with these Bylaws, or by the
written consent of all stockholders.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the
Board of Directors, or, if a Chairman has not been appointed or is
absent, the President, or, if the President is absent, a chairman
of the meeting chosen by a majority in interest of the stockholders
entitled to vote, present in person or by proxy, shall act as
chairman. The Secretary, or, in his absence, an Assistant
Secretary directed to do so by the President, shall act as
secretary of the meeting.
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(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of
meetings of stockholders as it shall deem necessary, appropriate or
convenient. Subject to such rules and regulations of the Board of
Directors, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the
meeting, including, without limitation, establishing an agenda or
order of business for the meeting, rules and procedures for
maintaining order at the meeting and the safety of those present,
limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted
proxies and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the
commencement thereof, limitations on the time allotted to questions
or comments by participants and regulation of the opening and
closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of
Directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with rules of
parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Qualification. The authorized
number of directors of the corporation shall be not less than one
(1) nor more than twelve (12) as fixed from time to time by
resolution of the Board of Directors; provided that no decrease in
the number of directors shall shorten the term of any incumbent
directors. Directors need not be stockholders unless so required
by the Articles of Incorporation. If for any cause, the directors
shall not have been elected at an annual meeting, they may be
elected as soon thereafter as convenient at a special meeting of
the stockholders called for that purpose in the manner provided in
these Bylaws.
Section 16. Powers. The powers of the corporation shall
be exercised, its business conducted and its property controlled by
the Board of Directors, except as may be otherwise provided by
statute or by the Articles of Incorporation.
Section 17. Election and Term of Office of Directors.
Members of the Board of Directors shall hold office for the terms
specified in the Articles of Incorporation, as it may be amended
from time to time, and until their successors have been elected as
provided in the Articles of Incorporation.
Section 18. Vacancies. Unless otherwise provided in the
Articles of Incorporation, any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other causes and any newly created directorships resulting from any
increase in the number of directors, shall unless the Board of
Directors determines by resolution that any such vacancies or newly
created directorships shall be filled by stockholder vote, be
filled only by the affirmative vote of a majority of the directors
then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of
the director for which the vacancy was created or occurred and
until such director's successor shall have been elected and
qualified. A vacancy in the Board of Directors
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shall be deemed to exist under this Bylaw in the case of the death,
removal or resignation of any director.
Section 19. Resignation. Any director may resign at any
time by delivering his written resignation to the Secretary, such
resignation to specify whether it will be effective at a particular
time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed
effective at the pleasure of the Board of Directors. When one or
more directors shall resign from the Board of Directors, effective
at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each
director so chosen shall hold office for the unexpired portion of
the term of the director whose place shall be vacated and until his
successor shall have been duly elected and qualified.
Section 20. Removal. Subject to the Articles of
Incorporation, any director may be removed by:
(a) the affirmative vote of the holders of a majority of the
outstanding shares of the Corporation then entitled to vote, with
or without cause; or
(b) the affirmative and unanimous vote of a majority of the
directors of the Corporation, with the exception of the vote of the
directors to be removed, with or without cause.
Section 21. Meetings.
(a) Annual Meetings. The annual meeting of the Board of
Directors shall be held immediately after the annual meeting of
stockholders and at the place where such meeting is held. No
notice of an annual meeting of the Board of Directors shall be
necessary and such meeting shall be held for the purpose of
electing officers and transacting such other business as may
lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise
provided, regular meetings of the Board of Directors shall be held
in the office of the corporation required to be maintained pursuant
to Section 2 hereof. Unless otherwise restricted by the Articles
of Incorporation, regular meetings of the Board of Directors may
also be held at any place within or without the state of Nevada
which has been designated by resolution of the Board of Directors
or the written consent of all directors.
(c) Special Meetings. Unless otherwise restricted by the
Articles of Incorporation, special meetings of the Board of
Directors may be held at any time and place within or without the
State of Nevada whenever called by the Chairman of the Board, the
President or any two of the directors.
