--------------------------------------------------------------------------------
Maurizio Forigo
PRESIDENT
SafeID. Corporation
Suite B3, 1700 Varsity Estates Drive NW
Calgary, Alberta, Canada T3B 2W9
(Name and Address of Person Authorized to Receive Notices
and Communications on Behalf of the Person Filing Statement)
--------------------------------------------------------------------------------
WITH A COPY TO:
KARL E. RODRIGUEZ, ESQ
24843 Del Prado, #318
Dana Point, CA 92629
(949) 248-9561
fax (949) 248-1688
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB-A2
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION (G) OF THE SECURITIES EXCHANGE ACT OF 1934
Safe ID Corporation
(formerly Inter.N Corporation)
Nevada 88-0407078
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
Suite B3, 1700 Varsity Estates Drive NW Calgary, Alberta Canada T3B-2W9
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (403) 247-4630
The following Securities are to be registered pursuant to Section 12(g) of the
Act:
Class-A Common Voting Equity Stock
24,000,000
September 20, 2000
The EXHIBIT INDEX is located at page 45 of this Registration Statement
1
<PAGE>
PART I 3
Item 1. Description of Business 3
(a) Business Development 3
(b) Business of the Issuer 3
Item 2. Managements Discussion and Analysis or Plan of Operation 8
(a) Plan of Operation for the next twelve months 8
(b) Discussion and Analysis of Financial Condition and Results of
Operations 9
(c) Reverse Acquisition Candidate 9
Item 3. Description of Property 9
Item 4. Security Ownership of Certain Beneficial Owners and Management 10
(a) Security Ownership of Management 10
(b) Security Ownership of Certain Beneficial Owners 10
(c) Changes in Control 11
Item 5. Directors, Executive Officers, Promoters and Control Persons 11
Item 6. Executive Compensation 12
Item 7. Certain Relationships and Related Transactions 12
Item 8. Description of Securities 12
The Registrant's Capital Authorized and Issued 12
Common Stock. 12
Secondary Trading 13
Unrestricted Shares of Common Stock. 13
PART II 15
Item 1 15
(a) Market Information 15
(b) Holders 15
(c) Dividends 15
Item 2. Legal Proceedings 15
Item 3. Changes in and Disagreements with Accountants 15
Item 4. Recent Sales of Unregistered Securities 16
Item 5. Indemnification of Officers and Directors 17
(a) Indemnity Provisions in the By-Laws of the Registrant 17
(b) Nevada Corporate provisions respecting indemnification 19
PART F/S 21
PART III 45
Item 1. Index to Exhibits 45
2
<PAGE>
PART I
UNNUMBERED ITEM: INTRODUCTION
This registration statement is voluntarily filed pursuant to Section 12(g)
of the Securities Exchange Act of 1934, in order to comply with the requirements
of the National Association of Securities Dealers for submission for quotation
on the Over the Counter Bulletin Board, often called OTCBB . This Issuer's
common stock is not presently quoted on the OTCBB. Its common stock is listed on
the Pink Sheets and may have traded in brokerage transactions. The requirements
of the OTCBB are that the financial statements and information about the Issuer
be reported periodically to the Commission and be and become information that
the public can access easily. This issuer wishes to report and provide
disclosure voluntarily, and will file periodic reports in the event that its
obligation to file such reports is suspended under the Exchange Act. If and when
this 1934 Act Registration is effective and clear of comments by the staff, this
issuer will be eligible for consideration for the OTCBB upon submission of one
or more NASD members for permission to publish quotes for the purchase and sale
of the shares of the common stock of the issuer.
ITEM 1. DESCRIPTION OF BUSINESS.
(A) BUSINESS DEVELOPMENT.
(1) FORM AND YEAR OF ORGANIZATION. This Corporation, Safe ID Corporation,
( the Registrant ) was duly organized on June 27, 1996 pursuant to the laws of
the State of Nevada as Inter.N Corporation. This Registrant will sometimes refer
to itself in normal English as we and us .
On June 30, 1996, Inter.N Corporation issued 6,000,000 shares of common
stock to its founders at par value of $0.001 for services valued at $1,000.
These common stock amounts have been fully adjusted to reflect a 2,000 for 1
split of October 12, 1998, and a 3 for 1 split on September 20, 1999.
On July 23, 1999, 9,000,000 shares were issued for the acquisition of
intellectual property in the form of a developed business plan. The fair value
of $30,000 has been assigned to coordinate the valuation with the proceeds
received from the following subsequent share issuance. On September 1, 1999,
9,000,000 shares were issued for $30,000 cash. The common stock amounts have
been adjusted to reflect the 3 for 1 split of September 20, 1999.
During August of 1999, Inter N. Corporation resolved to change its name to
Safe ID Corporation.
(2) BANKRUPTCY, RECEIVERSHIP OR SIMILAR PROCEEDING. None from inception
to date.
(B) BUSINESS OF THE ISSUER. We intend to become re-sellers of a product line
of miniaturized micro-chip technology for insertion into inanimate objects, or,
in appropriate contexts, the insertion under the skin of animals. The purpose of
these devices is positive identification. The chip is the size of a grain of
rice. It is programmable with unique codes with billions of combinations
possible. Positive identification of such things as cameras, bicycles, boats,
cars, skis, paintings and expensive clothes such as fur coats is easily
provided. The electronic product line includes a variety of radio frequency
micro-chips or "tags," portable readers, stationary readers and micro-chip
injecting devices.
3
<PAGE>
We have not commenced operations and have established no source of
revenues. We will purchase chips and resell them. Once sales have been
generated, we will recognize revenue at the time of delivery of the product to
the customer.
RADIO FREQUENCY IDENTIFICATION (RFID) RFID technology identifies an object
remotely through the use of radio frequencies and micro-chips and lasts
indefinitely. Because RFID codes can be read without line-of-sight or physical
contact, RFID technology provides a solution to certain difficult identification
problems which bar code technology cannot address. The chips are passive,
activated by the electromagnetic field of the scanner as it passes over the chip
and temporarily energizes the chip, allowing it to transmit its data to the
reader in milliseconds. Safe ID's readers (scanners) can read other
manufacturer's micro-chips and have an error detection and encryption algorithm
that reduces the probability of duplication or reading error to less than 1 in
10 billion. Management believes that no other manufacturers can guarantee this
reliability in their chip and coding systems.
MICRO-CHIPS are tiny, passive electronic devices, ranging in size from 12 to 28
millimeters in length and 2.1 to 3.5 millimeters in diameter. The smallest
micro-chip is about the size of a grain of rice. The life expectancy of these
micro-chips is greater than 75 years and over 100,000 reads.
TAMPER-PROOF & UNIQUE ID NUMBER. A computer-controlled process that ensures no
duplication uniquely codes each micro-chip. This code cannot be altered. The
micro-chips carry 96 bits of information including check bits, which allows 700
trillion non-reprogram able unique ID combinations. Because of the random
process, specific numbers or groups of numbers are not available. The
micro-chips unique ID number cannot be changed and there are no moving parts.
The micro-chip can be implanted into an object or animal. After implantation,
the device remains with the object or animal for life, where it provides the
unique ID number anytime it is scanned by a compatible electronic ID scanner.
Once implanted, the micro-chip remains inactive until read with a scanner that
sends a low radio frequency signal to the chip, providing the power needed by
the micro-chip to send its unique code back to the scanner and positively
identify the animal. The use of a Safe ID micro-chip allows the ID number to be
stored permanently inside an object or animal, where it cannot be lost or
altered. The micro-chip will last for the life of an animal with the unique ID
number intact. In addition to the number, the micro-chip generates a reliability
check to guarantee that the identifying number is read accurately. This all
takes place in less than .04 seconds.
EVERLASTING. The power supply is passive in nature, requiring no batteries
that wear out or run down. A radio signal from a reader or scanner is used to
read the permanent identification number through the skin of an animal or on an
object. The chips operate at 125 KHz and have an operating temperature range
from -200C to 800C.
SAFE, PERMANENT & POSITIVE. The Safe ID "Canadian Standard" Micro-chip is a
custom integrated circuit coil and capacitor (transponder) constructed of
non-toxic components and hermetically sealed in biocompatible glass containing a
programmed identification number. The whole device is as small as a grain of
rice. The micro-chip is coupled with an antenna and sealed in an inert glass
capsule that can be glued or inserted into an object. In the case of animate
identification, the chips are coated with Parylene-C, an anti-migratory coating
that effects protein bonding with the host muscle of the animal. After
implantation a small layer of connective tissue forms around the micro-chip,
preventing migration.
ANIMAL IDENTIFICATION. We do not intend to compete with our principal supplier
in the animal identification market. Avid of Canada is our supplier and
manufacturer of the micro-chip that is the basis of the technology we will use
for inanimate objects. It is about the size of a pencil lead and is therefore
suitable for injection into virtually all animals. This includes parakeets and
up to the size of a whale. Extensive testing, more than ten years, in a wide
variety of animals has shown no adverse side effects to the health of the
animal. We intend to focus on the use of this technology for identification of
inanimate objects.
4
<PAGE>
EASY IMPLANTATION. Implantation is no more difficult than a routine injection
when performed by a Veterinarian. It takes less than a minute including
preparation. Once implanted, the micro-chip requires no further attention during
the animals' life.
UNBIASED. Most forms of identification require subjective interpretation by the
observer color, brand, tattoo, markings, etc. The code generated by the
micro-chip is read by the scanner and is not subject to interpretation.
Consequently, error is eliminated.
DOWNLOAD SYSTEMS. SafeID systems are battery powered with optional AC adapters.
They feature several download capabilities with PC or Macintosh systems.
Emulation software packages are available to interface with MS DOS and Windows
programs.
SPECIFIC ITEMS:
(1) PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS. The products which
we sell have been market tested, sold and market-proven in Canada for over 10
years, by Avid of Canada for identification of animals. The market targeted is a
specific niche market for identification of inanimate objects. Product
warranties are set by the manufacturer.
SAFEID MINI TRACKER. The Mini-Tracker is the most compact reader available; it
is small enough to carry in a pocket and is compatible with all popular brands
of micro-chips. The reader generates a 125KHz frequency signal and the returning
data from the chip is stored on its 16 character Liquid Crystal Display (LCD).
During operation, the reader emits two beep tones to signal that a compatible
micro-chip has been energized and four beep tones sound every three minutes to
remind the user to turn the reader off when not in use. The Mini-Tracker can be
optionally equipped with an RS232 pigtail for downloading data to a PC or
Macintosh computer. Standard power is provided by one nine-volt alkaline battery
and battery capacity exceeds 6000 reads.
SAFEID POWER TRACKER II is a water resistant, portable, durable hand-held
micro-chip reader. The reader is able to operate fully immersed in water. Like
the Mini Tracker, micro-chip information can be stored on its 16 character LCD
and can be downloaded to a PC through a RS-232 interface. Standard power is
provided by one NiCad rechargeable battery and optional power is provided
through an AS 110-volt external power supply. Battery capacity allows for 3000
reads per charge and the reader weighs 680 grams or 1.4 pounds. All other
specifications are as per the Mini Tracker.
SAFEID POWER TRACKER III has the same look and specifications as the Power
Tracker II, but with the addition of on-board memory of 256k of non-volatile RAM
with a 10-year battery backup. It also features upload/download capabilities
with many widely used Windows based programs. The unit also features a green LED
that flashes to confirm that a given chip has been read.
SAFEID POWER TRACKER IV. With the same look and specifications as the other
Power Tracker products, this unit is powered by 2 nicad rechargeable batteries
or optional 1 1O-Volt external power. The unit can download to the Psion palm
top computer, and SafeID Data Logger or to a PC or Macintosh. The unit operates
at 128KHz, weighs 1 000 grams or 2.2 pounds and the battery capacity is 1250
reads per charge.
OTHER READING AND MONITORING SYSTEMS. SafeID's product line includes probes and
coils ranging from 6 to 24 inches in diameter and are designed to fit many
inanimate and animate applications. Options include any of the display and
upload/download capabilities of the other readers.
PSION ORGANIZER II. A hand-held computer with a removable solid state memory
disk, the Organizer incorporates the DT/Link for IBM/PC computer interfaces. The
computer can store up to 1 megabyte of data on its disk, additional disks are
available. The dimensions of the unit are 6 X 3.8 X 1.2 inches and the unit
weighs only 250 grams. It features 4 X 20 line LCD, a total of 36 alpha numeric
keys, and the storage drive is a standard 64k RAM pack with optional 128k, 256k,
5
<PAGE>
512k and 1 mgb drives. Power is sourced from a 9 volt alkaline or nicad battery
with optional 110-volt external source.
SOFTWARE. SafeID intends to provide and offer a Microsoft Access based database
to store and track valuables by recording their micro-chip ID numbers. This
software was developed by Avid of Canada. We will be a licensee of the software,
with the ability to customize the software to accommodate our clientele. The
customization intended would be to modify the records and fields to address in
animate objects rather than animals, as well as their own unique information
including such data as: Object name or title; Object category; Object
description; Object manufacturer or maker, painter, designer; Year Object was
made; Name of current owner (including details such as address, telephone, fax
and e-mail); Name of last owner; Alternate contact person; Record of sale of
object (i.e. A sale at auction); and Other pertinent information specific to
each sector/industry.
SYSTEM SPECIFICATIONS. Pentium PC with minimum 8 Meg RAM, SVGA Color Monitor,
Minimum 40 Meg free Hard Drive Space (plus room for data), and Mouse. Runs under
Windows '95. Routine software. For remote dial-in capabilities require
high-speed modem, minimum 28,800. Faster is better. Windows '95 must be
configured for remote dial, prior to shipping.
COMPUTER ASSISTANCE. SafeID will design a specialized reporting system for each
specific industry. SafeID can download data using a modem or copy information
onto a disk to integrate with customer's system. Should each specific industry
not have a computer system for the tracking of each animal, SafeID has the
capabilities of assisting in designing one.
(2) DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES. We will use the
Internet as our vehicle for selling. Direct sales and appointments will be made
from the Internet. Our web-site is www.mysafeid.com. It is operational, but we
have not launched operation. The Internet will automatically give us access to
the world-wide market. We will ship via Express Post and Federal Express. We
need to establish dynamic links to our site from hotels, airlines, travel
agencies and other manufacturers, in order to generate major market business.
(3) STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICE. None.
(4) COMPETITIVE BUSINESS CONDITIONS AND THE SMALL BUSINESS ISSUER'S
COMPETITIVE POSITION IN THE INDUSTRY. The following companies use the micro-chip
technology and have a specific niche in the marketplace for animal
identification: Avid Canada, Anitech, Trovan, Destron Fearing. Avid Canada, in
Calgary, has supplied the following statistics, which we believe to be accurate.
Avid has about 35% of the animal marketplace in Canada, Anitech has about 55%,
and Trovan has 10%. We will be a new entrant into this established market and
will begin at a competitive disadvantage, potentially; however, we will not
compete in the established animal identification market, but will exploit the
potential for identification of inanimate objects.
(5) SOURCES OF AND AVAILABILITY OF RAW MATERIALS AND THE NAMES OF
PRINCIPAL SUPPLIERS. Avid of Canada is the manufacturer and supplier of the
micro-chip technologies that we will use. We have established an excellent
working relationship with Avid. No written agreements have yet been formalized.
Avid sells its chips to anyone. No special agreement is necessary to purchase
chips from Avid. In addition, there are other suppliers of similar chips in Hong
Kong and Thailand. We note that we intend to become a customer of Avid in
the future by obtaining a licensing agreement with Avid. While it is true that
Avid will sell chips to anyone, the advantage of a license agreement is
two-fold: (1) Avid has obtained various Canadian Governmental approvals for
various uses of its chips. A license agreement is expected to authorize Safe ID
to represent that it uses Avid chips and that those chips carry the approvals of
the Canadian Governmental agencies. (2) A licensing agreement is expected to
confer benefits in preferential pricing and supply for purchases in quantity.
Second, the licensing agreement would move from a general discussion stage to an
agreement stage, when and if Safe ID has secured clearance of its 1934 Act
Registration, acceptance for quotation on the OTCBB, and consequently completed
6
<PAGE>
its intended private placement; so that, the agreement can be consummated with a
substantial cash deposit.
