<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of
The Securities Exchange Act of 1934
PONDEROSA PARTNERS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 95-4728285
------ ----------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
333 Washington Blvd., Marina Del Rey, California 90292
- --------------------------------------------------------------------------------
(Address of registrant's principal executive offices) (Zip Code)
310.449.0206
--------------
(Registrant's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of Each Exchange on which
to be so registered: each class is to be registered:
-------------------- -------------------------------
None None
---- ----
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.
--------------------------
(Title of Class)
Copies to:
Thomas E. Stepp, Jr.
Stepp & Beauchamp LLP
Attorneys-at-Law
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Facsimile 949.660.9010
Page 1 of __
Exhibit Index is specified on Page 9
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ITEM 1. DESCRIPTION OF BUSINESS.
- ---------------------------------
Development of the Company. We were incorporated under the laws of the State of
Nevada on February 27, 1997. We plan to build an Internet web portal designed
for facilitating e-commerce by selling excess inventory products. With that in
mind, we acquired the exclusive proprietary rights to a new Internet domain site
called DumpItQuick.com. Our mailing address is 333 Washington Blvd., Marina Del
Rey, CA., 90292, which is the office address of our Chief Executive Officer and
President, Scott Fite. Our telephone number is (310) 449-0206. The Company pays
no rent or other fees for the use of this mailing address.
Our initial capitalization was approximately $1,000 in expense reimbursement for
incorporation and development costs and $10,000 for services rendered. As of
December 31, 1998, we had assets of $11,000, no liabilities. To date, the
Company's only activities have been organizational ones, directed at developing
its business plan and raising its initial capital. The Company has not commenced
any commercial operations and owns no real estate.
Growth of the Internet and Online Commerce. The Internet has emerged as a global
medium enabling millions of people worldwide to share information, communicate
and conduct business electronically. International Data Corporation ("IDC")
estimates that the number of Internet users will grow from approximately 69
million worldwide in 1997 to approximately 320 million worldwide by the end of
2002. This growth is expected to be driven by the large and growing number of
personal computers ("PCs") installed in homes and offices, the decreasing cost
of PCs, easier, faster and cheaper access to the Internet, improvements in
network infrastructure, the proliferation of Internet content and the increasing
familiarity and acceptance of the Internet by businesses and consumers. The
Internet possesses a number of unique characteristics that differentiate it from
traditional media: users communicate or access information without geographic or
temporal limitations; users access dynamic and interactive content on a
real-time basis; and users communicate and interact instantaneously with a
single individual or with entire groups of individuals. As a result of these
characteristics, Internet commerce is expected to continue to grow rapidly. IDC
estimates that commerce over the Internet will increase from approximately $32
billion worldwide in 1998 to approximately $130 billion worldwide in 2000.
The exchange of goods between individuals--person-to-person trading-- has
traditionally been conducted through trading forums such as classified
advertisements, collectible shows, garage sales and flea markets or through
intermediaries, such as auction houses and local dealer shops. These markets are
highly inefficient, making person-to-person trading difficult for buyers and
sellers. Their fragmented, regional nature makes it difficult and expensive for
buyers and sellers to meet, exchange information and complete transactions. The
localized nature of these markets also results in a limited variety and breadth
of goods available in any one location. Buyers are limited to searching through
local classified ads or to traveling to numerous geographically-dispersed flea
markets, trade shows or dealer shops in order to find items of interest. These
markets often have high transaction costs because intermediaries either mark up
goods for resale or charge a commission. Because these markets are information
inefficient, buyers and sellers lack a reliable and convenient means of setting
prices for sales and purchases. Despite these inefficiencies, the Company
believes that the market for traditional person-to-person trading in the U.S.
through auctions and classified ads exceeded $50 billion in goods sold in 1997.
The Internet offers, for the first time, the opportunity to create a global
marketplace that overcomes the inefficiencies associated with traditional
person-to-person trading while offering the benefits of Internet-based commerce
to the person-to-person trading market. An Internet-based, centralized trading
place facilitates buyers' and sellers' meeting, listing items for sale,
exchanging information, interacting with each other and,
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ultimately, consummating transactions. It allows buyers and sellers to trade
directly, bypassing traditional intermediaries and lowering costs for both
parties. This trading place is global in reach, offering buyers a significantly
broader selection of goods to purchase and providing sellers the opportunity to
sell their goods efficiently to a broader base of buyers. It offers significant
convenience, allowing trading at all hours and providing continually-updated
information. By leveraging the interactive nature of the Internet, this trading
place also facilitates a sense of community through direct buyer and seller
communication, thereby enabling interaction between individuals with mutual
interests. We believe that there is a significant market opportunity for an
Internet-based, centralized trading place that applies the unique attributes of
the Internet to facilitate person-to-person trading.
Our Competition. Many businesses are already using the Internet to sell their
excess inventory. Most of these websites are specialized. For example,
PartsNet.com provides a website for buyers and sellers of automobile parts.
Solumed.com offers an Internet-based advertising service to facilitate the sale
of used, refurbished, or excess medical inventory and equipment. Allcorp.com is
a website dedicated to the sale of excess electronic inventory. Other websites
provide more general excess inventory services. TradeOut.com is an independent
business-to-business Internet exchange for companies seeking to buy and sell
excess inventory and idle assets. TheCloseOutCorner.com also provides a market
for large lots of excess inventory in a wide range of industries.
Employees. We do not have any employees. We expect to use consultants, attorneys
and accountants as necessary, until it is necessary to hire paid employees.
REPORTS TO SECURITY HOLDERS. We are not a reporting company, but will become one
60 days after this Registration Statement is filed. We will then be required to
file quarterly, annual, and other reports, including financial statements, with
the Securities and Exchange Commission ("SEC"). The public may read and copy any
materials filed with the SEC at the SEC's Public Reference Room at 450 Fifth
Street N.W., Washington, D.C. 20549. The public may also obtain information on
the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The address of that site is http://www.sec.gov.
Item 2. Plan of Operation
Except for historical matters, our plan of operation contains "forward-looking
statements" based on our current expectations. "Forward-looking statements" can
be identified by the use of forward-looking terminology such as "believes",
"could", "possibly", "probably", "anticipates", "estimates", "projects",
"expects", "may", "will", or "should". Such statements are subject to certain
risks, uncertainties and assumptions. We can give no assurance that the future
results anticipated by the forward-looking statements will be achieved.
LIQUIDITY AND CAPITAL RESOURCES. We are currently in the development stage and,
since inception, has experienced no significant change in liquidity or capital
resources or stockholder's equity other than the receipt of approximately $1,000
of expense reimbursement for incorporation and development costs and $10,000 for
services rendered. Consequently, our balance sheet for the period ending
December 31, 1998, reflects both a current asset and a total asset value of
$11,000.
