U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WESTERN SKY CORP.
(Name of Small Business Issuer in its charter)
Nevada 8700 88-0448523
(State or Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Classification Code Number) Identification No.)
Organization)
3360 W. Sahara, Suite 200, Las Vegas, Nevada, 89102; (702) 732-2253
(Address and telephone number of Registrant's principal
executive offices and principal place of business)
Shawn F. Hackman, Esq., 3360 West Sahara Avenue, Suite 200,
Las Vegas, Nevada 89102; (702) 732-2253
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as
practicable after this Registration
Statement becomes effective.
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities
Act, please check the following box and list the Securities
Act registration number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement
number of the earlier effective registration statement for
the same offering.
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement
number of the earlier effective registration statement for
the same offering.
If the delivery of the prospectus is expected to be made
pursuant to Rule 434, check the following box.
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered Common Shares
Amount to be registered 2,000,000
Proposed maximum offering price per unit $0.05
Proposed maximum aggregate offering price $1,000,000.00
Amount of registration fee $26.40
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its
effective date until the registrant shall file a further
amendment which specifically states that this registration
statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may
determine.
PART I. INFORMATION REQUIRED IN PROSPECTUS
PROSPECTUS
WESTERN SKY CORP.
2,000,000 Shares
Common Stock
Offering Price $0.05 per Share
WESTERN SKY CORP., a Nevada corporation ("Company"), is
hereby offering up to 2,000,000 shares of its $.001 par
value common stock ("Shares") at an offering price of $0.05
per share on a "best efforts" basis pursuant to the terms of
this Prospectus for the purpose of providing start-up and
working capital for the Company.
The Shares offered hereby are highly speculative and involve
a high degree of risk to public investors and should be
purchased only by persons who can afford to lose their
entire investment (See "Risk Factors" on page 8).
The Securities and Exchange Commission, or any State
Securities Commission, has not approved or disapproved these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
Price to Public Underwriting Discounts Proceeds
and Commissions (2) to Issuer (3)
Per Share $. 05 0 $.05
Total Minimum (1) $20,000.00 0 $20,000
Total Maximum $100,000.00 0 $ 100,000.00
Information contained herein is subject to completion or
amendment. The registration statement relating to the
securities has been filed with the Securities and Exchange
Commission. The securities may not be sold nor may offers
to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in
any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such State.
Subject to Completion, Dated _______________, 2000.
The shares being offered by WESTERN SKY CORP. are subject to
prior sale, acceptance of the subscriptions by WESTERN SKY,
INC. and approval of certain legal matters by counsel to
WESTERN SKY CORP.
This is our initial public offering of common stock.
The initial offering price per share is .05. We will apply
to list our common stock on the OTC:BB. No public market
currently exists for the shares of common stock.
WESTERN SKY CORP. has the right to accept or reject any
subscriptions, in whole or in part, for any reason. Until
______ 2000, all dealers effecting transactions in
registered securities may be required to deliver a
prospectus. This is true whether or not the dealer is
participating in this distribution. Dealers also have an
obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
The Company is conducting a "Blank Check" offering subject
to Rule 419 of Regulation C as promulgated by the U.S. Securities and
Exchange Commission (the "S.E.C.") under the Securities Act of 1933, as
amended (the "Securities Act").The net offering proceeds, after deduction for
offering expenses (estimated at $20,000) and sales commissions, and the
securities to be issued to investors must be deposited in an escrow account
(the "Deposited Funds" and "Deposited Securities," respectively). While held
in the escrow account, the deposited securities may not be traded or
transferred. Except for an amount up to 10% of the deposited funds otherwise
releasable under Rule 419, the deposited funds and the deposited securities
may not be released until an acquisition meeting certain specified criteria
has been consummated and a sufficient number of investors reconfirm their
investment in accordance with the procedures set forth in Rule 419. Pursuant
to these procedures, a new prospectus, which describes an acquisition
candidate and its business and includes audited financial statements, will be
delivered to all investors. The Company must return the pro rata portion of
the deposited funds to any investor who does not elect to remain an investor.