(d) Telephone Meetings. Any member of the Board of
Directors, or of any committee thereof, may participate in a
meeting by means of conference telephone or similar communications
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equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by such
means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the time and place of all
special meetings of the Board of Directors shall be orally or in
writing, by telephone, facsimile, telegraph or telex, during normal
business hours, at least twenty-four (24) hours before the date and
time of the meeting, or sent in writing to each director by first
class mail, charges prepaid, at least three (3) days before the
date of the meeting. Notice of any meeting may be waived in
writing at any time before or after the meeting and will be waived
by any director by attendance thereat, except when the director
attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
(f) Waiver of Notice. The transaction of all business at any
meeting of the Board of Directors, or any committee thereof,
however called or noticed, or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if
a quorum be present and if, either before or after the meeting,
each of the directors not present shall sign a written waiver of
notice. All such waivers shall be filed with the corporate records
or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Articles of Incorporation requires a greater
number and except with respect to indemnification questions arising
under Section 43 hereof, for which a quorum shall be one-third of
the exact number of directors fixed from time to time in accordance
with the Articles of Incorporation, a quorum of the Board of
Directors shall consist of a majority of the exact number of
directors fixed from time to time by the Board of Directors in
accordance with the Articles of Incorporation provided, however, at
any meeting whether a quorum be present or otherwise, a majority of
the directors present may adjourn from time to time until the time
fixed for the next regular meeting of the Board of Directors,
without notice other than by announcement at the meeting.
(b) At each meeting of the Board of Directors at which a
quorum is present, all questions and business shall be determined
by the affirmative vote of a majority of the directors present,
unless a different vote be required by law, the Articles of
Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise
restricted by the Articles of Incorporation or these Bylaws, any
action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without
a meeting, if all members of the Board of Directors or committee,
as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of
Directors or committee.
Section 24. Fees and Compensation. Directors shall be
entitled to such compensation for their services as may be approved
by the Board of Directors, including, if so approved, by resolution
of the Board of Directors, a fixed sum and expenses of attendance,
if any, for attendance at each regular or special meeting of the
Board of Directors and at any meeting of a committee of
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the Board of Directors. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other
capacity as an officer, agent, employee, or otherwise and receiving
compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may by
resolution passed by a majority of the whole Board of Directors
appoint an Executive Committee to consist of one (1) or more
members of the Board of Directors. The Executive Committee, to the
extent permitted by law and provided in the resolution of the Board
of Directors shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the corporation, including without
limitation the power or authority to declare a dividend, to
authorize the issuance of stock and to adopt a certificate of
ownership and merger, and may authorize the seal of the corporation
to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to
amending the Articles of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any
other class or classes or any other series of the same or any other
class or classes of stock of the corporation or fix the number of
shares of any series of stock or authorize the increase or decrease
of the shares of any series), adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property
and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the
bylaws of the corporation.
(b) Other Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors,
from time to time appoint such other committees as may be permitted
by law. Such other committees appointed by the Board of Directors
shall consist of one (1) or more members of the Board of Directors
and shall have such powers and perform such duties as may be
prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers
denied to the Executive Committee in these Bylaws.
(c) Term. Each member of a committee of the Board of
Directors shall serve a term on the committee coexistent with such
member's term on the Board of Directors. The Board of Directors,
subject to the provisions of subsections (a) or (b) of this Bylaw
may at any time increase or decrease the number of members of a
committee or terminate the existence of a committee. The
membership of a committee member shall terminate on the date of his
death or voluntary resignation from the committee or from the Board
of Directors. The Board of Directors may at any time for any
reason remove any individual committee member and the Board of
Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the
committee. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee,
and, in addition, in the absence or disqualification of any member
of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not
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he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place
of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other
committee appointed pursuant to this Section 25 shall be held at
such times and places as are determined by the Board of Directors,
or by any such committee, and when notice thereof has been given to
each member of such committee, no further notice of such regular
meetings need be given thereafter. Special meetings of any such
committee may be held at any place which has been determined from
time to time by such committee, and may be called by any director
who is a member of such committee, upon written notice to the
members of such committee of the time and place of such special
meeting given in the manner provided for the giving of written
notice to members of the Board of Directors of the time and place
of special meetings of the Board of Directors. Notice of any
special meeting of any committee may be waived in writing at any
time before or after the meeting and will be waived by any director
by attendance thereat, except when the director attends such
special meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A majority
of the authorized number of members of any such committee shall
constitute a quorum for the transaction of business, and the act of
a majority of those present at any meeting at which a quorum is
present shall be the act of such committee.