RESULTS OF OPERATIONS. To further development of our Internet web portal, we
have acquired the exclusive proprietary rights to the domain name
DumpItQuick.com, a website that will be designed for facilitating e-commerce by
selling excess inventory products. Our ongoing operations consist of additional
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organizational activities, acquisition of capital and development of our
website. We have not yet generated any revenues and do not anticipate generating
any revenues in the near future. For the current fiscal year, we anticipate
incurring a loss as a result of organizational, legal and accounting expenses.
NEED FOR ADDITIONAL FINANCING. We have an agreement with Hat Trick, Inc., a
principal shareholder, to provide limited funding daily operations. We believe
that our existing capital will be sufficient to meet our current cash needs,
including the costs of compliance with the continuing reporting requirements of
the Securities Exchange Act of 1934, as amended, for a period of approximately
one year. We anticipate compensating some of our consultants for services
related to the development of our ecommerce website by issuing stock to them.
IMPACT OF THE YEAR 2000. The Year 2000 (commonly referred to as "Y2K") issue
results from the fact that many computer programs were written using two, rather
than four, digits to identify the applicable year. As a result, computer
programs with time-sensitive software may recognize a two digit code for any
year in the next century as related to this century. For example, "00", entered
in a date-field for the year 2000, may be interpreted as the year 1900,
resulting in system failures or miscalculations and disruptions of operations,
including, among other things, a temporary inability to process transactions or
engage in other normal business activities. While companies and governments in
the United States spent an estimated $150 billion to $225 billion repairing the
problem, countries like Russia and China, which spent relatively minor amounts,
seemed to clear the New Year's Day hurdle with equal success. Major news media
in the United States are reporting that, after years of work and billions of
dollars spent repairing the Year 2000 computer glitch, the technological
tranquility of New Year's Day has raised a new concern that the United States
overreacted to this problem. While it is still too soon to state positively that
the Y2K transition has passed without mishap, we believe that Y2K issues will
not have a material adverse affect on our business.
ITEM 3. DESCRIPTION OF PROPERTY
- -------------------------------
The Company currently does not have any fixed assets or real property, nor does
it have any cash or cash equivalents (we define "cash equivalents" as all highly
liquid investments with a maturity of 3 months or less when purchased.) We do
not presently own any inventory or equipment.
We do not currently maintain an office or any other facilities and do not
anticipate the need for maintaining office facilities at any time in the
foreseeable future in order to carry out our plan of operations. We currently
maintain a mailing address (which is a mailing address shared by its C.E.O. and
President), at 333 Washington Blvd., Marina del Rey, CA., 90292, which is also
the office address of our C.E.O. and President. We do not pay rent or other fees
for the use of this mailing address. Our telephone number is (310) 449-0206.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ----------------------------------------------------------------------
Number of Shares %of Shares Title of
Name Owned Beneficially Owned Class
- ------------------------------ ------------------ --------- ----------
Hat Trick, Inc. 6,700,000 60.91 Common
Stephen W. Cooper 1,000,000 9.09 Common
Brian Lewis 1,000,000 9.09 Common
Eagle Point Partners, Inc. 500,000 4.55 Common
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Total 9,200,000 83.64%
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Scott Fite is an Officer and Director of Hat Trick, Inc., Eagle Point Partners,
Inc., and Ponderosa Partners, Inc. Stephen W. Cooper is an Officer and Director
of Ponderosa Partners, Inc.
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CHANGES IN CONTROL. We are not aware of any arrangements which may result in
"changes in control" as that term is defined by the provisions of Item 403(c) of
Regulation S-B.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
- --------------------------------------------------------------------
The directors and principal executive officers of the Company are as
specified on the following table:
Name Age Position
- -------------------- ------ -----------------------------------------------
Scott V. Fite 29 President, Chief Executive Officer and Director
- -------------------- ------ -----------------------------------------------
Stephen W. Cooper 28 Secretary, Treasurer and a Director
- -------------------- ------ -----------------------------------------------
SCOTT V. FITE received a Bachelor's Degree in Business and Finance from the
University of Arizona in 1995. From September 1996 to the present he has been
the President and Chief Financial Officer of Wall Street Partners, Inc. He is
the Chief Executive Officer and a director of Hat Trick, Inc. and is also a
director of Eagle Point Partners, Inc. He currently resides at 17 Jib Street,
Marina Del Rey, California.
STEPHEN W. COOPER received a Bachelor's Degree in Finance from California State
University and Northridge in 1994. He is currently attending Loyola Law School.
From September 1990 through August 1994 he was Supervisor of Operations for
Western Federal Credit Union. From September 1994 through July 1997 he was a
production manager for Gunther Lane Glass, Inc. He currently resides at 3730
Inglewood Avenue, Los Angeles, California.
There is no family relationship between any of the officers or directors of the
Company. There are no orders, judgments, or decrees of any governmental agency
or administrator, or of any court of competent jurisdiction, revoking or
suspending for cause any license, permit or other authority to engage in the
securities business or in the sale of a particular security or temporarily or
permanently restraining any officer or director of the Company from engaging in
or continuing any conduct, practice or employment in connection with the
purchase or sale of securities, or convicting such person of any felony or
misdemeanor involving a security, or any aspect of the securities business or of
theft or of any felony, nor are any of the officers or directors of any
corporation or entity affiliated with the Company so enjoined.
ITEM 6. EXECUTIVE COMPENSATION - REMUNERATION OF DIRECTORS AND OFFICERS.
- ------------------------------------------------------------------------
Specified below, in tabular form, is the aggregate annual remuneration of the
Company's Chief Executive Officer and the four (4) most highly compensated
executive officers other than the Chief Executive Officer who were serving as
executive officers at the end of the Company's last completed fiscal year.
Name of individual or Capacities in which Aggregate
Identity of Group remuneration was received remuneration
- ----------------------- ------------------------------------- -----------------
None None None
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There was no compensation paid to any executive officer of the Company during
the Company's last completed fiscal year. As of December 15, 1999, no
compensation has been paid or accrued to any of the officers or directors of the
Company.
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------
We issued our Officers, Directors and other entities a total of 11,000,000
shares of $0.001 par value common stock.
On or about March 11, 1997, Theodore T. Herman transferred a portion of his
common shares to various entities, transferring a total of 50,000 shares to 38
new shareholders. On or about November 15, 1997, Mr. Herman transferred the
remaining 500,000 shares of his common stock to Eagle Point Partners, Inc., a
Nevada corporation. The shares which were transferred by gift are considered
restricted securities in the hands of the donees, subject to Rule 144.
No officer, director, promoter, or affiliate of the Company has or proposes to
have any direct or indirect material interest in any asset proposed to be
acquired by the Company through security holdings, contracts, options, or
otherwise.
The Company maintains a mailing address at the residence of its President, for
which it pays no rent, and for which it does not anticipate paying rent in the
future. We do not anticipate acquiring additional office space in the near
future.
