UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
AMENDMENT No. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS PURSUANT TO SECTION 12 (b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
20/20 WEB DESIGN, INC.
----------------------
(Name of Small Business Issuer in its charter)
Nevada, USA 33-0677140
----------- ----------
(State of Incorporation) (IRS Employer Identification No.)
21800 Oxnard Street, #440, Woodland Hills, California 91367
-----------------------------------------------------------
(Address of principal executive offices)
Issuer's Telephone Number, (818) 598-6780
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares, with par value of $0.001
(Common Stock)
<PAGE>
20/20 WEB DESIGN, INC.
FORM 10-SB
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business 3
Item 2. Management's Discussion and Analysis or Plan of
Operation 25
Item 3. Description of Property 28
Item 4. Security Ownership of Certain Beneficial Owners
and Management 28
Item 5. Directors, Executives Officers, Promoters
and Control Persons 29
Item 6. Executive Compensation 34
Item 7. Certain Relationships and Related Transactions 35
Item 8. Description of Securities. 36
PART II
Item 1. Market Price and Dividends on the Registrant's
Common Equity and Other Shareholder Matters 37
Item 2. Legal Proceedings 38
Item 3. Changes in and Disagreements with Accountants 38
Item 4. Recent Sales of Unregistered Securities 38
Item 5. Indemnification of Directors and Officers 39
PART F/S
PART III
Item 1. Index to Exhibits 39
Articles of Incorporation and Bylaws
Amendments
Agreement and Plan of Reorganization
Letter of Intent
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
20/20 Web Design, Inc. (the "Company") was incorporated on August 31, 1995
as "Visioneering Corporation" under the laws of the State of Nevada, to engage
in any lawful corporate undertaking, including, but not limited to, selected
mergers and acquisitions. The Company subsequently changed its name to
"Asiamerica Energy Group, Inc." on January 12, 1996 when it entered into an
agreement to acquire an oil and gas company. No stock was issued and no assets
were acquired as this acquisition was not consummated. The principals involved
in that transaction were Michael Taylor and Kathleen Taylor on behalf of the
energy company while David Sidhu was the sole officer and director of the
Company at that time.
The Company then changed its name to "Care Financial Group, Inc." on April
29, 1996. At that time, the Company had agreed to form a wholly owned
subsidiary, Care Concepts, Inc., a Nevada corporation ("Care Concepts"). The
Company issued 3,700,000 shares of its common stock to Care Concepts which
shares were valued at $25,000. Care Concepts was in the business of designing
and building specialized motor vehicles for physically handicapped drivers and
passengers. The principals of Care Concepts were Jack D. Kelly, Derold L. Kelly
and Brian J. Kelly. Ultimately, this acquisition did not succeed and the Company
paid Care Concepts $80,000 to terminate the agreement between Care Concepts and
the Company while the shareholders of Care Concepts retained their shares of the
Company's common stock. The Company subsequently approved a 250-to-1 reverse
stock split after this transaction was terminated.
On May 15, 1997, the Company changed its name to "Trump Oil Corporation"
("Trump"). Trump proposed to merge with Fenway Resources Ltd., a Canadian
company involved in natural resource development which wanted to develop and
construct a cement manufacturing facility in the Philippines. This proposed
merger was never consummated and no shares were issued pursuant to this
agreement. At the time of the proposed Fenway acquisition, the Company's
directors were David Sidhu, Geoff Armstrong and Parmjit Singh. Mr. Sidhu served
as a director since the Company's incorporation, Mr. Armstrong served as a
director since May, 1997 and Mr. Singh served as a director since July 1997.
Messrs. Sidhu and Armstrong resigned as directors upon completion of the
acquisition of 20/20 Web Design, Inc. in early 1999 while Mr. Singh resigned
shortly before the acquisition of 20/20 Web Design, Inc.
3
<PAGE>
The principals of Fenway were H. John Wilson, A. Leonard Taylor, Laurie Maranda,
R. George Muscroft, Rene E. Cristobal and Milton Schlesinger. Since the merger
was not completed, no assets were acquired, no shares were issued and the
officers and directors remained the same for the Company until the acquisition
of 20/20 Web Design, Inc.
None of the proposed business activities for which the Company's name was
changed produced any revenues or created any appreciable business activities for
the Company. On March 10, 1999, the Company entered into a letter of intent with
20/20 Web Design, Inc. ("20/20 Web"), a Colorado corporation, a wholly owned
subsidiary of Multi-Source Capital, Ltd. ("MSC"), also a Colorado corporation.
The Company entered into an Agreement and Plan of Reorganization and completed
its acquisition of 20/20 Web, with the Company changing its name as a result. As
a result of the merger, MSC became the owner of 80% of the issued and
outstanding shares of the Company. The Company recorded the 8,620,000 shares of
stock issued to MSC at par value for a total of $8,620. MSC was later acquired
by TeleMall Communications, Inc. ("TeleMall"), which subsequently changed its
name to Stein's Holdings, Inc. ("Stein's"). The control persons of MSC at the
time of the merger of 20/20 Web with the Company were James Smith, Christopher
Burnell and Irving Einhorn. The control persons of TeleMall at the time of its
acquisition of MSC were Rex Morden, Eric Savage and Tom Wells. Messrs. Savage
and Wells resigned upon completion of the acquisition of MSC and were replaced
by Messrs. Einhorn and Smith. The Board of Stein's was increased to five and Mr.
Burnell and Randy Sutton were appointed to fill the newly created positions.
At the time that 20/20 Web was acquired by the Company, the officers and
directors of 20/20 Web were Christopher Burnell, James Smith and Irving Einhorn.
None of these officers or directors owned any shares in 20/20 Web. Randy Sutton
was appointed President of the Company upon completion of the acquisition of
20/20 Web but resigned from both Stein's and the Company in late February, 2000.
Mr. Sutton never owned shares in the Company or in 20/20 Web. The only
shareholder of 20/20 Web at the time of its acquisition by the Company was MSC.
Mr. Burnell was a director of the Company, 20/20 Web and MSC at the time of the
proposed transaction and abstained from voting on the proposed transaction.
In 1999, the Company continued the business of the Colorado corporation it
acquired and continued to design and maintain web sites for small, private
companies. The Company's clients included a jewelry store, a gift basket company
and certain other small companies. The revenues received from these operations
were minimal. The Company still has an outstanding contract with Image
4
<PAGE>
Jewelers, Inc. whereby the Company is entitled to half of the net profits
generated from sales on its web site (www.imagejewelry.com) but in 1999, the
Company received no revenue from this agreement. For this year, the Company has
received no revenues from this contract and does not anticipate receiving much
in the way of revenues from this agreement. Any revenues to be received will be
minimal.
In December, 1999, the Company formed a wholly owned subsidiary, Stein's
Cake Box ("Cake Box"), a Nevada corporation. The Company entered into a letter
of intent with a bakery operation in Lewisville, Texas controlled by the
Company's president, Randy Sutton. The Company lent $195,000 to Cake Box in
connection with the letter of intent. Cake Box used the $195,000 to pay some of
the construction costs of a proposed bakery operation estimated to ultimately
cost a total of $750,000. The proposed construction project was to expand an
existing bakery operation located at the same location, College Connection, Inc.
dba Stein's Bakery (the "Bakery"), also run by Mr. Sutton.
The Bakery previously entered into a letter of intent in early 1999 with
Stein's to be acquired by Stein's upon Stein's raising approximately $1,200,000
to pay off certain loan obligations of the Bakery. To date, the acquisition of
the Bakery by Stein's has not occurred. The Bakery supplies certain convenience
store and gas mini marts with freshly baked goods, mostly consisting of
doughnuts, muffins and cookies. Cake Box was going to commence operations and
supply freshly baked goods to convenience stores and mini marts upon completion
of its construction project. Commencing in late 1999, Cake Box began to produce
certain freshly baked goods for these retail mini marts by subcontracting the
baked goods from the Bakery pending the completion of the construction project.
In late February, 2000, the Company and the Bakery mutually agreed to cancel
their letter of intent concerning Cake Box, although the Bakery remains liable
to repay the $195,000 it acquired from Cake Box.
On February 29, 2000, the Company's President, CEO and director, Randy
Sutton, resigned as an officer and director of both the Company and Stein's. The
Bakery has agreed to repay the Company the $195,000 lent to pay off certain
construction debts of the Bakery as part of the Cake Box Letter of Intent
although it is uncertain when the Bakery will be able to repay the loan since
the construction project has not been completed and the Bakery is facing
potential legal action from the contractors and subcontractors whom have not
been paid for all their work to date. The Company will only be repaid when and
if the Bakery has the funds to repay the Company and may have to institute legal
5
<PAGE>
proceedings to obtain repayment. Even if the Company is successful in obtaining
a judgment against the Bakery, it would still have to collect on that judgment.
The Company believes that most, if not all, of the Bakery's assets are subject
to other outstanding liens and security interests of other senior creditors,
making it difficult for the Company to enforce any judgment it is ultimately
successful in obtaining.
Following the Company's lack of success with the Cake Box venture, the
Company has determined that it will remain inactive at the present time, except
for limited web design projects it may agree to undertake in the future,
although it has no present new contracts for any web design projects, and that
the Company will seek suitable acquisition candidates. The Company can be
defined as a shell company whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity. As part of its
business plan, this Company is filing this registration statement on Form 10-SB
in order to become subject to the reporting requirements of the Securities
Exchange Act of 1934.
The Company's office is located at 21800 Oxnard Street, Suite 440,
Woodland Hills, California 91367. The contact person is Shahram Khial,
President. The telephone number is (818) 598-6780. The Company's web site is
located at www.2020webdesign.com.
The Company's authorized capital includes 25,000,000 shares of common
stock with a par value of $.001; at December 31, 1999, the end of the most
recent fiscal year, 10,774,787 shares of common stock were outstanding; at
February 29, 2000, 10,774,787 shares were outstanding.
The Company's common stock trades on the NASD Electronic Bulletin Board
under the symbol "TWEB-BB".
The information in the Registration Statement is current as of March 6,
2000, unless otherwise indicated.
The Company's business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture, or partnership. The Company has very limited capital, and it is
unlikely that the Company will be able to take advantage of more than one such
business opportunity. The Company intends to seek opportunities demonstrating
the potential of long-term growth as opposed to short-term earnings.
6
<PAGE>
At the present time, the Company has not identified any business
opportunity that it plans to pursue, nor has the Company reached any agreement
or definitive understanding with any person concerning an acquisition. It is
anticipated that the Company's Officers and Directors will contact
broker-dealers and other persons with whom they are acquainted who are involved
in corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses they represent have an interest in
considering a merger or acquisition with the Company. No assurance can be given
that the Company will be successful in finding or acquiring a desirable business
opportunity, given the lack of any funds available for acquisitions, or that any
acquisition that occurs will be on terms that are favorable to the Company or
its stockholders. In addition, two of the Company's directors are directors of
another public company that is presently seeking a merger candidate similar to
what the Company is seeking. In the event that these two directors learn of an
opportunity for a public shell to merge with another company, both have agreed
that they will present the opportunity to both companies and leave the
negotiation of any potential deal to the other officers and directors of each
company to the extent practicable. Ultimately, the proposed merger candidate
will decide which company it prefers to merge with based on its needs and
requirements regarding total shares authorized, number of shares outstanding,
number of shareholders and other factors which the Company cannot determine at
the present will be most or more important to a potential merger candidate.
The Company's search will be directed toward small and medium- sized
enterprises which have a desire to become public corporations and which are able
to satisfy, or anticipate in the reasonably near future being able to satisfy,
the minimum asset requirements in order to qualify shares for trading on NASDAQ
or on a stock exchange (See "Investigation and Selection of Business
Opportunities"). The Company anticipates that the business opportunities
presented to it will (i) be recently organized with no operating history, or a
history of losses attributable to under- capitalization or other factors; (ii)
be experiencing financial or operating difficulties; (iii) be in need of funds
to develop a new product of service or to expand into a new market; (iv) be
relying upon an untested product or marketing concept; or (v) have a combination
of the characteristics mentioned in (i) through (iv). The Company intends to
concentrate its acquisition efforts on properties or businesses that it believes
to be undervalued. Given the above factors, investors should expect that any
acquisition candidate may have a history of losses or low profitability.
The Company does not propose to restrict its search for
7
<PAGE>
investment opportunities to any particular geographical area or industry, and
may, therefore, engage in essentially any business, to the extent of its limited
resources. This includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors.
As a consequence of this registration of its securities, any entity which
has an interest in being acquired by, or merging into the Company, is expected
to be an entity that desires to become a public company. In connection with such
a merger or acquisition, it is highly likely that an amount of stock
constituting control of the Company would be issued by the Company or purchased
from the current principal shareholders of the Company by the acquiring entity
or its affiliates. If stock is purchased from the current shareholders, the
transaction is very likely to result in substantial gains to them relative to
their purchase price for such stock. In the Company's judgment, none of its
Officers and Directors would thereby become an underwriter within the meaning of
the Section 2(11) of the Securities Act of 1933, as amended.
Depending upon the nature of the transaction, the current Officers and
Directors of the Company may resign their management positions with the Company
in connection with the Company's acquisition of a business opportunity. See
"Form of Acquisition", below, and "Risk Factors - The Company - Lack of
Continuity in Management". In the event of such resignations, the Company's
current management would not have any control over the conduct of the Company's
business following the Company's combination with a business opportunity.
It is anticipated that business opportunities will come to the Company's
attention from various sources, including its Officers and Directors, its other
stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plans, understandings, agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.
The Company does not foresee that it would enter into a merger or
acquisition transaction with any business with which its Officers or Directors
are currently affiliated. Should the Company determine in the future, contrary
to the foregoing expectations, that a transaction with an affiliate would be in
the best interests of the Company and its stockholders, the Company is in
general
8
<PAGE>
permitted by Nevada law to enter into such a transaction if:
1. The material facts as to the relationship or interest of the affiliate and as
to the contract or transaction are disclosed or are known to the Board of
Directors, and the Board in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested directors, even though
the disinterested directors constitute less than a quorum; or
2. The material facts as to the relationship or interest of the affiliate and as
to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
3. The contract or transaction is fair as to the Company as of the time it is
authorized, approved or ratified, by the Board of Directors or the stockholders.
INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the other
company's management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological changes, the
perceived benefit the company will derive from becoming a publicly held entity,
and numerous other factors which are difficult, if not impossible, to analyze
through the application of any objective criteria. In many instances, it is
anticipated that the historical operations of a specific business opportunity
may not necessarily be indicative of the potential for the future because of the
possible need to shift marketing approaches substantially, expand significantly,
change product emphasis, change or substantially augment management, or make
other changes. The Company will be dependent upon the owners of a business
opportunity to identify any such problems which may exist and to implement, or
be primarily responsible for the implementation of, required changes. Because
the Company may participate in a business opportunity with a newly organized
firm or with a firm which is entering a new phase of growth, it should be
emphasized that the Company will incur further risks, because management in many
instances will not have proved its abilities or effectiveness, the eventual
market for such company's products or services will likely not be established,
and such company may not be profitable when acquired.
It is anticipated that the Company will not be able to diversify, but will
essentially be limited to one such venture
9
<PAGE>
because of the Company's limited financing. This lack of diversification will
not permit the Company to offset potential losses from one business opportunity
against profits from another, and should be considered an adverse factor
affecting any decision to purchase the Company's securities. It is emphasized
that management of the Company may effect transactions having a potentially
adverse impact upon the Company's shareholders pursuant to the authority and
discretion of the Company's management to complete acquisitions without
submitting any proposal to the stockholders for their consideration. Holders of
the Company's securities should not anticipate that the Company necessarily will
furnish such holders, prior to any merger or acquisition, with financial
statements, or any other documentation, concerning a target company or its
business. In some instances, however, the proposed participation in a business
opportunity may be submitted to the stockholders for their consideration, either
voluntarily by such directors to seek the stockholders advice and consent or
because state law so requires.
The analysis of business opportunities will be undertaken by or under the
supervision of the Company's President, who is not a professional business
analyst. See "Management". Although there are no current plans to do so, Company
management might hire an outside consultant to assist in the investigation and
selection of business opportunities, and might pay a finder's fee. Since Company
management has no current plans to use any outside consultants or advisors to
assist in the investigation and selection of business opportunities, no policies
have been adopted regarding use of such consultants or advisors, the criteria to
be used in selecting such consultants or advisors, the services to be provided,
the term of service, or regarding the total amount of fees that may be paid.
However, because of the limited resources of the Company, it is likely that any
such fee the Company agrees to pay would be paid in stock and not in cash.