We intend to obtain a license to distribute our line of intended products
using Avid's micro-chips. Although there is a limited number of manufacturers of
these particular micro-chips, we believe that other suppliers could provide us
similar chips on comparable terms if an agreement with Avid were not reached. A
change in suppliers, however, could cause a delay in commencing operations and a
possible loss of sales, which would affect operating results adversely.
(6) DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS. We are a new company,
entering into a competitive field. We do not have an established customer base
yet.
(7) PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY
AGREEMENTS OR LABOR CONTRACTS. None. All rights belong to Avid of Canada. We
will be its licensee.
(8) NEED FOR ANY GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES
AND STATUS. Not Applicable. Avid of Canada has already established all necessary
approvals for the products we will sell and proven their safety with respect to
animals. We foresee no issues with respect to our intent to use the systems for
identifying inanimate objects.
(9) EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE
BUSINESS. Not Applicable. However, this issuer would expect to maintain its
corporate status with the State of its incorporation, and would file its tax
returns and reports required to be filed with the Commission. This issuer wishes
to report and provide disclosure voluntarily, and will file periodic reports in
the event that its obligation to file such reports is suspended under the
Exchange Act. If and when this 1934 Act Registration is effective and clear of
comments by the staff, this issuer will be eligible for consideration for the
OTCBB upon submission of one or more NASD members for permission to publish
quotes for the purchase and sale of the shares of the common stock of the
issuer. In connection with such submission and any continuation on the OTCBB,
this Registrant would expect to comply with NASD regulations, to the extent that
any such regulations are applicable to the conduct of the Registrant's affairs.
REPORTING UNDER THE 1934 ACT. This 1934 Act Registration of the common
stock of this Registrant has now become effective by operation of law ;
notwithstanding that it has not cleared comments by the the Staff of the
Securities Exchange Commission. It is not uncommon for 1934 Act Registration
Statements to go effective before the form has cleared comments of the SEC
Staff. Whether clear of comments or not, upon the legal effectiveness of this
Registration Statement, certain reporting requirements will apply to this
Registering Company. First and foremost, a 1934 Registered Company is required
to file an Annual Report on Form 10-K or 10-KSB, 90 days following the end of
its fiscal year. The key element of such annual filing is Audited Financial
Statements prepared in accordance with standards established by the Commission.
A 1934 Act Registrant also reports on the share ownership of affiliates and 5%
owners, initially, currently and annually. In addition to the annual reporting,
a Registrant is required to file quarterly reports on Form 10-Q or 10-QSB,
containing audited or un-audited financial statements, and reporting other
material events. Some events are deemed material enough to require the filing of
a Current Report on Form 8-K. Any events may be reported currently, but some
events, like changes or disagreements with auditors, resignation of directors,
major acquisitions and other changes require aggressive current reporting. All
reports are filed and become public information.
(10) ESTIMATE OF AMOUNT SPENT ON RESEARCH AND DEVELOPMENT IN EACH OF LAST
TWO YEARS. We do not conduct research and development of the products we
re-sell, or of new products which we may, at some future time, re-sell. Our
principal supplier is Avid Canada. Research and development is conducted by
those who supply us with products we will re-sell.
7
<PAGE>
(11) COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS. Not
Applicable.
(12) NUMBER OF TOTAL EMPLOYEES AND FULL-TIME EMPLOYEES. We have two
full-time employees: Maurizio Forigo and Lance Morginn, who are our officers and
directors.
(13) YEAR 2000 COMPLIANCE, EFFECT ON CUSTOMERS AND SUPPLIERS. The Company
is not aware of any Year 2000 compliance issues which have effected or would
affect us or customers or suppliers.
ITEM 2. MD&A SB 303
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
(A) PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS.
(1) CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS. We
estimate that we would require about $250,000 in the next twelve month to meet
overhead (rent, salaries, and operational expenses) and also expenses connected
with marketing (cost of goods sold, buying chips, mainly,) and also general
working capital. These necessary funds must be raised by offering additional
shares of stock in one or a combination of the following: a public offering
pursuant to the Securities Act of 1933; and/or, one or more private placement of
restricted securities. We have not determined yet, what plan or plans of capital
formation we will pursue. The principal purpose of this 1934 Act Registration is
to secure and sustain the quote-ability of our common stock on the OTCBB.
We would require about $50,000 to launch, to establish our dynamic link
relationships with major markets, and to produce and circulate brochures and
initial advertising announcements. The term "dynamic link" refers to the common
commercial practice by which one web site features a direct link to another web
site.
We would require about $200,000 in initial working capital to insure
liquidity for the first twelve months following our launch.
As previously stated, we believe that an initial $250,000 private placement
would be sufficient to defer our expenses until we begin to generate sufficient
revenues. When our 1934 Act Registration is clear of comments, we would proceed
with our planned private placement. We would expect to allow three months for
the completion and clearance of funds. At that time we will purchase inventory
and expect to begin making sales and recording revenues immediately. The basis
for our expectation of immediate revenue generation is based upon our
management's existing relationships and informal contacts with potential
customers. If we are unsuccessful in securing investment in our private
placement, we may not be able to continue as a going concern. It is apparent
that our cash on hand is insufficient for any material purpose. We do not have
any current operations other than our focus on this 1934 Act Registration.
Accordingly, expenses incurred in connection with this Registration which exceed
our available cash on hand must be and will be advanced by management.
We do not anticipate any contingency upon which we would voluntarily cease
filing reports with the SEC, even though we might cease to be required to do so.
It is in our compelling interest to report corporate affairs quarterly, annually
and currently, as the case may be, generally to provide accessible public
information to interested parties, and also specifically to maintain our
qualification for the OTCBB, if and when the Issuer's intended application for
submission may be effective.
(2) SUMMARY OF PRODUCT RESEARCH AND DEVELOPMENT. We do not have any new
products in development. We do not develop new products. We may re-sell products
developed by others in the future, when and if they are demonstrated to be
marketable and properly warranted by their manufacturers.
(3) EXPECTED PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT. None.
8
<PAGE>
(4) EXPECTED SIGNIFICANT CHANGE IN THE NUMBER OF EMPLOYEES. We have no
firm expectations. We hope to grow. Growth would be accompanied by additional
employees.
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
We are a Canadian company with a Canadian auditing firm, Smythe Ratcliffe,
Chartered Accountants. Smythe Ratcliffe is a member of PKF International
Association, an international association of independent accounting firms. Our
financial statements have been prepared in accordance with US GAAP. We are a
development stage company, as defined in Statement 7, of the Financial
Accounting Standards Board. Our financial statements have been prepared in
accordance with generally accepted accounting principles applicable to a going
concern, which assumes that we will realize our assets and discharge our
liabilities in the normal course of operations. Of course, our ability to do
this is dependent upon our ability to raise additional financing and to generate
revenues. Our plan is to raise funds, as we have described above, supplemented
by our planned principle operations, beginning this year, 2000.
We had no revenues or significant liabilities in 1998. We had only initial
selling and administrative expenses in that year, which were funded by loans
from shareholders. These loans remain on the books as of the end of 1999, in the
amount of $350.
We had no revenues in 1999. We incurred $29,361 in expenses in that year.
These expenses are detailed in our financial statements. They represent start-up
and organizational costs. These expenses were funded substantially by the sale
of stock, and not from operations. We have an insignificant amount cash and
other assets as of the close of this last fiscal year and currently.
An analysis of our financial condition concludes that we are a
barely-funded start-up, with an immediate need to begin generating revenues and
obtaining further financing. If we are not successful in this regard, we will
not be able to achieve our objectives in this year 2000, nor be able to launch
successful operations, and may fail. It is not our intention to fail, nor to
abandon our plan.
It is our belief that a world-wide market is developing for means and
devices for the positive identification of animals and inanimate objects, and
that Internet marketing can be achieved profitably within the frame work of our
expected funding requirements. There can be no guarantee that our operating
assumptions will prove correct.
(C) REVERSE ACQUISITION CANDIDATE. This Registrant is not a candidate for
reverse acquisition transactions, either as acquirer or target. It is the
intention of this Registrant to pursue the development of its business and
business plan, as described in the Items of this Registration Statement.
ITEM 3. DESCRIPTION OF PROPERTY.
We have one executive office in Calgary, Canada. The rent is $320.00
monthly, plus business tax and telephone, for a total monthly office cost
$369.15, annualized to indicate $4,429.80.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(A) SECURITY OWNERSHIP OF MANAGEMENT. To the best of Registrant's knowledge
and belief the following disclosure presents the total beneficial security
ownership of all Directors and Nominees, naming them, and by all Officers and
Directors as a group, without naming them, of Registrant, known to or
discoverable by Registrant. Please refer to explanatory notes if any, for
clarification or additional information.
9
<PAGE>
(B) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. To the best of
Registrant's knowledge and belief the following disclosure presents the total
security ownership of all persons, entities and groups, known to or discoverable
by Registrant, to be the beneficial owner or owners of more than five percent of
any voting class of Registrant's stock. Please refer to explanatory notes if
any, for clarification or additional information.
TABLE A/B
COMMON STOCK
OFFICERS AND DIRECTORS AND OWNERS OF 5% OR MORE
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Address of Beneficial Owner . Actual %
Ownership
-----------------------------------------------------------
Maurizio Forigo (1). . . . . . . . . . 6,000,000 25.00
112 16th Ave SW
Calgary Alberta T24 0T6
-----------------------------------------------------------
Lance Morginn. . . . . . . . . . . . . 6,000,000 25.00
1550 35th Ave W
Vancouver BC V6M 1H2
-----------------------------------------------------------
All Officers and Directors as a Group. 12,000,000 50.00
-----------------------------------------------------------
Silvio Forigo (1). . . . . . . . . . . 1,449,000 6.04
615 11th Ave SE Suite 204
Calgary Alberta T2G 0Y8
-----------------------------------------------------------
Hightech International SA (2). . . . . 1,380,000 5.75
Upglebe Crossfields Nether Compton
Sherborne Dorset DT9 4R3
United Kingdom
-----------------------------------------------------------
Charles Malette (3). . . . . . . . . . 1,482,000 6.18
1550 35th Ave W
Vancouver BC V6M 1H2
-----------------------------------------------------------
Diamond Investment Exchange (3). . . . 1,170,000 4.88
1550 35th Ave W
Vancouver BC V6M 1H2
-----------------------------------------------------------
Perpetual Securities S.A. (4). . . . . 1,200,000 5.00
7 Tilton Court Digby Road
Sherborne Dorset DT9 3NL
United Kingdom
-----------------------------------------------------------
Total Other 5% Owners. . . . . . . . . 6,681,000 27.84
-----------------------------------------------------------
Total Management and 5% owners . . . . 18,681,000 77.84
-----------------------------------------------------------
Total Shares Issued and Outstanding. . 24,000,000 100.00
-----------------------------------------------------------
</TABLE>
(1) Maurizio Forigo and Silvio Forigo are brothers. Each disclaims beneficial
interest in the security ownership of the other.
(2) Robert Bandfield has voting and investment control of the shares owned by
Hightech International SA.
(3) Mr. MaLette is the President of Diamond Investment Exchange. The combined
attributive total ownership is 11.06%.
(4) Chris Gulston has voting and investment control over the shares owned by
Perpetual Securities, SA.
10
<PAGE>
(C) CHANGES IN CONTROL. There are no arrangements known to Registrant,
including any pledge by any persons, of securities of Registrant, which may at a
subsequent date result in a change of control of the Issuer. We are not a
candidate for any acquisition, as a target company nor an acquiring company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The following persons are the Directors of Registrant, having taken office
on June 4, 1999, to serve until their successors might be elected or appointed.
The time of the next meeting of shareholders has not been determined.
<TABLE>
<CAPTION>
<S> <C> <C>
DIRECTOR'S NAME AGE OFFICE/POSITION
--------------------------------------------------
Maurizio Forigo 34 President
CEO
--------------------------------------------------
Lance Morginn . 27 Secretary/Treasurer
CFO
--------------------------------------------------
</TABLE>
Maurizio Forigo (age 34) is a highly motivated senior manager with an
extensive business background in both public and private companies. He has a
strong entrepreneurial spirit with the ability to envision the integration of
component technologies on a global basis. His experience includes raising
capital, negotiating strategic alliances, marketing strategies, directing
hardware/software development and resource allocation necessary to bring
emerging technologies to market. He was a former National Sales coordinator and
Key account manager for publishers of legal and tax information. He has over
nine years experience in sales, marketing, management, strategic planning and
organizational development.
During the past five years he has worked for two publishing firms, the
first being CCH Canadian Limited, the publishers of tax and legal information,
starting in 1991, where he was National Accounts Coordinator, with special
responsibility for content relations with the major Canadian accounting firms.
Then, in April of 1997, he went to Thomson Professional Publishing, a similar
business. He was Key Account Manager for corporate accounts, managing the top 30
corporations in Canada.
Lance Morginn (age 27) founded Planet City Graphics, a Vancouver based web
development company in April 1996. Other projects included the production of a
leading North American Y2K software package capable of physically updating
computer's CPU for year 2000 compliance solutions. In September 1998, a merger
between Planet City Graphics and Western Shores, a Vancouver based direct
response and database marketing agency, resulted in the joint venture of
MediaNet Solutions. Currently acting as the VP of New Media for MediaNet, Mr.
Morginn is responsible for defining new business opportunities and providing
strategic direction to help position the company for growth. He holds a degree
from the Vancouver Film School multi-media program. He is trained in various
multi-media computer programs used specifically for the Film and Video industry.
11
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION.
There is no present program of executive compensation. Officers and
Directors serve without fixed or established compensation at present.
The officers and directors of Safe ID Corporation have been fully
compensated during 1999 for the fair value of services performed. Executive
compensation had not been recorded for 1998, as the services performed by
officers and directors in 1998 were minimal, and the fair value for those
services has been determined to be nil. Management feels that the $35,866 paid
to directors and officers and recorded in the financial statements as consulting
expenses are reasonable estimates for services provided at the current level of
operations, and therefore, in compliance with SAB:1:B:1. Expenses incurred by
the officers and directors on behalf of Safe ID Corporation have been fully
reimbursed, and are recorded in the financial statements as operating expenses,
in compliance with SAB 5:T
There are no deferred compensation arrangements, options, bonuses or other
forms of compensation accrued or established.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Note 5 of the Auditors Report recites that during 1999, we paid consulting
fees of $5,867 and rent of $1,671 to directors or companies with a common
director. Common stock, valued at $30,000, was also issued to directors during
1999 for payment of intellectual property valued at $7,500. Amounts due to
shareholders represent advances from directors and other shareholders of our
company. These amounts are carried without interest or stated terms of
repayment.
The consulting fees were paid to Mr. Forigo. The rent payments were
actually a reimbursement for advances to pay rent. Please refer back to Item 6,
just preceding, for details.
ITEM 8. DESCRIPTION OF SECURITIES.
THE REGISTRANT'S CAPITAL AUTHORIZED AND ISSUED. The Registrant is authorized to
issue 25,000,000 shares of a single class of Common Voting Stock, of par value
$0.001, of which 24,000,000 shares are issued and outstanding.
COMMON STOCK. All shares of Common Stock when issued were fully paid for and
nonassessable. Each holder of Common Stock is entitled to one vote per share on
all matters submitted for action by the stockholders. All shares of Common Stock
are equal to each other with respect to the election of directors and cumulative
voting is not permitted; therefore, the holders of more than 50% of the
outstanding Common Stock can, if they choose to do so, elect all of the
directors. The terms of the directors are not staggered. Directors are elected
annually to serve until the next annual meeting of shareholders and until their
successor is elected and qualified. There are no preemptive rights to purchase
any additional Common Stock or other securities of the Registrant. The owners of
a majority of the common stock may also take any action without prior notice or
meeting which a majority of shareholders could have taken at a regularly called
shareholders meeting, giving notice to all shareholders thereafter of the action
taken. In the event of liquidation or dissolution, holders of Common Stock are
entitled to receive, pro rata, the assets remaining, after creditors, and
holders of any class of stock having liquidation rights senior to holders of
shares of Common Stock, have been paid in full. All shares of Common Stock enjoy
equal dividend rights. There are no provisions in the Articles of Incorporation
or By-Laws which would delay, defer or prevent a change of control.