TRANSACTIONS WITH PROMOTERS. Steven W. Cooper received 1,000,000 shares of our
common stock as "founder's stock" on February 27, 1997 for his management and
organizational services provided to the Company. Scott Fite received 1,000,000
shares of our common stock on February 27, 1997 as consideration for providing
incorporation and development costs to the Company and received an additional
700,000 shares of our common stock as consideration for management consulting
services provided to the Company.
ITEM 8. LEGAL PROCEEDINGS
- --------------------------
There are no legal actions pending against the Company nor are any such legal
actions contemplated. No director, officer or affiliate of the Company, and no
owner of record or beneficial owner of more than five percent (5%) of the
securities of the Company, or any associate of any such director, officer or
security holder is a party adverse to the Company or has a material interest
adverse to the Company in reference to pending litigation.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- -----------------------------------------------------------------
The right and the opportunity to transfer shares of the Company's common stock
will be very limited. Therefore, a public market for the common shares does not
exist and will not develop. As a consequence, assuming a shareholder could
properly transfer his or her shares of the Company's common stock, there is no
assurance that he or she could find a buyer for those shares of the Company's
common stock.
There have been no cash dividends declared on the Company's common stock since
the Company's inception. Dividends are declared at the sole discretion of the
Company's Board of Directors.
PENNY STOCK REGULATION. The Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks". Penny
stocks generally are equity securities with a price of less than $5.00
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(other than securities registered on certain national securities exchanges or
quoted on the Nasdaq system, provided that current price and volume information
with respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, deliver a standardized
risk disclosure document prepared by the Commission, which specifies information
about penny stocks and the nature and significance of risks of the penny stock
market. The broker-dealer also must provide the customer with bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules require that prior to a transaction in a penny stock not
otherwise exempt from those rules the broker- dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for a stock that becomes subject to the penny stock rules.
If any of the Company's securities become subject to the penny stock rules,
holders of those securities may have difficulty selling those securities.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
- -------------------------------------------------
There have been no sales of unregistered securities within the last three (3)
years which would be required to be disclosed pursuant to Item 701 of Regulation
S-B, except for the following: Since February 27, 1997 (the date of the
Company's formation), the Company has sold no Common Stock other than its
initial issue.
ITEM 11. DESCRIPTION OF SECURITIES
- ------------------------------------
Common Stock. The Company's Articles of Incorporation authorize the issuance of
50,000,000 shares of Common Stock. Each record holder of Common Stock is
entitled to one vote for each share held on all matters properly submitted to
the stockholders for their vote. Cumulative voting for the election of directors
is not permitted by the Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled to such dividends as
may be declared from time to time by the Board of Directors out of legally
available funds; and, in the event of liquidation, dissolution or winding up of
the affairs of the Company, holders are entitled to receive, ratably, the net
assets of the Company available to stockholders after distribution is made to
the preferred stockholders, if any, who are given preferred rights upon
liquidation. Holders of outstanding shares of Common Stock have no preemptive,
conversion or redemptive rights. All of the issued and outstanding shares of
Common Stock are, and all unissued shares when offered and sold will be, duly
authorized, validly issued, fully paid, and nonassessable. To the extent that
additional shares of the Company's Common Stock are issued, the relative
interests of then existing stockholders may be diluted.
REPORTS TO STOCKHOLDERS. When this Registration Statement becomes effective, the
Company will be a "reporting company" and will furnish its stockholders with an
annual report for each fiscal year ending December 31 containing financial
statements audited by its independent certified public accountants.
Additionally, the Company will be required to file quarterly and annual reports
with the Securities and Exchange Commission and may, in its sole discretion,
issue unaudited quarterly or other interim reports to its stockholders when it
deems appropriate.
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ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ---------------------------------------------------
Our Articles of Incorporation provide that no director or officer of the Company
shall be personally liable to the Company or any of its stockholders for damages
for breach of fiduciary duty as a director or officer involving any act or
omission of any such director or officer; provided, however, that the foregoing
provision does not eliminate or limit the liability of a director or officer for
acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law, or the payment of dividends in violation of Section 78.300 of
the Nevada Revised Statutes.
We may enter into indemnification agreements with each of our executive officers
pursuant to which the Company agrees to indemnify each such person for all
expenses and liabilities, including criminal monetary judgments, penalties and
fines, incurred by such person in connection with any criminal or civil action
brought or threatened against such person by reason of such person being or
having been an officer or director or employee of the Company. In order to be
entitled to indemnification by the Company, such person must have acted in good
faith and in a manner such person believed to be in the best interests of the
Company and, with respect to criminal actions, such person must have had no
reasonable cause to believe his or her conduct was unlawful.
IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION, INDEMNIFICATION FOR
LIABILITIES ARISING PURSUANT TO THE SECURITIES ACT OF 1933 IS CONTRARY TO PUBLIC
POLICY AND, THEREFORE, UNENFORCEABLE.
ITEM 13. FINANCIAL STATEMENTS.
Copies of the financial statements specified in Regulation 228.310 (Item 310)
are filed with this Registration Statement on Form 10-SB (see Item 15 below).
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
- --------------------------------------------------------------------------------
There have been no changes in or disagreements with the Company's accountants
since the formation of the Company required to be disclosed pursuant to Item 304
of Regulation S-B.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
(a) Index to Financial Statements. Page
- ---------------------------------- ----
Consolidated Balance Sheet for the year ended December 31, 1999 F-2
Consolidated Statements of Operations for the year ended
December 31, 1999 and for the period from inception to
December 31, 1999 F-3
Statement of Stockholders' Equity for the period from inception
to December 31, 1999 F-4
Consolidated Statements of Cash Flows for the year ended
December 31, 1999 and 1998 and for the period from inception
to December 31, 1999 F-5
Notes to the Consolidated Financial Statements F-6
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INDEPENDENT AUDITOR'S REPORT
----------------------------
To the Board of Directors and Stockholders
of Ponderosa Partners, Inc.
I have audited the accompanying balance sheet of Ponderosa Partners, Inc. (a
Nevada corporation in the development stage) as of December 31, 1999, and the
related statements of operations and accumulated deficit, stockholders' equity,
and cash flows for the year then ended, and for the period from Inception
February 27, 1997 to December 31, 1999. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted this audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial 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.
I believe that my audit provided a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Ponderosa Partners, Inc. as of
December 31, 1999, and the results of its operations and its cash flows for the
year then ended, and for the period from Inception February 27, 1997 to December
31, 1999, in conformity with generally accepted accounting principles.