Otherwise, the Company anticipates that it will consider, among other things,
the following factors:
1. Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;
2. The Company's perception of how any particular business opportunity will be
received by the investment community and by the Company's stockholders;
3. Whether, following the business combination, the financial condition of the
business opportunity would be, or would have a significant prospect in the
foreseeable future of becoming sufficient to enable the securities of the
Company to qualify for
10
<PAGE>
listing on an exchange or on a national automated securities quotation system,
such as NASDAQ, so as to permit the trading of such securities to be exempt from
the requirements of Rule 15c2-6 adopted by the Securities and Exchange
Commission. See "Risk Factors - The Company - Regulation of Penny Stocks";
4. Capital requirements and anticipated availability of required funds, to be
provided by the Company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;
5. The extent to which the business opportunity can be advanced;
6. Competitive position as compared to other companies of similar size and
experience within the industry segment as well as within the industry as a
whole;
7. Strength and diversity of existing management, or management prospects that
are scheduled for recruitment;
8. The cost of participation by the Company as compared to the perceived
tangible and intangible values and potential; and
9. The accessibility of required management expertise, personnel, raw materials,
services, professional assistance, and other required items.
In regard to the possibility that the shares of the Company would qualify
for listing on NASDAQ, the current standards include the requirements that the
issuer of the securities that are sought to be listed have net tangible assets
of at least $4,000,000 or a market capitalization of $50 million or $950,000 in
net income in the latest fiscal year. Many, and perhaps most, of the business
opportunities that might be potential candidates for a combination with the
Company would not satisfy the NASDAQ listing criteria.
Not one of the factors described above will be controlling in the
selection of a business opportunity, and management will attempt to analyze all
factors appropriate to each opportunity and make a determination based upon
reasonable investigative measures and available data. Potentially available
business opportunities may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Potential investors must recognize that, because of the Company's
limited capital available for investigation and management's limited experience
in business analysis, the Company may not discover or adequately evaluate
11
<PAGE>
adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.
Prior to making a decision to participate in a business opportunity, the
Company will generally request that it be provided with written materials
regarding the business opportunity containing such items as a description of
products, services and company history; management resumes; financial
information; available projections, with related assumptions upon which they are
based; an explanation of proprietary products and services; evidence of existing
patents, trademarks, or services marks, or rights thereto; present and proposed
forms of compensation to management; a description of transactions between such
company and its affiliates during relevant periods; a description of present and
required facilities; an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable period of time not
to exceed 60 days following completion of a merger transaction; and other
information deemed relevant.
As part of the Company's investigation, the Company's executive Officers
and Directors may meet personally with management and key personnel, may visit
and inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.
It is possible that the range of business opportunities that might be
available for consideration by the Company could be limited by the impact of
Securities and Exchange Commission regulations regarding purchase and sale of
penny stocks. The regulations would affect, and possibly impair, any market that
might develop in the Company's securities until such time as they qualify for
listing on NASDAQ or on another exchange which would make them exempt from
applicability of the penny stock regulations. See "Risk Factors - Regulation of
Penny Stocks".
Company management believes that various types of potential merger or
acquisition candidates might find a business combination
12
<PAGE>
with the Company to be attractive. These include acquisition candidates desiring
to create a public market for their shares in order to enhance liquidity for
current shareholders, acquisition candidates which have long-term plans for
raising capital through the public sale of securities and believe that the
possible prior existence of a public market for their securities would be
beneficial, and acquisition candidates which plan to acquire additional assets
through issuance of securities rather than for cash, and believe that the
possibility of development of a public market for their securities will be of
assistance in that process. Acquisition candidates which have a need for an
immediate cash infusion are not likely to find a potential business combination
with the Company to be an attractive alternative.
FORM OF ACQUISITION
It is impossible to predict the manner in which the Company may
participate in an business opportunity. Specific business opportunities will be
reviewed as well as the respective needs and desires of the Company and the
promoters of the opportunity and, upon the basis of that review and the relative
negotiating strength of the Company and such promoters, the legal structure or
method deemed by management to be suitable will be selected. Such structure may
include, but is not limited to leases, purchase and sale agreements, licenses,
joint ventures and other contractual arrangements. The Company may act directly
or indirectly through an interest in a partnership, corporation or other form of
organization. Implementing such structure may require the merger, consolidation
or reorganization of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a transaction, the Company's existing directors may resign and new
directors may be appointed without any vote by stockholders.
It is also probable that any proposed acquisition would be of the form of
a reverse merger where the Company would acquire a business with the Company
being the surviving entity. As such, the shareholders of the Company would
probably not be required to approve such a transaction or merger or any such
approval, if required, could be obtained from the Company from its majority
shareholder, Stein's, which owns 80% of the Company's common stock, which
percentage is greater than the 50% majority typically required to approve such
transactions. In such a case, the Company would not be required to provide a
proxy statement or an
13
<PAGE>
opportunity to vote to its shareholders on such proposed transaction. The
Company would be required to file a Current Report on Form 8-K to report this
transaction within fifteen (15) days of the event. The relevant financial
statements, including pro forma financial statements and audited financial
statements of the company to be acquired, would be filed with the Form 8-K or
within 60 days after the Form 8-K is filed. The Company intends to require
audited financial statements from any proposed acquisition candidate.
It is likely that the Company will acquire its participation in a business
opportunity through the issuance of Common Stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called tax free reorganization under the
Internal Revenue Code of 1986 depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e., 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other tax free provisions provided under the Internal Revenue Code, the
company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current Officers, Directors and principal
shareholders.
It is anticipated that any new securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available, from
registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of the transaction, the Company
may agree to register such securities either at the time the transaction is
consummated, or under certain conditions or at specified times thereafter. The
issuance of substantial additional securities and their potential sale into any
trading market that might develop in the Company's securities may have a
depressive effect upon such market.
The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions which
must
14
<PAGE>
be satisfied by each of the parties thereto prior to such closing, outline the
manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.
As a general matter, the Company anticipates that it, and/or its Officers
and principal shareholders will enter into a letter of intent with the
management, principals or owners of a prospective business opportunity prior to
signing a binding agreement. Such a letter of intent will set forth the terms of
the proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of the
other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys
and others. If a decision is made not to participate in a specific business
opportunity, the costs incurred in the related investigation would not be
recoverable. Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are provided, the
inability of the Company to pay until an indeterminate future time may make it
impossible to procure goods and services.
INVESTMENT COMPANY ACT AND OTHER REGULATION
The Company may participate in a business opportunity by purchasing,
trading or selling the securities of such business. The Company does not,
however, intend to engage primarily in such activities. Specifically, the
Company intends to conduct its activities so as to avoid being classified as an
investment company under the Investment Company Act of 1940 (the Investment
Act), and to avoid application of the costly and restrictive registration,
regulation and other provisions of the Investment Act.
Section 3(a) of the Investment Act contains the definition of an
investment company, and it excludes any entity that does not engage primarily in
the business of investing, reinvesting or
15
<PAGE>
trading in securities, or that does not engage in the business of investing,
owning, holding or trading investment securities (defined as all securities
other than government securities or securities of majority-owned subsidiaries)
the value of which exceeds 40% of the value of its total assets (excluding
government securities, cash or cash items). The Company intends to implement its
business plan in a manner, which will result in the availability of this
exception from the definition of an investment company. Consequently, the
Company's participation in a business or opportunity through the purchase and
sale of investment securities will be limited.
The Company's plan of business may involve changes in its capital
structure, management, control and business, especially if it consummates a
reorganization as discussed above. Each of these areas is regulated by the
Investment Act, in order to protect purchasers of investment company securities.
Since the Company will not register as an investment company, stockholders will
not be afforded these protections.
Any securities which the Company might acquire in exchange for its Common
Stock will be "restricted securities" within the meaning of the Securities Act
of 1933, as amended (the Act). If the Company elects to resell such securities,
such sale cannot proceed unless a registration statement has been declared
effective by the Securities and Exchange Commission or an exemption from
registration is available. Section 4(1) of the Act, which exempts sales of
securities not involving a distribution, would in all likelihood be available to
permit a private sale. Although the plan of operation does not contemplate
resale of securities acquired, if such a sale were to be necessary, the Company
would be required to comply with the provisions of the Act to effect such
resale.
An acquisition made by the Company may be in an industry that is regulated
or licensed by federal, state or local authorities. Compliance with such
regulations can be expected to be a time- consuming and expensive process.
LIMITATIONS ON RESALE
Numerous states have passed rules and regulations limiting the sale or
offers of securities of "blank check" companies in their jurisdictions. Some of
these regulations prohibit the initial sale and offer of the securities of
"blank check" companies as well as prohibiting the resale of these securities to
residents of these states. This may limit the ability of shareholders and
potential investors in the Company to sell or resell their shares of the
16
<PAGE>
Company's stock, thereby affecting the liquidity of their investment in the
Company's stock. The following states may have rules and regulations that may
impose such limitations on sales, offers and/or resales of the securities of
"blank check" companies such as this Company: Alaska, Arkansas, Arizona,
California, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana,
Iowa, Kansas, Kentucky, Massachusetts, Missouri, Nebraska, New Jersey, North
Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Utah, Vermont,
Virginia and Washington. This list may not contain every state that has such a
prohibition, or states that have other prohibitions against transactions in the
Company's stock and does not preclude additional states from adopting such
prohibitions. Shareholders and prospective investors are warned to check upon
the legality of any such sale or resale prior to entering into such an
arrangement.
COMPETITION
The Company expects to encounter substantial competition in its efforts to
locate attractive opportunities, primarily from business development companies,
venture capital partnerships and corporations, venture capital affiliates of
large industrial and financial companies, small investment companies, and
wealthy individuals. Many of these entities will have significantly greater
experience, resources and managerial capabilities than the Company and will
therefore be in a better position than the Company to obtain access to
attractive business opportunities. The Company also will experience competition
from other public blind pool companies, many of which may have more funds
available than does the Company.
CORPORATE OFFICES
The Company currently occupies office space at 21800 Oxnard Street, Suite
440, Woodland Hills, California 91367 at no cost to the Company. The Company's
telephone number is (818) 598-6780. Other than this office, the Company does not
currently maintain any other office facilities, and does not anticipate the need
for maintaining additional office facilities at any time in the foreseeable
future. The Company pays no rent as its majority shareholder, Stein's, provides
this space at no cost to the Company.
EMPLOYEES
The Company currently has no employees. Management of the Company expects
to use consultants, attorneys and accountants as necessary, and does not
anticipate a need to engage any full-time
17
<PAGE>
employees so long as it is seeking and evaluating business opportunities. The
need for employees and their availability will be addressed in connection with
the decision whether or not to acquire or participate in specific business
opportunities.
RISK FACTORS
Current and prospective shareholders should carefully consider the
following risk factors, together with the other information contained in this
Form 10-SB, in evaluating the Company and its business. The factors listed below
represent certain important factors the Company believes could cause such
results to differ. These factors are not intended to represent a complete list
of the general or specific risks that may affect the Company. It should be
recognized that other risks may be significant, presently or in the future, and
the risks set forth below may affect the Company to a greater extent than
indicated.
CONFLICTS OF INTEREST. Certain conflicts of interest exist between the Company
and its Officers and Directors. They have other business interests to whom they
devote their attention, and they may be expected to continue to do so in the
future. In addition, the directors and officers may be directors and officers of
other public shells that are also seeking suitable merger candidates. Two
directors are presently directors of another public company that is seeking a
suitable merger candidate. As a result, conflicts of interest may arise that can
be resolved only through their exercise of such judgment as is consistent with
their fiduciary duties to the Company. (See "Management" and "Conflicts of
Interest."
It is anticipated that Company's Officers and Directors may actively
negotiate or otherwise consent to the purchase of a portion of their common
stock as a condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, the Company's Officers and Directors may receive a
substantial premium to acquire the shares of the majority shareholder, Stein's,
of which the officers and directors of the Company are also officers and
directors, which would benefit them indirectly, in a merger or acquisition
transaction and could consider their own personal pecuniary benefit rather than
the best interests of other Company shareholders, and the other Company
shareholders are not expected to be afforded the opportunity to approve or
consent to any particular stock buy-out transaction. See "Conflicts of
Interest".
NEED FOR ADDITIONAL FINANCING. The Company has very limited cash funds and it
may be impossible to take advantage of any available
18
<PAGE>
business opportunities. The Company cannot rely on the repayment of the loan
made to Cake Box as being repaid in the near future, if at all, due to the
Bakery's present lack of funds and capital. Even if the lack of funds does not
hinder the acquisition of an interest in, or complete a transaction with, a
business opportunity, the Company will not, in all likelihood, have enough
capital to exploit the opportunity. Accordingly, the ultimate success of the
Company may depend upon its ability to raise additional capital. The Company has
not investigated the availability, source, or terms that might govern the
acquisition of additional capital and will not do so until it determines a need
for additional financing. If additional capital is needed, there is no assurance
that funds will be available from any source or, if available, that the funds
can be obtained on terms acceptable to the Company. If not available, the
Company's operations will be limited to those that can be financed with its
debt/equity securities.
REGULATION OF PENNY STOCKS. The Company's securities are subject to a Securities
and Exchange Commission rule that imposes special sales practice requirements
upon broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
Accredited investors means, in general terms, institutions with assets in excess
of $5,000,000, or individuals having a net worth in excess of $1,000,000 or
having an annual income that exceeds $200,000 (or that, when combined with a
spouse's income, exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of broker-dealers to sell
the Company's securities and also may affect the ability of purchasers in this
offering to sell their securities.
In addition, the Securities and Exchange Commission has adopted a number
of rules to regulate Penny stocks. Such rules include Rules 3a51-1, 15g-1,
15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-7 under the Securities Exchange Act
of 1934, as amended. Because the securities of the Company may constitute Penny
stocks within the meaning of the rules, the rules would apply to the Company and
to its securities. The rules may further affect the ability of owners of Shares
to sell the securities of the Company.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i) control
of the market for the security by one or a few broker-dealers that are often
related to
19
<PAGE>
the promoter or issuer; (ii) manipulation of prices through prearranged matching
of purchases and sales and false and misleading press releases; (iii) boiler
room practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker- dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to the
Company's securities.
LIMITED OPERATING HISTORY. The Company was formed on August 31, 1995 for the
purpose of engaging in any lawful activity; however, the Company has limited
operating history, minimal revenues from operations, and limited assets. The
Company faces all of the risks of a new business and the special risks inherent
in the investigation, acquisition, or involvement in a new business opportunity.
The Company must be regarded as a new or start-up venture with all of the
unforeseen costs, expenses, problems, and difficulties to which such ventures
are subject.
NO ASSURANCE OF SUCCESS OR PROFITABILITY. There is no assurance that the Company
will acquire a favorable business opportunity. Even if the Company should become
involved in a business opportunity, there is no assurance that it will generate
revenues or profits, or that the market price of the Company's Common Stock will
be increased thereby.
POSSIBLE BUSINESS NOT IDENTIFIED AND HIGHLY RISKY. The Company has not
identified and has no commitments to enter into or acquire a specific business
opportunity and therefore can disclose the risks and hazards of a business or
opportunity that it may enter into in only a general manner, and cannot disclose
the risks and hazards of any specific business or opportunity that it may enter
into. A shareholder can expect a potential business opportunity to be quite
risky. The Company's acquisition of or participation in a business opportunity
will likely be highly illiquid and could result in a total loss to the Company
and its stockholders if the business or opportunity proves to be unsuccessful.
See "ITEM 1 Description of Business".
TYPE OF BUSINESS ACQUIRED. The type of business to be acquired may
20
<PAGE>
be one that desires to avoid effecting its own public offering and the
accompanying expenses, delays, uncertainties, and federal and state requirements
which purport to protect investors. Because of the Company's lack of capital, it
is more likely than not that any acquisition by the Company will involve other
parties whose primary interest is the acquisition of control of a publicly
traded company. Moreover, any business opportunity acquired may be currently
unprofitable or present other negative factors.
IMPRACTICABILITY OF EXHAUSTIVE INVESTIGATION. The Company's lack of funds and
the lack of full-time management will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a business opportunity
before the Company commits its capital or other resources thereto. Management
decisions, therefore, will likely be made without detailed feasibility studies,
independent analysis, market surveys and the like which, if the Company had more
funds available to it, would be desirable. The Company will be particularly
dependent in making decisions based upon information provided by the promoter,
owner, sponsor, or others associated with the business opportunity seeking the
Company's participation. A significant portion of the Company's available funds
may be expended for investigative expenses and other expenses related to
preliminary aspects of completing an acquisition transaction, whether or not any
business opportunity investigated is eventually acquired.
LACK OF DIVERSIFICATION. Because of the lack of financial resources that the
Company has, it is unlikely that the Company will be able to diversify its
acquisitions or operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.
POSSIBLE RELIANCE UPON UNAUDITED FINANCIAL STATEMENTS. The Company generally
will require audited financial statements from companies that it proposes to
acquire. No assurance can be given, however, that audited financials will be
available to the Company. In cases where audited financials are unavailable, the
Company will have to rely upon unaudited information received from target
companies management that has not been verified by outside auditors. The lack of
the type of independent verification which audited financial statements would
provide increases the risk that the Company, in evaluating an acquisition with
such a target company, will not have the benefit of full and accurate
information about the financial condition and operating history of the target
company. This risk increases the prospect that the acquisition of such a company
might prove to be an unfavorable one for the Company
21
<PAGE>
or the holders of the Company's securities.