Section 26. Organization. At every meeting of the
directors, the Chairman of the Board of Directors, or, if a
Chairman has not been appointed or is absent, the President, or if
the President is absent, the most senior Vice President, or, in the
absence of any such officer, a chairman of the meeting chosen by a
majority of the directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the
corporation shall include, if and when designated by the Board of
Directors, the Chairman of the Board of Directors, the Chief
Executive Officer, the President, one or more Vice Presidents, the
Secretary, the Chief Financial Officer, the Treasurer, the
Controller, all of whom shall be elected at the annual
organizational meeting of the Board of Direction. The Board of
Directors may also appoint one or more Assistant Secretaries,
Assistant Treasurers, Assistant Controllers and such other officers
and agents with such powers and duties as it shall deem necessary.
The Board of Directors may assign such additional titles to one or
more of the officers as it shall deem appropriate. Any one person
may hold any number of offices of the corporation at any one time
unless specifically prohibited therefrom by law. The salaries and
other compensation of the officers of the corporation shall be
fixed by or in the manner designated by the Board of Directors.
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Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure
of the Board of Directors and until their successors shall have
been duly elected and qualified, unless sooner removed. Any
officer elected or appointed by the Board of Directors may be
removed at any time by the Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The
Chairman of the Board of Directors, when present, shall preside at
all meetings of the stockholders and the Board of Directors. The
Chairman of the Board of Directors shall perform other duties
commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time. If there is no President, then the
Chairman of the Board of Directors shall also serve as the Chief
Executive Officer of the corporation and shall have the powers and
duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all
meetings of the stockholders and at all meetings of the Board of
Directors, unless the Chairman of the Board of Directors has been
appointed and is present. Unless some other officer has been
elected Chief Executive Officer of the corporation, the President
shall be the chief executive officer of the corporation and shall,
subject to the control of the Board of Directors, have general
supervision, direction and control of the business and officers of
the corporation. The President shall perform other duties commonly
incident to his office and shall also perform such other duties and
have such other powers as the Board of Directors shall designate
from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may
assume and perform the duties of the President in the absence or
disability of the President or whenever the office of President is
vacant. The Vice Presidents shall perform other duties commonly
incident to their office and shall also perform such other duties
and have such other powers as the Board of Directors or the
President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all
meetings of the stockholders and of the Board of Directors and
shall record all acts and proceedings thereof in the minute book of
the corporation. The Secretary shall give notice in conformity
with these Bylaws of all meetings of the stockholders and of all
meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties
given him in these Bylaws and other duties commonly incident to his
office and shall also perform such other duties and have such other
powers as the Board of Directors shall designate from time to time.
The President may direct any Assistant Secretary to assume and
perform the duties of the Secretary in the absence or disability of
the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such
other duties and have such other powers as the Board of Directors
or the President shall designate from time to time.
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(f) Duties of Chief Financial Officer. The Chief Financial
Officer shall keep or cause to be kept the books of account of the
corporation in a thorough and proper manner and shall render
statements of the financial affairs of the corporation in such form
and as often as required by the Board of Directors or the
President. The Chief Financial Officer, subject to the order of
the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Chief Financial Officer shall
perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time.
The President may direct the Treasurer or any Assistant Treasurer,
or the Controller or any Assistant Controller to assume and perform
the duties of the Chief Financial Officer in the absence or
disability of the Chief Financial Officer, and each Treasurer and
Assistant Treasurer and each Controller and Assistant Controller
shall perform other duties commonly incident to his office and
shall also perform such other duties and have such other powers as
the Board of Directors or the President shall designate from time
to time.
Section 29. Delegation of Authority. The Board of
Directors may from time to time delegate the powers or duties of
any officer to any other officer or agent, notwithstanding any
provision hereof.
Section 30. Resignations. Any officer may resign at any
time by giving written notice to the Board of Directors or to the
President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such
notice is given, unless a later time is specified therein, in which
event the resignation shall become effective at such later time.