/s/ Harold Spector
Pasadena, California
January 25, 2000
F-1
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PONDEROSA PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
December 31, 1999
ASSETS
Current Assets $ 0
---------
Fixed Assets 0
---------
Other Assets
Organizational Costs, net of accumulated
amortization of $6,233 (Note 3) 4,767
Website (Note 4) 10,000
---------
Total Other Assets 14,767
---------
TOTAL ASSETS $ 14,767
=========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable (Note 5) $ 2,000
---------
Long-Term Liabilities 0
---------
Total Liabilities 2,000
---------
Stockholders' Equity
Common Stock, $.001 par value; 50,000,000
shares authorized, 11,000,000 shares issued
and outstanding (Note 6) 11,000
Paid-in Capital (Note 7) 11,400
Accumulated deficit during the development stage (9,633)
---------
Total Stockholders' Equity 12,767
---------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 14,767
=========
The auditor's report and accompanying notes are
an integral part of the financial statements
F-2
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PONDEROSA PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
For the Year ended December 31, 1999 and
the period from Inception February 27, 1997 to December 31, 1999
Inception
Year Feb.27,1997
Ended to
Dec.31,1999 Dec.31,1999
----------- -----------
REVENUE $ 0 $ 0
----------- -----------
COSTS AND OPERATING EXPENSES 2,000 3,400
----------- -----------
INCOME (LOSS) FROM OPERATIONS (2,000) (3,400)
OTHER INCOME (EXPENSES):
Amortization (2,200) (6,233)
----------- -----------
NET LOSS BEFORE INCOME TAXES (4,200) (9,633)
PROVISION FOR INCOME TAXES 0 0
----------- -----------
NET LOSS (4,200) (9,633)
ACCUMULATED DEFICIT DURING THE
DEVELOPMENT STAGE
BEGINNING OF PERIOD (5,433) 0
----------- -----------
ENDING OF PERIOD $ (9,633) $ (9,633)
=========== ===========
The auditor's report and accompanying notes are
an integral part of the financial statements
F-3
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<TABLE>
PONDEROSA PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Period from Inception February 27, 1997
to December 31, 1999
<CAPTION>
Common Paid-in Accumulated
Shares Stock Capital Deficit Total
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at Inception
February 27, 1997 0 $ 0 $ 0 $ 0 $ 0
Issuance shares for Incorp-
orated costs 11,000,000 11,000 11,000
Net Loss during the Period (1,833) (1,833)
----------------------------------------------------------
Balance at Dec. 31, 1997 11,000,000 $11,000 $ 0 $(1,833) $ 9,167
Net Loss during the period (3,600) (3,600)
----------------------------------------------------------
Balance at Dec. 31, 1998 11,000,000 $11,000 $ 0 $(5,433) $ 5,567
Paid-in Capital for
Accounts Payable 1,400 1,400
Paid-in Capital for Website 10,000 10,000
Net Loss during the period (4,200) (4,200)
----------------------------------------------------------
Balance at Dec. 31, 1999 11,000,000 $11,000 $11,400 $(9,633) $12,767
==========================================================
</TABLE>
The auditor's report and accompanying notes are
an integral part of the financial statements
F-4
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PONDEROSA PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the Year ended December 31, 1999 and
the period from Inception February 27, 1997 to December 31, 1999
Inception
Year Feb.27,1997
Ended to
Dec.31,1999 Dec.31,1999
----------- -----------
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $ (4,200) $ (9,633)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization 2,200 6,233
Increase in Accounts Payable 600 2,000
----------- -----------
Net cash (used) by operating activities (1,400) (1,400)
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES 0 0
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Increase in Paid-in Capital 1,400 1,400
----------- -----------
Net cash provided from Financing Activities 1,400 1,400
----------- -----------
NET INCREASE IN CASH 0 0
CASH AT BEGINNING OF PERIOD 0 0
----------- -----------
CASH AT END OF PERIOD $ 0 $ 0
=========== ===========
SUPPLEMENTAL DISCLOSURE:
Interest paid $ 0 $ 0
=========== ===========
Taxes paid $ 0 $ 0
=========== ===========
SUPPLEMENTAL SCHEDULE FOR NONCASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock for incorporation costs and services
rendered $ 11,000
===========
Paid-in Capital incurred for building a website $ 10,000
===========
The auditor's report and accompanying notes are
an integral part of the financial statements
F-5
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PONDEROSA PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
For the Period from Inception February 27, 1997
to December 31, 1999
NOTE 1 - GENERAL
Ponderosa Partners, Inc., (the "Company") was incorporated under the laws of the
state of Nevada on February 27, 1997. The Company is authorized to do any legal
business activity as controlled by Nevada Law. The Company elected fiscal year
ended December 31st.
The Company has not commenced planned principle operations since the inception
of incorporation, and is considered a development stage company as defined under
Financial Accounting Standards Board Statement No. 7.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company uses the accrual basis of accounting for financial reporting, in
accordance with generally accepted accounting principles.
Use of Estimate
In preparing financial statements in conformity with GAAP, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Revenue Recognition
The Company did not conduct any business operations since inception, and
consequently, has not generated any operating revenue. The Company is building
an Internet web portal designed for facilitating e-commerce by selling excess
inventory products.
Fixed Assets
As of December 31, 1999, the Company does not maintain or control any fixed
assets.
F-6
<PAGE>
PONDEROSA PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
For the Period from Inception February 27, 1997
to December 31, 1999
NOTE 2 - SUMMARY of SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
The Company accounts income taxes in accordance with Financial Accounting
standards Board Statement No. 109.
Statements of Cash Flows
The Company prepares its statement of cash flows using the indirect method as
defined under Financial Accounting Standards Board Statement No. 95. For
purposes of the statements of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents. As of December 31, 1999, there were no cash equivalents.
NOTE 3 - ORGANIZATIONAL COSTS
The Company elects to capitalize and amortize its organizational costs over a
sixty month period using the straight line method.
Amortization expense for the year ended December 31, 1999, and for the period
from inception February 27, 1997 to December 31, 1999, was $2,200 and $6,233,
respectively.
NOTE 4 - WEBSITE
The Company elects to capitalize the costs incurred for developing a website.
Amortization of the website will not be charged to the operations until the
planned operations commenced.
NOTE 5 - ACCOUNTS PAYABLE
As of December 31, 1999, accounts payable included an audit fee of $2,000.
F-7
<PAGE>
PONDEROSA PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
For the Period from Inception February 27, 1997
to December 31, 1999
NOTE 6 - COMMON STOCKS TRANSACTIONS
The Company issued 11,000,000 shares of common stock at par for its
incorporation fees and services rendered by the Directors to the Company. These
costs were included as Organizational costs (See Note 3).
NOTE 7 - PAID-IN CAPITAL
In 1999, a stockholder assumed the Company's accounts payable of $1,400. The
contribution was credited to paid-in capital. Also, the shareholder provided a
working capital of $10,000 to the Company to develop the website.
NOTE 8 - INCOME TAXES
No provision for income taxes was provided in the accompanying statement of
operations. As of December 31, 1999, the Company had approximately $9,633 net
operating loss carryforward to reduce future taxable income. To the extent not
utilized, the NOL carryforward will begin to expire in 2012.
However, the Company did not file any income tax return since inception, and it
is not tax compliance.
NOTE 9 - YEAR 2000
The year 2000 issue concerns the ability of data sensitive software to properly
recognize the year 2000 in calculating and processing computer system
information. The Company has no hardware or software. The Company is silent as
to this issue.