Unless a sufficient number of investors elect to remain investors, all
investors will be entitled to the return of a pro rata portion of the
deposited funds (plus interest) and none of the deposited
securities will be issued to investors. In the event an acquisition is not
consummated within 18 months of the effective date of this prospectus, the
deposited funds will be returned on a pro rata basis to all investors.
Until 90 days after the date funds and securities are
released from the escrow or trust account pursuant to Rule
419, all dealers effecting transactions in the registered
securities, whether or not participating in this
distribution, may be required to deliver a prospectus.
This prospectus is not an offer to sell or a solicitation to buy the
securities offered. It is unlawful to make such an offer or solicitation.
The delivery of this prospectus, nor a sale of the mentioned securities shall
create an implication that there has been no change in the information in
this prospectus. If a material change does occur, however, this prospectus
will be amended or supplemented accordingly for all existing shareholders
and prospective investors.
This prospectus does not intentionally contain a false statement or material
fact, nor does it intentionally omit a material fact. No person or entity
has been authorized by WESTERN SKY CORP. to give any information or
make a representation, warranty, covenant, or agreement
which is not expressly provided for or continued in this
prospectus. Any such information that is given should not
be relied upon as having been authorized.
This Company is not a Reporting Company. Upon written
or oral request, any person who receives a prospectus will
have an opportunity to meet with representatives of
WESTERN SKY CORP. to verify any of the information included
in the prospectus and to obtain additional information.
Such a person shall also, upon written or oral request,
receive a copy of any information that is incorporated by
reference in the prospectus and the address (including title
or department) and telephone number. Such information shall
be provided without charge.
All offerees and subscribers will be asked to
acknowledge in the subscription agreement that they have
read this prospectus carefully and thoroughly, they were
given the opportunity to obtain additional information;
and they did so to their satisfaction.
A maximum of 2,000,000 shares may be sold on a "best-
efforts" basis. All of the proceeds from the sale of Shares
will be placed in an interest-bearing escrow account by 12
o'clock noon of the fifth business day after receipt
thereof, until the sum of $20,000, the minimum offering, is
received. If less than $20,000 is received from the
sale of the Shares within 120 days of the date of this
Prospectus, the offer will remain open for another 120 days
after which all proceeds will be refunded promptly to
purchasers with interest and without deduction for
commission or other expenses. Subscribers will not be able
to obtain return of their funds while in escrow. No
commissions are anticipated. No sales commission will be paid in
connection with the sales of these shares. The Net Proceeds to the
Company is before the payment of certain expenses in connection with this
offering. See "Use of Proceeds."
TABLE OF CONTENTS PAGE
PROSPECTUS SUMMARY 1
RISK FACTORS 2
USE OF PROCEEDS 3
DETERMINATION OF OFFERING PRICE 4
DILUTION 5
PLAN OF DISTRIBUTION 6
LEGAL PROCEEDINGS 7
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 9
DESCRIPTION OF SECURITIES 10
INTEREST OF NAMED EXPERTS AND COUNSEL 11
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES 12
ORGANIZATION WITHIN LAST FIVE YEARS 13
DESCRIPTION OF BUSINESS 14
PLAN OF OPERATION 15
DESCRIPTION OF PROPERTY 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 17
MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS 18
EXECUTIVE COMPENSATION 19
FINANCIAL STATEMENTS 20
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 21
Rights and Protections Under Rule 419
Escrow of 90% of the Proceeds Derived Hereby
Upon completion of this offering, 90% of the net proceeds
therefrom will be placed in an escrow account with Southwest Escrow as escrow
agent, subject to release upon the earlier of (I) written notification by
the company of its need for all, or substantially all, of such net proceeds
for the purpose of facilitating a business combination; or (II) 18 months
after the effective date of this registration statement. See "Risk Factors"
and "Proposed Business."