Moreover, the Company will be subject to the reporting provisions of the
Securities Exchange Act of 1934, as amended (the Exchange Act), and thus will be
required to furnish certain information about significant acquisitions,
including audited financial statements for any business that it acquires.
Consequently, acquisition prospects that do not have, or are unable to provide
reasonable assurances that they will be able to obtain, the required audited
statements would not be considered by the Company to be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable. Should the Company, during the time it remains subject to the
reporting provisions of the Exchange Act, complete an acquisition of an entity
for which audited financial statements prove to be unobtainable, the Company
would be exposed to enforcement actions by the Securities and Exchange
Commission (the Commission) and to corresponding administrative sanctions,
including permanent injunctions against the Company and its management. The
legal and other costs of defending a Commission enforcement action are likely to
have material, adverse consequences for the Company and its business. The
imposition of administrative sanctions wold subject the Company to further
adverse consequences.
In addition, the lack of audited financial statements would prevent the
securities of the Company from becoming eligible for listing on NASDAQ, the
automated quotation system sponsored by the National Association of Securities
Dealers, Inc., or on any existing stock exchange. Moreover, the lack of such
financial statements is likely to discourage broker-dealers from becoming or
continuing to serve as market makers in the securities of the Company. Without
audited financial statements, the Company would almost certainly be unable to
offer securities under a registration statement pursuant to the Securities Act
of 1933, and the ability of the Company to raise capital would be significantly
limited until such financial statements were to become available.
OTHER REGULATION. An acquisition made by the Company may be of a business that
is subject to regulation or licensing by federal, state, or local authorities.
Compliance with such regulations and licensing can be expected to be a
time-consuming, expensive process and may limit other investment opportunities
of the Company.
DEPENDENCE UPON MANAGEMENT; LIMITED PARTICIPATION OF MANAGEMENT. The Company
currently has three individuals who serve as its Officers and Directors. The
Company will be heavily dependent upon their skills, talents, and abilities to
implement its business plan, and may, from time to time, find that the inability
of the
22
<PAGE>
Officers and Directors to devote their full time attention to the business of
the Company results in a delay in progress toward implementing its business
plan. Furthermore, since only four individuals are serving as the Officers and
Directors of the Company, it will be entirely dependent upon their experience in
seeking, investigating, and acquiring a business and in making decisions
regarding the Company's operations. (See "Management.") Because investors will
not be able to evaluate the merits of possible business acquisitions by the
Company, they should critically assess the information concerning the Company's
Officers and Directors.
LACK OF CONTINUITY IN MANAGEMENT. The Company does not have an employment
agreement with its Officers and Directors, and as a result, there is no
assurance that they will continue to manage the Company in the future. In
connection with acquisition of a business opportunity, it is likely the current
Officers and Directors of the Company may resign. A decision to resign will be
based upon the identity of the business opportunity and the nature of the
transaction, and is likely to occur without the vote or consent of the
stockholders of the Company.
INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Company's Articles of
Incorporation provide for the indemnification of its Directors, Officers,
employees, and agents, under certain circumstances, against attorney's fees and
other expenses incurred by them in any litigation to which they become a party
arising from their association with or activities on behalf of the Company. The
Company will also bear the expenses of such litigation for any of its Directors,
Officers, employees, or agents, upon such person promise to repay the Company if
it is ultimately determined that any such person shall not have been entitled to
indemnification. This indemnification policy could result in substantial
expenditures by the Company, which it will be unable to recoup.
DEPENDENCE UPON OUTSIDE ADVISORS. To supplement the business experience of its
Officers and Directors, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants, or advisors. The
selection of any such advisors will be made by the Company's President without
any input from stockholders. Furthermore, it is anticipated that such persons
may be engaged on an as needed basis without a continuing fiduciary or other
obligation to the Company. In the event the President or the Company considers
it necessary to hire outside advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required services.
LEVERAGED TRANSACTIONS. There is a possibility that any acquisition
23
<PAGE>
of a business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generated enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.
COMPETITION. The search for potentially profitable business opportunities is
intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company. These competitive
conditions will exist in any industry in which the Company may become
interested.
NO FORESEEABLE DIVIDENDS. The Company has not paid dividends on the Common Stock
and does not anticipate paying such dividends in the foreseeable future.
LOSS OF CONTROL BY PRESENT MANAGEMENT AND STOCKHOLDERS. The Company may consider
an acquisition in which the Company would issue as consideration for the
business opportunity to be acquired an amount of the Company's authorized but
unissued Common Stock that would, upon issuance, represent the great majority of
the voting power and equity of the Company. The result of such an acquisition
would be that the acquired company's stockholders and management would control
the Company, and the Company's management could be replaced by persons unknown
at this time. Such a merger would result in a greatly reduced percentage of
ownership of the Company by its current shareholders. In addition, the Company's
majority shareholder could sell its control blocks of stock at a premium price
to the acquired company's stockholders.
The acquisition will, in all probability, be structured as a tax-free
exchange under the Internal Revenue Code of 1986 to accommodate the shareholders
of the business entity to be acquired. If so structured, the Company's
shareholders will not be impacted either positively or negatively.
SHARES ELIGIBLE FOR FUTURE SALE. Sales of a substantial number of shares of the
Company's common stock in the public market could adversely affect the market
price of the 10,774,787 shares
24
<PAGE>
outstanding at December 31, 1999, 2,154,787 shares of common stock are free
tradable. 8,620,000 shares of common stock are eligible for sale in the public
market, subject to compliance with Rule 144 under the Securities Act of 1933, as
amended (the Securities Act). Rule 144 generally provides that beneficial owners
of shares who have held such shares for one year may sell within a three month
period a number of shares not exceeding the greater of 1% of the total
outstanding shares or the average trading volume of the shares during the four
calendar weeks preceding such sale. The present Officers and Directors own no
shares of the Company's stock. However, all of the officers and directors are
officers and directors of Stein's, the majority shareholder of the Company and
owner of the 8,620,000 shares of restricted stock. Stein's could sell its stock
in accordance with Rule 144 after May 1, 2000 since it will have held its shares
for at least one year at that time but Stein's has no intention of selling its
shares at the present time.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE
When used in this Form 10-SB, the words anticipated, estimate, expect, and
similar expressions are intended to identify forward- looking statements. Such
statements are subject to certain risks, uncertainties and assumptions including
the possibility that the Company's will fail to generate projected revenues.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated or projected.
LIQUIDITY AND CAPITAL RESOURCES
The Company was previously in the development stage until late 1999. Since
inception, the Company has experienced no significant change in liquidity or
capital resources or stockholders equity other than the receipts of proceeds
from offerings of its capital stock. The Company received $250,000 from an
offering conducted under Rule 504 of Regulation D in 1999. The Company also
raised $158,354 from the issuance of 7,200,000 shares of the Company's common
stock prior to 1997. In 1997, the Company raised an additional $345,000 from the
sale of its common stock. The Company's balance sheet as of December 31, 1999
reflects limited assets and limited liabilities. Further, there exists no
agreements or understandings with regard to loan agreements by or with the
Officers, Directors, principals, affiliates or shareholders of the Company.
25
<PAGE>
The Company will attempt to carry out its plan of business as discussed
above. The Company cannot predict to what extent its lack of liquidity and
capital resources will hinder its business plan prior to the consummation of a
business combination.
RESULTS OF OPERATIONS
During the period from August 31, 1995 (inception) through December 31,
1999, the Company engaged in limited operations and attempted to commence
operations in a number of different fields, none of which was ultimately
successful or resulted in any appreciable revenues for the Company. The revenues
received by the Company during this period consisted of $2,500 from its web
design and $28,136 in revenues from the bakery operations resulting in a net
loss of $34,910 for the period ended December 31, 1999. The Bakery operations
ceased in February, 2000 and the Company will receive no further revenues from
those operations. For the year ended December 31, 1998, the Company had no
revenues or income but recorded a net operating loss of $359,441 resulting
primarily from a loss on an investment of $347,833 and $10,100 in professional
fees. The net loss per share was $.003 for the year ended December 31, 1999
compared to a loss per share of $.035 for the year ended December 31, 1998.
For the year ended December 31, 1999, the Company had assets of
approximately of $508,000 and current liabilities of approximately $313,000, of
which most of the assets and liabilities related to the operations of Cake Box.
For the year ended December 31, 1998, the Company had total assets of
approximately $2,500 and no current liabilities. Shareholders equity for the
year ended December 31, 1999 was approximately $194,000 compared to total
shareholder equity of approximately $2,500 at December 31, 1998. The difference
between the year end figures from 1998 to 1999 are primarily attributable to the
Cake Box operations. Since those operations ceased in late February, 2000, the
Company's financial statements will be impacted by the cessation of this bakery
operations and the accompanying write off of its investment in the bakery
operations.
The Company anticipates that until a business combination is completed
with an acquisition candidate, it will not generate revenues and may operate at
a loss after completing a business combination, depending upon the performance
of the acquired business.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
26
<PAGE>
The following discussion of the financial condition, changes in financial
condition and results of operations of the Company for the fiscal years ended
December 31, 1999 and December 31, 1998 should be read in conjunction with the
financial statements of the Company and related notes included therein.
The Company was incorporated on August 31, 1995 as Visioneering
Corporation. On January 12, 1996, the Company amended its Articles of
Incorporation to change its name to Asiamerica Energy Corporation, to Care
Financial Corporation in April 29, 1996 and to Trump Oil Corporation on May 15,
1997. In March, 1999, the Company entered into a letter of intent to acquire
20/20 Web Design, Inc., a Colorado corporation wholly owned by Stein's Holdings,
Inc. fka Multi-Source Capital, Ltd. As part of that transaction, the Company
issued 8,620,000 shares of its common stock to Stein's with the result that
Stein's owns 80% of the issued and outstanding shares of the Company. The
Company also approved a ten-for-one reverse stock split as part of that
transaction.
Since the agreements described above, the Company has financed its
activities through the distribution of equity capital, including private
placements of its common stock resulting in the Company raising capital of
$749,494 from 1995 to the present. The Company used the proceeds from these
offerings to fund its proposed operations, to pay salaries, to pay general and
administrative expenses and any necessary expenses.
The Company will attempt to carry out its business plan as discussed
above. The Company cannot predict to what extent its lack of liquidity and
capital resources will hinder its business plan prior to the consummation of a
business combination.
NEED FOR ADDITIONAL FINANCING
The Company believes that its existing capital will not be sufficient to
meet the Company's cash needs, including the costs of compliance with the
continuing reporting requirements of the Securities Exchange Act of 1934, as
amended. Once a business combination is completed, the Company's needs for
additional financing are likely to increase substantially. It is anticipated
that Stein's will likely advance any funds necessary to insure that the Company
is able to meet its reporting obligations under the 1934 Act and that these
loans will be repaid either when the Company merges or acquires a business or
from the repayment of the $195,000 loan made to Stein's Bakery. However, Stein's
has not agreed in writing to provide these funds and can only provide these
funds to the extent that it has available funds to loan to the
27
<PAGE>
Company.
No commitments to provide additional funds have been made by management or
other stockholders. Accordingly, there can be no assurance that any funds will
be available to the Company to allow it to cover its expenses.
The Company might seek to compensate providers of services by issuances of
stock in lieu of cash.
ITEM 3 DESCRIPTION OF PROPERTY.
The Company currently occupies office space provided by its majority
shareholder, Stein's Holdings, Inc., at no cost. The Company believes that its
facilities are sufficient for its needs at the present time. The Company's
telephone number is (818) 598-6780.
ITEM 4 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the date of this Registration
Statement, the number of shares of Common Stock owned of record and beneficially
by executive Officers, Directors and persons who hold 5.0% or more of the
outstanding Common Stock of the Company. Also included are the shares held by
all executive officers and directors as a group.
Names and Addresses Number of Shares Percent of
Owned Beneficially Beneficially Owned Shares
Cede and Co.(1) 614,118 5.7%
P.O. Box 22
New York NY 10274
Irving M. Einhorn (2) 0 0.0%
11900 Olympic Blvd. Ste 510
Los Angeles, CA 9004
Shahram Khial (2) 0 0.0%
21800 Oxnard Street Ste. 440
Woodland Hills CA 91367
Christopher Burnell (2) 0 0.0%
21800 Oxnard Street Ste. 440
Woodland Hills CA 91367
James H. Smith (2) 0 0.0%
28
<PAGE>
348 Georgetown Ave
San Mateo, CA 94402
Stein's Holdings, Inc.(3) 8,620,000 80.00%
21800 Oxnard Street Ste 440
Woodland Hills CA 91367
(1) Cede owns the shares as nominee for the shareholders who have placed their
shares in street name. Cede does not have investment power for the shares nor
voting power of the shares.
(2) Denotes officer or director - all officers and directors are also officers
and directors of Stein's Holdings, Inc. which is the majority shareholder of the
Company.
(3) The control persons of Stein's are the officers and directors of the
Company: Christopher Burnell, James Smith, Irving Einhorn, and Shahram Khial.
These persons have both investment and voting power for the 8,620,000 shares
beneficially owned by Stein's.
ITEM NO. 5 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
The Directors and executive Officers currently serving the Company are
as follows:
Name Age Position Held and Tenure
Irving M. Einhorn 58 Director since April 1, 1999
Shahram Khial, Ph.D. 49 CEO, CFO and Director since
March 1, 2000
James Smith 55 Director since April 1, 1999
Christopher L. Burnell 26 Secretary and Director since
Feb. 15, 1999
The Directors named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, Directors will be elected for one-year terms
at the annual stockholders meeting. Officers will hold their positions at the
pleasure of the Board of Directors, absent any employment agreement, of which
none currently exist or is contemplated. There is no arrangement or
understanding between the Directors and Officers of the Company and any other
person pursuant to which any Director or Officer was or is to be
29
<PAGE>
selected as a Director or Officer of the Company.
There is no family relationship between or among any Officer and Director.
The Directors and Officers of the Company will devote their time to the
Company's affairs on an as needed basis. As a result, the actual amount of time
which each will devote to the Company's affairs is unknown and is likely to vary
substantially from month to month.
The Company has no audit or compensation committee.
BIOGRAPHICAL INFORMATION
IRVING EINHORN, ESQ.: Mr. Einhorn has been a practicing attorney for the past 26
years and he is an expert in the field of securities. Mr. Einhorn's expertise in
securities began upon graduation from law school in 1971 when he joined the
Securities and Exchange Commission's Chicago Regional office as a staff
attorney. He was promoted to the position of Branch Chief in charge of the
Enforcement in 1974 and in 1975 to the position of Senior Trial Counsel where he
was responsible for all litigation conducted by that office. In 1980, Mr.
Einhorn transferred to the Commission's headquarters in Washington, D.C. where
for the next four years he was Assistant Chief Trial Attorney with the Division
of Enforcement's Trial Unit. In this position, Mr. Einhorn was responsible for
prosecuting the Commission's most sensitive and complex cases. In March, 1984,
he was appointed to the position of Regional Administrator of the Securities and
Exchange Commission's Los Angeles office. In this position, Mr. Einhorn
supervised a staff of over 100 persons engaged in performing the Commission's
enforcement and regulatory responsibilities in the states of Arizona, Nevada,
Hawaii and California.
In May, 1989, Mr. Einhorn resigned from the SEC and joined Pacific Brokerage
Services, Inc., a member of the New York Stock Exchange, as Executive Vice
President and General Counsel. While there, he participated in management of all
aspects of the firm's operations on the New York Stock Exchange. As legal
counsel, he directed and conducted all firm arbitration proceedings and
exercised oversight of the firm's compliance department. In October 1990, Mr.
Einhorn entered the private practice of law, limiting his practice to securities
litigation and the representation of individuals before the SEC. He has also
served as an expert witness in a number of securities cases.
Mr. Einhorn is also an officer and director of Stein's Holdings,
30
<PAGE>
Inc., majority shareholder of the Company, traded on the OTC Electronic Bulletin
Board under the symbol "SNHS" and a director of National Healthcare Technology,
Inc., traded on the OTC Bulletin Board under the symbol "NHKT."
In 1968, Mr. Einhorn received a Bachelor of Arts degree from Temple University.
Mr. Einhorn then obtained his Juris Doctorate from Valparaiso University School
of Law in 1971. Mr. Einhorn has received further education by way of the
National Institute for Trial Advocacy, whereby he obtained education in the art
of Trial Advocacy and Advanced Trial Advocacy Skills in 1977 and 1982,
respectively.