F-8
<PAGE>
(b) Index to Exhibits.
- -----------------------
Copies of the following documents are filed with this Registration
Statement on Form 10-SB as exhibits:
INDEX TO EXHIBITS Page
- ----------------- ----
3.1 Corporate Charter E-1
(Charter document)
3.2 Articles of Incorporation E-2 through E-7
3.3 Bylaws E-8 through E-16
(Instrument defining the rights of
Security holders)
11 Statement of Computation of Per Share Earnings*
24 Power of Attorney E-17
27 Financial Data Schedule
*included in financial statements
9
<PAGE>
SIGNATURES
In accordance with the provisions of Section 12 of the Securities
Exchange Act of 1934, Ponderosa Partners, Inc. has duly caused this Registration
Statement on Form 10-SB to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Newport Beach, State of California, on January
13, 2000.
Ponderosa Partners, Inc.,
a Nevada corporation
By: /s/ Scott Fite
---------------------------
Scott Fite
Its: President
32
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and hereby
authorizes Scott Fite with the full power of substitution, as attorney-in-fact,
to sign in such person's behalf, individually and in each capacity stated below,
and to file any amendments, including post-effective amendments to this
Registration Statement.
In accordance with the requirements of the Securities Exchange Act of 1934, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
PONDEROSA PARTNERS, INC.
____________________________ January 13, 2000
President and Director
____________________________ January 13, 2000
Secretary, Treasurer and Director
33
SECRETARY OF STATE
STATE OF NEVADA CORPORATE SEAL
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that PONDEROSA PARTNERS, INC. did on FEBRUARY 27, 1997 file in
this office the original Article of Incorporation; that said Articles are now on
file and of record in the office of the Secretary of State of the State of
Nevada, and further, that said Articles contain all the provisions required by
the law of said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set
my hand and affixed the Great Seal of
State, at my office, in Carson City,
Nevada, on FEBRUARY 27, 1997.
SEAL OF NEVADA HERE /s/ Dean Heller
Secretary of State
By /s/ Mary M. Rejco
Certification Clerk
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
ARTICLES OF INCORPORATION
FEB 27 1997
OF
No. C3959-97
PONDEROSA PARTNERS, INC.
/S/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
ONE: The name of this corporation is PONDEROSA PARTNERS, INC. Director
Theodore T. Herman resides at 9855 Topanga Canyon Blvd, #124, Chatsworth, Ca,
91311
TWO: Its registered office in the State of Nevada is located at 1304 W.
Washington, Carson City, Nevada, 89703, that this Corporation may maintain an
office, or offices, in such other places within or without the State of Nevada
as may be from time to time designated by the Board of Directors, or by the
By-Laws of said Corporation, and that this Corporation may conduct all Corporate
business of every kind and nature, including the holding of all meetings of
Directors and Shareholders, outside the State of Nevada as well as within the
State of Nevada.
THREE: The purpose of this Corporation is to engage in any lawful act or
activity for which a corporation may be organized, including but not limited to
the following:
(A) Shall have such rights, privileges and powers as may be conferred upon
corporations by any existing law,
(B) May at any time exercise such rights, privileges and powers, when not
inconsistent with the purpose and objects for which this Corporation is
organized.
(C) Shall have powers to have succession by its corporate name for the
period limited in its Certificate or its Articles of Incorporation, and
when no period is limited, perpetually, or until dissolved and its affairs
are wound-up according to law.
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
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(F) Shall have power to hold, purchase and convey real and personal estate
and to mortgage or lease any such real and personal estate with its
franchise. The power to hold real and personal estate shall include the
power to take the same by devise or bequest in the State of Nevada, or in
any other state, territory or country.
(G) Shall have the power to appoint such officers and agents as the affairs
of the Corporation shall require, and to allow them suitable compensation.
(H) Shall have the power to make By-Laws not inconsistent with the
Constitution or laws of the United -States, or the State of Nevada, for the
management, regulation and government of its business, and the calling and
holding of meetings of its stockholders.
(I) Shall have power to windup and dissolve itself, or be wound-up or
dissolved.
(J) Shall have the power to adopt and use a common seal or stamp. The use
of a seal or a stamp by the Corporation on any corporate documents is not
necessary. The Corporation may use a seal or stamp, Wit desires, but such
use or nonuse shall not in any way affect the legality of the document.
(K) Shall have the power to borrow money and contract debts when necessary
for the transaction of its business, or for the exercise of its corporate
rights, privileges or franchise, or for any ether lawful purpose of its
incorporation; to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidence of indebtedness, payable at
a specific time to times, or payable upon the happening of a specified
event or events, whether secured by mortgage, pledge or otherwise, or
unsecured, for money borrowed, or in payment for property purchased, or
acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of capital stock at or
any bonds, securities or evidences of the indebtedness created by, any
other corporation or corporations of the State of
2
<PAGE>
Nevada, or any other state or government, and while owners of such stack,
bonds, securities or evidence of indebtedness, to exercise all rights,
powers, and privileges of ownership, including the right to vote, if any.
(M) Shall have the power to purchase, hold, sell and transfer shares of its
own capital stock, and use thereof its capital, capital surplus, surplus,
or other property or fund.
(N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State
of Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any
foreign countries.
(O) Shall have the power to do all and everything necessary and proper for
the accomplishment of the objects enumerated in its Certificate or Articles
of Incorporation of the Corporation, or any amendment thereof
(P) Shall have the power to make donations for the public welfare or for
charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities.
FOUR: The name and address in this state of the Corporation's initial agent
for service of process is: Bob Foley, 1304 W. Washington, Carson City, Nv,
89703.
FIVE: This Corporation is authorized to issue only one class of shares of
stock. The total number of shares which the Corporation is authorized to issue
is Fifty Million (50,000,000), par value $0.001 per share.
SIX: The governing board of this Corporation shall be known as directors.
There shall be one (1) director and the number of directors may from time to
time be increased or decreased
3
<PAGE>
provided by the By-Laws of this Corporation, providing that the number of
directors shall not be reduced to less than one (1).
SEVEN: The Corporation is to have perpetual existence.
EIGHT: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
(A) Subject to the By-Laws, if any, adopted by the Stockholders, to make,
alter or amend the By-Laws of the Corporation.
(B) To fix the amount to be reserved as working capital over and above its
capital stock paid in.
(C) To authorize and cause to be executed, mortgages and liens upon the
real and personal property of this Corporation.
(D) By resolution passed by a majority of the voting power given at a
Stockholders meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock
issued and outstanding, the Board of Directors shall have the power and
authority at any meeting to sell, lease or exchange all of the property and
assets of the Corporation including its goodwill and its corporate
franchises, upon such terms and conditions as its Board of Directors deems
expedient and for the best interests of the Corporation.
NINE. No director or officer of the Corporation shall be personally liable
to the Corporation or any of its Stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct, fraud or a knowing violation of
law, or (ii) the payments of dividends in violation of section 78.300 of the
Nevada Revised Statues. Any repeal
4
<PAGE>
or modification of this Article by the Stockholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director or officer of the Corporation for acts or omissions
prior to such repeal or modification.