Unless otherwise specified in such notice, the acceptance of any
such resignation shall not be necessary to make it effective. Any
resignation shall be without prejudice to the rights, if any, of
the corporation under any contract with the resigning officer.
Section 31. Removal. Any officer may be removed from
office at any time, either with or without cause, by the
affirmative vote of a majority of the directors in office at the
time, or by the unanimous written consent of the directors in
office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of
Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instrument. The Board
of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or
persons, to execute on behalf of the corporation any corporate
instrument or document, or to sign on behalf of the corporation the
corporate name without limitation, or to enter into contracts on
behalf of the corporation, except where otherwise provided by law
or these Bylaws, and such execution or signature shall be binding
upon the corporation.
Unless otherwise specifically determined by the Board of
Directors or otherwise required by law, promissory notes, deeds of
trust, mortgages and other evidences of indebtedness of the
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corporation, and other corporate instruments or documents requiring
the corporate seal, and certificates of shares of stock owned by
the corporation, shall be executed, signed or endorsed by the
Chairman of the Board of Directors, or the President or any Vice
President, and by the Secretary or Treasurer or any Assistant
Secretary or Assistant Treasurer. All other instruments and
documents requiting the corporate signature, but not requiring the
corporate seal, may be executed as aforesaid or in such other
manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on
funds to the credit of the corporation or in special accounts of
the corporation shall be signed by such person .or persons as the
Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent or
employee shall have any power or authority to bind the corporation
by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the
Corporation. All stock and other securities of other corporations
owned or held by the corporation for itself, or for other parties
in any capacity, shall be voted, and all proxies with respect
thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors, the Chief
Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be in
such form as is consistent with the Articles of Incorporation and
applicable law. Every holder of stock in the corporation shall be
entitled to have a certificate signed by or in the name of the
corporation by the Chairman of the Board of Directors, or the
President or any Vice President and by the Treasurer or Assistant
Treasurer or the Secretary or Assistant Secretary, certifying the
number of shares owned by him in the corporation. Any or all of
the signatures on the certificate may be facsimiles. In case any
officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of
issue. Each certificate shall state upon the face or back thereof,
in full or in summary, all of the powers, designations,
preferences, and rights, and the limitations or restrictions of the
shares authorized to be issued or shall, except as otherwise
required by law, set forth on the face or back a statement that the
corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative,
participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a
reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof a
written notice containing the information required to be
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set forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a statement
that the corporation will furnish without charge to each stockholder who
so requests the powers, designations, preferences and relative
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Except as
otherwise expressly provided by law, the rights and obligations of
the holders of certificates representing stock of the same class
and series shall be identical.
Section 35. Lost Certificates. A new certificate or
certificates shall be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have
been lost, stolen, or destroyed, upon the making of an affidavit of
that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or
certificates, the owner of such lost, stolen, or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require or to give
the corporation a surety bond in such form and amount as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed.
Section 36. Transfers.
(a) Transfers of record of shares of stock of the corporation
shall be made only upon its books by the holders thereof, in person
or by attorney duly authorized, and upon the surrender of a
properly endorsed certificate or certificates for a like number of
shares.
(b) The corporation shall have power to enter into and
perform any agreement with any number of stockholders of any one or
more classes of stock of the corporation to restrict the transfer
of shares of stock of the corporation of any one or more classes
owned by such stockholders in any manner not prohibited by the
General Corporation Law of Nevada.
Section 37. Fixing Record Dates.
(a) In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may
fix, in advance, a record date, which record date shall not precede
the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not
be more than sixty (60) nor less than ten (10) days before the date
of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose
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of any other lawful action, the Board of Directors may fix, in advance,
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date
shall be not more than sixty (60) days prior to such action. If no
record date is filed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating
thereto.