JAMES H. SMITH: Mr. Smith has over 30 years of experience in automotive,
electronic component manufacturing and distribution, and pharmaceutical
wholesaling. Currently, Mr. Smith is chief operations officer of Decision
Dynamix Corporation. Prior to that, Mr. Smith served as the president for
McKesson Drug Company, which is an $11 billion wholesaler of pharmaceutical and
generic products, home health care, and health and beauty care products. Prior
to McKesson, Mr. Smith served as the president for the world's largest
electronic component distributor, Hamilton Hallmark, which is a division of
Avnet, Inc. Mr. Smith led the consolidation of Hamilton/Avnet with its third
largest competitor, Hallmark Electronics. Mr. Smith also served as corporate
senior vice president of Avnet, Inc.
Mr. Smith spent sixteen years with electronic component manufacturing companies:
Harris Semiconductor, Rockwell Microelectronics, ITT Semiconductor Components
Group, Texas Instruments, and International Rectifier. Mr. Smith's vast
experience stems from holding positions in sales, sales management, product line
marketing, customer services, advertising, and worldwide sales and marketing
with offshore profit and loss responsibility.
Mr. Smith is also a director of Stein's Holdings, Inc., majority shareholder of
the Company, traded on the OTC Bulletin Board under the symbol "SNHS" as well as
being an officer and director of National Healthcare Technology, Inc., traded on
the OTC Bulletin Board under the symbol "NHKT."
Mr. Smith graduated from Michigan State University with a Bachelor of Arts in
Economics.
SHAHRAM KHIAL, Ph.D. Dr. Khial was appointed CEO and CFO of the Company on March
1, 2000. From October 1996 to the present, Dr. Khial was employed by IPA
Preferred of California as vice president
31
<PAGE>
of Business Development and Special Corporate Projects. Prior to that, Dr. Khial
occupied the same position at Thrifty Management Services, Inc. From 1990
through April, 1996, Dr. Khial was vice president at HealthCare Management
Resources, Inc. in Santa Ana, California. Mr. Khial has extensive experience in
management and marketing. Dr. Khial also serves as CEO pf Pars Cultural
Foundation, Inc., a non-profit organization promoting Persian culture, art,
music and history.
Dr. Khial is also a director and president of Stein's Holdings, Inc.,
majority shareholder of the Company, traded on the OTC Bulletin Board under the
symbol "SNHS."
Dr. Khial received his doctorate in Educational Administration with an
Emphasis on Program Development, Evaluation, Supervision and Human Resources
Management in 1984 from the University of Utah. Dr. Khial was a candidate for a
Masters in Public Administration at the University of Tehran from 1977 to 1978.
Dr. Khial received his Bachelor of Arts degree in Law and Political Science from
the University of Tehran.
CHRISTOPHER BURNELL. Mr. Burnell joined the Company as a director in February,
1999. Mr. Burnell is presently COO of Stein's Holdings, Inc., majority
shareholder of the Company. Mr. Burnell presently is co-owner of a Play It Again
Sports store in Escondido, California. Mr. Burnell previously held Series 7, 63
and 24 licenses from the National Association of Securities Dealers, Inc.
("NASD") and worked for several NASD member firms.
Mr. Burnell is also an officer and director of Stein's Holdings, Inc., majority
shareholder of the Company, traded on the OTC Bulletin Board under the symbol
"SNHS."
Mr. Burnell attended Southwestern College and Grossmont College.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
As permitted by Nevada law, the Company's Articles of Incorporation
provide that the Company will indemnify its Directors and Officers against
expenses and liabilities they incur to defend, settle, or satisfy any civil or
criminal action brought against them on account of their being or having been
Company Directors or officers unless, in any such action, they are adjudged to
have acted with gross negligence or willful misconduct. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to Directors, Officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that, in the opinion of
the Securities and Exchange
32
<PAGE>
Commission, such indemnification is against public policy as expressed in that
Act and is, therefore, unenforceable.
OTHER PUBLIC SHELL ACTIVITIES
No Officer and/or Director of the Company has any prior involvement with
public shell companies or experience in identifying emerging companies for
investment and/or business combinations. However, two of the Company's
directors, Mr. Smith and Mr. Einhorn, are directors of another public company,
National Healthcare Technology, Inc., which is also seeking suitable merger
candidates and which may be described as a public shell. In the event that
Messrs. Smith and Einhorn are presented with a potential merger candidate, they
will present this opportunity to both companies and allow the officers of those
companies to negotiate directly with the potential merger candidate. Ultimately,
the potential merger candidate will decide which company it is interested in
merging with and at that point, it is anticipated that a letter of intent will
be executed. At that point, all of the directors, including Messrs. Smith and
Einhorn will evaluate the potential merger candidate and decide whether or not
the Company should proceed with the proposed acquisition.
CONFLICTS OF INTEREST
The Officers and Directors of the Company will devote only a small portion
of their time to the affairs of the Company, estimated to be no more than
approximately 5 hours per month. There will be occasions when the time
requirements of the Company's business conflict with the demands of their other
business and investment activities. Such conflicts may require that the Company
attempt to employ additional personnel. There is no assurance that the services
of such persons will be available or that they can be obtained upon terms
favorable to the Company. Tow of the directors, Messrs. Smith and Einhorn, are
directors of another public company, National Healthcare Technology, Inc. which
is also a shell company seeking a suitable merger candidate. Messrs. Smith and
Einhorn have agreed to submit possible merger candidates that they become aware
of to both companies for their review and negotiation with the merger candidate.
There is no procedure in place that would allow the Officers and Directors
to resolve potential conflicts in an arms-length fashion. Accordingly, they will
be required to use their discretion to resolve them in a manner, which they
consider appropriate.
The Company's Officers and Directors may actively negotiate or
33
<PAGE>
otherwise consent to the purchase of a portion of Stein's Holdings, Inc.'s
common stock as a condition to, or in connection with, a proposed merger or
acquisition transaction. It is anticipated that a substantial premium over the
initial cost of such shares may be paid by the purchaser in conjunction with any
sale of shares by Stein's which is made as a condition to, or in connection
with, a proposed merger or acquisition transaction. The fact that a substantial
premium may be paid to Stein's, for which all of the Company's directors are
also directors, to acquire its shares creates a potential conflict of interest
for them in satisfying their fiduciary duties to the Company and its other
shareholders. Even though such a sale could result in a substantial profit to
Stein's, they would be legally required to make the decision based upon the best
interests of the Company and the Company's other shareholders, rather than their
own personal pecuniary benefit or that of Stein's. Since the amount of stock
that Stein's owns is a significant control position, it is possible that a
potential merger candidate would attempt to purchase that position directly from
Stein's, with Stein's reaping the entire financial gain and the Company's other
shareholders receiving no direct financial benefit. Stein's shareholders would
receive the financial gain but not the Company's shareholders since any funds to
be paid for the purchase of Stein's stock would go directly to Stein's and not
to the Company nor its shareholders.
ITEM 6. EXECUTIVE COMPENSATION.
No salaries were paid to any officers, director or employees nor was any
stock issued to any officer, director or employee as compensation.
Directors are entitled to reimbursement for reasonable travel and other
out-of-pocket expenses incurred in connection with attendance at meeting of the
Board of Directors.
The Company has no material bonus or profit-sharing plans pursuant to
which cash or non-cash compensation is or may be paid to the Company's directors
or executive officers.
The Company has no compensatory plan or arrangements, including payments
to be received from the Company, with respect to any executive officer or
director, where such plan or arrangement would result in any compensation or
remuneration being paid resulting from the resignation, retirement or any other
termination of such executive officer's employment or from a change-in-control
of the Company or a change in such executive officer's responsibilities
following a change-in-control and the amount, including all periodic payments or
installments where the value of
34
<PAGE>
such compensation or remuneration exceeds $100,000 per executive officer.
During the last completed fiscal year, no funds were set aside or accrued
by the Company to provide pension, retirement or similar benefits for Directors
or Executive Officers.
The Company has no written employment agreements.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In March, 1999, the Company approved the issuance of 8,620,000 shares of
its common stock to Stein's Holdings, Inc. fka Multi- Source Capital, Ltd. as
part of the Company's merger and acquisition of 20/20 Web Design, Inc., a wholly
owned subsidiary of Multi-Source Capital, Ltd. As part of that transaction, the
Company changed its name to 20/20 Web Design, Inc. and its shareholders approved
a ten-to-one reverse stock split of the Company's common stock. The stock issued
to MSC was recorded at par value or $8,620 on the Company's books. At the time
of the merger with MSC, Christopher Burnell was a director of the Company as
well as being an officer and director of MSC. Mr. Burnell abstained from voting
on the proposed transaction on behalf of the Company and MSC.
In December, 1999, the Company entered into a letter of intent with
College Connection, Inc. dba Stein's Bakery in Lewisville, Texas, an entity
controlled by Randy Sutton, then President and CEO of the Company. In connection
with this letter of intent, the Company created a wholly owned subsidiary,
Stein's Cake Box, Inc., a Nevada corporation, and lent it $195,000, which was
used to pay certain construction costs of the bakery plant expansion in
Lewisville, Texas. The Company was unable to raise an additional $550,000 to pay
for the rest of the construction costs and the letter was intent was canceled by
the Company and College Connection. College Connection has agreed to repay the
$195,000 loan but the Company is uncertain as to when the loan will be repaid,
if at all.
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 will adopt a policy under which any consulting or finder's fee
that may be paid to a third party for consulting services to assist management
in evaluating a prospective business opportunity would be paid in stock or in
cash. Accordingly, the
35
<PAGE>
Company is unable to predict whether or in what amount such a stock issuance
might be made.
Although management has no current plans to cause the Company to do so, it
is possible that the Company may enter into an agreement with an acquisition
candidate requiring the sale of all or a portion of the common stock held by the
Company's current stockholders to the acquisition candidates or its principals,
or to other individuals or business entities, or requiring some other form of
payment to the Company's current stockholders, or requiring the future
employment of specified officers and payment of salaries to them. It is more
likely than not that any sale of securities by the Company current stockholders
to an acquisition candidate would be at a price substantially higher than that
originally paid by such stockholders. Any payment to current stockholders in the
context of an acquisition involving the Company would be determined entirely by
the largely unforeseeable terms of a future agreement with an unidentified
business entity.
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of
25,000,000 shares of Common Stock, par value $.001. Each record holder of Common
Stock is entitled to one vote for each share held in all matters properly
submitted to the stockholders for their vote. Cumulative voting for the election
of directors is not permitted by the Amended 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
The Company plans to furnish its stockholders with an annual
36
<PAGE>
report for each fiscal year containing financial statements audited by its
independent certified public accountants. In the event the Company enters into a
business combination with another company, it is the present intention of
management to continue furnishing annual reports to stockholders. Additionally,
the Company may, in its sole discretion, issue unaudited quarterly or other
interim reports to its stockholders when it deems appropriate. The Company
intends to comply with the periodic reporting requirements of the Securities
Exchange Act of 1934 for so long as it is subject to those requirements.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS
The Company's common stock trades on the NASD Electronic Bulletin Board in
the United States, having the trading symbol "TWEB" and CUSIP #90136K-103. The
common stock commenced trading in April, 1997.
The range of high and low bid information for the Company's common stock
over the last two fiscal years is shown below, by quarter:
High Bid Low Bid
1st Qtr. 1998 3.1875 1.50
2nd Qtr. 1998 2.25 .25
3rd Qtr. 1998 .50 .125
4th Qtr. 1998 .53125 .1875
1st Qtr. 1999 .375 .25
2nd Qtr. 1999 6.00 2.50
3rd Qtr. 1999 5.00 2.25
4th Qtr. 1999 4.25 3.00
The NASD provided the above information to the Company. These quotations
may reflect inter-dealer prices without retail mark- up/mark-down/commission and
may not reflect actual transactions. In addition, in March, 1999, the Company
approved a one-for-ten reverse stock split as part of its acquisition of 20/20
Web Design, Inc. The prices for the second, third and fourth quarter of 1999 are
the high and low bid prices post-split.
As of December 31, 1999, the Company estimates there are 60 "holders of
record" of its common stock and estimates that there are approximately 75
beneficial shareholders of its common stock.
There are no restrictions that limit the Company's ability to
37
<PAGE>
pay dividends on its common stock. The Company has not declared any dividends
since incorporation and does not anticipate that it will do so in the
foreseeable future. The present policy of the Company is to retain future
earnings for use in the operations and expansion of its business.
The Company's common stock is issued in registered form. Signature Stock
Transfer, Inc. of Addison, Texas is the registrar and transfer agent for the
common stock.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
No Director, Officer or affiliate of the Company, and no owner of record
or beneficial owner of more than 5.0% 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 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company completed two private placements
in the United States under Rule 504 of Regulation D. The most recent offering in
March, 1999 raised $230,000 by the sale of 1,150,000 (post-split) shares of
common stock subscribed for at $.20 per share by 13 investors by prior
management. The Company sold the shares to friends and business acquaintances of
the prior officers and directors. There was no underwriter and no underwriter's
discounts or commissions were paid.
In 1997, Company's prior management issued 1,000,000 (post- split) shares
of its common stock for cash consideration of $345,000 to ten subscribers under
Rule 504 of Regulation D. In 1998, the Company's prior management issued $19,000
shares of its common stock, valued at $19,000 to satisfy a corporate debt. The
Company relied on an exemption from registration contained in Section 4(2) of
the Securities Act of 1933, as amended, as an offering not involving the public.
The creditor was provided with access to the Company's books and records and
afforded the opportunity to ask for additional information.
38
<PAGE>
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation and the Bylaws of the Company, filed as
Exhibits 2.1 and 2.6, respectively, provide that the Company will indemnify its
Officers and Directors for costs and expenses incurred in connection with the
defense of actions, suits, or proceedings where the Officer or Director acted in
good faith and in a manner he reasonably believed to be in the Company's best
interest and is a party by reason of his status as an Officer or Director,
absent a finding of negligence or misconduct in the performance of duty.
PART F/S
The following financial statements required by Item 310 of Regulation S-B
are furnished below.
Independent Auditor's Report dated January 10, 2000
Consolidated Balance Sheets as of December 31, 1999 and December 31, 1998
Consolidated Statements of Operations for the years ended December 31, 1999 and
December 31, 1998
Consolidated Statement of changes in Stockholders' Equity for the years ended
December 31, 1999 and December 31, 1998
Consolidated Statements of Cash Flows for the years ended December 31, 1999 and
December 31, 1998
Notes to Consolidated Financial Statements
<PAGE>
20/20 WEB DESIGN, INC.
AND CONSOLIDATED SUBSIDIARY
(FORMERLY TRUMP OIL CORPORATION)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE>
TABLE OF CONTENTS
Page No.
--------
INDEPENDENT AUDITORS' REPORT .................................... 1
FINANCIAL STATEMENTS
Consolidated Balance Sheets................................... 2
Consolidated Statements of Operations......................... 3
Consolidated Statement of Changes in Stockholders' Equity..... 4
Consolidated Statements of Cash Flows......................... 5
Notes to Consolidated Financial Statements.................... 6-12
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
20/20 Web Design, Inc. and Subsidiary
Las Vegas, Nevada
We have audited the accompanying consolidated balance sheets of 20/20 Web
Design, Inc. and Subsidiary as of December 31, 1999 and 1998, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on the financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 20/20 Web Design, Inc. and
Subsidiary as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Moffitt & Company, P.C.
Scottsdale, Arizona
January 10, 2000
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
<TABLE>
<CAPTION>
1999 1998
--------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 237 $ 0
Accounts receivable 28,173 0
--------- ---------
TOTAL CURRENT ASSETS 28,410 0
PROPERTY AND EQUIPMENT 480,204 0
OTHER ASSETS
Organization costs, net of amortization 0 2,513
--------- ---------
TOTAL ASSETS $ 508,614 $ 2,513
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
Trade $ 1,403 $ 0
Related entity 312,468 0
--------- ---------
TOTAL CURRENT LIABILITIES 313,871 0
--------- ---------
STOCKHOLDERS' EQUITY
Common stock
Authorized 25,000,000 shares, par
value .001(cent) per share
Issued and outstanding - 10,774,787 shares
in 1999 and 1,004,787 shares in 1998 10,775 1,005
Paid-in capital in excess of par value of stock 738,719 521,349
Retained earnings (deficit) (554,751) (519,841)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 194,743 2,513
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 508,614 $ 2,513
========= =========
</TABLE>
See Accompanying Notes and Independent Auditors' Report.
2
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
SALES $ 30,636 $ 0
COST OF SALES 27,264 0
------------ ------------
GROSS PROFIT 3,372 0
------------ ------------
EXPENSES
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 38,282 11,608
LOSS ON INVESTMENT IN SUBSIDIARY 0 347,833
------------ ------------
TOTAL EXPENSES 38,282 359,441
------------ ------------
(LOSS) BEFORE INCOME TAXES (34,910) (359,441)
INCOME TAXES 0 0
------------ ------------
NET (LOSS) $ (34,910) $ (359,441)
============ ============
NET (LOSS) PER COMMON SHARE $ (.003) $ (.358)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 10,774,787 1,003,737
============ ============
</TABLE>
See Accompanying Notes and Independent Auditors' Report.