TEN: This Corporation reserves the right to amend, alter, change or repeal
any provision contained in the Articles of Incorporation, in the manner now or
hereafter prescribed by statute, or by the Articles of Incorporation, and all
rights conferred upon Stockholders herein are granted subject to this
reservation.
Dated: Dec 27, 96
/s/ Theodore T. Herman
------------------------------------------
Theodore T. Herman - Incorporator/Director
9855 Topanga Canyon #124
Chatsworth, Ca, 91311
I, the undersigned, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 27 day of Dec, 1996
/s/ Theodore T. Herman
------------------------------------------
Theodore T. Herman - Incorporator/Director
9855 Topanga Canyon #124
Chatsworth, Ca, 91311
5
<PAGE>
ACKNOWLEDGMENT
State of California
County of Los Angeles
On 61-06, 1997 before me, the undersigned, a Notary Public in and for said
State, personally appeared Theodore T. Herman personally known to me or proved
to me on the basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
/s/ Mary L. Pastor
-----------------------
Notary Public
Notary stamp of Mary L. Pastor
6
BY-LAWS
OF
PONDEROSA PARTNERS, INC.
SHAREHOLDERS
1. ANNUAL MEETING. Unless the Board of Directors or the President of
the corporation selects a different time or date, the annual meeting of
shareholders shall be in the last month of the Corporation of each year as
called. The annual meeting shall be for the purpose of electing a Board of
Directors and transacting such other business as may properly be brought before
the meeting.
2. SPECIAL MEETING. Special meetings of shareholders may be called at
any time by the Board of Directors, the Chairman of the Board, the President or
the holders of shares entitled to cast not less than one-tenth of the votes at
the meeting.
3. PLACE. Meetings of shareholders shall be held at the principal
executive office of the corporation or at any other place, within or without
Nevada, which may be designated by the Board of Directors.
4. NOTICE
(a) ANNUAL AND SPECIAL MEETINGS. A written notice of each meeting
of shareholders shall be given not more than 60 days and, except as provided
below, not less than 10 (or, if sent by third-class mail, 30) days before the
date of the meeting to each shareholder entitled to vote at the meeting. The
notice shall state the place, date and hour of the meeting and, if directors are
to be elected at the meeting, the names of the nominees intended to be presented
by management for election. The notice shall also state (i) in the case of an
annual meeting, those matters which the Board of Directors intends to present
for action by the shareholders, and (ii) in the case of a special meeting, the
general nature of the business to be transacted and that no other business may
be transacted. Notice shall be delivered personally, by mail or other means
addressed to the shareholder at the address of such shareholder appearing on the
books of the purpose of notice or as otherwise provided by law. Upon written
request to the Chairman of the Board, the President, the Secretary or any Vice
President of the corporation by any person (but not the Board of Directors)
entitled to call a special meeting of shareholders, the person receiving such
request shall cause a notice to be given to the shareholders entitled to vote
that a meeting will be held at a time requested by the person calling the
meeting not less than 35 nor more than 60 days after the receipt of the request.
(b) ADJOURNED MEETINGS. Notice of an adjourned meeting need be
given if (i) the meeting is adjourned for 45 days or less, (ii) the time and
place of the adjourned meeting are
1
<PAGE>
announced at the meeting at which the adjournment is taken and (iii) no new
record date is fixed for the adjourned meeting. Otherwise notice of the
adjourned meeting shall be given as in the case of an original meeting.
5. RECORD DATE. The Board of Directors may fix in advance a record
date for the determination of the shareholders entitled to notice of any meeting
to vote, to receive payment of any dividend or other distribution or allotment
of rights or to exercise any rights. Such record date shall not be more than 60
nor less than 10 days prior to the date of the meeting nor more than 60 days
prior to such other action. Except as provided by law, when a record date is so
fixed, only shareholders at the close of business on the record date are
entitled to notice and to vote, to receive the dividend, distribution or
allotment of rights or to exercise rights, as the case may be, notwithstanding
any transfer of shares on the books of the corporation after the record date,
except as otherwise provided by law, the corporation shall be entitled to treat
the holder of record of any shares as the holder in fact of such shares and
shall not be bound to recognize any equitable or other claim to or interest in
such shares on the part of any other person, whether or not the corporation
shall have express or other notice of such claim or interest, A determination of
shareholders or record entitled to notice of or to vote at a meeting of
shareholders shall apply to any adjournment of the meeting unless the Board of
Directors fixes a new record date. The Board of Directors shall fix a new record
date if the adjourned meeting takes place more than 45 days from the date set
for the original meeting.
6. MEETING WITHOUT REGULAR CALL AND NOTICE. The transactions of any
meeting of shareholders, however called and noticed and wherever held, are as
valid as though had at a meeting duly held after regular call and notice if a
quorum is present in person or by proxy and if, either before or after the
meeting, each of the persons entitled to vote who is not present at the meeting
in person or by proxy signs a written waiver of notice, a consent to the holding
of the meeting or an approval of the minutes of the meeting. For such purposes,
a shareholder shall not be considered present at a meeting if, at the beginning
of the meeting, the shareholder objects to the transaction of any business
because the meeting was not properly called or convened, or, with respect to the
consideration of a matter required to be included in the notice for the meeting
which was not so included, the shareholder expressly objects to such
consideration at the meeting.
7. QUORUM AND REQUIRED VOTE. A majority of the shares entitled to
vote, represented in person or by proxy, constitutes a quorum for the
transaction of business. No business may be transacted at a meeting in the
absence of a quorum other than the adjournment of such meeting, except that if
quorum other than the adjournment of such meeting, business may be transacted
until the meeting is adjourned even though the withdrawal of shareholders
results in less than a quorum. If a quorum is present at a meeting, the
affirmative vote of a majority of the shares represented at the meeting and
entitled to vote on any matter shall be the act of the shareholders unless the
vote of a larger number is required by law or the Articles of Incorporation. If
a quorum is present at the commencement of a meeting but the withdrawal of
shareholders results in less than a quorum, the affirmative vote of the majority
of shares required to constitute a quorum shall be the act of the shareholders
unless the vote of a larger number is required by law or the Articles of
Incorporation. Any meeting of shareholders, whether or not a
2
<PAGE>
quorum is present, may be adjourned by the vote of a majority of the shares
represented at the meeting.
8. PROXIES. A shareholder may be represented at any meeting of
shareholders by a written proxy signed by the person entitled to vote or by such
person's duly authorized attorney-in-fact. A proxy must bear a date within 11
months prior to the meeting, unless the proxy specifies a different length of
time. A revocable proxy is revoked by a writing delivered to the Secretary of
the corporation stating that the proxy is revoked or by a subsequent proxy
executed by, or by attendance at the meeting and voting in person by, the person
executing the proxy.