Section 38. Registered Stockholders. The corporation shall
be entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on
the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws
of Nevada.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds,
debentures and other corporate securities of the corporation, other
than stock certificates (covered in Section 34), may be signed by
the Chairman of the Board of Directors, the President or any Vice
President, or such other person as may be authorized by the Board
of Directors, and the corporate seal impressed thereon or a
facsimile of such seal imprinted thereon and attested by the
signature of the Secretary or an Assistant Secretary, or the Chief
Financial Officer or Treasurer or an Assistant Treasurer; provided,
however, that where any such bond, debenture or other corporate
security shall be authenticated by the manual signature, or where
permissible facsimile signature, of a trustee under an indenture
pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and
attesting the corporate seal on such bond, debenture or other
corporate security may be the imprinted facsimile of the signatures
of such persons. Interest coupons appertaining to any such bond,
debenture or other corporate security, authenticated by a trustee
as aforesaid, shall be signed by the Treasurer or an Assistant
Treasurer of the corporation or such other person as may be
authorized by the Board of Directors, or bear imprinted thereon the
facsimile signature of such person. In case any officer who shall
have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on
any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or
attested shall have been delivered, such bond, debenture or other
corporate security nevertheless may be adopted by the corporation
and issued and delivered as though the person who signed the same
or whose facsimile signature shall have been used thereon had not
ceased to be such officer of the corporation.
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ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. Dividends upon the
capital stock of the corporation, subject to the provisions of the
Articles of Incorporation, if any, may be declared by the Board of
Directors pursuant to law at any regular or special meeting.
Dividends may be paid in cash, in property, or in shares of the
capital stock, subject to the provisions of the Articles of
Incorporation.
Section 41. Dividend Reserve. Before payment of any
dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the Board
of Directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property
of the corporation, or for such other purpose as the Board of
Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any
such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers,
Other Officers, Employees and Other Agents.
(a) Directors Officers. The corporation shall indemnify its
directors and officers to the fullest extent not prohibited by the
Nevada General Corporation Law; provided, however, that the
corporation may modify the extent of such indemnification by
individual contracts with its directors and officers; and,
provided, further, that the corporation shall not be required to
indemnify any director or officer in connection with any proceeding
(or part thereof) initiated by such person unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the
corporation, (iii) such indemnification is provided by the
corporation, in its sole discretion, pursuant to the powers vested
in the corporation under the Nevada General Corporation Law or (iv)
such indemnification is required to be made under subsection (d).
(b) Employees and Other Agents. The corporation shall have
power to indemnify its employees and other agents as set forth in
the Nevada General Corporation Law.
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(c) Expense. The corporation shall advance to any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director or officer, of the
corporation, or is or was serving at the request of the corporation
as a director or executive officer of another corporation,
partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request
therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by
or on behalf of such person to repay said mounts if it should be
determined ultimately that such person is not entitled to be
indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined
pursuant to paragraph (e) of this Bylaw, no advance shall be made
by the corporation to an officer of the corporation (except by
reason of the fact that such officer is or was a director of the
corporation in which event this paragraph shall not apply) in any
action, suit or proceeding, whether civil, criminal, administrative
or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or
(ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, that the facts known to the decision-
making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in
a manner that such person did not believe to be in or not opposed
to the best interests of the corporation.
(d) Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances to
directors and officers under this Bylaw shall be deemed to be
contractual rights and be effective to the same extent and as if
provided for in a contract between the corporation and the director
or officer. Any right to indemnification or advances granted by
this Bylaw to a director or officer shall be enforceable by or on
behalf of the person holding such right in any court of competent
jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim
is made within ninety (90) days of request therefor. The claimant
in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his
claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such
action that the claimant has not met the standard of conduct that
make it permissible under the Nevada General Corporation Law for
the corporation to indemnify the claimant for the amount claimed.
In connection with any claim by an officer of the corporation
(except in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such
officer is or was a director of the corporation) for advances, the
corporation shall be entitled to raise a defense as to any such
action clear and convincing evidence that such person acted in bad
faith or in a manner that such person did not believe to be in or
not opposed in the best interests of the corporation, or with
respect to any criminal action or proceeding that such person acted
without reasonable cause to believe that his conduct was lawful.