12
<PAGE>
SECONDARY TRADING refers to the marketability to resell the securities of this
Registrant in brokerage transactions, and that marketability is generally
governed by Rule 144, promulgated by the Securities and Exchange Commission
pursuant to 3 of the Securities Act of 1933. Securities which have not been
registered pursuant to the Securities Act of 1933, but were exempt from such
registration when issued, are generally Restricted Securities as defined by
Rule 144(a). The impact of the restrictions of Rule 144 are (i) a basic one year
holding period from purchase; and (ii) a limitation of the amount any
shareholder may sell during the second year, as to non-affiliates of the
Registrant; however, as to shares owned by affiliates of the Registrant, the
second-year limitation of amounts attaches and continues indefinitely, at least
until such person has ceased to be an affiliate for 90 days or more. The
limitation of amounts is generally 1% of the total issued and outstanding in any
90 day period.
UNRESTRICTED SHARES OF COMMON STOCK. All of the 24,000,000 shares issued and
outstanding, were when issued Restricted Securities, as defined by Rule 144(a).
Any shareholder intending to resell securities in brokerage transactions would
be required to establish that he or she was entitled to resell within the
parameters and provisions of Rule 144, as has been generally described above.
About 14,652,000 shares are believed to be affiliate-owned and
affiliate-restricted shares.
On June 30, 1996, 1,000 shares of common stock (now 6,000,000 shares
post-split) were issued to founders. These shares are more than two years old.
It is not believed that any of those founders' shares are presently owned by
affiliates. In any case, present and former affiliate of our corporation,
officers, directors and promoters, may not be entitled to rely on Rule 144(e)(1)
for resale in brokerage transactions at this time. Such persons are likely to be
deemed promoters of our acquired business, with the result that shares owned by
them or acquired by them in connection with the acquisition would be deemed to
be new investment shares by analogy to Rule 145, as if acquired in connection
with our acquisition.
On July 23, 1999, 3,000,000 shares were issued for the acquisition of the
business plan of Safe ID Corporations, and another 3,000,000 shares were issued
to investors for cash, in reliance on our business plan as acquired. These are
restricted securities as defined in Rule 144(a) and not yet one year old. They
are presently restricted from resale in brokerage transactions. As indicated,
following the expiration of the initial one year hold, Rule 144 would permit
resale's in limited amounts, of securities issued or deemed issued in connection
with or after our acquisition of our present business.
OPTIONS AND DERIVATIVE SECURITIES. There are no outstanding options or
derivative securities of this Registrant. There are no shares issued or reserved
which are subject to options or warrants to purchase, or securities convertible
into common stock of this Registrant.
RISKS OF "PENNY STOCK." If and when any trading might be established, our common
stock may be deemed to be "penny stock" as that term is defined in Reg.Section
240.3a51-1 of the Securities and Exchange Commission. Penny stocks are stocks
(i) with a price of less than five dollars per share; (ii) that are not traded
on a "recognized" national exchange; (iii) whose prices are not quoted on the
NASDAQ automated quotation system (NASDAQ) listed stocks must still meet
requirement (i) above); or (iv) in issuers with net tangible assets less than
$2,000,000 (if the issuer has been in continuous operation for at least three
years) or $5,000,000 (if in continuous operation for less than three years), or
with average revenues of less than $6,000,000 for the last three years.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Reg.
Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."
13
<PAGE>
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires broker/dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Company's common stock to resell their shares to third parties or to
otherwise dispose of them.
RISKS OF STATE BLUE SKY LAWS. In addition to other risks, restrictions and
limitations which may affect the resale of the existing shares of the common
stock of this Registrant, consideration must be given to the Blue Sky laws and
regulations of each State or jurisdiction in which a shareholder wishing to
re-sell may reside. This Registrant has taken no action to register or qualify
its common stock for resale pursuant to the Blue Sky laws or regulations of
any State or jurisdiction. Accordingly offers to buy or sell the existing
securities of this Registrant may be unlawful in certain States.
The remainder of this page left intentionally blank
14
<PAGE>
PART II
ITEM 1.
MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY
AND SHAREHOLDER MATTERS.
(A) MARKET INFORMATION. The Common Stock of this Registrant is cleared for
quotation Over the Counter in the NQB Pink Sheets. To the best of the
Registrant's knowledge and belief, there has been no market activity, buying or
selling, of the common stock of this Registrant, in brokerage transactions.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
period . high bid low bid
--------------------------------
1st 1999 N/A N/A
2nd 1999 N/A A/A
3rd 1999 2.30 0.50
4th 1999 0.75 0.50
period . high bid low bid
--------------------------------
1st 2000 - -
2nd 2000 - -
--------------------------------
</TABLE>
The foregoing price information is based upon inter-dealer prices without
retail mark-up, mark-down or commissions and may not reflect actual
transactions.
(B) HOLDERS. There are presently 34 shareholders of our common stock.
(C) DIVIDENDS. No cash dividends have been paid by the Company on its Common
Stock or other Stock and no such payment is anticipated in the foreseeable
future.
ITEM 2. LEGAL PROCEEDINGS.
There are no proceedings, legal, enforcement or administrative, pending,
threatened or anticipated involving or affecting this Issuer.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
This Corporation, Safe ID Corporation, ( the Registrant ) was duly
organized on June 27, 1996 pursuant to the laws of the State of Nevada as
Inter.N Corporation. We have changed Auditors effectively with the change of
control of July 23, 1999. There have been no disagreements of any sort or kind
with Auditors or Accountants respecting any matter or item reflected in the
financial statements of this Issuer, either before or after the change.
15
<PAGE>
Barry L. Friedman, CPA, 1582 Tulita Drive, Las Vegas Nevada 89123,
performed the Audit for Inter.N Corporation, for the ten months ended October
30, 1998, and the years ended December 31, 1997 and 1996, and from inception
June 27, 1996. During that time, we had no operations, businesses or source of
revenues. No adverse opinion, disclaimer of opinion or opinions qualified or
modified as to any uncertainty, audit scope or accounting has been rendered,
issued or expressed, during the two preceding years or at any time.
On July 23, 1999, Inter.N acquired of the business plan of Safe ID
Corporation. Safe ID is a business located in Canada. Upon the change of
control incidental to the acquisition by Inter.N (in form) of Safe ID, which was
the acquisition of Inter.N (in substance) by Safe ID, the Consolidated Audit for
1999 was prepared by the Canadian Auditor of the acquired Canadian Company.
July 23, 1999, Mr. Friedman was relieved as auditor for the renamed Safe ID, and
Smythe Ratcliffe, Charted Accounts, of Vancouver were retained as Auditors of
the Corporation, by the new Board of Directors, as a result of the transaction
by which the form empty and inactive InterN. became the present Safe ID.
At no time during any preceeding fiscal year or interim period up to and
Including July 23, 1999,, preceeding the change were there any disagreements
with the former accountants on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure
which if not resolved to the satisfaction of the former accountants, would have
caused it to make reference to the subject matter in its reports. Please see
Exhibit 16.1 to this filing for Mr. Friedman's acknowledgment. For information
purposes, Mr. Friedman's Audit is provided as Exhibit 16.2.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
On June 30, 1996, 6,000,000 shares of common stock were issued to founders
at par value of $0.001 for organizational and administrative services valued at
$1,000. These common stock amounts have been fully adjusted to reflect a 2,000
for 1 split of October 12, 1998, and a 3 for 1 split on September 20, 1999.
These services included the creation and organization of this corporation, and
service as Officers and Directors until July 23, 1999.
On July 23, 1999, 9,000,000 shares were issued for the acquisition of
intellectual property in the form of a developed business plan. These shares
were issued to persons who became our Officers and Directors. The shares were
issued formally at par value of $0.001, and valued at $7,500. The fair value of
$30,000 has been assigned to coordinate this valuation with the proceeds
received from the following subsequent share issuance of September 1, 1999.
Please see Note 7 (c) of our Audited Financial Statements of December 31, 1999.
On September 1, 1999, 9,000,000 shares were issued for $30,000 cash, to
nine highly sophisticated investors, each with established pre-existing
relationships with management, which relationships afforded each full access to
the kind and sort of information which registration would have provided. The
common stock amounts have been adjusted to reflect the 3 for 1 split of
September 20, 1999.
Each of the foregoing issuances was made pursuant to Section 4(2) of the
Securities Act of 1933, which provides an exemption from registration under
Section 5 of the Act, for placements and sales by the issuer, not involving any
public offering, advertising or public solicitation.
There were no Underwriters or Underwriting, and no discounts or
commissions. No securities sold are convertible or exchangeable into equity
securities, nor are there currently any warrants or options representing equity
securities.
16
<PAGE>
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
This Item discloses (a) the indemnity provisions in By-Laws of the
Registrant; and (b) reproduces the Nevada Corporate provisions respecting such
indemnification.
(A) INDEMNITY PROVISIONS IN THE BY-LAWS OF THE REGISTRANT.
ARTICLE VIII INDEMNIFICATION
8.1. ACTION, SUITES OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE
CORPORATION. The Corporation shall indemnify any Directors, Officer, Employee or
Agent of the Corporation who was or is party or is threatened to be made a party
to any threatened, pending or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that he is or was a
Director, Officer, employee or agent of the Corporation or is or was serving at
-the request of the Corporation as a Director, Officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and, in the case of conduct
in his official capacity with the Corporation, in a manner he reasonably
believed to be in the best interest of the Corporation, or, in all other cases,
that his conduct was at least not opposed to the Corporation's best interests.
In the case of any criminal proceeding, he must have had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order settlement, conviction, or upon a plea of nolo
contenders or its equivalent, shall not, or itself, determine that the
individual did not meet the standard of conduct set forth in this paragraph.
8.2. ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact
that he is or was a Director, Officer, employee or agent of the Corporation or
is or was serving at the request of the Company as a Director, Officer, employee
or agent of another corporation, partnership joint venture, trust or other
enterprise against expenses(including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and, in the case of conduct in his official
capacity with the Corporation, in a manner he reasonably believed to be in the
best interests of the Corporation and, in all other cases, that his conduct was
at least not opposed to the Corporation's best interests; but no indemnification
shall be made in respect of any claim, issue or matter as to which such person
has been adjudged to be liable for negligence or misconduct in the performance
of this duty to the Corporation or where such person was adjudged liable on the
basis that personal benefit was improperly received by him, unless and only to
the extent that the court in which such action or suit was brought determines
upon application that, despite the adjudication of liability, but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnification for such expenses which such court deems proper.
8.3. INDEMNIFICATION OF SUCCESSFUL PARTY. To the extent- that a Director,
Officer, employee or agent of the Corporation has been successful on the merits
or otherwise (including, without limitation, dismissal without prejudice) in
defense of any action, suit, or proceeding referred to in this Article VIII or
in defense of any claim, issue, or matter therein, he shall be indemnified
against all expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
8.4. DETERMINATION OF RIGHT TO INDEMNIFICATION. Any indemnification under (1) or
(2) of this Article VIII (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the Director, Officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
paragraphs (1) or (2) of this Article VII. Such determination shall be made by
17
<PAGE>
the Board of Directors by a majority vote of a quorum consisting of Directors
who were not parties to such action, suit or proceeding, or, if such a quorum is
not obtainable and a quorum of disinterested Directors so directs, by
independent legal counsel in a. written opinion, or by the shareholders.
8.5. ADVANCE OF COSTS, CHARGES AND EXPENSES. Cost, charges and expenses
(including attorney's fees) incurred in defending a civil or criminal action,
suit, or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board of
Directors as provided in paragraph (4) of this Article VIII upon receipt of a
written affirmation by the Director, Officer, employee or agent of his good
faith belief that he has met the standard of conduct described in paragraphs (1)
or (2) of this Article VIII, and an undertaking by or on behalf of the Director,
Officer, employee or agent to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the Corporation as
authorized in this Article VIII. The majority of the Directors may, in the
manner set forth above, and upon approval of such Director, Officer, employee or
agent of the Corporation, authorize the Corporation's counsel to represent such
person in any action, suit or proceeding, whether or not the Corporation is a
party to such action, suit or proceeding.
8.6. SETTLEMENT. If in any action, suit or proceeding, including any appeal,
within the scope of (1) or (2) of this Article VIII, the person to be
indemnified shall have unreasonably failed to enter into a settlement thereof,
then, notwithstanding any other provision hereof, the indemnification obligation
of the Corporation to such person in connection with such action, suit or
proceeding shall not exceed the total of the amount at which settlement could
have been made and the expenses by such person prior to the time such settlement
could reasonably have been effected.
8.7. OTHER RIGHTS; CONTINUATION OF RIGHT TO INDEMNIFICATION. The indemnification
provided by this Article VIII shall not be deemed exclusive of any other rights
to which those indemnified may be entitled under these Articles of
Incorporation, any bylaw, agreement, vote of shareholders or disinterested
Directors, or otherwise, and any procedure provided for by any of the foregoing,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to person who has ceased to be
a Director, Officer, employee or agent and shall inure to the benefit of heirs,
executors, and administrators of such a person. All rights to indemnification
under this Article VIII shall be deemed to be a contract between the Corporation
and each director or officer of the Corporation who serves or served in such
capacity at any time while this Article VIII is in effect. Any repeal or
modification of this Article VIII or any repeal or modification of relevant
provisions of the Nevada Corporation Code or any other applicable laws shall not
in any way diminish any rights to indemnification of such Director, Officer,
employee or agent or the obligations of the Corporation arising hereunder. This
Article VIII shall be binding upon any successor corporation to this
Corporation, whether by way of acquisition, merger, consolidation or otherwise.
8.8. INSURANCE. The Corporation may purchase and maintain insurance on behalf of
any person who is or was a Director, Officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as Director,
Officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provision of this Article VIII: provided, however, that
such insurance is available on acceptable terms, which determination shall be
made by a vote of the majority of the Directors.
8.9. SAVING CLAUSE. If this Article VIII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Director, Officer, employee and
agent of the Corporation as to any cost, charge and expense (including
attorney's fees), judgment fine and amount paid in settlement with respect to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, including an action by or in the right of the Corporation, to the
18
<PAGE>
full extent permitted by an applicable portion of this Article VII that shall
not have been invalidated and to the full extent. permitted by applicable law.
8.10. AMENDMENT. The affirmative vote of at least. two-thirds of the total votes
eligible to be cast shall be required to amend, repeal, or adopt any provision
inconsistent with, this Article VIII. No amendment, termination or repeal of '
this Article VIII shall affect or impair in any way the rights of any Director,
officer, employee or agent of the Corporation to indemnification under the
provisions hereof with respect to any action, suit or proceeding arising out of,
or relating to, any actions, transactions or facts occurring prior to the final
adoption of such amendment, termination or appeal.
8.11. SUBSEQUENT LEGISLATION. If the Nevada Corporation Code is amended after
adoption of these Articles to further expand the indemnification permitted to
Directors, Officers, employees or agents of the Corporation, then the
Corporation shall indemnify such persons to the fullest extent permitted by the
Nevada Revised Statutes, as so amended.
(B) NEVADA CORPORATE PROVISIONS RESPECTING INDEMNIFICATION.
NRS 78.7502 DISCRETIONARY AND MANDATORY INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS: GENERAL PROVISIONS.
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorney's fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys fees, actually and reasonably incurred by him in
connection with the defense. (Added to NRS by 1997, 694)
19
<PAGE>
NRS 78.751 AUTHORIZATION REQUIRED FOR DISCRETIONARY INDEMNIFICATION;
ADVANCEMENT OF EXPENSES; LIMITATION ON INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES.
1. Any discretionary indemnification under NRS-078.7502 unless ordered by a
court or advanced pursuant to subsection 2, may be made by the corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances. The
determination must be made: (a) By the stockholders; (b) By the board of
directors by majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding; (c) If a majority vote of a quorum
consisting of directors who were not parties to the action, suit or proceeding
so orders, by independent legal counsel in a written opinion; or (d) If a quorum
consisting of directors who were not parties to the action, suit or proceeding
cannot be obtained, by independent legal counsel in a written opinion.
2. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section: (a) Does not exclude any other
rights to which a person seeking indemnification or advancement of expenses may
be entitled under the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an action in
his official capacity or an action in another capacity while holding his office,
except that indemnification, unless ordered by a court pursuant to NRS 78.7502
or for the advancement of expenses made pursuant to subsection 2, may not be
made to or on behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional misconduct, fraud or
a knowing violation of the law and was material to the cause of action. (b)
Continues for a person who has ceased to be a director, officer, employee or
agent and inures to the benefit of the heirs, executors and administrators of
such a person. (Added to NRS by 1969, 118; A 1987, 83; 1993, 976; 1997, 706)
20
<PAGE>
PART F/S
The following Audited Financial Statements are provided.