9. VOTING. Except as provided below or as otherwise by the Articles of
Incorporation by law, a shareholder shall be entitled to one vote for each share
held of record on the record date fixed for the determination of the
shareholders entitled to vote at a meeting or, if no such date is fixed, the
date determined in accordance with law. Upon the demand of any shareholder made
at a meeting before the voting begins, the election of directors shall be by
ballot. At every election of directors, shareholders may cumulate votes and give
one candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shares are normally entitled or
distribute votes according to the same principle among as many candidates as
desires; however, no shareholder shall be entitled to cumulate votes for any one
or more candidates unless such candidate or candidates' names have been placed
in nomination prior to the voting and at least one shareholder has given notice
at the meeting prior to the voting of such shareholder's intention to cumulate
votes.
10. ELECTION INSPECTORS. One or three election inspectors may be
appointed by the Board of Directors in advance of a meeting of shareholders or
at the meeting by the chairman of the meeting. If not previously chosen, one or
three inspectors shall be appointed by the chairman of the meeting if a
shareholder or proxy holder so requests. When inspectors are appointed at the
request of a shareholder or proxy holder, the majority of shares represented in
person or by proxy shall determine whether one or three inspectors shall be
chosen. The election inspectors shall determine all questions concerning the
existence of a quorum and the right to vote, shall tabulate and determine the
results of voting and shall do all other acts necessary or helpful to the
expeditious and impartial conduct of the vote. If there are three inspectors,
the decision, act or certificate of a majority of the inspectors is effective as
if made by, all.
11. ACTION WITHOUT MEETING. Except as provided below or by the
Articles of Incorporation, any action which may be taken at any meeting of
shareholders may be taken without a meeting and without prior notice of a
consent in writing, setting forth the action so taken, is signed by the holders
of outstanding shares having not less than the minimum number of votes which
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote on such action were present and voted.
12. REPORTS. The annual report to shareholders shall be sent as
required by law.
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<PAGE>
13. LOST STOCK CERTIFICATES. The corporation may cause a new stock
certificate to be issued in place of any certificate issued by the corporation
alleged to have been lost, stolen or destroyed. The corporation may, at its
discretion and as a condition precedent to such issuance, require the owner of
such certificate to deliver an affidavit stating that such certificate was lost,
stolen or destroyed or to give the corporation a bond or other security
sufficient to indemnify it against any claim that may be made against it,
including any expense or liability, on account of the alleged less, theft or
destruction or the issuance of a new certificate.
BOARD OF DIRECTORS
14. NUMBER. The number of directors of this corporation shall be one
until such number is changed by. an amendment of the Articles of Incorporation
or this By-Law.
15. POWERS. Subject to the limitations imposed by law or contained in
the Articles of Incorporation the business and affairs of the corporation shall
be managed and all corporate powers shall be exercised by or under the ultimate
direction of the Board of Directors.
16. ELECTION, TERM OF OFFICE AND VACANCIES, At each annual meeting of
shareholders, directors shall be elected to hold office until the next annual
meeting. Each director, including a director elected to fill a vacancy, shall
hold office until the expiration of the term for which the director was elected
and until a successor has been elected. The Board of Directors may declare
vacant the office of a director who has been declared to be of unsound mind by
court order or convicted of a felony. Vacancies on the Board of Directors not
caused by removal may be filed by a majority of the directors then in office,
regardless of whether they constitute a quorum, or by the sole remaining
director. In the case of the resignation of a sole director, he may appoint a
successor at the time of such resignation. The shareholders may elect a director
at any time to fill any vacancy not filled, or which cannot be filed, by the
Board of Directors.
17. REMOVAL. Except as described below, any or all of the directors
may be removed without cause if such removal is approved by the affirmative vote
of the majority of the outstanding shares entitled to vote. Unless the entire
Board of Directors is so removed, no director may be removed if (i) the votes
cast against removal or not consenting in writing to such removal, would be
sufficient to elect such director if voted cumulatively at an election at which
the same total number of votes were cast, or, if such action is taken by written
consent, all shares entitled to vote were voted and (ii) the entire number of
directors authorized at the time of the director's most recent election were
then being elected.
18. RESIGNATION. Any director may resign by giving written notice to
the Chairman of the Board, the President, the Secretary or the Board of
Directors. Such resignation shall be effective when given unless the notice
specifies a later time. The resignation shall be effective regardless of whether
it is accepted by the corporation.
19. COMPENSATION. If the Board of Directors so resolves, the
directors, including the Chairman of the Board, shall receive compensation and
expenses of attendance for meetings of the Board of Directors and of committees
of the Board. Nothing herein shall preclude any
4
<PAGE>
director from serving the corporation in another capacity and receiving
compensation for such service.
20. COMMITTEES. The Board of Directors may, by resolution adopted by
the majority of the authorized number of directors, designate one or more
committees, such consisting of two or more directors, to serve at the pleasure
of the Board. The Board may designate one or more directors as alternate members
of a committee who may replace any absent member at any meeting of the
committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. To the
extent permitted by the resolution of the Board of Directors, a committee may
exercise all of the authority of the Board to the extent permitted by Section
78.125 of the Nevada Revised Statutes.
21. INSPECTION OF RECORDS AND PROPERTIES. Each director may inspect
all books, records, documents and physical properties of the corporation and its
subsidiaries at any reasonable time. Inspections may be made either by the
director or the director's agent or attorney. The right of inspection includes
the right to copy and make extracts.
22. TIME AND PLACE OF MEETINGS AND TELEPHONE MEETINGS. Unless
the Board of Directors otherwise determines, the Board shall hold its annual
meetings in September of each year as called, time and place of the meeting to
be selected by the Chairman. Directors may participate in a meeting through the
use of conference telephone or similar communications equipment, so long as all
members so participating can hear each other.
23. CALL. Meetings of the Board of Directors, whether regular or
special, may be called by the Chairman of the Board, the President, the
Secretary, any Vice President or any two directors.
24. NOTICE. Regular meetings of the Board of Directors may be held
without notice if the time of such meetings has been fixed by the Board..
Special meetings shall be held upon four days' notice by mail or 48 hours'
notice delivered personally or by telephone or telegraph, and regular meetings
shall be held upon similar notice if notice is required for such meetings.
Neither a notice nor a waiver of notice need specify the purpose of any regular
or special meeting. If a meeting is adjourned for more than 24 hours, notice of
the adjourned meeting shall be given prior to the time of such meeting to the
directors who were not present at the time of the adjournment.
25. MEETING WITHOUT NOTICE TO ALL DIRECTORS. Notice of a meeting need
not be given to any director who, either before or after the meeting, signs a
written waiver of notice or a consent to holding the meeting or an approval of
the minutes of the meeting or who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice to such director. All such
waivers, consents and approvals shall be filed with the corporate records or
made a part of the Minutes of the Meeting.
26. ACTION WITHOUT MEETING. Any action required or permitted to be
taken by the Board of Directors may be taken without a meeting, if all of the
members of the Board individually or collectively consent in writing to such
action.