Neither the failure of the corporation (including its
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Board of Directors, independent legal counsel or its stockholders) to
have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in
the Nevada General Corporation Law, nor an actual determination by
the corporation (including its Board of Directors, independent
legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the
action or create a presumption that claimant has not met the
applicable standard of conduct. In any suit brought by a director
or officer to enforce a right to indemnification or to an
advancement of expenses hereunder, the burden of proving that the
director or officer is not entitled to be indemnified, or to such
advancement of expenses, under this Article XI or otherwise shall
be on the corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any
person by this Bylaw shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Bylaws, agreement, vote
of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited
by the Nevada General Corporation Law.
(f) Survival of Rights. The rights conferred on any person
by this Bylaw shall continue as to a person who has ceased to be a
director, officer, employee or other agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person.
(g) Insurance. To the fullest extent permitted by the Nevada
General Corporation Law, the corporation, upon approval by the
Board of Directors, may purchase insurance on behalf of any person
required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw
shall only be prospective and shall not affect the rights under
this Bylaw in effect at the time of the alleged occurrence of any
action or omission to act that is the cause of any proceeding
against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall
be invalidated on any ground by any court of competent
jurisdiction, then the corporation shall nevertheless indemnify
each director and officer to the full extent not prohibited by any
applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly construed and
shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement, arbitration and
appeal of, and the giving of testimony in, any threatened,
pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and
shall include, without limitation, court costs, attorneys'
fees, witness fees, fines, amounts paid in settlement or
judgment and any other costs and expenses of any nature or
kind incurred in connection with any proceeding.
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(iii) The term the "corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so
that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director,
officer, employee or agent or another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of this Bylaw
with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its
separate existence had continued.
(iv) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall
include, without limitation, situations where such person is
serving at the request of the corporation as, respectively, a
director, executive officer, officer, employee, trustee or
agent of another corporation, partnership, joint venture,
trust or other enterprise.
(v) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation"
as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Whenever, under any provisions
of these Bylaws, notice is required to be given to any stockholder,
it shall be given in writing, timely and duly deposited in the
United States mail, postage prepaid, and addressed to his last
known post office address as shown by the stock record of the
corporation or its transfer agent.
(b) Notice to directors. Any notice required to be given to
any director may be given by the method stated in subsection (a),
or by facsimile, telex or telegram, except that such notice other
than one which is delivered personally shall be sent to such
address as such director shall have filed in writing with the
Secretary, or, in the absence of such filing, to the last known
post office address of such director.
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(c) Affidavit of Mailing. An affidavit of mailing, executed
by a duly authorized and competent employee of the corporation or
its transfer agent appointed with respect to the class of stock
affected, specifying the name and address or the names and
addresses of the stockholder or stockholders, or director or
directors, to whom any such notice or notices was or were given,
and the time and method of giving the same, shall in the absence of
fraud, be prima facie evidence of the facts therein contained.
(d) Time Notices Deemed Given. All notices given by mail, as
above provided, shall be deemed to have been given as at the time
of mailing, and all notices given by facsimile, telex or telegram
shall be deemed to have been given as of the sending time recorded
at time of transmission.
(e) Methods of Notice. It shall not be necessary that the
same method of giving notice be employed in respect of all
directors, but one permissible method may be employed in respect of
any one or more, and any other permissible method or methods may be
employed in respect of any other or others.
(f) Failure to Receive Notice. The period or limitation of
time within which any stockholder may exercise any option or right,
or enjoy any privilege or benefit, or be required to act, or within
which any director may exercise any power or right, or enjoy any
privilege, pursuant to any notice sent him ill the manner above
provided, shall not be affected or extended in any manner by the
failure of such stockholder or such director to receive such
notice.
(g) Notice to Person with Whom Communication Is Unlawful.
Whenever notice is required to be given, under any provision of law
or of the Articles of Incorporation or Bylaws of the corporation,
to any person with whom communication is unlawful, the giving of
such notice to such person shall not be require and there shall be
no duty to apply to any governmental authority or agency for a
license or permit to give such notice to such person. Any action
or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same
force and effect as if such notice had been duly given. In the
event that the action taken by the corporation is such as to
require the filing of a certificate under any provision of the
Nevada General Corporation Law, the certificate shall state, if
such is the fact and if notice is required, that notice was given
to all persons entitled to receive notice except such persons with
whom communication is unlawful.