Escrowed Funds Not To Be Used For Salaries Or
Reimbursable Expenses
No funds (including any interest earned thereon) will be
disbursed from the escrow account for the payment of salaries or reimbursement
of expenses incurred on the company's behalf by the company's officers and
directors. Other than the foregoing, there is no limit on the amount of such
reimbursable expenses, and there will be no review of the reasonableness of
such expenses by anyone other than the Company's board of directors, both of
whom are officers. In no event will the escrowed funds (including any
interest earned thereon) be used for any purpose other than implementation of
a business combination.
See "Risk Factors," "Use Of Proceeds" and "Certain Transactions."
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by
detailed information appearing elsewhere in this prospectus
("Prospectus"). Each prospective investor is urged to read
this Prospectus, and the attached Exhibits, in their
entirety.
DEPOSIT OF OFFERING PROCEEDS AND SECURITIES
Rule 419 requires that the net offering proceeds, after
deduction for underwriting compensation and offering costs, and all
securities to be issued be deposited into an escrow or trust account
(the "Deposited Funds" and "Deposited Securities," respectively) governed by
an agreement which contains certain terms and provisions specified by the
rule. Under Rule 419, the Deposited Funds and Deposited Securities will be
released to the Company and to investors, respectively, only after the
Company has met the following three conditions:
First, the Company must execute an agreement for an acquisition(s) meeting
certain prescribed criteria; second, the Company must successfully complete a
reconfirmation offering which includes certain prescribed terms and conditions;
and third, the acquisition(s) meeting the prescribed criteria must be
consummated.
POST-EFFECTIVE AMENDMENT
Once the agreement(s) governing the acquisition(s) of a business(es) meeting
the above criteria has (have) been executed, Rule 419 requires
the Company to update the registration statement of which this prospectus is a
part with a post-effective amendment. The post-effective amendment must
contain information about: the proposed acquisition candidate(s) and its
business(es), including audited financial statements; the results of this
offering; and the use of the funds disbursed from the escrow account. The
post-effective amendment must also include the terms of the reconfirmation
offer mandated by Rule 419. The offer must include certain prescribed
conditions which must be satisfied before the Deposited Funds and Deposited
Securities can be released from escrow.
RECONFIRMATION OFFERING
The reconfirmation offer must commence within five business
days after the effective date of the post-effective amendment. Pursuant to
Rule 419, the terms of the reconfirmation offer must include the following
conditions:
(1) The prospectus contained in the post-effective amendment will be sent to
each investor whose securities are held in the escrow account within five
business days after the effective date of the post-effective amendment;
2) Each investor will have no fewer than 20, and no more than 45, business
days from the effective date of the post-effective amendment to notify the
Company in writing that the investor elects to remain an investor;
(3) If the Company does not receive written notification from any investor
within 45 business days following the effective date, the pro rata portion of
the Deposited Funds (and any related interest or dividends) held in the escrow
account on such investor's behalf will be returned to the investor within five
business days by first class mail or other equally prompt means;
(4) The acquisition(s) will be consummated only if investors having
contributed 80% of the maximum offering proceeds elect to
reconfirm their investments; and
(5) If a consummated acquisition(s) has not occurred within 18
months from the date of this prospectus, the Deposited Funds
held in the escrow account shall be returned to all investors on a pro rata
basis within five business days by first class mail or other equally prompt
means.
RELEASE OF DEPOSITED SECURITIES AND DEPOSITED FUNDS
The Deposited Funds and Deposited Securities may be released to the Company and
the investors, respectively, after:
(1) The Escrow Agent has received written certification from the Company
and any other evidence acceptable by the Escrow Agent that the Company has
executed an agreement for the acquisition(s) of a business(es) the value of
which represents at least 80% of the maximum offering proceeds and has filed
the required post-effective amendment, the post-effective amendment has been
declared effective, the mandated reconfirmation offer having the conditions
prescribed by Rule 419 has been completed, and the Company has satisfied all
of the prescribed conditions of the reconfirmation offer; and
(2) The acquisition(s) of the business(es) the value of which represents
at least 80% of the maximum offering proceeds is (are) consummated.