3
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Paid in
Number Capital in
Of Excess of
Common Common Par Value Retained
Shares Stock of Stock Earnings
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1998 1,002,887 $ 1,003 $ 502,351 $ (160,400)
ISSUANCE OF COMMON STOCK
FOR CORPORATION DEBT 1,900 2 18,998 0
NET (LOSS) FOR THE YEAR
ENDED DECEMBER 31, 1998 0 0 0 (359,441)
---------- ---------- ---------- ----------
BALANCE, DECEMBER 31, 1998 1,004,787 1,005 521,349 (519,841)
ISSUANCE OF COMMON STOCK
FOR CASH PER PRIVATE
PLACEMENT 1,150,000 1,150 228,850 0
COSTS TO ACQUIRE FINANCING
FOR PRIVATE PLACEMENT 0 0 (2,860) 0
ISSUANCE OF COMMON STOCK
FOR 20/20 WEB DESIGN, INC 8,620,000 8,620 (8,620) 0
NET (LOSS) FOR THE YEAR
ENDED DECEMBER 31, 1999 0 0 0 (34,910)
---------- ---------- ---------- ----------
BALANCE, DECEMBER 31, 1999 10,774,787 $ 10,775 $ 738,719 $ (554,751)
========== ========== ========== ==========
</TABLE>
See Accompanying Notes and Independent Auditors' Report.
4
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (34,910) $(359,441)
Adjustments to reconcile net (loss) to net cash
(used) by operating activities:
Loss on investment 0 347,833
Organization costs 2,513 1,508
Professional fees 0 10,100
Increases (decreases)
Accounts receivable (28,173) 0
Accounts payable 28,193 0
--------- ---------
NET CASH FLOWS (USED) BY OPERATING
ACTIVITIES (32,377) 0
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (195,000) 0
--------- ---------
NET CASH FLOWS (USED) BY INVESTING
ACTIVITIES (195,000) 0
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock 227,140 0
--------- ---------
NET CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES 227,140 0
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 237 0
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 0 0
--------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 237 $ 0
========= =========
SUPPLEMENTARY DISCLOSURE OF
CASH FLOW INFORMATION
Interest paid $ 0 $ 0
========= =========
Taxes paid $ 0 $ 0
========= =========
NON CASH INVESTING AND FINANCING
ACTIVITIES
Issuance of company stock for 20/20 Web Design, Inc. $ 8,620 $ 0
========= =========
Related party payable for acquisition of property and
See Accompanying Notes and Independent Auditors' Report.
5
<PAGE>
<CAPTION>
<S> <C> <C>
equipment $ 285,204 $ 0
========= =========
Issuance of common stock for services and payables $ 0 $ 19,000
========= =========
</TABLE>
See Accompanying Notes and Independent Auditors' Report.
6
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
20/20 Web Design, Inc. was incorporated in August 1995 in the state of
Nevada. The corporation is in the business of developing website designs
and managing and acquiring subsidiary corporations.
Stein's Cake Box, Inc. was incorporated in December 1999 in the state of
Nevada. The company is in the business of selling bakery products to
retail establishments in the Dallas, Texas, metropolitan area.
Principles of Consolidation
For 1999, the consolidated financial statements include the accounts of
20/20 Web Design, Inc. and its wholly owned subsidiary, Stein's Cake Box,
Inc.
All material inter-company accounts and transactions have been eliminated.
Corporation Name Changes
The corporation has changed its name as follows:
1. At date of incorporation - Visioneering Corporation
2. January 12, 1996 - Asiamerica Energy Group, Inc.
3. April 29, 1996 - Care Financial Group, Inc.
4. May 15, 1997 - Trump Oil Corporation
5. April 23, 1999 - 20/20 Web Design, Inc.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the company considers all
highly liquid debt instruments purchased with an original maturity of
three months or less to be cash equivalents.
Accounts Receivable and Allowance for Doubtful Accounts
Uncollectible accounts receivable are written off at the time management
specifically determines them to be uncollectible. At December 31, 1999,
management believed that all accounts receivable were collectible.
Property and Equipment
Property and equipment are stated at cost. Major renewals and improvements
are charged to the asset accounts while replacements, maintenance and
repairs, which do not improve or extend the lives of the respective
assets, are expensed. At the time property and equipment are retired or
See Accompanying Notes and Independent Auditors' Report.
7
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property and Equipment (Continued)
otherwise disposed of, the asset and related accumulated depreciation
accounts are relieved of the applicable amounts. Gains or losses from
retirements or sales are credited or charged to income.
At December 31, 1999, the company was not depreciating the property and
equipment as the $480,204 of property and equipment was all construction
in process and the assets were not completed or placed in service.
Accounting Estimates
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were used.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable for
the current year and deferred taxes on temporary differences between the
amount of taxable income and pretax financial income and between the tax
bases of assets and liabilities and their reported amounts in the
financial statements. Deferred tax assets and liabilities are included in
the financial statements at currently enacted income tax rates applicable
to the period in which the deferred tax assets and liabilities are
expected to be realized or settled as prescribed in FASB Statement No.
109, Accounting for Income Taxes. As changes in tax laws or rate are
enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes.
Net Loss Per Share
The company adopted Statement of Financial Accounting Standards No. 128
that requires the reporting of both basic and diluted earnings per share.
Basic earnings per share is computed by dividing net income available to
common shareowners by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock.
NOTE 2 DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The company has financial instruments, none of which are held for trading
purposes. The company estimates that the fair value of all financial
instruments at December 31, 1999 and 1998, as defined in FASB 107, does
not differ materially from the aggregate carrying values of its financial
instruments
See Accompanying Notes and Independent Auditors' Report.
8
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2 DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
recorded in the accompanying balance sheet. The estimated fair value
amounts have been determined by the company using available market
information and appropriate valuation methodologies. Considerable
judgement is required in interpreting market data to develop the estimates
of fair value, and accordingly, the estimates are not necessarily
indicative of the amounts that the company could realize in a current
market exchange.
NOTE 3 PROPERTY AND EQUIPMENT
At December 31, 1999, the property and equipment consisted of construction
in process on the building space next to Stein's Bakery. Stein's Cake Box,
Inc. is negotiating for a lease on this space. As of the date of this
report, a final lease has not been consummated. If a lease is not signed,
the company could incur a loss on the nonrecovery of the funds expended
for the construction.
There is no depreciation for the years ended December 31, 1999 and 1998.
NOTE 4 ACCOUNTS PAYABLE, RELATED ENTITY
The accounts payable, related entity, is due to College Connection, In.,
DBA Stein's Bakery, for the following:
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Purchases of bakery products $ 27,264 $ 0
Construction in process for funds due to the
contractor (College Connection, Inc. signed
the construction contract) 285,204 0
--------- ---------
Total $ 312,468 $ 0
========= =========
NOTE 5 INCOME TAXES
1999 1998
--------- ---------
(Loss) from continuing operations before income taxes $ (34,910) $(359,441)
The provision for income taxes is estimated as follows:
Currently payable $ 0 $ 0
--------- ---------
Deferred $ 0 $ 0
--------- ---------
</TABLE>
See Accompanying Notes and Independent Auditors' Report.
9
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 5 INCOME TAXES (CONTINUED)
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
A reconciliation of the provision for income taxes compared with
the amounts at the Federal Statutory rate was as follows:
Income taxes computed at statutory federal rates $ 0 $ 0
Income tax per books $ 0 $ 0
Deferred income tax asset and liabilities reflect the impact of
temporary differences between amounts of assets and liabilities
for financial reporting purposes and the basis of such assets
and liabilities as measured by tax laws
The net deferred tax is: $ 0 $ 0
-------- --------
The net deferred tax liability is: $ 0 $ 0
-------- --------
Temporary differences and carryforwards that give rise to
deferred tax assets and liabilities included the following:
<CAPTION>
Deferred Tax
----------------------
Assets Liabilities
-------- -----------
<S> <C> <C>
Net operating loss $ 19,300 $ 0
Less valuation allowance 19,300 0
-------- --------
Net $ 0 $ 0
======== ========
A reconciliation of the valuation allowance is as follows:
Balance, beginning of year $ 77,976 $ 0
Less adjustment for limitation due to merger (63,876) 0
Addition for year 5,200 77,976
-------- --------
Balance, end of year $ 19,300 $ 77,976
======== ========
</TABLE>
NOTE 6 TAX CARRYFORWARDS
The corporation has the following net operating loss carryforwards:
Year Amount Expiration Date
---- -------- ---------------
1998 $ 94,200 2018
1999 34,432 2019
--------
$128,632
========
See Accompanying Notes and Independent Auditors' Report.
10
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 7 PRIVATE PLACEMENT OFFERING
In March 1999, the company had a private placement for 11,500,000
(1,150,000 after 10-1 stock split) shares of common stock at $0.02 per
share. All of the shares were sold and the company realized $230,000 less
$2,860 of costs.
NOTE 8 STOCK OPTIONS
The company does not have any stock options outstanding at December 31,
1999 and 1998.
NOTE 9 BUSINESS COMBINATION
On March 30, 1999, the company completed a merger with 20/20 Web Design,
Inc. by exchanging 8,620,000 shares of section 144 restricted common stock
for 100% of the outstanding shares of 20/20 Web Design, Inc.
The merger has been accounted for as a pooling of interest (reverse
acquisition as defined by the Securities and Exchange Commission) and the
company recorded the merger as follows:
Increase in common stock
8,620,000 shares @ .001(cent)par value $8,620
Decrease in paid-in capital 8,620
After the merger, the company changed its name to 20/20 Web
Design, Inc.
The following unaudited information presents certain income
statement data of the separate companies for the periods
preceding the merger:
1999 1998
--------- ---------
Net sales
Trump Oil Corporation $ 2,500 $ 0
20/20 Web Design, Inc. 0 0
Net (loss)
Trump Oil Corporation (12,000) (359,441)
20/20 Web Design, Inc. 0 0
There were no material transactions between Trump Oil Corporation and
20/20 Web Design, Inc. prior to the merger. The effects of conforming
20/20 Web Design, Inc.'s accounting policies to those of Trump Oil
Corporation were not material.
NOTE 10 ECONOMIC DEPENDENCY IN 1999
Sales
98.3% of the Stein Cake Box, Inc.'s sales are to one customer.
See Accompanying Notes and Independent Auditors' Report.
11
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 10 ECONOMIC DEPENDENCY IN 1999 (CONTINUED)
Cost of Goods Sold
Stein Cake Box, Inc. purchases all of its baked goods from one supplier,
Stein's Bakery.
NOTE 11 INSURANCE
Stein's Cake box does not carry liability or worker's compensation
insurance.
NOTE 12 SEGMENT REPORTING FOR 1999
The company has two reportable segments:
20/20 Web Design, Inc. - Web design and management of subsidiary
company operations.
Stein's Cake Box, Inc. - Sales of bakery products.
The company evaluates segment performance based on income from operations.
Sales for each segment are based on the location of the third-party
customer. All intercompany transactions between segments have been
eliminated.
Segment results for 1999 are as follows:
<TABLE>
<CAPTION>
20/20 Web Stein's Cake
Design, Inc. Box, Inc.
------------ ------------
<S> <C> <C>
Net sales $ 2,500 $ 28,136
Income (loss) from operations (35,437) 527
Assets 137 508,477
Capital expenditures 0 480,204
A reconciliation from the segment information to the consolidated balances
for income (loss) from operations and assets is set forth below:
Segment (loss) from operations $ (34,910)
Consolidated (loss) from operations (34,910)
Segment assets 508,614
Consolidated total assets 508,614
</TABLE>
See Accompanying Notes and Independent Auditors' Report
12
<PAGE>
20/20 WEB DESIGN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 13 WEB DESIGN CONTRACT
In December 1998, the company entered into a web-design contract which
began in September 1999. As compensation for its services, the company
will receive 50% of the net sales profits generated by the Internet web
site created by the company.
The initial term of the contract shall be for two years.
The company did not realize any income from the contract in 1999.
See Accompanying Notes and Independent Auditors' Report.
13
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
(2) Charter and By-laws
(3) Instruments defining the rights of security holders
(5) Voting Trust Agreement - Not Applicable
(6) Material Contracts
(7) Material Foreign Patents - Not Applicable
(12) Additional Exhibits
ITEM 2. DESCRIPTION OF EXHIBITS
(2.1) Articles of Incorporation
(2.2) Amendment to the Articles of Incorporation
(2.3) Amendment to the Articles of Incorporation
(2.4) Amendment to the Articles of Incorporation
(2.5) Amendment to the Articles of Incorporation
(2.6) Amended Bylaws
(3.1) Agreement and Plan of Reorganization with 20/20 Web
39
<PAGE>
Design, Inc.
(12.1) Letter of Intent with Stein's Cake Box and Stein's Bakery
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized. 20/20 WEB DESIGN, INC.
Date: March 6, 2000 By: /s/Shahram Khial, Ph.D.
------------------------
Shahram Khial, Ph.D., CEO and CFO
40
Exhibit 2.1
ARTICLES OF INCORPORATION
OF
VISIONEERING CORPORATION
The undersigned Incorporator, acting as incorporator, pursuant to the
provisions of the laws of the State of Nevada relating to private corporations,
hereby adopts the following Articles of Incorporation:
ARTICLE ONE. [Name] The name of the corporation is:
VISIONEEERING CORPORATION
ARTICLE TWO. [RESIDENT AGENT]. The initial agent for service of process is
Nevada Agency and Trust Company, 50 West Liberty Street, Suite 880, City of
Reno, County of Washoe, State of Nevada 89501.
ARTICLE THREE. [PURPOSES]. The purposes for which the corporation is organized
are to engage in any activity or business not in conflict with the laws of the
State of Nevada or of the United States of America, and without limiting the
generality of the foregoing, specifically:
[OMNIBUS]. To have to exercise all the powers now or hereafter conferred
by the laws of the State of Nevada upon corporations organized pursuant to
the laws under which the corporation is organized and any and all acts
amendatory thereof and supplemental thereto.
[CARRYING ON BUSINESS OUTSIDE STATE]. To conduct and carry on its business
or any branch thereof in any state or territory of the United States or in
any foreign country in conformity with the laws of such state, territory,
or foreign country, and to have and maintain in any state, territory, or
foreign country a business office, plant, store or other facility.
[PURPOSES TO BE CONSTRUED AS POWERS]. The purposes specified herein shall
be construed both as purposes and powers and shall be in no wise limited
or restricted by reference to, or inference from, the terms of any other
clause in this or any other articles, but the purposes and powers
specified in each of the clauses herein shall be regarded as independent
purposes and powers, and the enumeration of specific purposes and powers
shall not be construed to limit or restrict in any manner the meaning of
the general terms or of the general powers of the corporation; nor shall
the expression of one
41
<PAGE>
thing be deemed to exclude another, although it be of like nature not
expressed.
ARTICLE FOUR. [CAPITAL STOCK]. The Corporation shall have authority to issue an
aggregate of TWENTY FIVE MILLION (25,500,000) shares of Common Capital Stock,
Par Value ONE MILL ($.001) per share, for a total capitalization of TWENTY-FIVE
THOUSAND DOLLARS ($25,000).
The holders of the shares of capital stock of the corporation shall not be
entitled to pre-emptive or preferential rights to subscribe to any unissued
stock or any other securities which the corporation may now or hereafter be
authorized to issue.
The corporation's capital stock may be issued and sold from time to time for
such consideration as may be fixed by the Board of Directors, provided that the
consideration so fixed is not less than par value.
The stockholders shall not possess cumulative voting rights at all shareholders
meetings called for the purpose of electing a Board of Directors.
ARTICLE FIVE. [DIRECTORS]. The affairs of the corporation shall be governed by a
Board of Directors of not less than one (1) person. The name and address of the
first Board of Directors is:
Name Address
David Sidhu 18201 Von Karman Suite 1170
Irvine California 92715
ARTICLE SIX. [ASSESSMENT OF STOCK]. The capital stock of the corporation, after
the amount of the subscription price or par value has been paid in, shall not be
subject to pay debts of the corporation, and no paid up stock and no stock
issued as fully paid up stock shall ever be assessable or assessed.
ARTICLE SEVEN. [INCORPORATOR]. The name and address of the incorporator of the
corporation is as follows:
Name Address
Amanda E. Walker 50 West Liberty Street, Suite 880
Reno, Nevada 89501
ARTICLE EIGHT. [PERIOD OF EXISTENCE]. The period of existence of the corporation
shall be perpetual.
42
<PAGE>
ARTICLE NINE. [BY-LAWS]. The initial By-laws of the corporation shall be adopted
by its Board of Directors. The power to alter, amend, or repeal the By-laws, or
to adopt new By-laws, shall be vested in the Board of Directors except as
otherwise may be specifically provided in the By-laws.