(h) Notice to Person with Undeliverable Address. Whenever
notice is required to be given, under any provision of law or the
Articles of Incorporation or Bylaws of the corporation, to any
stockholder to whom (i) notice of two consecutive annual meetings,
and all notices of meetings or of the taking of action by written
consent without a meeting to such person during the period between
such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been
mailed addressed to such person at his address as shown on the
records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required.
Any action or meeting which shall be taken or held without notice
to such person shall have the same force and effect as if such
notice had been duly given. If any such person shall deliver to
the corporation a written notice setting forth his then current
address, the requirement that notice be given to such
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person shall be reinstated. In the event that the action taken by the
corporation is such as to require the filing of a certificate under
any provision of the Nevada General Corporation Law, the
certificate need not state that notice was not given to persons to
whom notice was not required to be given pursuant to this
paragraph.
ARTICLE XII
AMENDMENTS
Section 45. Amendments.
The Board of Directors shall have the power to adopt, amend,
or repeal Bylaws as set forth in the Articles of Incorporation.
ARTICLE XIV
LOANS TO OFFICERS
Section 46. Loans to Officers. The corporation may lend
money to, or guarantee any obligation of, or otherwise assist any
officer or other employee of the corporation or of its
subsidiaries, including any officer or employee who is a Director
of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the corporation. The loan,
guarantee or other assistance may be with or without interest and
may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in these Bylaws shall
be deemed to deny, limit or restrict the powers of guaranty or
warranty of the corporation at common law or under any statute.
Declared as the By-Laws of Balsam Ventures, Inc. as of the 29th day
of February, 2000.
/s/ Robert Smith
Signature of Officer: ________________________
Name of Officer: ROBERT SMITH
Position of Officer: PRESIDENT AND DIRECTOR
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Sample
Share Certificate
<PAGE>
Cane & Company, LLC
Affiliated with O'Neill Ritchie Taylor Law Corporation
of Vancouver, British Columbia, Canada
Michael A. Cane* Stephen F.X. O'Neill**
Leslie L. Kapusianyk** Michael H. Taylor**
Telephone: (702) 312-6255
Facsimile: (702) 312-6249
E-mail: [email protected]
101 Convention Center Drive
Suite 1200
Las Vegas, NV 89109
March 29, 2000
Balsam Ventures, Inc.
12-5880 Hampton Place
Vancouver, British Columbia V6T 2E9
Canada
Attention: Robert Smith, President
Re: Balsam Ventures, Inc. Registration Statement on Form SB-2
Ladies and Gentlemen:
We have acted as counsel for Balsam Ventures, Inc., a Nevada
corporation (the "Company"), in connection with the preparation
of the registration statement on Form SB-2 (the "Registration
Statement") filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as
amended (the "Act"), relating to the offering of certain shares
of the Company's common stock.
In rendering the opinion set forth below, we have reviewed (a)
the Registration Statement and the exhibits thereto; (b) the
Company's Articles of Incorporation; (c) the Company's Bylaws;
(d) certain records of the Company's corporate proceedings as
reflected in its minute books; and (e) such statutes, records and
other documents as we have deemed relevant. In our examination,
we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and
conformity with the originals of all documents submitted to us as
copies thereof. In addition, we have made such other examinations
of law and fact as we have deemed relevant in order to form a
basis for the opinion hereinafter expressed.
Based upon the foregoing, we are of the opinion that the common
stock to be sold by the selling shareholders is validly issued,
fully paid and nonassessable.
Very truly yours,
CANE AND COMPANY, LLC
/s/ Michael A. Cane
_____________________________
Michael A. Cane, attorney and
Managing Member
*Licensed Nevada, California, Washington and Hawaii State Bars
** British Columbia Bar only
<PAGE>
Balsam Ventures, Inc.
March 29, 2000
Page 2
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement and to all references to this Firm under
the caption "Interests of Named Experts and Counsel" in the
Registration Statement.
Very truly yours,
CANE AND COMPANY, LLC
/s/ Michael A. Cane
_____________________________
Michael A. Cane, attorney and
Managing Member
2