The Company
WESTERN SKY CORP. (the "Company"), was incorporated on
January 28th, 2000, under the laws of the State of Nevada,
to engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions. The
Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to
its original shareholders, the Company never commenced any
operational activities.
The Company was formed by John E. Dhonau, the initial
director, for the purpose of creating a corporation which
could be used to consummate a merger or acquisition. Mr.
Dhonau serves as President and Director. Mr. Dhonau
determined next to proceed with filing a Form SB-2.
Mr. Dhonau, the President and Director, elected to
commence implementation of the Company's principal business
purpose, described below under "Item 2, Plan of Operation".
As such, the Company can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate
a merger or acquisition with a private entity.
The proposed business activities described herein
classify the Company as a "blank check" company. Many
states have enacted statutes, rules and regulations limiting
the sale securities of "blank check" companies in their
prospective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in the
Company's securities until such time as the Company has
successfully implemented its business plan described herein.
Accordingly, each shareholder of the Company has executed
and delivered a "lock-up" letter agreement, affirming that
his/her respective shares of the Company's common stock
until such time as the Company has successfully consummated
a merger or acquisition and the Company is no longer
classified as a "blank check" company. In order to provide
further assurances that no trading will occur in the
Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place his/her
respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully
consummated. However, while management believes that the
procedures established to preclude any sale of the Company's
securities prior to closing of a merger or acquisition will
be sufficient, there can be no assurances that the
procedures established herein will unequivocally limit any
shareholder's WESTERN SKY to sell their respective securities
before such closing.
The Offering
Shares of the Company will be offered at $.05 per Share. See
"Plan of Distribution, page. The minimum purchase required
of an investor is $300.00. If all the Shares offered are
sold the net proceeds to the Company will be $100,000.00
less certain costs associated with this offering. See "Use
of Proceeds." This balance will be used as working capital
for the Company.
Liquidity of Investment
Although the Shares will be "free trading," there is no
established market for the Shares and there may not be in
the future. Therefore, an investor should consider his
investment to be long-term. See "Risk Factors, page 6."
Risk Factors
An investment in the company involved risks due in part to
no previous operating history of Company, as well as
competition in this field of business. Also, certain
potential conflicts of interest arise due to the
relationship of the Company to management and others. See
"Risk Factors, page 8."
RISK FACTORS
The securities offered hereby are highly speculative in
nature and involve a high degree of risk. They should be
purchased only by persons who can afford to lose their
entire investment. Therefore, each prospective investor
should, prior to purchase, consider very carefully the
following risk factors among other things, as well as all
other information set forth in this prospectus.
RULE 419 GENERALLY. Rule 419 generally requires that the
securities to be issued and the funds received in a blank check offering be
deposited and held in an escrow account until an acquisition meeting specified
criteria is completed. Before the acquisition can be completed and before the
funds and securities can be released, the issuer in a blank check offering is
required to update its registration statement with a post-effective amendment.
After the effective date of any such post-effective amendment, the Company is
required to furnish investors with the prospectus produced thereby containing
information, including audited financial statements, regarding the proposed
acquisition candidate and its business. Investors must be given no fewer than
20 and no more than 45 business days from the effective date of the
post-effective amendment to decide to remain investors or require the return
of their investment funds. Any investor not making a decision within said
period is automatically to receive a return of his investment funds.
Although investors may request the return of their investment funds in
connection with the reconfirmation offering required by Rule 419, the Company's
shareholders will not be afforded an opportunity specifically to approve or
disapprove any particular transaction involving the purchase of Shares from
management. See Risk Factor entitled "Actual and Potential Conflicts of
Interest."
PROHIBITION TO SELL OR OFFER TO SELL SHARES IN ESCROW
ACCOUNT. According to Rule 15g-8 as promulgated by the S.E.C. under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), it shall be
unlawful for any person to sell or offer to sell Shares (or any interest in
or related to the Shares) held in the Rule 419 escrow account other than
pursuant to a qualified domestic relations order or by will or the laws of
descent and distribution. As a result, contracts for sale to be satisfied by
delivery of the Deposited Securities (e.g.,contracts for sale on a when, as,
and if issued basis) are prohibited.