ARTICLE TEN. [STOCKHOLDERS' MEETINGS]. Meetings of the stockholders shall be
held at such place within or without the State of Nevada as may be provided by
the By-laws of the corporation. Special meetings of the stockholders may be
called by the President or any other executive officer of the corporation, the
Board of Directors, or any member thereof, or by the record holder or holders of
at least ten percent (10%) of all shares entitled to vote at the meeting. Any
action otherwise required to be taken at a meeting of stockholders, except
election of directors, may be taken without a meeting if a consent signed in
writing, setting forth the action so taken, shall be signed by stockholders
having at least a majority of the voting power.
ARTICLE ELEVEN. [CONTRACTS OF CORPORATION]. No contract or other transaction
between the Corporation and any other corporation, whether or not a majority of
the shares of capital stock of such other corporation is owned by this
corporation, and no act of this corporation shall in any way be affected or
invalidated by the fact that any of the directors of this corporation are
pecuniarily or otherwise interested in, or are directors or officers of such
other corporation. Any director of this corporation, individually, or any firm
of which such director may be a member, may be a party to, or may be pecuniarily
or otherwise interested in any contract or transaction of the corporation;
provided, however, that the fact that he or such firm is so interested shall be
disclosed or shall have been known tot he Board of Directors of this
corporation, or a majority thereof; and any director of this corporation who is
also a director or officer of such other corporation, or who is so interested,
may be counted in determining the existence of a quorum at any meeting of the
Board of Directors of this corporation that shall authorize such contract or
transaction, and may vote thereof to authorize such contract or transaction,
with like force and effect as if he were not such director or officer of such
other corporation or not so interested.
ARTICLE TWELVE. [LIABILITY OF DIRECTORS AND OFFICERS]. No director or officer
shall have any personal liability to the corporation or its stockholders for
damages for breach of fiduciary duty as a director or officer, except that this
Article Twelve shall not eliminate or limit the liability of director or officer
for (I) acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law, or (ii) the payment of dividends in
43
<PAGE>
violation of the Nevada Revised Statutes.
IN WITNESS WHEREOF, the undersigned incorporator has hereunto affixed his
signature at Reno, Nevada this 31st day of August, 1995.
/s/___________________________________
AMANDA E. WALKER
44
EX - 2.2
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
VISIONEERING CORPORATION
MICHAEL TAYLOR AND KATHLEEN TAYLOR, hereby certify that:
They are the President and Secretary, respectively, of Visioneering Corporation,
a Nevada corporation.
The Articles of Incorporation originally filed with the Nevada Secretary of
State on August 31, 1995 are hereby amended as follows:
ARTICLE ONE is amended to read in its entirety as follows:
"[NAME]. The name of the corporation is
ASIAMERICA ENERGY GROUP INC."
The foregoing amendment of Articles of Incorporation has been approved by a
majority of the corporation's Board of Directors and a majority of the
corporation's shareholders.
We have executed the Certificate of Amendment of the Articles of Incorporation
on January 9, 1996.
/s/ Michael Taylor, President
/s/ Kathleen Taylor, Secretary
45
EX - 2.3
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
ASIAMERICA ENERGY GROUP INC.
A Nevada corporation
David Sidhu hereby certifies:
He is the President and Secretary of Asiamerica Energy Group Inc., a Nevada
corporation.
The Board of Directors of Asiamerica Group Inc. has approved the following
amendments to ARTICLE ONE of the Articles of Incorporation of Asiamerica Energy
Group Inc.:
"The name of the corporation is Care Financial Group, Inc."
The amendment specified in Paragraph 2 of this Certificate has been approved by
the requisite vote of the shareholders of Asiamerica Energy Group Inc., pursuant
to the provisions of Section 78.390 of the General Corporation Law of Nevada.
Asiamerica Energy Group Inc. has only one class of shares which class is common.
Each outstanding common share is entitled to one vote. Asiamerica Energy Group
Inc. has 3,500,000 common shares outstanding and therefore, the total number of
common shares entitled to vote with respect to that amendment is 3,500,000. The
number of common shares voting in favor of that amendment exceeded the vote
required, in that the affirmative vote of a majority, that is, more than fifty
percent (50%), of the issued and outstanding common shares is required for the
approval of that amendment and that amendment was approved by the affirmative
vote of 3,500,000 common shares, or one hundred percent (100%) of the issued and
outstanding common shares.
/s/ David Sidhu, President
/s/ David Sidhu, Secretary
Each of the undersigned declares under penalty of perjury that the matters
specified in the foregoing Certificate are true and correct of his own knowledge
and this declaration was executed on April 29, 1996, at Irvine, California.
/s/ David Sidhu
46
Exhibit 2.4
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
CARE FINANCIAL GROUP, INC.
* * * * * *
Pursuant to the provisions of the Nevada Revised Statutes, CARE FINANCIAL GROUP,
INC., a Nevada corporation, adopts the following amendment to its Articles of
Incorporation:
The undersigned hereby certify that in the 15th of May, 1997, a Special Meeting
of the Board of Directors was duly held and convened at which there was present
a quorum of the Board of Directors acting throughout all proceedings. And at
which time the following resolution was duly adopted by the Board of Directors:
BE IT RESOLVED: That the Secretary of the corporation is hereby ordered and
directed to obtain the written consent of stockholders owning at least a
majority of the voting power of the outstanding stock of the corporation for the
following purpose:
To amend Article One to provide that the name of the Corporation shall be
changed from CARE FINANCIAL GROUP, INC. to TRUMP OIL CORPORATION.
Pursuant to the provisions of the Nevada Revised Statutes, a majority of the
stockholders holding 4.2 MILLION shares of the 7.2 MILLION shares outstanding of
CARE FINANCIAL GROUP, INC. gave their written consent to the adoption of the
Amendment to Article One of the Articles of Incorporation as follows:
ARTICLE ONE. [NAME]. The name of the corporation is:
TRUMP OIL CORPORATION
IN WITNESS WHEREOF, the undersigned being the President and Secretary of CARE
FINANCIAL GROUP, INC., a Nevada corporation, hereunto affix their signatures
this 15th day of May, 1997.
CARE FINANCIAL GROUP, INC.
/s/ Ranbir Dhaliwal, President
/s/ Geoff Armstrong, Secretary
47
Exhibit 2.5
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
TRUMP OIL CORPORATION
Pursuant to the provisions of the Nevada Revised Statutes, TRUMP OIL
CORPORATION, a Nevada corporation, adopts the following amendment to its
Articles of Incorporation:
The undersigned hereby certify that in the 31st of March, 1999, a Special
Meeting of the Board of Directors was duly held and convened at which there was
present a quorum of the Board of Directors acting throughout all proceedings.
And at which time the following resolution was duly adopted by the Board of
Directors:
BE IT RESOLVED: That the Secretary of the corporation is hereby ordered and
directed to obtain the written consent of stockholders owning at least a
majority of the voting power of the outstanding stock of the corporation for the
following purpose:
To amend Article One to provide that the name of the Corporation shall be
changed from TRUMP OIL CORPORATION to 20/20 WEB DESIGN, INC.
Pursuant to the provisions of the Nevada Revised Statutes, a majority of the
stockholders holding 11,000,000 shares of the 21,547,866 shares outstanding of
TRUMP OIL CORPORATION gave their consent to the adoption of the Amendment to
Article One of the Articles of Incorporation as follows:
ARTICLE ONE. [NAME]. The name of the corporation is:
20/20 WEB DESIGN, INC.
IN WITNESS WHEREOF, the undersigned being the President and Secretary of TRUMP
OIL CORPORATION, a Nevada corporation, hereunto affix their signatures this 22nd
day of April, 1999.
TRUMP OIL CORPORATION
/s/ Randy Sutton, President
/s/ Christopher Burnell, Secretary
48
EX 2.6
AMENDED BYLAWS
OF
20/20 WEB DESIGN, INC.
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the Corporation shall be
held at a location within or without the State of Nevada, on a date and at a
time so designated by the Board of Directors, in each year, if not a legal
holiday, and if a legal holiday, then on the next succeeding day not a legal
holiday, for the purpose of electing Directors of the Corporation to serve
during the ensuing year and for the transaction of such other business as may be
brought before the meeting.
At least (5) days' written notice specifying the time and place, when and where,
the annual meeting shall be convened, shall be mailed in the United States Post
Office addressed to each of the stockholders of record at the time of issuing
the notice at his or her or its address last known, as the same appears on the
books of the Corporation.
Nevertheless, a failure to give such notice, or any irregularity in such notice,
shall not affect the validity of annual meetings or any of the proceedings had
at such meeting, and in such event these Bylaws shall be, and shall be deemed to
be, sufficient notice of such meeting without requirement of further notice.
SECTION 2. Special meetings of the stockholders may be held at the office of the
Corporation in the State of Nevada, or elsewhere, whenever called by the
President, or by the Board of Directors, or by vote of, or by an instrument in
writing signed by the holders of 10% of the issued and outstanding capital
stock. At least ten (10) days' written notice of such meeting, specifying the
day and hour and place, when and where such meeting shall be convened, and the
objects for calling the same, shall be mailed in the United States Post Office,
addressed to each of the stockholders at the time of issuing the notice, and at
his or her or its address last known, as the same appears on the books of the
Corporation.
If all the stockholders of the Corporation shall waive notice of special
meeting, no notice of such meetings shall be required, and whenever all the
stockholders shall meet in person or by proxy, such meeting shall be valid for
all purposes without call or
49
<PAGE>
notice, and at such meeting any corporate action may be taken.
The written certificate of the officer or officers calling any special meeting
setting forth the substance of the notice, and the time and place of the mailing
of the same to the several stockholders, and the respective addresses to which
the same were mailed, shall be prima facie evidence of the manner and fact of
the calling and giving of such notice.
If the address of any stockholder does not appear upon the books of the
Corporation, it will be sufficient to address any notice to such stockholder at
Carson City, Nevada.
SECTION 3. All business lawful to be transacted by the stockholders of the
Corporation may be transacted at any special meeting or at any adjournment
thereof. Only business, however, shall be acted upon at special meeting of the
stockholders as shall have been referred to in the notice of special meeting;
provided, however, that if 100% of all the outstanding capital stock of the
Corporation is represented, either in person or by proxy, any lawful business
may be transacted, and such meeting shall be valid for all purposes.
SECTION 4. At all stockholders' meeting, the holders of fifty percent (50%) in
amount of the entire issued and outstanding capital stock of the Corporation
shall constitute a quorum for all the purposes of such meeting.
If the holders of the amount of stock necessary to constitute a quorum shall
fail to attend, in person or by proxy, at the time and place fixed by these
Bylaws for any annual meeting, or fixed by a notice as above-provided for a
special meeting, a majority in interest of the stockholders present in person or
by proxy may adjourn from time to time without notice other than by announcement
at the meeting, until holders of the amount of stock requisite to constitute a
quorum shall be present, any business may be transacted which might have been
transacted as originally called.
SECTION 5. At each meeting of the stockholders, every stockholder shall be
entitled to vote in person or by his or her duly authorized proxy appointed by
instrument in writing subscribed by each stockholder by his or her duly
authorized attorney. Each stockholder shall have one (1) vote for each share of
stock standing registered in his or her name on the books of the Corporation,
ten (10) days preceding the day of such meeting.
At each meeting of the stockholders, a full, true and complete list, in
alphabetical order, of all the stockholders entitled to
50
<PAGE>
vote at such meeting, and indicating the number of shares held by each,
certified by the secretary of the Corporation, shall be furnished, which list
shall be prepared at least ten (10) days before such meeting, and shall be open
to the inspection for the stockholders, or their agents or proxies, at the place
where such meeting is to be held. Only the persons in whose name shares of stock
are registered on the books of the Corporation for ten (10) days preceding the
date of such meeting, as evidenced by the list of stockholders so furnished,
shall be entitled to vote at such meeting. Proxies and powers of attorney to
vote must be filed with the Secretary of the Corporation before an election or a
meeting of stockholders, or they cannot be used at such election or meeting.
SECTION 6. At each meeting of the stockholders, the polls shall be opened and
closed; the proxies and ballots issued, received, and be taken in charge of, for
the purpose of the meeting, and all questions touching the qualifications of
voters and validity of proxies, and the acceptance or rejection of votes, shall
be decided by two (2) inspectors. Such inspectors shall be appointed at the
meeting by the presiding officer of the meeting.
SECTION 7. At the stockholders' meeting, the regular order of business shall be
as follows:
1. Reading and approval of the minutes of previous meeting or meetings;
2. Reports of the Board of Directors, the President, Treasurer and Secretary of
the Corporation in the order named;
3. Reports of Committees;
4. Election of Directors;
5. Unfinished business;
6. New Business;
7. Adjournment.
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Board of Directors of the Corporation shall consist of one
director initially. Directors shall be chosen by the stockholders annually at
the annual meeting of the Corporation and shall hold office for one (1) year,
and until their successors are
51
<PAGE>
elected and qualify. The Directors of the Corporation may increase the number of
Directors by majority vote of the Board. The Directors may appoint directors to
newly created directorships with each newly elected director to serve until the
Annual Meeting of Shareholders and until their successors are elected and
qualified.
SECTION 2. When any vacancy occurs among the Directors by death, resignation,
disqualification or other cause, the stockholders, at any regular or special
meeting, or at any adjourned meeting thereof or the remaining directors, by the
affirmative vote of a majority thereof, shall lect a successor to hold office
for the unexpired portion of the term of the Director whose place shall have
become vacant and until his or her successor shall have been elected and shall
qualify.
SECTION 3. Meetings of the Directors may be held at the principal office of the
Corporation in the state of Nevada, or elsewhere, at such place or places as the
Board of Directors may from time to time, determine.
SECTION 4. Without notice or call, the Board of Directors shall hold its first
meeting for the year immediately after the election of Directors at such annual
meeting.
Regular meetings of the Board of Directors shall be held as set by the Chairman
of the Board. Notice of such regular meetings shall be mailed to each Director
by the secretary at least three (3) days previous to the day fixed for such
meetings, but no regular meeting shall be held void or invalid if such notice is
not given, provided the meeting is held at the time and place fixed by the
Chairman for holding such regular meetings.
Special meetings of the Board of Directors may be held on the call of the
President or Secretary on at least one (1) day's notice via telephone or by
facsimile.
Any meeting of the Board, no matter where held, at which all the members shall
be present, even though without or of which notice shall have been present,
shall be valid for all purposes unless otherwise indicated in the notice calling
the meeting or in the waiver notice.
Any and all business may be transacted by any meeting of the Board of Directors,
either regular or special.
SECTION 5. A majority of the Board of Directors in office shall constitute a
quorum for the transaction of business, but if at any meeting of the Board there
be less than a quorum present, a
52
<PAGE>
majority of those present may adjourn the meeting, and no notice of such
adjournment shall be required. The Board of Directors may prescribe rules not in
conflict with these Bylaws for the conduct of its business.
SECTION 6. A Director need not be a stockholder of the Corporation.
SECTION 7. The Directors shall be allowed and paid all necessary expenses
incurred in attending any meeting of the Board.
SECTION 8. The Board of Directors shall make a report to the stakeholders at
annual meetings of the stockholders of the condition of the Corporation, and
shall, on request, furnish each of the stockholders with a true and correct copy
thereof.
The Board of Directors, in its discretion, may submit any contract or act for
approval or ratification at any meeting of the stockholders called for the
purpose of considering any such contract or act, which, if approved by or
ratified by the vote of the holders of a majority of the capital stock
represented in person or by proxy at such meeting, provided that a lawful quorum
of stockholders be there represented in person or by proxy shall be valid and
binding upon the Corporation and upon all the stock holders thereof, as if it
had been approved or ratified by every stockholder of the Corporation.
SECTION 9. The Board of Directors may, by resolution passed by a majority of
whole Board, designate an Executive Committee. This committee shall consist of
two (2) or more members besides the President, who by virtue of his or her
office, shall be a member of the committee and the chairman thereof. The
Committee shall, in the interim between meetings of the Board, exercise all
powers of that body in accordance with the general policy of the Corporation and
under the direction of the Board of Directors. It shall also attend to and
supervise all the financial operations of the Corporation, and shall examine and
audit all the Corporation's accounts at the close of each fiscal year, and at
such other times that it may deem necessary. The Secretary shall be the
Secretary of the Committee and shall attend its meetings, and its meetings shall
be held in the call of the President. All members of the Committee must be given
at least two (2) days notice of meetings whether by mail or facsimile or by
personal communication, either by telephone or otherwise. A majority of the
members of the Committee shall constitute a quorum. The Committee shall keep due
records of all meetings and actions of the Committee, and such records shall at
all times be open to the inspection of any Director.
53
<PAGE>
SECTION 10. The Board of Directors is vested with the complete and unrestrained
authority in the management of all the affairs of the Corporation, and is
authorized to exercise for such purpose as the General Agent of the Corporation,
its entire corporate authority.