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27. QUORUM AND REQUIRED VOTE. A majority of the directors then in
office shall constitute quorum for the transaction of business, provided that
unless the authorized number of directors is one, the number constituting a
quorum shall not be less than the greater of one-third of the authorized number
of directors or two directors. Except as otherwise provided by Section 78.315 of
the Nevada Revised Statutes, the Articles of Incorporation or these By-Laws,
every act or decision done or made by a majority of the directors present at a
meeting duly held at which a quorum is present is the act of the Board, A
meeting at which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of directors, if any action taken is approved by
at least a majority of the required forum for such meeting. A majority of the
directors present at a meeting, whether or not a quorum is present, may adjourn
the meeting to another time and place.
28. COMMITTEE MEETINGS. The principles set forth in Sections 22
through 27 of these By-Laws shall apply to committees of the Board of Directors
and to actions by such committees
29. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND CERTAIN
OTHERS.
(a) RIGHT OF INDEMNITY. To the fill extent permitted by law, this
corporation shall indemnify its directors, officers, employees and other persons
described in Subsection 78.751 of the Nevada Revised Statutes, including persons
formerly occupying any such position, against all expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred by them in
connection with any "proceeding", as that term is used in such Subsection and
including an action by or in the right of the corporation to prove a judgment in
its favor, by reason of the fact that such person is or was a person described
by such Subsection, "Expenses", as used in this By-Law, shall have the same
meaning as in Section 78.751 of the Nevada Revised Statutes.
(b) APPROVAL OF INDEMNITY. Upon written request to the Board of
Directors by any person seeking indemnity under Section 78.751 of the Nevada
Revised Statutes, the Board shall promptly determine whether such person has met
the applicable standard of conduct set forth in such Subsection. If the Board
determines that the person seeking indemnity has not met such standard of
conduct, the Board shall promptly call a meeting of shareholders at which the
shareholders shall determine whether the person seeking indemnity has met such
standard of conduct.
(c) ADVANCEMENT OF EXPENSES. To the flail extent permitted by law
and except as shall otherwise be determined by the Board of Directors in the
specific instance, expenses incurred by a person seeking indemnity under this
By-Law in defending any proceeding covered by this By-Law shall be advanced by
the corporation prior to the final disposition of the proceeding upon receipt of
an undertaking by or on behalf of such person to repay such amount unless it
shall ultimately be determined that such person is entitled to be indemnified by
the corporation therefore.
6
<PAGE>
OFFICERS
30. TITLES AND RELATION TO BOARD OF DIRECTORS. The officers of the
corporation shall include a Chairman of the Board, a President, a Secretary and
a Chief Financial Officer. The Board of Directors may also choose a Treasurer
and one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers or
other officers. Any number of offices may be held by the same person and, unless
otherwise determined by the Board, the Chairman of the Board and President shall
be the same person. All officers shall perform their duties and exercise their
powers subject to the direction of the Board of Directors.
31. ELECTION, TERM OR OFFICE AND VACANCIES At its regular meeting
after each annual meeting of shareholders, the Board of Directors shall choose
the officers of the corporation, No officer need be a member of the Board of
Directors except the Chairman of the Board, The officers shall hold office until
their successors are chosen, except that the Board of Directors may remove any
officer at any time. If an office becomes vacant for any reason, the vacancy
shall be filled by the Board.
32. RESIGNATION Any officer may resign at any time upon written notice
to the corporation without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Such resignation shall be
effective when given unless the notice specifies a later time. The resignation
shall be effective regardless of whether it is accepted by the corporation.
33. SALARIES. The Board of Directors shall fix the salaries of the
Chairman of the Board and President and may fix the salaries of other employees
of the corporation including the other officers. If the Board does not fix the
salaries of the other officers, the President shall fix such salaries.
34. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside
over all meetings of the Board of Directors. The Chairman of the Board shall be
the general manager and chief executive officer of the corporation and shall
preside at all meetings of shareholders.
35. PRESIDENT. The President shall effectuate orders and resolutions
of the Board of Directors and shall exercise such other powers and perform such
other duties as the Board of Directors shall prescribe.
36.SECRETARY The Secretary shall have the following powers and duties:
(a) RECORD OF CORPORATE PROCEEDINGS. The Secretary shall attend
all meetings of the Board of Directors and its committees and of shareholders
and shall record all votes and the minutes of such meetings in a book to be kept
for that purpose at the principal executive office of the corporation or at such
other place as the Board of Directors may determine. The Secretary shall keep at
the corporation's principal executive office, if in Nevada, or at its principal
business office in Nevada if the principal executive office is not in Nevada,
the original or a copy of the By-Laws, as amended.
7
<PAGE>
(b) RECORD OF SHARES. Under Section 78.235 of the Nevada Revised
Statutes the Corporation elects to issue uncertificated shares until by action
of the Board of Directors it authorizes certificates to be issued. Pending the
issuance of share certificates, the Corporation will keep a Book Entry of all
shares and Shareholders. Unless a transfer agent is appointed by the Board of
Directors to keep a share register, the Secretary shall keep at the principal
executive office of the corporation a share register showing the names of the
shareholders and their addresses, the number and class of shares held by each,
the number and date of certificates issued and the number and date of
cancellation of each certificate surrendered for cancellation.
(c) NOTICES. The Secretary shall give such notices as may be
required by law or these By-Laws.
(d) ADDITIONAL POWERS AND DUTIES. The Secretary shall exercise
such other powers and perform such other duties as the Board of Directors or
President shall prescribe.
37. CHIEF FINANCIAL OFFICER. Unless otherwise determined by the Board
of Directors, the Chief Financial Officer shall have custody of the corporate
funds and securities and shall keep adequate and correct accounts of the
corporation's properties and business transactions. The Chief Financial Officer
shall disburse such funds of the corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, shall render to the
President and directors, at regular meetings of the Board of Directors or
whenever the Board may require, an account of all transactions and the financial
condition of the corporation and shall exercise such other powers and perform
such other duties as the Board of Directors or President shall prescribe.
38. OTHER OFFICERS. The other officers of the corporation if any,
shall perform such duties as the Board of Directors or President shall
prescribe.
39. AMENDMENT OF BY-LAWS Except as provided by law or in the Articles
of Incorporation, By-Laws may be adopted, amended or repealed by the affirmative
vote of a majority of the outstanding shares entitled to vote. Except as
provided by law or the Articles of Incorporation and subject to the right of
shareholders to adopt, amend or repeal By-Laws, the Board of Directors may
adopt, amend or repeal By-Laws.
***
8
<PAGE>
This is to certify that the foregoing is a true and correct copy of
the By-Laws of the corporation named in the title of these By-Laws and that such
By-Laws were duly adopted by the incorporators of such corporation on March 18,
1997.
Dated: March 18, 1997 /s/ Theodore T. Herman
----------------------------
Theodore T. Herman
Secretary
9
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