--------------------------------------------------------------------------------
FINANCIAL STATEMENTS PAGE
--------------------------------------------------------------------------------
F-1 Audited Financial Statements for the years ended December 31, 1999,
1998 22
--------------------------------------------------------------------------------
We have filed Quarterly Reports on Form 10-QSB for the first and second
quarters of year 2000. Rather than incorporate those un-audited statements by
reference, they are provided as follows:
--------------------------------------------------------------------------------
FINANCIAL STATEMENTS PAGE
--------------------------------------------------------------------------------
00-QF1 Un-Audited Financial Statements for the three months ended March 31,
2000 33
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FINANCIAL STATEMENTS PAGE
--------------------------------------------------------------------------------
00-QF2 Un-Audited Financial Statements for the three months and six months
ended June 30, 2000 39
--------------------------------------------------------------------------------
21
<PAGE>
--------------------------------------------------------------------------------
F-1
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1999, 1998
AND FROM INCEPTION JUNE 27, 1996
--------------------------------------------------------------------------------
22
<PAGE>
--------------------------------------------------------------------------------
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
(U.S. DOLLARS)
--------------------------------------------------------------------------------
23
<PAGE>
INDEX PAGE
REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS
FINANCIAL STATEMENTS
Balance Sheets
Statements of Operations
Statements of Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
24
<PAGE>
REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF SAFE ID CORPORATION
We have audited the accompanying balance sheets of Safe ID Corporation (A
Development Stage Company) as at December 31, 1999 and 1998 and the related
statements of operations, stockholders' equity, and cash flows for the years
then ended and the cumulative totals for the development stage of operations
from June 27, 1996 (inception) through December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The financial statements of Safe ID Corporation from June 27, 1996
(inception) through October 31, 1998 were audited by other auditors whose report
dated November 13, 1998, expressed an unqualified opinion on those statements.
Our opinion insofar as it relates to the cumulative totals for development stage
operations from June 27, 1996 (inception) through October 31, 1998, is based
solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1999 and
1998, and the results of its operations and its cash flows for the years then
ended, and the cumulative totals for the development stage of operations from
June 27, 1996 (inception) through October 31, 1998, in conformity with generally
accepted accounting principles in the United States. Our opinion, insofar as it
relates to the cumulative totals for development stage operations from June 27,
1996 (inception) through October 31, 1998, is based solely on the report of the
other auditors.
The accompanying financial statements have been prepared assuming the Company
will continue as a going-concern. As discussed in note 2 to the financial
statements, the Company has no established source of revenue. This raises
substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is also described in note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/Smythe Ratcliffe
"Smythe Ratcliffe"
Chartered Accountants
Vancouver, Canada
January 21, 2000
25
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
----------------------------------------------------------------------------
ASSETS
CURRENT
Cash. . . . . . . . . . . . . . . . . . . . . . . . . $ 2,778 $ 0
Prepaid expense . . . . . . . . . . . . . . . . . . . 5,600 0
----------------------------------------------------------------------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . $ 8,378 $ 0
============================================================================
LIABILITIES
CURRENT
Accounts payable. . . . . . . . . . . . . . . . . . . $ 5,239 $ 0
DUE TO SHAREHOLDERS (note 5). . . . . . . . . . . . . . 350 350
----------------------------------------------------------------------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . 5,589 350
----------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
COMMON STOCK, 25,000,000 shares authorized, 24,000,000
(1998 - 6,000,000) shares issued and outstanding. . . 24,000 6,000
ADDITIONAL PAID-IN CAPITAL. . . . . . . . . . . . . . . 32,000 (5,000)
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE. . . . (53,211) (1,350)
----------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY. . . . . . . . . . . . . . . 2,789 (350)
----------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . . . . . . $ 8,378 $ 0
============================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIOD FROM
JUNE 27, 1996
(INCEPTION) TO
1999 1998 1997 DECEMBER 31, 1999
-------------------------------------------------------------------------------------------
EXPENSES
Consulting . . . . . . . . $ 35,866 $ 0 $ 0 $ 35,866
Professional fees. . . . . 6,900 0 0 6,900
Travel . . . . . . . . . . 4,976 0 0 4,976
Selling and administrative 2,385 350 0 3,735
Rent . . . . . . . . . . . 1,671 0 0 1,671
Bank charges . . . . . . . 63 0 0 63
-------------------------------------------------------------------------------------------
TOTAL EXPENSES AND NET
LOSS FOR PERIOD. . . . . . $ 51,861 $ 350 $ 0 $ 53,211
===========================================================================================
NET LOSS PER SHARE . . . . . $ (0.0045) $ (0.0001) $ 0.0000 0
===========================================================================================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING. . . 11,515,068 6,000,000 6,000,000 0
===========================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999, 1998, 1997 AND 1996
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
COMMON COMMON ADDITIONAL DURING THE TOTAL
STOCK STOCK PAID-IN DEVELOPMENT STOCKHOLDERS'
NUMBER AMOUNT CAPITAL STAGE EQUITY
--------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 27, 1996 . . . . . . . . . . 0 0 $ 0 $ 0 $ 0
COMMON STOCK ISSUED FOR SERVICES (note 7b) 6,000,000 6,000 (5,000) 0 1,000
NET LOSS, JUNE 27, 1996
TO DECEMBER 31, 1996. . . . . . . . . . . 0 0 0 (1,000) (1,000)
--------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1996 . . . . . . . . 6,000,000 6,000 (5,000) (1,000) 0
NET LOSS, YEAR ENDED
DECEMBER 31, 1997 . . . . . . . . . . . . 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 . . . . . . . . 6,000,000 6,000 (5,000) (1,000) 0
NET LOSS, YEAR ENDED
DECEMBER 31, 1998 . . . . . . . . . . . . 0 0 0 (350) (350)
--------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 . . . . . . . . 6,000,000 6,000 (5,000) (1,350) (350)
COMMON STOCK ISSUED
For intellectual property (note 7c). . . 9,000,000 9,000 21,000 0 30,000
For cash (note 7d) . . . . . . . . . . . 9,000,000 9,000 21,000 0 30,000
NET LOSS, YEAR ENDED
DECEMBER 31, 1999 . . . . . . . . . . . . 0 0 0 (51,861) (51,861)
SHARE ISSUE COSTS. . . . . . . . . . . . . 0 0 (5,000) 0 (5,000)
--------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 . . . . . . . . 24,000,000 $24,000 $ 32,000 $ (53,211) $ 2,789
==============================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIOD FROM
JUNE 27,1996
(INCEPTION) TO
1999 1998 1997 DECEMBER 31, 1999
-------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss. . . . . . . . . . . . . . . . . . . . $ (51,861) $(350) $ 0 $ (53,211)
Adjustment to reconcile net loss
to net cash used by operating
activities
Issuance of common stock for payment
of intellectual property. . . . . . . . . . . 30,000 0 0 31,000
CHANGES IN NON-CASH WORKING CAPITAL
Prepaid expense . . . . . . . . . . . . . . . . (5,600) 0 0 (5,600)
Accounts payable. . . . . . . . . . . . . . . . 5,239 0 0 5,239
-------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES . . . . . . (22,222) (350) 0 (22,572)
FINANCING ACTIVITIES
Issuance of common stock. . . . . . . . . . . . 25,000 0 0 25,000
Advances from shareholders. . . . . . . . . . . 0 350 0 350
-------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . 25,000 350 0 25,350
-------------------------------------------------------------------------------------------------------
CASH INFLOW . . . . . . . . . . . . . . . . . . . 2,778 0 0 2,778
CASH, BEGINNING OF PERIOD . . . . . . . . . . . . 0 0 0 0
-------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD . . . . . . . . . . . . . . . $ 2,778 $ 0 $ 0 $ 2,778
=======================================================================================================
SUPPLEMENTAL DISCLOSURE FOR NON-CASH TRANSACTIONS
Issuance of common stock for payment of
intellectual property . . . . . . . . . . . . $ 30,000 $ 0 $ 0 $ 31,000
=======================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31
(U.S. DOLLARS)
1. ORGANIZATION OF COMPANY
The Company was incorporated on June 27, 1996 under the laws of the State of
Nevada as Inter N. Corporation. The Company changed its name to Safe ID
Corporation on September 20, 1999. The Company is in the development stage as
more fully defined in Statement No. 7 of the Financial Accounting Standards
Board. The Company's head office is located in Calgary, Canada.
On July 23, 1999, the Company acquired intellectual property in the form of a
business plan with the issuance of common stock. The fair value of this
transaction was determined to be the fair value of the common stock issued, as
further explained in note 7 (c). The business plan has been charged to
operations during the year as consulting expenses.
2. GOING CONCERN
These financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern, which assumes that
the Company will realize its assets and discharge its liabilities in the normal
course of operations. The ability of the Company to operate as a going concern
is dependent upon the Company's ability to raise additional financing and to
generate revenues.
Management's plan is to obtain financing through private placements subsequent
to the quotation of the Company's common stock on the OTC Bulletin Board.
Management believes the funds received through these private placements will be
sufficient to meet the Company's requirements for their planned principal
operations for the next fiscal year.
3. UNCERTAINTY
The Company intends to obtain the license to distribute a line of miniaturized
micro-chips, used in the identification of inanimate objects, and is currently
in negotiations to obtain this license from an established supplier in Canada.
Although there is a limited number of manufacturers of these particular
micro-chips, management believes that other suppliers could provide similar
micro-chips on comparable terms if an agreement can not be reached in the
current negotiations. A change in suppliers, however, could cause a delay in
commencing operations and a possible loss of sales, which would affect operating
results adversely.
4. SIGNIFICANT ACCOUNTING POLICIES
(a) Loss per share
Loss per share computations are based on the weighted average number of common
shares outstanding during the year.
(b) Shares issued in exchange for services
The valuation of the common shares issued in exchange for services is valued at
an estimated fair market value as determined by officers and directors of the
Company based upon other sales and issuances of the Company's common shares
within the same general time period.
(c) Revenue recognition
As the Company is in the start-up stage of operations no revenues have been
earned to date. Once sales have been earned by the Company, the Company will
recognize such revenues at the time of delivery of the product to the customers.
30
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31
(U.S. DOLLARS)
4. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Functional currency
The Company's functional currency is U.S. dollars.
(e) Financial instruments
The Company's financial instruments include cash, accounts payable, and amounts
due to shareholders. It is management's opinion that the Company is not exposed
to significant interest, currency or credit risk associated with these financial
instruments. The carrying values approximate the fair values of these financial
instruments.
(f) Foreign currency translation
Transactions in foreign currency are translated into U.S. dollars as follows:
(i) Monetary assets and liabilities at the rate of exchange in effect as at
the balance sheet date;
(ii) Revenues and expenses at the average rate of exchange for the year.
Gains and losses arising from this translation of foreign currency are included
in net loss. Comprehensive loss would be approximately equal to the net loss as
reported in these financial statements.
(g) Use of estimates
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses, as well as disclosures of contingent assets and
liabilities. Because of inherent uncertainties in this process, actual future
results could differ from those expected at the reporting date. Management
believes the estimates are reasonable.
5. DUE TO SHAREHOLDERS
Amounts due to shareholders represent advances from directors and shareholders
of the Company. These amounts are without interest or stated terms of
repayment.
6. RELATED PARTY TRANSACTIONS
During 1999, the Company paid consulting fees of $5,867 (1998 - $0) and rent of
$1,671 (1998 - $0) to directors or Companies with a common director. Common
stock valued at $30,000 was issued to directors during 1999 (note 7c) for
payment of intellectual property valued at $7,500 (1998 - $0).
31
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31
(U.S. DOLLARS)
7. EQUITY TRANSACTIONS
(a) The Company affected a 2,000-for-1 stock split on October 12, 1998 and a
3-for-1 stock split on September 20, 1999. All share amounts included in these
financial statements have been adjusted to reflect the effect of the stock
splits.
(b) On June 30, 1996, the Company issued 6,000,000 shares of common stock
with a par value of $0.001 each for administrative services valued at $1,000.
(c) On July 23, 1999, the Company issued 9,000,000 shares of common stock
with a par value of $0.001 each for intellectual property valued at $7,500.
Additional compensation of $22,500 has been recorded to reflect the fair value
of the common shares issued. Fair value has been determined as equal to the
proceeds received in a subsequent private placement of an equal number of shares
on September 1, 1999.
(d) On September 1, 1999, 9,000,000 shares of common stock with a par value
of $0.001 each were issued for cash proceeds of $30,000.
8. INCOME TAXES
A provision for income taxes for the years ended December 31, 1999, 1998, and
1997 has not been recognized as the Company had operating losses for both tax
and financial reporting purposes. Due to the uncertainty surrounding the timing
of realizing the benefits of its favourable tax attributes in future tax
returns, the Company has recorded a full valuation allowance against its net
deferred tax asset.
The Company's net operating loss carryforward totalled approximately $53,000 at
December 31, 1999 (1998 - $1,350) of which approximately $1,000 expires in 2016,
$350 expires in 2018, and the remainder expires in 2019.
32
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT 00-QF1
UN-AUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 2000
--------------------------------------------------------------------------------
33
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(UNAUDITED)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
2000 1999
----------- --------------
ASSETS
CURRENT
Cash $ 4,406 $ 2,778
Prepaid expense 0 5,600
---------------------------------------------------------------- ----------- --------------
TOTAL ASSETS $ 4,406 $ 8,378
---------------------------------------------------------------- ----------- --------------
LIABILITIES
CURRENT
Accounts payable $ 8,069 $ 5,239
DUE TO SHAREHOLDERS 6,350 350
---------------------------------------------------------------- ----------- --------------
TOTAL LIABILITIES 14,419 5,589
---------------------------------------------------------------- ----------- --------------
STOCKHOLDERS' EQUITY
COMMON STOCK, 25,000,000 shares authorized, par value of $0.001,
24,000,000 (1999 - 24,000,000) shares issued and outstanding 24,000 24,000
ADDITIONAL PAID-IN CAPITAL 32,000 32,000
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (66,013) (53,211)
---------------------------------------------------------------- ----------- --------------
TOTAL STOCKHOLDERS' EQUITY (10,013) 2,789
---------------------------------------------------------------- ----------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,406 $ 8,378
---------------------------------------------------------------- ----------- --------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIOD FROM
THREE MONTHS THREE MONTHS JUNE 27, 1996
ENDED MARCH 31, ENDED MARCH 31, (INCEPTION) TO
2000 1999 MARCH 31, 2000
(Note 2)
EXPENSES
Professional fees $ 8,430 $ 0 $ 15,330
Selling and administrative 2,833 0 6,568
Rent 762 0 2,433
Consulting 688 0 36,554
Bank charges 89 0 152
Travel 0 0 4,976
---------------------------- ---------------- ----------------- ---------------
TOTAL EXPENSES AND NET
LOSS FOR PERIOD $ 12,802 $ 0 $ 66,013
---------------------------- ---------------- ----------------- ---------------
NET LOSS PER SHARE $ 0.00 $ 0.00
---------------------------- ---------------- -----------------
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 24,000,000 6,000,000
---------------------------- ---------------- -----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
35
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
COMMON COMMON ADDITIONAL DURING THE TOTAL
STOCK STOCK PAID-IN DEVELOPMENT STOCKHOLDERS'
NUMBER AMOUNT CAPITAL STAGE EQUITY
---------- ------- ------------ ------------- ---------------
BALANCE, JUNE 27, 1996 0 $ 0 $ 0 $ 0 $ 0
Common Stock Issued for Services 6,000,000 6,000 (5,000) 0 1,000
Net Loss, June 27, 1996
to December 31, 1996 0 0 0 (1,000) (1,000)
---------------------------------- ---------- ------- ------------ ------------- ---------------
BALANCE, DECEMBER 31, 1996 6,000,000 6,000 (5,000) (1,000) 0
YEAR ENDED DECEMBER 31, 1997
Net loss 0 0 0 0 0
---------------------------------- ---------- ------- ------------ ------------- ---------------
BALANCE, DECEMBER 31, 1997 6,000,000 6,000 (5,000) (1,000) 0
YEAR ENDED DECEMBER 31, 1998
Net loss 0 0 0 (350) (350)
---------------------------------- ---------- ------- ------------ ------------- ---------------
BALANCE, DECEMBER 31, 1998 6,000,000 6,000 (5,000) (1,350) (350)
YEAR ENDED DECEMBER 31, 1999
Common stock issued
For cash 9,000,000 9,000 21,000 0 30,000
For services 9,000,000 9,000 21,000 0 30,000
Net loss 0 0 0 (51,861) (51,861)
Share issue costs 0 0 (5,000) 0 (5,000)
---------------------------------- ---------- ------- ------------ ------------- ---------------
Balance, December 31, 1999 24,000,000 24,000 32,000 (53,211) 2,789
Period Ended March 31, 2000
Net loss 0 0 0 (12,802) (12,802)
---------------------------------- ---------- ------- ------------ ------------- ---------------
Balance, March 31, 2000 24,000,000 $24,000 $ 32,000 $ (66,013) $ (10,013)
---------------------------------- ---------- ------- ------------ ------------- ---------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
36
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIOD FROM
THREE MONTHS THREE MONTHS JUNE 27,1996
ENDED MARCH 31 ENDED MARCH 31 (INCEPTION) TO
2000 1999 MARCH 31, 2000
---------------- ---------------- ----------------
(Note 2)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (12,802) $ 0 $ (66,013)
Adjustment to reconcile net loss
to net cash used by operating
activities
Issuance of common stock for payment
of services 0 0 31,000
CHANGES IN NON-CASH WORKING CAPITAL
Prepaid expense 5,600 0 0
Accounts payable 2,830 0 8,069
----------------------------------------- ---------------- ---------------- ----------------
NET CASH USED IN OPERATING ACTIVITIES (4,372) 0 (26,944)
----------------------------------------- ---------------- ---------------- ----------------
FINANCING ACTIVITIES
Advances from shareholders 6,000 0 6,350
Issuance of common stock 0 0 25,000
----------------------------------------- ---------------- ---------------- ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 6,000 0 31,350
----------------------------------------- ---------------- ---------------- ----------------
CASH INFLOW 1,628 0 4,406
CASH, BEGINNING OF PERIOD 2,778 0 0
----------------------------------------- ---------------- ---------------- ----------------
CASH, END OF PERIOD $ 4,406 $ 0 $ 4,406
----------------------------------------- ---------------- ---------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
37
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(U.S. DOLLARS)
1. BASIS OF PRESENTATION
These unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States
for interim financial information. These financial statement are condensed and
do not include all disclosures required for annual financial statements. The
organization and business of the Company, accounting policies followed by the
Company and other information are contained in the notes to the Company's
audited financial statements filed as part of the Company's December 31, 1999
Form 10-SB-12G, which is currently under review by the Securities Exchange
Commission.