SECTION 11. The regular order of business at meetings of the Board of Directors
shall be as follows:
1. Reading and approval of the minutes of any previous meeting or meetings;
2. Reports of officers and committee persons;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first meeting after the annual meeting
of stockholders, shall elect a President, a Secretary and a Treasurer, to hold
office for one (1) year next coming, and until their successors are elected and
qualify. The President shall be a member of the Board of Directors. All
officers, agents and factors shall be chosen and appointed in such matter and
shall hold their office for such terms as the Board of Directors may by
resolution prescribe.
SECTION 2. The President shall be the executive officer of the Corporation and
shall have the supervision and, subject to the control of the Board of
Directors, the direction of the Corporation's affairs, with full power to
execute all resolutions and orders of the Board of Directors not especially
entrusted to some other officer of the Corporation. The President shall be a
member of the Executive Committee, and the Chairman thereof; he or she shall
preside at all meetings of the stockholders, and shall perform such other duties
as shall be prescribed by the Board of Directors.
SECTION 3. The Vice President, if appointed, shall be vested with all the powers
and perform all the duties in the absence or inability to act of the President,
including the signing of
54
<PAGE>
Certificates of Stock issued by the Corporation, and he or she shall so perform
such other duties as shall be prescribed by the Board of Directors.
SECTION 4. The Treasurer shall have custody of all the funds and securities of
the Corporation. When necessary or proper, he or she shall endorse on behalf of
the Corporation for collection checks, notes, and other obligations; he or she
shall jointly with such other officer as shall be designated by these Bylaws,
sign all checks made by the Corporation, and shall pay out and dispose of the
same under the direction of the Board of Directors. The Treasurer shall sign
with the President all bills of exchange and promissory notes of the
Corporation; he or she shall also have the care and custody of the stocks,
bonds, certificates, vouchers, evidence of debts, securities and such other
property belonging to the Corporation as the Board of Directors shall designate;
he or she shall sign all papers required by law or by these Bylaws or the Board
of Directors to be signed by the Treasurer. Whenever required by the Board of
Directors, the Treasurer shall render a statement of the Corporation's cash
account; he or she shall enter regularly in the books of the Corporation to be
kept by him or her for the purpose, full and accurate accounts of all monies
received and paid by him of her on account of the Corporation. The Treasurer
shall at all reasonable times exhibit the books of account to any Director of
the Corporation during business hours, and shall perform all acts incident to
the position of Treasurer subject to the control of the Board of Directors.
The Treasurer shall, if required by the Board of Directors, give bond to the
Corporation conditioned for the faithful performance of all his or her duties as
Treasurer in such sum, and with such security as shall be approved by the Board
of Directors, the expense of such bond to be borne by the Corporation.
SECTION 5. The Board of Directors may appoint an Assistant Treasurer who shall
have such powers and perform such duties as may be prescribed by the Treasurer
of the Corporation or by the Board of Directors, and the Board of Directors may
require the Assistant Treasurer to give a bond to the Corporation in such sum
and with such security as it shall approve, and conditioned for the faithful
performance of his or her duties as Assistant Treasurer, the expense of such
bond to be borne by the Corporation.
SECTION 6. The Secretary shall keep the Minutes of all the meeting of the Board
of Directors and the Minutes of all meetings of the stockholders and of the
Executive Committee in the books provided for that purpose. The Secretary shall
attend to the giving and serving of all notices of the Corporation; he or she
may sign with
55
<PAGE>
the President or a Vice-President, in the name of the Corporation, all contracts
authorized by the Board of Directors of Executive Committee; he or she shall
have the custody of the corporate seal of the Corporation; he or she shall affix
the corporate seal to all certificates of stock duly issued by the Corporation;
he or she shall have charge of the Stock Certificate Books, Transfer Books and
Stock Ledgers, and such other books and papers as the Board of Directors or the
Executive Committee may direct, all of which shall at all reasonable times be
open to the examination of any Director upon application at the office, in
general, perform all the duties incident to the office of Secretary.
SECTION 7. The Board of Directors may appoint an Assistant Secretary who shall
have such powers and perform such duties as may be prescribed by the Secretary
or by the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of Directors, the President
shall have full power and authority on behalf of the Corporation to attend and
to act and to vote at any meetings of the stockholders of any Corporation in
which the Corporation may hold stock, and at any such meetings, shall possess
and may exercise any and all rights and powers incident to the ownership of such
stock, and which as the new owner thereof, the Corporation might have the
possessed and exercised if present. The Board of Directors, by resolution, from
time to time, may confer like powers on any person or persons in place of the
President to represent the Corporation for the purposes in this section
mentioned.
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the Corporation shall be issued in such manner
and at such times and upon such conditions as shall be prescribed by the Board
of Directors.
SECTION 2. Ownership of stock in the Corporation shall be evidenced by
certificates of stock in forms as shall be prescribed by the Board of Directors,
and shall be under the seal of the Corporation and signed by the President or
the Vice President and also by the Secretary or an Assistant Secretary.
All certificates shall be consecutively numbered; the name of the person owning
the shares represented thereby with the number of such shares represented
thereby with the number of such shares and the date of issue shall be entered on
the Corporation's books.
No certificates shall be valid unless it is signed by the President
56
<PAGE>
or Vice-President and the Secretary or Assistant Secretary.
All certificates surrendered to the Corporation shall be canceled and a new
certificate shall be issued when the former certificate for the same number of
shares shall have been surrendered or canceled.
SECTION 3. No transfer of stock shall be valid as against the Corporation except
on surrender and cancellation of the certificate therefor, made either in person
or under assignment, and a new certificate shall be issued therefor.
Whenever any transfer shall be expressed as made for collateral security and not
absolutely, the same shall be so expressed in the entry of said transfer on the
books of the Corporation.
SECTION 4. The Board of Directors shall have power and authority to make all
such rules and regulations for inconsistent herewith as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
the capital stock of the Corporation.
The Board of Directors may appoint a transfer agent and a registrar of transfers
and may require all stock certificates to bear the signature of each transfer
and such registrar of transfer.
SECTION 5. The Stock Transfer Books shall be closed for all meetings of the
stockholders for a period of ten (10) days prior to such meetings and shall be
closed for the payment of dividends during such periods as from time to time may
be fixed by the Board of Directors, and during such periods no stock shall be
transferable.
SECTION 6. Any person or persons applying for a certificate of stock in lieu of
one alleged to have been lost or destroyed, shall make affidavit or affirmation
of the fact, and shall deposit with the Corporation an affidavit. Whereupon, at
the end of six (6) months after the deposits of said affidavit and upon such
person or persons giving Bond of Indemnity to the Corporation with surety to be
approved by the Board of Directors in double the current value of the stock,
against any damage, loss or inconvenience to the Corporation, which may or can
arise in consequence of a new or duplicate certificate being issued in lieu of
the one lost or missing, the Board of Directors may cause to be issued to such
persons or person a new certificate, or a duplicate of the certificate lost or
destroyed. The Board of Directors may, in its discretion, refuse to issue such
new or duplicate certificates save upon the order of some court having
jurisdiction in such matter,
57
<PAGE>
anything herein to the contrary notwithstanding.
ARTICLE V
OFFICE AND BOOKS
SECTION 1. The principal office of the Corporation in Nevada shall be at Carson
City, Nevada, or such other place as the Board of Directors may designate,
within Nevada or in any other state or territory.
SECTION 2. The Stock and Transfer Books of the Corporation shall be kept at its
principal office for the inspection of all who are authorized or have right to
see the same, and for the transfer of stock. All other books of the Corporation
shall be kept at such places as may be prescribed by the Board of Directors.
A copy of the Bylaws, duplicate Stock Ledger, and Articles of Incorporation of
the Corporation shall be kept at its principal office in the State of Nevada,
and shall be subject to the inspection of any of the stockholders.
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to reserve over and above the
capital stock paid in, such an amount, in its discretion, as it may deem
advisable to fix as a reserve fund, and may, from time to time, declare
dividends from the accumulated profits of the Corporation in excess of the
amounts reserved, and pay at the same time to stockholders of the Corporation,
and may also, it deems the same advisable, declare stock dividends of the
unissued capital stock.
SECTION 2. Unless otherwise ordered by the Board of Directors, all agreements
and contracts shall be signed by the President and the Secretary in the name and
on behalf of the Corporation, and shall have the corporate seal thereto
attached.
SECTION 3. All monies of the Corporation shall be deposited when and as received
by the Treasurer of such bank or banks or other depository as may from time to
time be designated by the Board of Directors, and such deposits shall be made in
the name of the Corporation.
SECTION 4. No note, draft, acceptance, endorsement or other evidence of
indebtedness shall be valid or against the Corporation
58
<PAGE>
unless the same shall be signed by the President or Vice-President, and attested
by a Secretary or an Assistant Secretary, or signed by the Treasurer or an
Assistant Treasurer and countersigned by the President, Vice-President or
Secretary, except that the Treasurer or Assistant Treasurer may, without
countersignature, sign payroll checks and make endorsements for deposit to the
credit of the Corporation in all its duly authorized depositories. No check or
order for money shall be signed in blank.
SECTION 5. No loan or advance of money shall be made by the Corporation to any
stockholder or officer therein, unless the Board of Directors shall otherwise
authorize.
SECTION 6. No Director nor executive officer shall be entitled to any salary or
compensation for any services performed for the Corporation, unless such salary
or compensation shall be fixed by resolution of the Board of Directors.
SECTION 7. The Corporation may take, acquire, hold, mortgage, sell, or otherwise
deal in stocks or bonds or securities of any other Corporation, if and as often
as the Board of Directors shall elect.
SECTION 8. The Directors shall have power to authorize and cause to be executed,
mortgages and liens without limit as to amount upon the property and franchise
of this Corporation, and pursuant to the affirmative vote, either in person or
by proxy, or the holders of a majority of the capital stock issued and
outstanding; the Directors shall have authority to dispose in any manner of the
whole property of this Corporation.
SECTION 9. The Corporation shall have a corporate seal, the design thereof being
as follows:
ARTICLE VII
AMENDMENT OF BYLAWS
Amendments and changes of these Bylaws may be made at any regular or special
meeting of the Board of Directors by a vote of a majority of the Board, or may
be made by a vote of, or a consent in writing signed by, the holders of 50% of
the issued and outstanding capital stock.
Certificate by Secretary of Adoption by Directors
THIS IS TO CERTIFY:
59
<PAGE>
That I am the duly elected, qualified and acting Secretary for the above-named
Corporation and that the above and foregoing Bylaws were adopted as the Bylaws
of said Corporation of the date set forth above by the Board of Directors of
said Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of April, 1999.
/s/ Christopher Burnell
Secretary
60
EX - 3.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated this 30th day of March,
1999 (the "Agreement") is by and among 20/20 Web Design, Inc. ("Web"), a wholly
owned subsidiary of Multi-Source Capital, Ltd. ("MSC"), a Colorado corporation,
with its principal place of business located at 21800 Oxnard Street, Suite 440,
Woodland Hills CA 91367 ("MSC"), Trump Oil Corporation, a Nevada corporation
("TOC"), and the sole Shareholder of Web, MSC.
RECITALS:
A. MSC owns, in the aggregate, 100,000 shares of the $.001 par value
Common Stock of Web (the "Web Shares"), representing 100% of the issued and
outstanding shares of Web; and
B. The Board of Directors of TOC deems it advisable and in the best
interest of TOC to acquire the Web Shares in exchange for the issuance by TOC of
its Common Shares in accordance with the applicable provisions of Nevada law and
the terms and conditions set forth herein.
In consideration of the mutual promises, representations and conditions
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
As used in this Agreement, the following terms shall have the following
meanings:
A. "Reorganization" shall mean the acquisition by TOC of the Web
Shares in exchange for the TOC Shares as further defined herein.
B. "Closing Date" shall mean the date upon which the reorganization
shall have occurred in accordance with the terms and conditions set forth
herein.
C. "Web Shareholder" shall mean the sole shareholder of Web which
shareholder is offering all of its shares of Web Common Stock for exchange
hereunder.
D. "TOC Shares" shall mean the Common Shares to be issued to the Web
Shareholder.
ARTICLE II
61
<PAGE>
Reorganization
2.01 Plan and Agreement of Reorganization. A plan of reorganization is
hereby adopted to as follows:
A. Subject to the terms and conditions hereinafter set forth, on the
Closing Date, and in the manner hereinafter proved, (i) the Web Shareholder
shall exchange the Web Shares for the TOC Shares in the amounts set forth
herein; Web shall cease to exist and TOC shall be the surviving corporation.
B. TOC and the Web Shareholder, respectively, shall take, or cause
to be taken, such action as may be necessary or appropriate in order to
effectuate the transactions contemplated hereby. Such action shall include, but
not be limited to, the filing of Articles of Merger with the Colorado Secretary
of State. In the event that after the Closing Date, any further action is
necessary or desirable to carry out the purposes of this Agreement and to vest
TOC or the Web Shareholder with full title to the securities to be exchanged
hereby, the officers and directors of TOC or the Web Shareholder, as the case
may be, shall take all such necessary action.
2.02 Effective Date of the Reorganization for Accounting Purposes. The
transactions contemplated by this Agreement shall be effective as of April 1,
2000 for accounting purposes and for all other purposes to the extent
permissible by law.
2.03 Consideration and Basis of Exchange of Shares. The manner and basis
of exchanging the Web Shares for the Common Shares of TOC shall be as follows:
A. On the Closing Date, the Web Shareholder shall deliver to TOC
certificates aggregating 100,000 Web Shares, or 100% of the issued and
outstanding Web Shares, duly endorsed in favor of TOC; the Web Shareholder shall
be issued, in exchange for the Web Shares held of record on the Closing Date,
8,620,000 TOC Shares. The Web Shareholder and TOC agree that the Web Shares and
the TOC Shares exchanged hereby shall be "restricted securities" as that term is
defined in Rule 144 under the Securities Act of 1933, as amended (the "1933
Act") and all certificates issued under this Agreement shall bear an appropriate
legend to such effect.
B. Before the Closing Date, TOC shall approve a ten-to- one reverse
stock split such that the number of shares of TOC issued and outstanding shall
be reduced from approximately twenty million shares to two million shares. All
the shares to be issued to the Web Shareholder shall be post-split shares.
Additionally,
62
<PAGE>
the name of TOC shall be changed to "20/20 Web Design, Inc.," a Nevada
corporation.
C. TOC shall raise approximately $200,000 before the Closing Date to
fund the operations of Web upon the consummation of this Agreement.
2.04 Closing. Closing of this Agreement shall be held at a date to be
mutually agreed upon by the parties at the offices of Web, or such other place
as the parties may mutually agree. The parties shall exchange such other
documents and take such other actions as may be necessary or appropriate for
completing the transactions contemplated by the Agreement.
ARTICLE III
Investment Representations
3.01 Representations of Web Shareholder. As a condition to the issuance by
TOC to the Web Shareholder of certificates for the TOC Shares, the Web
Shareholder hereby represents to TOC as follows:
A. It is acquiring the TOC Shares hereunder for its own account and
for the purposes of investment, and not with a view to, or for sale in
connection with, any distribution thereof.
B. It (i) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its
proposed investment in the TOC Shares, or (ii) it has been advised by attorneys,
accountants or other representatives having such knowledge and experience. It
acknowledges that its attorneys, accountants and other representatives had,
prior to its action, the opportunity to ask questions of, and to receive answers
from TOC concerning TOC, its affiliates and business and financial condition.
C. It understands and acknowledges that all of the TOC Shares to be
delivered to it pursuant to the provisions of this Agreement, will be
"restricted securities" within the meaning of the 1933 Act, and agrees that the
certificate shall bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW AND MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
63
<PAGE>
EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW.
D. It understands and acknowledges that the TOC Shares to be
delivered pursuant to the provisions of this Agreement will not be registered
under the 1933 Act and, accordingly, it recognizes that it will be required to
bear the economic risk of its investment until such securities are registered,
if at all. It agrees on behalf of itself, its successors and assigns, that it
will only sell, transfer, pledge or hypothecate any of the TOC Shares to be
acquired by it pursuant to the provisions of this Agreement pursuant to an
effective Registration Statement under the 1933 Act or in a transaction wherein
registration of the securities is not required. The Web Shareholder understands
that TOC has no obligation to register the TOC Shares under the 1933 Act.
E. It shall indemnify and hold harmless TOC, each person who
controls TOC within the meaning of the 1933 Act, and each officer and director
of TOC, against losses, claims, damages or liabilities, joint or several, to
which TOC, such controlling person, or any such officer or director may become
subject under the 1933 Act or otherwise, insofar as such losses, claims damages
or liabilities (or actions with respect thereof) arise out of or are based upon
any breach or violation of its representations and warranties contained in this
Agreement and shall reimburse TOC, such controlling persons and such officers
and directors for any legal and any other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage or
liability or any action. The rights to indemnification provided for in this
Section 3.01 shall be in addition to and not in substitution of any other rights
or remedies to which TOC, such controlling person or such officer or director
may be entitled under this Agreement or at law, in equity or otherwise.