In the opinion of the Company's management, these financial statements reflect
all adjustments necessary to present fairly the Company's financial position at
March 31, 2000 and the results of operations and cash flows for the three
months ended March 31, 2000 and 1999. The results of operations for the three
months ended March 31, 2000 are not necessarily indicative of the results to be
expected for the entire fiscal year.
2. COMPARATIVE FIGURES
Operating results for the three month period ended March 31, 1999 were not
audited or reviewed.
38
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT 00Q-F2
UN-AUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 2000
--------------------------------------------------------------------------------
39
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(UNAUDITED)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, December 31,
2000 1999
----------------------------------------------------------------------------------------------------
ASSETS
CURRENT
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,035 $ 2,778
Prepaid expense. . . . . . . . . . . . . . . . . . . . . . . . . . . 0 5,600
--------------------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,035 $ 8,378
==========================
LIABILITIES
CURRENT
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,606 $ 5,239
DUE TO SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . 6,350 350
--------------------------
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 22,956 5,589
--------------------------
STOCKHOLDERS' EQUITY
COMMON STOCK, 25,000,000 shares authorized, par value of
$0.001, 24,000,000 (1999 - 24,000,000) shares issued and outstanding 24,000 24,000
ADDITIONAL PAID-IN CAPITAL . . . . . . . . . . . . . . . . . . . . . . 32,000 32,000
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE . . . . . . . . . . . (76,921) (53,211)
--------------------------
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . (20,921) 2,789
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . $ 2,035 $ 8,378
==========================
</TABLE>
40
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PERIOD FROM
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS JUNE 27, 1996
ENDED JUNE 30, ENDED JUNE 30, ENDED JUNE 30, ENDED JUNE 30 (INCEPTION) TO
2000 1999 2000 1999 JUNE 30, 2000
(Note 2). . . . . . . . . (note 2)
------------------------------------------------------------------------------------------------------------------
EXPENSES
Professional fees . . . . . $ 8,537 $ 0 $ 16,967 $ 0 $ 23,867
Selling and administrative. 1,605 0 4,438 0 8,173
Rent. . . . . . . . . . . . 748 0 1,510 0 3,181
Bank charges. . . . . . . . 18 0 107 0 170
Consulting. . . . . . . . . 0 0 688 0 36,554
Travel. . . . . . . . . . . 0 0 0 0 4,976
------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES AND NET
LOSS FOR PERIOD . . . . . . $ 10,908 $ 0 $ 23,710 $ 0 $ 76,921
==================================================================================================================
NET LOSS PER SHARE. . . . . . $ 0.00 $ 0.00 $ 0.00 $ 0.00
==================================================================================================================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING . . . 24,000,000 6,000,000 24,000,000 6,000,000
==================================================================================================================
</TABLE>
41
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
COMMON COMMON ADDITIONAL DURING THE TOTAL
STOCK STOCK PAID-IN DEVELOPMENT STOCKHOLDERS'
NUMBER AMOUNT CAPITAL STAGE EQUITY
------------------------------------------------------------------------------------------------------
BALANCE, JUNE 27, 1996 . . . . . . 0 $ 0 $ 0 $ 0 $ 0
Common Stock Issued for Services 6,000,000 6,000 (5,000) 0 1,000
------------------------------------------------------------------------------------------------------
Net Loss, June 27, 1996
to December 31, 1996 . . . . . 0 0 0 (1,000) (1,000)
------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1996 . . . . 6,000,000 6,000 (5,000) (1,000) 0
YEAR ENDED DECEMBER 31, 1997
Net loss . . . . . . . . . . . . 0 0 0 0 0
------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 . . . . 6,000,000 6,000 (5,000) (1,000) 0
YEAR ENDED DECEMBER 31, 1998
Net loss . . . . . . . . . . . . 0 0 0 (350) (350)
------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 . . . . 6,000,000 6,000 (5,000) (1,350) (350)
YEAR ENDED DECEMBER 31, 1999
Common stock issued
For cash . . . . . . . . . . . 9,000,000 9,000 21,000 0 30,000
For services . . . . . . . . . 9,000,000 9,000 21,000 0 30,000
Net loss . . . . . . . . . . . . 0 0 0 (51,861) (51,861)
Share issue costs. . . . . . . . 0 0 (5,000) 0 (5,000)
------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 . . . . 24,000,000 24,000 32,000 (53,211) 2,789
Period Ended June 30, 2000
Net loss . . . . . . . . . . . . 0 0 0 (23,710) (23,710)
------------------------------------------------------------------------------------------------------
Balance, June 30, 2000 . . . . . . 24,000,000 $24,000 $ 32,000 $ (76,921) $ (20,921)
======================================================================================================
</TABLE>
42
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIOD FROM
SIX MONTHS SIX MONTHS JUNE 27,1996
ENDED JUNE 30 ENDED JUNE 30 (INCEPTION) TO
2000 1999 JUNE 30, 2000
(Note 2)
----------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss . . . . . . . . . . . . . . . . $ (23,710) $ 0 $ (76,921)
Adjustment to reconcile net loss
to net cash used by operating
activities
Issuance of common stock for payment
of services. . . . . . . . . . . . . . 0 0 31,000
CHANGES IN NON-CASH WORKING CAPITAL
Prepaid expense. . . . . . . . . . . . . 5,600 0 0
Accounts payable . . . . . . . . . . . . 11,367 0 16,606
----------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES. . . (6,743) 0 (29,315)
----------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Advances from shareholders . . . . . . . 6,000 0 6,350
Issuance of common stock . . . . . . . . 0 0 25,000
----------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES. 6,000 0 31,350
----------------------------------------------------------------------------------------------
CASH INFLOW (OUTFLOW). . . . . . . . . . . (743) 0 2,035
CASH, BEGINNING OF PERIOD. . . . . . . . . 2,778 0 0
----------------------------------------------------------------------------------------------
CASH, END OF PERIOD. . . . . . . . . . . . $ 2,035 $ 0 $ 2,035
==============================================================================================
</TABLE>
43
<PAGE>
SAFE ID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(U.S. DOLLARS)
1. BASIS OF PRESENTATION
These unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States
for interim financial information. These financial statements are condensed and
do not include all disclosures required for annual financial statements. The
organization and business of the Company, accounting policies followed by the
Company and other information are contained in the notes to the Company's
audited financial statements filed as part of the Company's December 31, 1999
Form 10-SB which is currently under review by the Securities Exchange
Commission.
In the opinion of the Company's management, these financial statements reflect
all adjustments necessary to present fairly the Company's financial position at
June 30, 2000 and December 31, 1999 and the results of operations and cash
flows for the six months ended June 30, 2000 and 1999. The results of
operations for the six months ended June 30, 2000 are not necessarily indicative
of the results to be expected for the entire fiscal year.
2. COMPARATIVE FIGURES
Operating results for the six month period ended June 30, 1999 were not audited
or reviewed.
44
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT INDEX
--------------------------------------------------------------------------------
Exhibit
Table
# Table Category / Description of Exhibit Page Number
--------------------------------------------------------------------------------
[3] ARTICLES/CERTIFICATES OF INCORPORATION, AND BY-LAWS
--------------------------------------------------------------------------------
3.1 Articles of Incorporation 39
3.2 By-Laws 46
--------------------------------------------------------------------------------
[16] LETTERS ON CHANGE OF CERTIFYING ACCOUNTANTS
--------------------------------------------------------------------------------
16.1 Consent of Previous Auditor
16.2 Previous Audit
--------------------------------------------------------------------------------
45
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to signed on its behalf by the undersigned, thereunto
authorized.
SAFE ID CORPORATION
(formerly INTER.N CORPORATION)
by
Dated: September 20, 2000
/s/Maurizio Forigo /s/Lance Morginn
Maurizio Forigo Lance Morginn
president/director secretary/director
46
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT 3.1
ARTICLES OF INCORPORATION
--------------------------------------------------------------------------------
47
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
Filled by:
Inter.N Corporation
I, the Undersigned, Maurizio Forigo President of Inter.N Corporation do Hereby
certify:
That the Board of Directors of said corporation at a meeting duly convened, held
on the 4th day of August, 1999, adopted a resolution to amend the original
Articles of Incorporation as follows:
Article I "Name and purpose is hereby amended to read as follows:
The name of the Corporation is Safe ID Corporation
Article II "Resident Agent and Principal Office" is hereby amended to read as
follows:
The name of eh Resident Agent in Nevada is Russert Services, Inc. and the street
address of such Resident Agent is 1555 E. Flamingo Rd., #151, Las Vegas, NV
89119.
Article III "Capital Stock" is hereby amended to read as follows:
1. Number of Shares. The aggregate number of capital stock shares which the
Corporation shall have authority to issue, is twenty-five million (25,000,000)
shares, of common stock, $0.001 par value. The Board of Directors may, in its
discretion, issue stock and debt securities with such terms and conditions as it
may decide, without shareholder approval. Upon the filing of these amendments to
read as herein set forth and effective September 6th, 1999, each one (1)
outstanding share is split, reconstituted and converted into three (3) shares.
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 8,000,000: that the said change(s)
and amendments have both consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
/s/Maurizio Forigo
Maurizio Forigo-President Dated: August 17, 1999
/s/L. Morginn
L. Morginn-Secretary Dated: August 17, 1999
48
<PAGE>
Articles of Incorporation
Of
INTER.N CORPORATION
KNOW ALL MEN BY THESE PRESENTS:
That I, TERRALL W. CHILCOAT, the incorporator, do hereby form a corporation
under the laws of the State of Nevada relating to general corporation. I do
hereby certify:
FIRST: That the name of the Corporation is: INTER.N CORPORATION
SECOND: That the principal office of this Corporation is to be located at 1504
Highway #395 N. Suite #8-00227, Gardnerville, Douglas County, Nevada, although
the Corporation may maintain an office or offices in places, towns and cities
within or without the State of Nevada as the Board of Directors may, from time
to time, determine or as may be designated by the By-Laws of this Corporation.
THIRD: The objects for which this Corporation is formed are: To engage in any
lawful activity, except banking, insurance, gaming and engineering unless
approved by the appropriate licensing bodies of the State of Nevada, although
including but not limited to the following;
(a) Shall have all rights, privileges and powers as may be conferred upon
corporation by any existing law, and may at any time exercise those rights,
privileges and powers, when not inconsistent with the purposes and objects for
which this Corporation is formed. It is the intention that the objects, purposes
and powers specified herein shall be nowise limited or restricted by reference
to or inference from the terms of any other clause or paragraph in this Articles
of Incorporation, but that the objects, purposes and powers specified in each of
the clauses or paragraphs of this charter shall be regarded was independent
objects, purposes and powers.
(b) Shall have the power to have succession by its corporate name for the period
limited in its Articles of Incorporation, and when no period is limited or
specified, to exist in perpetuity, or until it dissolves itself or is dissolved
and its affairs wound up according to law.
(c) Shall have the power to sue and be sued in any court of law or equity.
(d) Shall have the power to make legal and binding contracts with whomever it
wishes as directed by the Board of Directors.
(e) Shall have the power to hold, purchase and convey real and personal estate
and to mortgage or lease said real and personal estate with its franchises,
including the power to take the same by devise or bequest in the State of
Nevada, or in any other state, territory or country.
(f) Shall have the power to appoint all officers and agents as the affairs of
this Corporation shall require, and to allow them suitable compensation as
established in the By-Laws.
(g) Shall have the power to make By-Laws not inconsistent with the constitution
or laws of the United States, or the State of Nevada, for the management
regulation and government of its affairs and property, the transfer of its
stock, the transaction of its business, and property, the transfer of its stock,
the transaction of its business, and the calling and holding of meetings of its
stockholders.
(h) Shall have the power to adopt and use a common seal or stamp and alter the
same at its pleasure. The use of a seal or stamp by this Corporation on any
49
<PAGE>
corporate documents is not necessary or required. The Corporation may use a seal
or stamp, if it desires, although said use or nonuse shall not in any way affect
the legality of its documents.
(i) Shall have the power to borrow money and contract debts when necessary for
the transaction of its business, or for the exercise of its corporate rights,
privileges or franchises, to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidences of indebtedness, payable upon
the happening of a specified event or events, whether secured by mortgage,
pledge or otherwise, or unsecured, for money borrowed, or in payment for
property purchased, or acquired, or for any other lawful object or purpose of
its incorporation.
(j) Shall have the power to guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the capital stock, or any
bonds, securities or evidences of the indebtedness created by any other
corporation or corporations of the State of Nevada, or any other state or
government, and in further, while owners of said stock, bonds, securities or
evidences of indebtedness, to exercise all the rights, powers and privileges of
ownership, including the right to vote, if any voting privileges exist.
(k) Shall have the power an use thereof, of its capital, capital surplus,
surplus, or other property or fund to further the objects of this Corporation
and to purchase, hold, sell and transfer shares of its own capital stock, known
as "treasury shares", either directly or indirectly, by the Corporation or a
wholly owned subsidiary of the Corporation, so long as aforementioned purchase
does not impair the corporate capital to the detriment of the stockholders and
creditors if any creditors exist, except that shares of its own stock belonging
to the Corporation must not be voted upon, directly or indirectly, nor counted
as outstanding shares for any purpose, to compute any stockholders' quorum or
vote, nor participate in distributions or as assets for the purpose of computing
the amount available for distributions, or the purchase of shares issued by this
Corporation. Unless the Articles of incorporation provide otherwise, treasury
shares may be retired and restored to the status of authorized and un-issued
shares without an amendment to the Articles of Incorporation or may be disposed
of for any consideration as the Board of Directors may determine.
(l) Shall have the power to conduct business, have one or more offices for said
purposes, and hold, purchase, mortgage and convey real and personal property in
the State of Nevada, an in any of the several states, territories, possessions
and dependencies of the United States, the District of Columbia, and any foreign
countries allowed by law.
(m) Shall have the power to do all and everything necessary an proper for the
accomplishment of the objects enumerated thereof, or necessary or incidental to
the protection and benefit of the Corporation, and, in general, to carry on any
lawful business necessary or incidental to the attainment of the objects of this
Corporation, or any amendment thereof.
(n) Shall have the power to make donations for the public good and welfare, or
for charitable, scientific advancement or educational purposes and to use these
donations for taxable deductions.
(o) Shall have the power to enter into partnerships, limited or general, or
joint ventures, in connection with any lawful activities.
(p) Shall be recognized as a legal entity beyond the limits of this state and
that, subject to any reasonable requirement of registration, any business or
activities transacted outside this state be granted protection of full faith and
credit under Section 1 of Article IV of the Constitution of the United States.
FOURTH: No stockholder shall be entitled as a matter of right to subscribe for
or receive additional shares of any class of stock of this Corporation, or any
bonds, debentures or securities convertible into stock, although any stated
50
<PAGE>
additional shares of stock or other securities convertible into stock may be
issued or disposed of by the Board of Directors to those persons and on those
terms as in its discretion it shall deem advisable. That the total number of
common stock authorized that may be issued by this Corporation is TWENTY FIVE
MILLION (25,000,000) shares of stock with a nominal or par value of ONE TENTH OF
ONE CENT ($00.001) per share of stock, and no other class of stock shall be
authorized without amendment to the Articles of Incorporation by the Board of
Directors. Said shares of stock may be issued by the Corporation, from time to
time, for any stated considerations as may be fixed by the Board of Directors.
FIFTH: The capital stock, after the amount of the subscription price, or par
value, has been paid in, shall not be subject to assessment to pay the debts of
the Corporation and shall have full entitlement to receive the net assets of
this Corporation upon dissolution.
SIXTH: The governing board of this Corporation shall be known as directors and
the number of directors may, from time to time, be increased or decreased in any
stated manner as shall be provided by the By-Laws of this Corporation, providing
that the number of directors shall not be reduced to less one (1). The Board of
Directors shall have full control over the affairs of the Corporation subject
only to any and all limitations as may be provided by statute. The name and post
office address of the first members of the Board of Directors, until the first
annual meeting of stockholders or until their successors are elected and
qualify, shall be ONE(1) in number and listed as follows:
NAME: POST OFFICE ADDRESS
TERRALL W. CHILCOAT 1504 Highway #395 N. #8-00227
Gardnerville, Nevada 89401-5274
SEVENTH: The powers of the incorporator are to terminate upon filing of the
Articles of Incorporation. The name and post office address of the incorporator
signing the Articles of Incorporation is as follows:
NAME: POST OFFICE ADDRESS
TERRALL W. CHILCOAT 1504 Highway #395 N. #8-00227
Gardnerville, Nevada 89401-5274
EIGHTH: The resident agent for this Corporation shall be;
1ST CLASS ONLY
The address of said agent, and, the principle or statutory address of this
Corporation in the State of Nevada is;
1504 Highway #395 N. #8-00227
Gardnerville, Nevada 89401-5274
NINTH: The Corporation is to have perpetual existence.
TENTH: In furtherance and not in limitation of the powers conferred by stature,
the Board of Directors is expressly authorized:
(a) Subject to the By-Laws, if any, have been adopted by the stockholders, to
make, alter or amend the By-Laws of this Corporation.
(b) To fix the amount to be reserved as working capital over an above its
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
51
<PAGE>
(c) By resolution passed by majority of the whole Board of Directors, to
designate one (1) or more committee member who are natural persons, although not
directors, and must be approved by the Board of Directors, which, to the extent
provided in the resolution, or in the By-Laws or this Corporation, shall have
and may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation. The aforementioned committee, or
committees, shall have any and all names, or name, as may be stated in the
By-Laws of this Corporation, or as may be determined, from time to time, by
resolution adopted by the Board of Directors.
(d) When and as authorized by the affirmative vote of the stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a stockholders meeting called for that purpose, or when authorized by written
consent of the holders of at any so stated meeting to sell, lease or exchange
all, or any part, of the property and assets of this Corporation, including its
good will and its corporate franchises, upon any and all terms and conditions as
its Board of Directors deems expedient and for the best interests of the
Corporation.
ELEVENTH: No Director or Officer of this Corporation shall be personally liable
to this Corporation or any of its stockholders for damages for breach of
fiduciary duty as a Director or Officer involving any act of omission of any
said Director or Officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of said Director or Officer (I)for acts or
omission which involve intentional misconduct, fraud or knowing violation of the
law, or (II)the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes. Any repeal or modification of this Article by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation of the personal liability of any Director or
Officer of this Corporation for acts or omissions prior to aforesaid repeal or
modification.
TWELFTH: This Corporation, upon any and all terms and conditions as its Board of
Directors deems expedient and for the best interest of the Corporation, reserves
the right to amend, alter, change or repeal, in any manner, any provision
contained in the Articles or Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
Articles of Incorporation
(PURSUANT TO NRS 78)
STATE OF NEVADA
SECRETARY OF STATE
1. NAME OF CORPORATION: INTER.N CORPORATION
2. RESIDENT AGENT: (designated resident agent and his STREET ADDRESS in Nevada
where process may be served)
Name of Resident Agent: 1ST CLASS ONLY
Street Address: 1504 HWY #395 N. Ste. #8-00227 - Gardnerville, NV
89401-5274
3. Shares: (number of shares the corporation is authorized to issue)
Number of Shares with par value: 25,000,000 Par Value: $0.001 Number of shares
with par value: .
4. Governing Board: shall be styled as (check one): XXX Directors
Trustees
The FIRST BOARD OF DIRECTORS shall consist of I members and the names and
addresses are as follows
52
<PAGE>
TERRAL W. CHILCOAT. 1504 Hwy #395 N. Ste. #8-0227- Gardnerville, NV 89401
-------------------- --------------------------------------------------------
Name Address
5. PURPOSE(optional - see reverse side): The purpose of the Corporation shall
be:
6. OTHER MATTERS: This form includes the minimal statutory requirements to
incorporate under NRS 78. You may attach additional information pursuant to NRS
78.037 or any other information you deem appropriate. If any of the additional
information is contradictory to this form, it cannot be files and will be
returned to you for correction. Number of pages attached (6).
7. SIGNATURES OF INCORPORATORS: The names and addresses of each of the
incorporators signing the articles: (Signatures must be notarized.)
TERRALL W. CHILCOAT
---------------------
Name (print)
1504 HWY #395 N. Ste. #8-00227 Gardnerville, NV 89410
-------------------------------------------------------------
Address
/s/Terrall W. Chilcoat
Terrall W. Chilcoat
State Nevada County of Carson
This instrument was acknowledged before me on
June 20th 1996, by
Terrall W. Chilcoat
Name of Person
As incorporator
Of INTER.N CORPORATION .
53
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT 3.2
BY-LAWS
--------------------------------------------------------------------------------
54
<PAGE>
BYLAWS OF Inter.N Corporation
ARTICLE I
OFFICES
1.1. Registered Office and Agent. The principal office and resident agent
of Inter.N Corporation, (the "Corporation") in Nevada shall be as designated by
the Board of Directors from time to time.
1.2. Other Offices. The Corporation may establish and maintain such other
offices at such other-places of business both within and without the State of
Nevada as the Board of Directors may from time to time determine.
ARTICLE II
STOCKHOLDERS
2.1. Annual Meetings. The annual stockholders' meeting for electing
Directors and transacting other business shall be held at such time and place
within or without the State of Nevada as may be designated by the Board of
Directors in a Resolution and set forth in the notice of the meeting. Failure
to hold any annual stockholders' meeting at the designated time shall not work a
forfeiture or dissolution of the Corporation.
2.2. Special Meetings. Special meetings of the stockholders may be called
by the Board of Directors or by the Chairman of the Board, if one be elected, or
by the President, and shall be called by the President or Secretary at the
request in writing of stockholders owning not less a majority of all the shares
entitled to vote at the proposed meeting. Such request shall state the purpose
or purposes of the proposed meeting. Business transacted at any special meeting
of stockholders shall be limited to the purposes stated in the notice thereof.
2.3. Place of Meeting. All stockholders' meetings shall be held at such
place, within or without the State of Nevada as shall be fixed from time to time
by resolution of the Board of Directors.
2.4. Notice of Meetings. Written or printed notice stating the place, day
and hour of the meeting and, in case of a special meeting- the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
or more than fifty days before the date of the meeting, either personally or by
mail, by or at the direction of the President, the Secretary or the officer or
persons calling the meeting, to each stockholder -of record entitled to vote at
such meeting, except that if the authorized shares are to be increased, at least
thirty days notice shall be given. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to the stockholder
at his address as it appears on the stock transfer books of the Corporation,
with postage thereon prepaid.
2.5. Waiver of Notice. Whenever any notice is required to be given to any
stockholder of the Corporation under the provisions of any statute or the
Articles of Incorporation or these Bylaws, a waiver thereof in writing signed by
the person or persons entitled to such notice, whether before, at or after the
time stated therein, shall be equivalent to the giving of such notice.
Attendance of a stockholder at a meeting shall constitute a waiver of notice of
such meeting, except when such stockholder attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the trans-action of
any business because the meeting is not lawfully called or convened.
2.6. Organization. Meetings of the stockholders shall be presided over by the
Chairman of the Board, or if he is not present or one has not been elected, by
the President, or if nether the Chairman of the Board nor the President is
present, by a temporary chairman to be chosen by a majority of the stock-holders
entitled to vote who are present in person or by proxy at the meeting. The
Secretary of the Corporation, or in his absence, an Assistant Secretary, shall
act as secretary of every meeting, or if neither the Secretary nor any Assistant
Secretary is present, by a temporary secretary to be chosen by a majority of the
55
<PAGE>
stockholders entitled to vote who are present in person or by proxy at the
meeting.
2.7. Voting. Except as otherwise specifically provided by the Articles of
Incorporation or by these Bylaws or by statute, all matters coming before any
meeting of stockholders shall be decided by a vote of the majority of the votes
cast. The vote upon any question shall be by ballot whenever requested by any
person entitled to vote, but, unless such a request is made, voting may be
conducted in any way approved at the meeting.
2.8. Stockholders Entitled to Vote. Each stockholder of the Corporation
shall be entitled to vote, in person or by proxy, each share of stock standing
in his name on the books of the Corporation on the record date fixed or
determined pursuant to Section 6.06 hereof.
2.9. Proxies. The right to vote by proxy shall exist only if the instrument
authorizing such proxy to act shall have been executed in writing by the
stockholder himself or by his attorney-in-fact duly authorized in writing. Such
proxy shall be filed with the Secretary of the Corporation before or at the time
of the meeting. No proxy shall be valid after eleven months from the date of
its execution, unless otherwise provided in the proxy.
2.10. Quorum. The presence at any stockholders' meeting, in person or by
proxy, of the record holders of shares aggregating at least fifty one percent
(51%) the number of shares entitled to vote at the meeting as indicated in the
Articles of Incorporation shall be necessary and sufficient to constitute a
quorum for the transaction of business. The stockholders present at the
stockholders meeting, for which a quorum exists, may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
2.11. Absence of Quorum. In the absence of a quorum at any stockholders'
meeting, a majority of the total number of shares entitled to vote at the
meeting and present there at, in person or by proxy, may adjourn the meeting for
a period not to exceed sixty days at any one adjournment. Any business that
might have been transacted at the meeting originally called may be transacted at
any such adjourned meetings at which a quorum is present.
2.12. List of Stockholders. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make, at least ten days
before each meeting of stockholders, a complete current list of the stockholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of ten days prior to such meeting, shall be kept on
file at the principal office of the Corporation, whether within or without the
State of Nevada, and shall be subject to the inspection of any stockholder
during the whole time of the meeting. The original stock transfer books shall
be prima facie evidence as to who are the stockholders entitled to examine such
list or transfer books or to vote at any meeting of stockholders. Failure to
comply with the requirements of this Section 2.12 shall not affect the validity
of any action taken at such meeting of stockholders.
2.13. Action by Stockholders Without a Meeting. Any action required to be
taken at a meeting of the stockholders of the Corporation or any action which
may be taken at such a meeting, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by a majority of the
stock-holders entitled to vote with respect to the subject matter thereof,
except that if a different proportion of voting power is required for such
action at a meeting, then that proportion of written consents is required. Such
consents shall have the same force and effect as a vote in person of the
stockholders of the Corporation A consent shall be sufficient for this Section
2.13 if it is executed in counterparts, in which event all of such counterparts,
when taken together, shall constitute one and the same consent.
56
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
3.1. Number and Term of Office. The Board of Directors of the Corporation
shall consist of not less than one nor more than thirteen (13) Directors, as
determined by the Board of Directors of the Corporation. Each Director
(whenever elected) shall hold office until his successor shall have been elected
and qualified unless he shall resign or his office shall become vacant by his
death or removal. Directors need not be residents of the State of Nevada or
stockholders of the Corporation.
3.2. Election of Directors. Except as otherwise provided in Sections 3.03
and 3.04 hereof and except as otherwise provided in the Articles of
Incorporation, the Directors shall be elected annually at the annual
stockholders' meeting for the election of Directors. The persons elected as
Directors shall be those nominees, equal to the number then constituting the
Board of Directors, who shall receive the largest number of affirmative votes
validly cast at such election by the holders of shares entitled to vote
therefore. Failure to annually re-elect Directors of the Corporation shall not
affect the validity of any action taken by a Director who shall have been duly
elected and qualified and who shall not, at the time of such action, have
resigned, died, or
been removed from his position as a Director of the Corporation.
3.3. Removal of Directors. At a meeting called expressly for that purpose,
the entire Board of Directors or any lesser number may be removed, with or
without cause, by a vote of the holders of the majority of the shares then
entitled to vote at an election of Directors.
3.4. Vacancies and Newly Created Directorships. Any vacancy occurring in
the Board of Directors may be filled by the affirmative vote of a majority of
the remaining Directors though less than a quorum of the Board of Directors. A
Director elected to fill a vacancy shall be elected for the unexpired term of
his predecessor in office and until his successor shall have been elected and
qualified. Any number of Directors shall be filled by the affirmative vote of a
majority of the Directors then in office or by an election at an annual meeting
of a special meeting of the stockholders called for that purpose. A Director
chosen to fill a position resulting from an increase in the number of directors
shall hold such position until the next annual meeting of stockholders and until
his successor shall have been elected and qualified.
3.5. Resignations. Any Director may resign at any time by mailing or
delivering or by transmitting by telegram or cable written notice of his
resignation to the Board of Directors of the Corporation at the Corporation's
principal office or its registered office in the State of Nevada or to the
President, the Secretary, or any Assistant Secretary of the- Corporation. Any
such resignation shall take effect at the time specified therein or if no time
be specified, then at the time of receipt thereof.
3.6. General Powers. The business of the Corporation shall be managed by
the Board of Directors, which may exercise all such powers of the Corporation
and do all such lawful acts and things that are not by statute or by the
Articles of Incorporation or by these Bylaws directed or required to be
exercised or done by the stockholders.
3.7. Annual Meetings. The annual meeting of the Board of Directors for
electing officers and transacting other business shall be held immediately after
the annual stockholders' meeting at the place of such meeting. Failure to hold
any annual meeting of the Board of Directors of the Corporation at the
designated time shall, not work a forfeiture or dissolution of the Corporation.
3.8. Regular Meetings. The Board of Directors from time to time may provide
by resolution for the holding of regular meetings and fix the time and place of
such meetings. Regular meetings may be held within or without the State of
Nevada. Notice of regular meetings need not be given, provided that notice of
57
<PAGE>
any change in the time or place of such meetings shall be sent promptly to each
Director not present at the meeting at which such change was made.
3.9. Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board, if one be elected, or by the President on
two days notice to each Director specifying the time and place (within or
without the State of Nevada) of the meeting, and shall be called by the
President or Secretary in like manner and on like notice on the written request
of two or more Directors.
3.10. Notice. All notices to a Director required by Sections 3.07 or 3.09
hereof shall be addressed to him at his residence or usual place of business and
may be given by mail, telegram, radiogram, cable or by personal delivery. No
notice need be given of any adjourned meeting.