3.02 Disclosure Materials. TOC has distributed to the Web Shareholder and
the Web Shareholder hereby represents and warrants to TOC that it has had the
opportunity to review, prior to its action in closing under this Agreement:
A. The most recent Audited Financial Statements of TOC; and
B. Such other data in the possession of TOC regarding the business
and/or finances of TOC and its affiliates as the Web Shareholder has reasonably
requested.
ARTICLE IV
General Representations
64
<PAGE>
4.01 Representations of the Web Shareholder. The Web Shareholder hereby
represents and warrants as follows:
A. Each Web Share delivered to TOC for exchange hereunder shall be
delivered free and clear of any lien, encumbrance or security interest thereon,
and the 100,000 shares delivered hereunder by the Web Shareholder constitute all
the outstanding Web Shares as of the Closing Date.
B. No Web Shares issued and delivered to TOC for exchange hereunder
shall be subject to any option, warrant or other right to purchase such shares,
or any voting trust or other arrangement relating to the voting of such shares.
C. The Web Shares to be delivered to TOC for exchange hereunder
constitute 100% of the issued and outstanding shares of Web.
D. There is no firm, corporation, agency or other person that is
entitled to a finder's fee or any type of brokerage commission in relation to or
in connection with the transactions contemplated by this Agreement as a result
of any Agreement or understanding with such Web Shareholder or such Web
Shareholder's affiliates or Shareholder.
E. It has received or otherwise has knowledge of any and all
liabilities of TOC as of the date of closing and hereby confirm its acceptance
of same.
4.02 Representations of TOC. TOC hereby represents and warrants to the Web
Shareholder as follows:
A. Organization and Good Standing. TOC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. TOC has full corporate power and authority to conduct its business as
now conducted and to own or lease and operate the assets and property now owned
or leased or operated by it. TOC is qualified to transact business in those
jurisdictions wherein its business requires such action.
B. Disclosure Statement. TOC has made available to the Web
Shareholder true, accurate and complete copies of its financial statements.
C. Absence of Certain Events. Except as disclosed in the materials
referred to herein, there has not been any change in the financial condition or
in the nature of the business or operation of TOC which has had a materially
adverse affect on its
65
<PAGE>
business, operations, assets, properties or prospects since December 31, 1998.
Except as disclosed in the materials referred to herein, TOC knows of no
development, except general economic conditions effecting business generally, of
a nature that is materially adverse to the business, operations, assets,
properties or prospects of TOC.
D. Authority and Compliance. TOC has full corporate power and lawful
authority to execute and deliver this Agreement. The consummation and
performance by TOC of the transactions contemplated by this Agreement have been
duly and validly authorized by all necessary corporate and other proceedings.
This Agreement has been duly and validly executed and delivered on behalf of TOC
and constitutes a valid obligation of TOC, enforceable in accordance with its
terms. No consent, authorization or approval of, exemption by, or filing with
any domestic governmental or administrative authority, or any court, is required
to be obtained or made by TOC in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby. The execution, delivery, consummation and performance of
this Agreement by TOC will not conflict with or result in the breach or
violation of any term or provision of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, note or other material agreement or
instrument to which TOC is a party or by which it is bound, or any law, order,
writ, injunction, rule or regulation or any court or governmental agency or
body.
E. Shares of TOC. The TOC Shares to be issued pursuant to this
Agreement will be issued from the authorized and previously unissued Common
Shares of TOC and, upon issuance and delivery to the Web Shareholder, will be
duly authorized and validly issued, fully paid and nonassessable.
F. Full Disclosure. No representation or warranty by TOC in this
Agreement or any document to be delivered by TOC pursuant hereto, and no
statement, list, certificate or instrument furnished or to be furnished to the
Web Shareholder pursuant hereto or in connection with the negotiation, execution
or performance of this Agreement contains or will contain any untrue statement
of material fact or omits or will omit to state any fact necessary to make any
statement herein or therein not misleading or necessary to complete and correct
the presentation of all material aspects of the business of TOC.
G. Finder. There is no firm, corporation, agency or other person
that is entitled to a finder's fee or any type of brokerage commission in
relation to or in connection with the
66
<PAGE>
transactions contemplated by this Agreement as a result of any agreement or
understanding with TOC or any of TOC's affiliates or Shareholder.
4.03 Representations of Web. Web hereby represents and warrants to TOC as
follows:
A. Organization and Good Standing. Web is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado. Web has full corporate power and authority to conduct its business as
now conducted and to own or lease and operate the assets and property now owned
or leased or operated by it. Web is qualified to transact business in those
jurisdictions wherein its business requires such action.
B. Absence of Certain Events. Except as disclosed in the materials
referred to herein, there has not been any change in the financial condition or
in the nature of the business or operation of Web which has had a materially
adverse affect on its business, operations, assets, properties or prospects
since December, 1998. Except as disclosed in the disclosure materials referred
to herein, Web knows of no development, except general economic conditions
effecting business generally, of a nature that is materially adverse to the
business, operations, assets, properties or prospects of Web.
C. Authority and Compliance. Web has full corporate power and lawful
authority to execute and deliver this Agreement. The consummation and
performance by Web of the transactions contemplated by this Agreement have been
duly and validly authorized by all necessary corporate and other proceedings.
This Agreement has been duly and validly executed and delivered on behalf of Web
and constitutes a valid obligation of Web, enforceable in accordance with its
terms. No consent, authorization or approval of, exemption by, or filing with
any domestic governmental or administrative authority, or any court, is required
to be obtained or made by Web in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby. The execution, delivery, consummation and performance of
this Agreement by Web will not conflict with or result in the breach or
violation of any term or provision of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, note or other material agreement or
instrument to which Web is a party or by which it is bound, or any law, order,
writ, injunction, rule or regulation or any court or governmental agency or
body.
D. Full Disclosure. No representation or warranty by
67
<PAGE>
Web in this Agreement or any document to be delivered by Web pursuant hereto,
and no statement, list, certificate or instrument furnished or to be furnished
to the Web Shareholder pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains or will contain any untrue
statement of material fact or omits or will omit to state any fact necessary to
make any statement herein or therein not misleading or necessary to complete and
correct the presentation of all material aspects of the business of Web.
E. Tender of All Shares. The Shares to be tendered by the Web
Shareholder for exchange hereunder constitute 100% of the issued and outstanding
shares of Web as of the Closing Date.
F. Finder. There is no firm, corporation, agency or other person
that is entitled to a finder's fee or any type of brokerage commission in
relation to or in connection with the transactions contemplated by this
Agreement as a result of any agreement or understanding with Web or any of Web's
affiliates or Shareholder.
ARTICLE V
Additional Agreements
TOC and the Web Shareholder hereby further agree as follows:
5.01 Access and Information. TOC hereby agrees to give Web and the Web
Shareholder and their respective accountants, attorneys and representatives,
full access during normal business hours through the period prior to the Closing
Date to all of its properties, books, contracts, commitments and records, and
TOC will furnish to Web and the Web Shareholder during such period all such
information concerning its affairs that Web and the Web Shareholder may
reasonably request. The Web Shareholder hereby agree that each will give to TOC
and its accountants, attorneys and representatives full access during normal
business hours through the period prior to the Closing Date to such information
as may be reasonably necessary in order to confirm the representations and
warranties of the Web Shareholder set forth herein. In the event of the
termination of this Agreement, each party will return to the other all
documents, work papers and other materials obtained from the other relating to
the transactions contemplated hereby, whether so obtained before or after the
execution hereof, and will use best efforts to have any information so obtained
and not heretofore made public, kept confidential.
5.02 Expenses. Upon termination of this Agreement as provided herein, each
party will pay all costs and expenses of its
68
<PAGE>
performance of and compliance with all agreements and conditions contained
herein to be performed or complied with, including fees, expenses and
disbursements of its accountants and attorneys.
5.03 Meeting of Board of Directors. Immediately following closing under
this Agreement, the Board of Directors of TOC shall duly convene a meeting at
which the Board will be increased from three to five and Irving M. Einhorn and
James Smith shall be appointed to the Board of Directors of TOC.
5.04 Further Assurances. If at any time, any party to this Agreement shall
consider or be advised that any further action or assurance is necessary or
desirable to vest the title to any securities exchanged hereby, the officer and
directors of TOC, or the Web Shareholder, as the case may be, shall deliver such
documents or take such other action as may be necessary or proper to perfect or
confirm title to such securities and otherwise carry out the purposes of this
Agreement.
ARTICLE VI
Conditions Precedent
6.01 Conditions Precedent to Obligations of Web Shareholder. The
obligations of the Web Shareholder to effect the transaction contemplated herein
shall be subject to the following conditions (which may be waived in writing by
the Web Shareholder):
A. The representations and warranties of TOC herein, shall be true
and accurate as of and at the Closing Date with the same effect as though made
at such time; TOC shall have performed all obligations and complied with all
covenants required by this Agreement to be performed or complied with by it
prior to the Closing Date; and
B. No material change in the corporate status, business, operations
or financial condition of TOC shall have occurred since December 31, 1998 other
than changes in the ordinary course of business, none of which has been
materially adverse in relation to TOC, and no other event or condition of any
character shall have occurred or arisen since that date which shall have
materially or adversely effected the corporate status, business, operations or
financial condition of TOC.
6.02 Conditions Precedent to the Obligations of Web. The obligation of Web
to effect the transaction contemplated hereby shall be subject to the conditions
(which may be waived in writing by Web) that the representations and warranties
of TOC contained herein shall be true and accurate as of and at the Closing Date
69
<PAGE>
with the same effect as though made at such time; and that TOC shall have
performed all obligations and complied with all covenants required by this
Agreement to be performed or complied with by them prior to the Closing Date.
6.03 Conditions Precedent to Obligations of TOC. The obligations of TOC to
effect the transaction contemplated herein shall be subject to the following
conditions (which may be waived in writing by TOC):
A. The representations and warranties of Web and the Web Shareholder
herein shall be true and accurate as of and at the Closing Date with the same
effect as though made at such time; Web and the Web Shareholder shall have
performed all obligations and complied with all covenants required by this
Agreement to be performed or complied with by it prior to the Closing Date; and
B. No material change in the corporate status, business, operations
or financial condition of Web shall have occurred since December 31, 1998, other
than changes in the ordinary course of business, none of which has been
materially adverse in relation to Web, and no other event or condition of any
character shall have occurred or arisen since that date which shall have
materially or adversely effected the corporate status, business, operations or
financial condition of Web.
ARTICLE VII
Termination and Abandonment
Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and abandoned at any time before or after the
Closing Date under any one or more of the following circumstances:
A. By the mutual consent of the Web Shareholder and the Board of
Directors of TOC;
B. By TOC, if prior to the Closing Date, the conditions set forth in
Section 6.03 have not been met;
C. By Web, if prior to the closing the conditions set forth in
Section 6.02 have not been met;
D. By the Web Shareholder, if prior to the Closing Date, the
conditions set forth in Section 6.01 have not been made;
E. By any party, if any action or proceeding before any court or
governmental body or agency shall have been instituted or
70
<PAGE>
threatened to restrain or prohibit the transaction contemplated hereby and the
Web Shareholder and TOC deem it advisable not to proceed with the transaction.
Upon termination and abandonment, no party shall have any liability or
obligation to any other party to this Agreement.
ARTICLE VIII
General Provisions
8.01 Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained in this Agreement shall
survive the Closing Date.
8.02 Assignability and Amendments. This Agreement shall not be altered or
otherwise amended except pursuant to an instrument in writing signed by each of
the parties. No assignment of any of its obligations by any party shall relieve
such party from primary liability for any of its obligations hereunder. This
Agreement shall be binding upon, and subject to the terms of the foregoing
sentence, shall inure to the benefit of the parties, their successors, legal
representatives and assigns.
8.03 Notices. Any notice, request, instruction or other document to be
given hereunder by any party to any of the other parties shall be in writing and
shall be deemed to have been duly given when delivered personally or five days
after dispatch by registered or certified mail, postage prepaid, return receipt
requested, to the party to whom the same is given or made, at the addresses set
forth herein, with copies,
in the case of TOC, to:
Randy Sutton, President
Trump Oil Corporation
1301-A Ridgeway Drive
Lewisville TX
and, in the case of Web and the Web Shareholder, to:
Christopher Burnell, President
Multi-Source Capital, Ltd.
21800 Oxnard Street Suite 440
Woodland Hills CA 91367
or at such other address as any party shall specify to the others in writing.
71
<PAGE>
8.04 Expenses. Whether or not the transactions contemplated by this
Agreement, each party hereto shall bear the expenses incurred by it in
connection with the transactions contemplated hereby.
8.05 Entire Agreement. This Agreement, and other writings and agreements
specifically identified herein, contain the entire agreement between the parties
with respect to the transactions contemplated herein and supersede all previous
written or oral negotiations, commitments or understandings.
8.06 Waivers and Remedies. Any waiver must be in writing. A waiver of any
breach or failure to perform any of the terms or conditions of this Agreement
shall not in any way effect, limit or waiver a party's right at any time to
enforce strict compliance thereafter with every other term or condition of this
Agreement. All remedies under this Agreement shall be cumulative, but not
alternative.
8.07 Counterparts and Headings. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. All headings (including,
without limitation, article headings and section titles), are inserted for
convenience of reference only and shall not effect the meaning or interpretation
of any terms of this Agreement. References to masculine, feminine or neuter
shall each include the other, as the circumstances may require.
8.08 Severability. If to the extent that any court of competent
jurisdiction holds any provision (or any part thereof) of this Agreement to be
invalid or unenforceable, such holdings shall in no way effect the validity of
the remainder of this Agreement.
8.09 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
20/20 WEB DESIGN, INC.
By:
Christopher Burnell, President
TRUMP OIL CORPORATION
By:
Randy Sutton, President
72
<PAGE>
WEB SHAREHOLDER:
MULTI-SOURCE CAPITAL, LTD.
By:
Christopher Burnell, President
73
<PAGE>
20/20 WEB DESIGN, INC.
21800 Oxnard Street Suite 440
Woodland Hills CA 91367
(818) 598-6780
(818) 598-6779 Facsimile
December 10, 1999
VIA FACSIMILE
Randy Sutton, President
Stein's Cake Box, Inc.
1301-A Ridgeville Road
Lewisville TX
RE: Letter of Intent
Dear Mr. Sutton:
This letter of intent shall act as a memorialization of the terms of an
agreement by and between 20/20 Web Design, Inc. ("Web") and Stein's Cake Box,
Inc. ("SCB") regarding a proposed business combination between these parties.
It is the parties' understanding that upon completion of the proposed
combination, Web will own the majority of then-issued and outstanding shares of
SCB in exchange for the issuance of approximately 1,300,000 shares in Stein's
Holdings, Inc. ("Stein's"), the majority shareholder of Web and the payment of
$700,000. Upon completion of the transaction, SCB will become a wholly owned
subsidiary of Web.
This letter of intent is contingent upon (i) agreement and execution of a
business combination agreement upon terms and conditions mutually acceptable to
both parties; (ii) completion of due diligence investigations satisfactory to
both parties and their respective counsel and advisors; (iii) board of director
and shareholder approval (if required); and (iv) completion and filing of any
required filings with the Securities & Exchange Commission and/or any state or
other regulatory agencies. It is the intention of the parties to affect a
tax-free reorganization.
In an effort to accommodate SCB, who is presently in the midst of an
expansion of its plant and offices to accommodate its
74
<PAGE>
projected operations for 2000, upon execution of this letter, Web will wire the
sum of $195,000 to pay an outstanding construction bill. In the event that the
parties are unable to consummate this proposed business transaction, then SCB
will be obligated to repay Web the $195,000 as well as any other monies advanced
to SCB pursuant to this Letter of Intent.
Upon your execution of this letter, both parties will use their best
efforts to provide copies of their respective books and records to each other so
that this agreement can move forward as quickly as possible.
If the terms of this letter are acceptable, please indicate by signing at
the bottom and return this letter via facsimile to (818) 598-6779.
Sincerely,
20/20 WEB DESIGN, INC.
/s/ Christopher Burnell
Christopher Burnell, COO
Accepted this 10th day of December, 1999 by Stein's Cake Box, Inc.
/s/ Randy Sutton
------------------------
Randy Sutton, President
75
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 237
<SECURITIES> 0
<RECEIVABLES> 26,173
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 28,410
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 508,614
<CURRENT-LIABILITIES> 313,871
<BONDS> 0
<COMMON> 10,775
0
0
<OTHER-SE> 183,968
<TOTAL-LIABILITY-AND-EQUITY> 508,614
<SALES> 30,636
<TOTAL-REVENUES> 30,636
<CGS> 27,264
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 38,282
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (34,910)
<INCOME-TAX> 0
<INCOME-CONTINUING> (34,910)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34,910)
<EPS-BASIC> (.003)
<EPS-DILUTED> (.003)
</TABLE>