3.11. Waiver of Notice. Whenever any notice is required to be given to any
Director of the Corporation under the provisions of any statute or under the
provisions of the Articles of Incorporation or these Bylaws, a waiver thereof in
writing signed by the person or persons entitled to such notice, whether before,
at or after the time stated therein, shall be equivalent to the giving of such
notice. Attendance of a Director at a meeting of the Board of Directors shall
constitute a waiver of notice of such meeting, except where a Director attends
such a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any annual, regular or special
meeting of the Board of Directors need be specified in the notice or waiver of
notice of such meeting.
3.12. Quorum. At all meetings of the Board of Directors a majority of the
whole Board of Directors shall constitute a quorum for the transaction of
business and, except as may be otherwise specifically provided by statute or by
the Articles of Incorporation or these Bylaws, the act of a majority of the
Directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors. In the absence of a quorum the Directors present there
may adjourn the meeting from time to time without notice other than announcement
at the meeting, until a quorum be present.
3.13. Action by Directors or Committee Without Meeting. Any action required to
be taken at a meeting of the Directors of the Corporation or any committee
thereof or any action which may be taken at such a meeting, may be taken without
a meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the Directors or members of the committee, as the case may be,
entitled to vote with respect to the subject matter thereof. Such consent shall
have the same force and effect as a unanimous vote of the Board of Directors or
of the committee, as the case may be, of the Corporation. A consent shall be
sufficient for this Section 3.13 if it is executed in counter-parts, in which
event all of such counterparts, when taken together, shall constitute one and
the same consent.
3.14. Telephone/Electronic Meetings. Any Director or any member of a committee
may participate in a meeting of the Board of Directors or a committee, as the
case may be, by means of a conference telephone, e-mail or other communications
equipment by means of which all persons participating in such meeting can
communicate with each other on a real-time basis, and such participation shall
constitute the presence of such person at such meeting.
3.15. Compensation. By resolution of the Board of Directors, any Director may
be paid any one or more of the following: his expenses, if any, of attendance at
meetings; a fixed sum for attendance at meetings; or a stated salary as
Director. Nothing herein contained shall be construed to preclude any Director
from serving the Corporation in any capacity as an officer, employee, agent or
otherwise, and receiving compensation therefore.
58
<PAGE>
3.16. Reliance on Accounts and Reports, etc. A Director, or a member of any
committee designated by the Board of Directors, in the performance of his
duties, shall be fully protected in relying in good faith upon the books of
account or reports made to the Corporation by any of its officers, or by an
independent certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
3.17. Presumption of Assent. A Director of the Corporation who is present at a
meeting of the Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the act ion taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as the Secretary of the
meeting before the adjournment thereof, or shall forward such dissent by
registered or certified mail to the Secretary of the Corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to
a Director who voted in favor of such action.
ARTICLE IV
COMMITTEES
4.1. How Constituted. By resolution adopted by a majority of the whole
Board of Directors, the Board may designate one or more committees, including an
Executive Committee, each consisting of two or more Directors. The Board of
Directors may designate one or more Directors as alternate members of any such
committee, who may replace any absent or disqualified member at any meeting of
such committee. Any such committee, to the extent provided in the resolution and
except as may otherwise be provided by statute,, shall have and may exercise the
powers of the Board of Directors. in the management of the business and affairs
of the Corporation and may authorize the seal of the Corporation to be affixed
to all papers which may require it; but the designation of such committee and
the delegation thereto of the authority shall not operate to relieve the Board
of Directors, or any member thereof, of any responsibility imposed upon it or
him by law. In the absence or disqualification of any member of any such
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
4.2. Proceedings, Quorum and Manner of Acting. Except as otherwise
prescribed by the Board of Directors, each committee may adopt such rules and
regulations governing its proceedings, quorum, and manner of acting as it shall
deem proper and desirable, provided that the quorum shall not be less than two
members.
ARTICLE V
OFFICERS AND AGENTS
5.1. Officers. The officers of the Corporation shall consist of a
President, one or more Vice-Presidents, a Secretary and a Treasurer, each of
whom shall be elected by the Board of Directors. The Board of Directors may
elect and appoint a Chairman of the Board and may elect and appoint such other
officers, assistant officers, and agents as may be deemed necessary and may
delegate to one or more officers or agents the power to appoint such other
officers, assistant officers and agents and to prescribe their respective
rights, terms of office, authorities and duties. The same person may hold any
two or more offices of the Corporation. An officer of the Corporation need not
be a Director of the Corporation nor a resident of the State of Nevada.
5.2. Term of Office. Except as provided in Sections 5.03, 5.04 and 5.05
hereof, each officer appointed by the Board of Directors shall hold office until
his successor shall have been appointed and qualified.
59
<PAGE>
5.3. Resignation. Any officer or agent of the Corporation may resign at any
time by mailing or delivering or by transmitting by telegram or cable written
notice of his resignation to the Board of Directors of the Corporation at the
Corporation's principal office or its registered office in the State of Nevada
or to the President, the Secretary or any Assistant Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein or if no time be specified, then at the time of receipt thereof.
5.4. Removal. Any officer or agent may be removed by the Board of
Directors, or by the Executive Committee, if any, either with or without cause,
whenever in its judgment, the best interests of the Corporation will be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights. In addition, any other officer,
assistant officer or agent appointed in accordance with the delegation
provisions of Section 5.01 hereof may be removed, either with or without cause,
by any such officer or agent upon whom such power of delegation shall have been
conferred by the Board of Directors.
5.5. Vacancies and Newly Created Offices. If any vacancy shall occur in any
office by reason of death, resignation, removal, disqualification or other
cause, or if any new office shall be created, such vacancies or newly created
offices may be filled by the Board of Directors at any regular or special
meeting or may be filled by any officer or agent to whom the power is delegated
in accordance with the delegation provisions of Section 5.01 hereof.
5.6. President. The President shall be the chief operating officer of the
Corporation and shall, in the absence of the Chairman of the Board, preside at
all stockholders' meetings and at all meetings of the Board of Directors.
Subject to the supervision-of the Board of Directors and such direction and
control as the Chairman of the Board, if one be elected, may exercise on matters
of general policy, he shall have general supervision over its operating
officers, employees and agents. He shall sign (unless a Vice President shall
have signed) certificates representing the stock of the Corporation authorized
for issuance by the Board of Directors, and except as the Board of Directors may
otherwise order, he may sign in the name and on behalf of the Corporation all
deeds, bonds, contracts or agreements. He shall exercise such other powers and
perform such other duties as from time to time may be assigned to him by the
Board of Directors.
5.7. Executive Vice-President and Vice-Presidents. The Executive Vice
President, if one be elected, and any Vice-Presidents, if one or more be
elected, shall have such powers and perform such duties as may be assigned to
them by the Board of Directors or by the President. At the request of or in the
absence or disability of the President, the Executive Vice-President (or the
Vice-President, if there is no duly appointed Executive Vice-President, and if
there are two or more Vice-Presidents, then the senior of the Vice Presidents
present are able to act) may perform all the duties of the President and, when
so acting, shall have the powers of and be subject to all the restrictions upon
the President. The Executive Vice-President or any Vice-President may sign
(unless the President or another Vice-President shall have signed) certificates
representing stock of the Corporation authorized for issuance by the Board of
Directors.
5.8. Treasurer and Assistant Treasurers. The Treasurer shall have general
charge of, and general responsibility for, all funds, securities and receipts of
the Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust
companies, or other depositories as shall from time to time be designed by the
Board of Directors. He shall have all powers and perform all duties incident to
the office of a treasurer of a corporation and as are provided for him in these
Bylaws, and shall exercise such other powers and perform such other duties as
may be assigned to him by the Board of Directors. Any Assistant Treasurer may
perform such duties of the Treasurer as the Treasurer or the Board of Directors
60
<PAGE>
may assign, and, in the absence of the Treasurer, any Assistant Treasurer may
perform all the duties of the Treasurer.
5.9. Secretary and Assistant Secretaries. The Secretary shall attend to the
giving and serving of all notice of the Corporation and shall record all the
proceedings of all meetings of the stockholders and of the Board of Directors in
a book to be kept for that purpose. He shall keep in safe custody the seal of
the Corporation, and shall have charge of the records of the Corporation,
including the stock books and such other books, reports, certificates and other
documents required by law to be kept, all of which shall at all reasonable times
be open to inspection by any Director. He shall sign (unless an Assistant
Secretary shall have signed) certificates representing stock of the Corporation
authorized for issuance by the Board of Directors. He shall perform such duties
as pertain to his office or as may be required by the Board of Directors. Any
Assistant Secretary may perform such duties of the Secretary as the Secretary or
the Board of Directors may assign, and, in the absence of the Secretary,
Assistant Secretary may per form all the duties of the Secretary.
5.10. Controller. The Comptroller, if one be elected, shall have general
charge and supervision of financial reports. He shall maintain adequate records
of all assets, liabilities and transactions of the Corporation and shall keep
the books and accounts and cause adequate audits thereof to be made regularly
and shall exercise a general check upon the disbursements of funds of the
Corporation. In general, he shall perform all duties incident to the office of
a comptroller of a corporation, and shall exercise such other powers and perform
such other duties as may be assigned to him by the Board of Directors.
5.11. Remuneration. The salaries or other compensation of the officers of the
Corporation shall be determined by the Board of Directors, except that the Board
of Directors may by resolution delegate to any officer or agent the power to fix
salaries or other compensation of any other officer, assistant officer or agent
appointed in accordance with the delegation provisions of Section 5.01 hereof.
5.12. Surety Bonds. The Board of Directors may require any officer or agent of
the Corporation to execute a bond to the Corporation in such sum and with such
surety or sureties as the Board of Directors may determine, conditioned upon the
faithful performance of his duties to the Corporation, including responsibility
for negligence and for the accounting of any of the Corporation's property,
funds or securities that may come into his hands.
ARTICLE VI
CAPITAL STOCK
6.1. Signatures. The shares of the Corporation's capital stock shall be
represented by certificates signed by the President or a Vice-President and the
Secretary or an Assistant Secretary of the Corporation; any may be sealed with
the seal of the Corporation, or a facsimile thereof. The signatures of the
President or a Vice-President and of the Secretary or an Assistant Secretary
upon certificates may be facsimiles if the certificate if countersigned by a
transfer agent, or registered by a registrar, other than the Corporation itself
or an employee of the Corporation. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date of its
issue.
6.2. Certificates. Each certificate representing shares Of the Corporation
shall state upon the face thereof. (a) that the Corporation is organized under
the laws of the State of Nevada (b) the name of the person to whom such
certificate is issue; (c) the number and class of, shares which such certificate
61
<PAGE>
represents; and (d) the par value of each share represented by such certificate,
or a statement that the shares are without par value. Each certificate shall
also set forth conspicuously on the face or back hereof such restrictions upon
transfer, or a reference thereto, as shall be adopted by the Board of Directors
and stockholders. No certificate shall be issued for any shares until such share
is fully paid.
6.3. Classes of Stock. If the Corporation is or shall become authorized to
issue shares of more than one class, then, in addition to the provisions of
Section 6.02 hereof, every certificate representing shares issued by the
Corporation shall also set forth upon the face or back of the certificate, or
shall state that the Corporation will furnish to any stockholder upon request
and without charge, a full statement of the designations, preferences,
limitations, and relative rights of the shares of each class authorized to be
issued and, if the Corporation is or shall become authorized to issue any
preferred or special class-in series, the variations in the relative rights and
preferences between the shares of each such series so far as the same have been
fixed and determined and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent series.
6.4. Consideration for Shares. Shares having a par value may be issued for
such consideration expressed in dollars, not less than the par value thereof, as
shall be fixed from time to time by the Board of Directors. Shares without par
value may be issued for such consideration expressed in dollars as may be fixed
from time to time by the Board of Directors. The Corporation may dispose of
treasury shares for such consideration expressed in dollars as may be fixed from
time to time by the Board of Directors. The consideration for the issuance of
shares may be paid, in whole or in part, in money, in other property, tangible
or intangible, or in labor or services actually perform ed for the Corporation.
Neither promissory notes nor future services shall constitute payment or part
payment for shares of the Corporation.
6.5. Transfer of Capital Stock. Transfers of shares of stock of the
Corporation shall be made on the books of the Corporation upon surrender of the
certificate or certificates, properly endorsed or accompanies by proper
instruments of transfer, representing such shares, subject to the terms of any
agreements among the Corporation and shareholders.
6.6. Registered Stockholders. Prior to due presentment for registration of
transfer of shares of stock, the Corporation may treat the person registered on
its books as the absolute owner of such shares of stock for all purposes, and
accordingly shall not be bound to recognize any legal, equitable or other claim
or interest in such shares on the part of any other person, whether or not it
shall have the express or other notice thereof, except as otherwise expressly
provided by statute; provided, however, that whenever any transfer of shares
shall be made for collateral security and not absolute, it shall be so expressed
in the entry of the transfer if, when the certificates are presented to the
Corporation for transfer, both the transferor and the transferee request the
Corporation to do so.
6.7. Transfer Agents and Registrars. The Board of Directors may, from time
to time, appoint or remove one or more transfer agents or one or more registrars
of transfers of shares of stock of the Corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or one of such registrars
of transfers and shall not be valid unless so countersigned. If the same person
shall be both transfer agent and registrar, only one counter signature by such
person shall be required.
6.8. Fixing or Determination of Record Date. The Board of Director s may
fix, in advance, a date as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any meeting of stockholders
and any adjournment thereof, or entitled to receive payment of any dividend or
any other distribution, allotment of rights, or entitled to exercise rights in
62
<PAGE>
respect of any change, conversion, or exchange of capital stock, or entitled to
give any consent for any purpose, or in order to make a determination of
stockholders for any other proper purpose; provided, however, that such record
date shall be a date not more than fifty days nor less than ten days before the
date of such meeting of stockholders or the date of such other action. If no
record date is so fixed, the record date for determining stockholders entitled
to notice of or to vote at any stockholders' meeting shall be at the close of
the business on the date next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. The record date for determining stockholders
entitled to express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the day on
which the first written consent is expressed. The record date for determining
stockholders for any other purpose shall, unless otherwise specified by the
Board of Directors, be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of such meeting, provided, however
that the Board of Directors may fix a new record date for the adjourned meeting.
Only such stockholders as shall be stockholders of record on the record date so
fixed shall be entitled to such notice of, and to vote at, such meetings and any
adjournments thereof or to receive payment of such dividend, or other
distribution, or to receive such consent, as the case may be, notwithstanding
any transfer of any shares on the books of the Corporation after any such record
date.
6.9. Lost or Destroyed Certificates. The Board of Directors may direct that
a new certificate or certificates of stock be issued in place of any certificate
or certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of the fact by the person
claiming the certificate or certificates to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, at its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate or certificates alleged to have been lost,
stolen or destroyed.
ARTICLE, VII
FINANCE
7.1. Checks, Drafts, etc. All checks, drafts or order for the payment of
money shall be signed by one or more of officers or other persons as may be
designated by resolution of the Board of Directors.
7.2. Fiscal Year. The fiscal year of the Corporation shall be such as may
from time to time be established by the Board of Directors.
ARTICLE VIII
INDEMNIFICATION
8.1. Action, Suites or Proceedings Other than by or in the Right of the
Corporation. The Corporation shall indemnify any Directors, Officer, Employee
or Agent of the Corporation who was or is party or is threatened to be made a
party to any threatened, pending or completed action, suit, or proceeding.,
whether civil, criminal, administrative, or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he is or was a
Director, Officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a Director, Officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
63
<PAGE>
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and, in the case of conduct
in his official capacity with the Corporation, in a manner he reasonably
believed to be in the best interest of the Corporation, or, in all other cases,
that his conduct was at least not opposed to the Corporation's best interests.
In the case of any criminal proceeding, he must have had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order settlement, conviction, or upon a plea of no
contenders or its equivalent, shall not, or itself, determine that the
individual did not meet the standard of conduct set forth in this paragraph.
8.2. Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of
the fact that he is or was a Director, Officer, employee or agent of the
Corporation or is or was serving at the request of the Company as a Director,
Officer, employee or agent of another corporation, partnership joint venture,
trust or other enterprise against expenses(including attorney's fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and, in the case of conduct in his
official capacity with the Corporation, in a manner he reasonably believed to be
in the best interests of the Corporation and, in all other cases, hat his
conduct was at least not opposed to the Corporation's best interests; but no
indemnification shall be made in respect of any claim, issue or matter as to
which such person has been adjudged to be liable for negligence or misconduct in
the performance of this duty to the Corporation or where such person was
adjudged liable on the basis that personal benefit was improperly received by
him, unless and only to the extent that the court in which such action or suit
was brought determines upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnification for such expenses which such
court deems proper.
8.3. Indemnification of Successful Party. To the extent- that a Director,
Officer, employee or agent of the Corporation has been successful on the merits
or otherwise (including, without limitation, dismissal without prejudice) in
defense of any action, suit, or proceeding referred to in this Article VIII or
in defense of any claim, issue, or matter therein, he shall be indemnified
against all expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
8.4. Determination of Right to Indemnification. Any indemnification under
(1) or (2) of this Article VIII (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the Director, Officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
paragraphs (1) or (2) of this Article VII. Such determination shall be made by
the Board of Directors by a majority vote of a quorum consisting of Directors
who were not parties to such action, suit or proceeding, or, if such a quorum is
not obtainable and a quorum of disinterested Directors so directs, by
independent legal counsel in a. written opinion, or by the shareholders.
8.5. Advance of Costs, Charges and Expenses. Cost, charges and expenses
(including attorney's fees) incurred in defending a civil or criminal action,
suit, or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board of
Directors as provided in paragraph (4) of this Article VIII upon receipt of a
written affirmation by the Director, Officer, employee or agent of his good
faith belief that he has met the standard of conduct described in paragraphs (1)
or (2) of this Article VIII, and an undertaking by or on behalf of the Director,
Officer, employee or agent to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the Corporation as
authorized in this Article VIII. The majority of the Directors may, in the
manner set forth above, and upon approval of such Director, Officer, employee or
agent of the Corporation, authorize the Corporation's counsel to represent such
person in any action, suit or proceeding, whether or not the Corporation is a
party to such action, suit or proceeding.
64
<PAGE>
8.6. Settlement. If in any action, suit or proceeding, including any
appeal, within the scope of (1) or (2) of this Article VIII, the person to be
indemnified shall have unreasonably failed to enter into a settlement thereof,
then, notwithstanding any other provision hereof, the indemnification obligation
of the Corporation to such person in connection with such action, suit or
proceeding shall not exceed the total of the amount at which settlement could
have been made and the expenses by such person prior to the time such settlement
could reasonably have been effected.
8.7. Other Rights; Continuation of Right to Indemnification. The
indemnification provided by this Article VIII shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under these Articles
of Incorporation, any bylaw, agreement, vote of shareholders or disinterested
Directors, or otherwise, and any procedure provided for by any of the foregoing,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to person who has ceased to be
a Director, Officer, employee or agent and shall inure to the benefit of heirs,
executors, and administrators of such a person. All rights to indemnification
under this Article VIII shall be deemed to be a contract between the Corporation
and each director or officer of the Corporation who serves or served in such
capacity at any time while this Article VIII is in effect. Any repeal or
modification of this Article VIII or any repeal or modification of relevant
provisions of the Nevada Corporation Code or any other applicable laws shall not
in any way diminish any rights to indemnification of such Director, Officer,
employee or agent or the obligations of the Corporation arising hereunder. This
Article VIII shall be binding upon any successor corporation to this Corporation
whether by way of acquisition, merger, consolidation or otherwise.
8.8. Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a Director, Officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as Director,
Officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provision of this Article VIII: provided, however, that
such insurance is available on acceptable terms, which determination shall be
made by a vote of the majority of the Directors.
8.9. Saving Clause. If this Article VIII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Director, Officer, employee and
agent of the Corporation as to any cost, charge and expense (including
attorney's fees), judgment fine and amount paid in settlement with respect to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, including an action by or in the right of the Corporation, to the
full extent permitted by an applicable portion of this Article VII that shall
not have been invalidated and to the full extent. permitted by applicable law.
8.10. Amendment. The affirmative vote of at least. two-thirds of the total
votes eligible to be cast shall be required to amend, repeal, or adopt any
provision inconsistent with, this Article VIII. No amendment, termination or
repeal of this Article VIII shall affect or impair in any way the rights of any
Director, Officer, employee or agent of the Corporation to indemnification under
the provisions hereof with respect to any action, suit or proceeding arising out
of, or relating to, any actions, transactions or facts occurring prior to the
final adoption of such amendment, termination or appeal.
8.11. Subsequent Legislation. If the Nevada Corporation Code is amended after
adoption of these Articles to further expand the indemnification permitted to
Directors, Officers, employees or agents of the Corporation, then the
Corporation shall indemnify such persons to the fullest extent permitted by the
Nevada Revised Statutes, as so amended.
65
<PAGE>
ARTICLE IX
MISCELLANEOUS
9.1. Seal. The corporate seal of the Corporation shall be circular in form
and shall bear the name of the Corporation. The form of seal shall be subject
to alteration by the Board of Directors and the seal may be used by causing it
or a facsimile to be impressed or affixed or printed or otherwise reproduced.
Any Officer or Director of the Corporation shall have the authority to affix the
corporate seal of the Corporation to any document requiring the same.
9.2. Books and Records. The Board of Directors shall have power from time
to time to determine whether and to what extent, and at what times and places
and under what conditions and regulations, the accounts and books of the
Corporation (other than stock ledger), or any of them, shall be open to the
inspection of the stockholders. No stockholder shall have any right to inspect
any account, book or document of the Corporation except at a time conferred by
statute, unless authorized by a resolution of the stockholders or the Board of
Directors.
9.3. Waivers of Notice. Whenever any notice is required to be given by law,
or under the provisions of the Articles of Incorporation or of these Bylaws, a
waiver thereof in writing, signed by the person or person entitled to such
notice, whether before, at or after the time stated therein, shall be deemed
equivalent of notice.
9.4. Amendments. The Board of Directors shall have the power to make, alter
or repeal these Bylaws, in whole or in part, at any time and from time to time.
These Bylaws may be altered or repealed, and new Bylaws made, by the
stockholders at any annual or special meeting if notice of the proposed
alteration or repeal or new Bylaws is included in the notice or waiver of notice
of such meeting.
APPROVED AND ADOPTED as of this 12th day of October, 1998.
/s/Melissa Morris
Melissa Morris, Secretary
66
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT 16.1
CONSENT OF PREVIOUS AUDITOR
--------------------------------------------------------------------------------
67
<PAGE>
BARRY L. FRIEDMAN, CPA
A PROFESSIONAL CORPORATION
1582 TULITA DRIVE
LAS VEGAS NV 89123
May 19, 2000
Safe ID Corporation re: Inter.N Corporation/ Safe ID Corporation.
(formerly Inter.N Corporation)
Suite B3, 1700 Varsity Estates Drive NW
Calgary, Alberta Canada T3B-2W9
To the Board of Directors:
I agree with the following disclosure to be made in the Company's 1934 Act
Registration Statement on Form 10-SB:
There have been no disagreements of any sort or kind with Auditors or
Accountants respecting any matter or item reflected in the financial statements
of this Issuer.
Barry L. Friedman, CPA, 1582 Tulita Drive, Las Vegas Nevada 89123,
performed the Audit for Inter.N Corporation, for the years ended December 31,
1998 and 1997, and the ten months ended October 30, 1998, and from inception
June 27, 1996. At that time, the company had no operations, businesses or source
of revenues. No adverse opinion, disclaimer of opinion or opinions qualified or
modified as to any uncertainly, audit scope or accounting has been rendered,
issued or expressed, during the two preceding years or at any time.
During the two most recent fiscal years and any subsequent interim period
preceding the change, there were no disagreements with the former accountants on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which if not resolved to the
satisfaction of the former accountants, would have caused it to make reference
to the subject matter in its reports.
Please let me know if you require anything further.
Very Truly Yours
Barry L. Friedman
/s/Barry L. Friedman
Barry L. Friedman, CPA
a professional corporation
68
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT 16.2
PREVIOUS AUDIT
--------------------------------------------------------------------------------
69
<PAGE>
INTER.N CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
October 30, 1998
December 31, 1997
December 31, 1996
70
<PAGE>
Table of Contents
Independent Auditors Report
Assets
Liabilities and Stockholder's Equity
Statement of Operations
Statement of Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
71
<PAGE>
Barry L. Friedman, P.C.
Certified Public Accountant
1582 Tulita Drive
Las Vegas, Nevada 89123
Office (702) 361-8414
Fax No. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors
Inter.N Corporation
Gardnerville, Nevada
November 13, 1998
I have -audited the accompanying Balance Sheets of .Inter.N Corporation, (A
Development Stage Company), as of Oc1:ober 30, 1998, December 31, 1997, and
December 31, 1996, and the related statements of operations, stockholders,
equity and cash flows for period January 1, 1998, to October :30, 1998, for the
year ended December 31, 1997, and the period June 27, 1996, (inception) to
December 31, 1996. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally ac(7epted 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 '3tatement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Inter.N Corporation, (A Development
Stage Company) as of October 30, 1998, December 31, 1997,- and December 31,
1996, and the results of its operations and cash flows for the period January 1,
1998, to October 30, 1998i for the year ended December 31, 1997, and the period
June 27, --996, .(inception) to December 31, 1996, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company has no established source of revenue. This raises
substantial. doubt about its ability to continue as a going concern.
Management's plan in regard to these matters are also described in Note 4. The
financial statements do not include any adjustments that might result from the
outcome of this ,uncertainty.
/s/Barry L. Friedman
Barry L. Friedman
Certified Public Accountant
72
<PAGE>
INTER.N CORPORATION
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ASSETS . . . . . . . October December December
30, 1998 31, 1997 31, 1996
-----------------------------------------------------
Current Assets:. . . $ 0 $ 0 $ 0
-----------------------------------------------------
Total Current Assets $ 0 $ 0 $ 0
-----------------------------------------------------
Other Assets . . . . $ 0 $ 0 $ 0
-----------------------------------------------------
Total Other Assets . $ 0 $ 0 $ 0
-----------------------------------------------------
Total Assets . . . . $ 0 $ 0 $ 0
=====================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
73
<PAGE>
INTER.N CORPORATION
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C> <C>
October December December
30, 1998 31, 1997 31, 1996
----------------------------------------------------------------------
CURRENT LIABILITES:
Officers Advances (Note#6) . . . . $ 350 $ 0 $ 0
----------------------------------------------------------------------
TOTAL CURRENT LIABILITES . . . . . $ 350 $ 0 $ 0
----------------------------------------------------------------------
STOCKHOLDERS' EQUITY: (Note 1)
Common Stock, $0.001 par value
authorized 25,000,000 Shares
issued and outstanding at
December 31, 1996-1,000 shares . . $ 0 $ 0 $ 1
December 31, 1997-1,000 shares . . $ 0 $ 1 $ 0
October 30, 1998-2,000,000 shares. $ 2,000 $ 0 $ 0
Additional paid in Capital . . . . ($1,000) $ 999 $ 999
Accumulated (Loss) . . . . . . . . ($1,350) ($1,000) ($1,000)
----------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY . . . . ($350) $ 0 $ 0
----------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY . . . . . . . $ 0 $ 0 $ 0
======================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
74
<PAGE>
INTER.N CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Jan. 1, Year Jun. 27 Jun. 27, 1996
1998, to. Ended 1996, to (inception)
Oct. 30,. Dec. 31, Dec. 31, to Oct. 30,
1998 1997 1996 1998
----------------------------------------------------------------------------
INCOME:
Revenue . . . . . . $ 0 $ 0 $ 0 $ 0
----------------------------------------------------------------------------
EXPENSES:
General, Selling
and Administrative. $ 350 $ 0 $ 0 $ 1,350
----------------------------------------------------------------------------
Total Expenses. . . $ 350 $ 0 $ 0 $ 1,350
----------------------------------------------------------------------------
Net Profit (Loss) . ($350) $ 0 $ 0 ($1,350)
============================================================================
Net Profit (Loss)
per weighted
share (Note 1). . . ($0.0004) $ 0.0000 $ 0.0000 ($0.0014)
============================================================================
Weighted Average
number of common
shares outstanding. 1,000,000 1,000,000 1,000,000 1,000,000
============================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
75
<PAGE>
INTER.N CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Additional
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit
---------------------------------------------------------------------------
June 30, 1996
Issuance of common stock $ 1,000 $ 1 $ 999 $ 0
Net (Loss),
June 27, 1996
to December 31, 1996 . . $ 0 $ 0 $ 0 ($1,000)
---------------------------------------------------------------------------
Balance,
December 31, 1996. . . . $ 1,000 $ 1 $ 999 ($1,000)
Net (Loss) year ended
December 31, 1997. . . . $ 0 $ 0 $ 0 $ 0
---------------------------------------------------------------------------
Balance,
December 31, 1997. . . . $ 1,000 $ 1 $ 999 ($1,000)
October 12, 1998
forward stock split
2,000:1. . . . . . . . . $ 1,999,000 $ 1,999 ($1,999) $ 0
Net (Loss),
January 1, 1998
to October 30, 1998. . . $ 0 $ 0 $ 0 ($350)
---------------------------------------------------------------------------
Balance,
October 30, 1998 . . . . $ 2,000,000 $ 2,000 ($1,000) ($1,350)
===========================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
76
<PAGE>
INTER.N CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Jan. 1, Year Jun. 27 Jun. 27, 1996
1998, to. . . . . . . Ended 1996, to (inception)
Oct. 30,. . . . . . . Dec. 31, Dec. 31, to Oct. 30,
1998 1997 1996 1998
------------------------------------------------------------------------------
Cash Flows from
Operating Activities:
Net (Loss). . . . . . . ($350) $ 0 ($1,000) ($1,350)
Adjustment to
reconcile net loss
to net cash
provided by operating
activities. . . . . . . $ 0 $ 0 $ 0 $ 0
Changes in assets and
liabilities:
Increase in current
liabilities:. . . . . . $ 350 $ 0 $ 0 $ 350
------------------------------------------------------------------------------
Net Cash used in
operating activities. . $ 0 $ 0 ($1,000) ($1,000)
Cash Flows from
investing activities. . $ 0 $ 0 $ 0 $ 0
Cash Flows from
Financing Activities:
Issuance of common
Stock for cash. . . . . $ 0 $ 0 $ 1,000 $ 1,000
------------------------------------------------------------------------------
Net Increase (decrease)
in cash . . . . . . . . $ 0 $ 0 $ 0 $ 0
Cash,
beginning of period . . $ 0 $ 0 $ 0 $ 0
------------------------------------------------------------------------------
Cash,
end of period . . . . . $ 0 $ 0 $ 0 $ 0
==============================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
77
<PAGE>
INTER.NICORPORATION
(A Development Stage Company)
October 30, 1998, December 31, 1997, and December 31, 1996
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - History and organization of the Company
The Company was organized June 27, 1996, under the laws of the State of
Nevada as Inter.N Corporation. The Company currently has no operations and, in
accordance with SFAS 47, is considered a development company.
On June 30, 1996, the Company issued 1,000 shares of it's $.001 par value common
stock for services of $ 1,000.
On October 12, 1998, the Company forward split its common stock 2,000:1, thus
increasing the number of outstanding common stock shares from 1,000 shares to
2,000,000 shares.
NOTE 2 - Accounting Policies and Procedures
The Company has not determined its accounting policies and procedures,
except as follows:
1. The Company uses the accrual method of accounting.
2. Earnings or loss per share is calculated using the weighted averaged
number of common shares outstanding.
3The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
NOTE 3 - Warrants and Options
There are no warrants or options outstanding to issue any additional shares
of common stock of the Company.
NOTE 4 - Going Concern
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets amid liquidation of liabilities in the normal course
of business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is, management's plan to seek additional
capital through a merger with an existing operating company.
78
<PAGE>
INTER.N CORPORATION
(A Development Stage Company)
October 30, 1998, December 31, 1997, and December 31, 1996
NOTES TO-FINANCIAL STATEMENTS CONTINUED
NOTE 5 - Related Party Transactions
The Company neither owns or leases any real or personal property. Office
services are provided without charge by an officer. Such costs are immaterial
to the financial statements and accordingly, have not been reflected therein.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
NOTE 6 - OFFICERS ADVANCES
While the Company is seeking additional capital through a merger with an
existing operating company, an officer of the Company has advanced funds on
behalf of the Company to pay for any costs incurred by it. These funds are
interest free.
79
<PAGE>