DISCRETIONARY USE OF PROCEEDS; "BLANK CHECK" OFFERING. As a
result of management's broad discretion with respect to the specific
application of the net proceeds of this offering, this offering can be
characterized as a "blank check" offering. Although substantially all of the net
proceeds of this offering are intended generally to be applied toward effecting
a Business Combination, such proceeds are not otherwise being designated for any
more specific purposes. Accordingly, prospective investors will invest in the
Company without an opportunity to evaluate the specific merits or risks of any
one or more business combinations. There can be no assurance that determinations
ultimately made by the Company relating to the specific allocation of the net
proceeds of this offering will permit the Company to achieve its business
objectives. See "Proposed Business."
REGULATIONS CONCERNING "BLANK CHECK" ISSUERS. The ability to
register or qualify for sale the Shares for both initial sale and secondary
trading is limited because a number of states have enacted regulations pursuant
to their securities or "blue sky" laws restricting or, in some instances,
prohibiting, the sale of securities of "blank check" issuers, such as the
Company, within that state. In addition, many states, while not specifically
prohibiting or restricting "blank check" companies, may not register the
Shares for sale in their states. Because of such regulations and other
restrictions, the Company's selling efforts, and any secondary market which
may develop, may only be conducted in those jurisdictions where an applicable
exemption is available or a blue sky application has been filed and accepted
or where the Shares have been registered.
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The
Company has had no operating history nor any revenues or
earnings from operations. The Company has no significant
assets or financial resources. The Company will, in all
likelihood, sustain operating expenses without corresponding
revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net
operating loss which will increase continuously until the
Company can consummate a business combination with a
profitable business opportunity. There is no assurance that the
Company can identify such a business opportunity and
consummate such a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED
OPERATIONS. The success of the Company's proposed plan of
operation will depend to a great extent on the operations,
financial condition and management of the identified
business opportunity. While management intends to seek
business combinations with entities having established
operating histories, there can be no assurance that the
Company will be successful in locating candidates meeting
such criteria. In the event the Company completes a business
combination, of which there can be no assurance, the success
of the Company's operations may be dependent upon management
of the successor firm or venture partner firm and numerous
other factors beyond the Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS
OPPORTUNITIES AND COMBINATIONS. The Company is and will
continue to be an insignificant participant in the business
of seeking mergers with, joint ventures with and
acquisitions of small private entities. A large number of
established and well-financed entities, including venture
capital firms, are active in mergers and acquisitions of
companies which may be desirable target candidates for the
Company. Nearly all such entities have significantly
greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently,
the Company will be at a competitive disadvantage in
identifying possible business opportunities and successfully
completing a business combination. Moreover, the Company
will also compete in seeking merger or acquisition
candidates with numerous other small public companies.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER
TRANSACTION - NO STANDARDS FOR BUSINESS COMBINATION. The
Company has no arrangement, agreement or understanding with
respect to engaging in a merger with, joint venture with or
acquisition of, a private entity. There can be no assurance
the Company will be successful in identifying and evaluating
suitable business opportunities or in concluding a business
combination. Management has not identified any particular
industry or specific business within an industry for
evaluations. The Company has been in the developmental
stage since inception and has no operations to date. Other
than issuing shares to its original shareholders, the
Company never commenced any operational activities. There
is no assurance the Company will be able to negotiate a
business combination on terms favorable to the Company. The
Company has not established a specific length of operating
history or a specified level of earnings, assets, net worth
or other criteria which it will require a target business opportunity to have
achieved, and without which the Company would not consider a
business combination in any form with such business
opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no
significant operating history, losses, limited or no
potential for earnings, limited assets, negative net worth
or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.
While seeking a business combination, management anticipates
devoting up to twenty hours per month to the business of the
Company. The Company's two officers have not entered into
written employment agreements with the Company and are not
expected to do so in the foreseeable future. The Company
has not obtained key man life insurance on either of its
officers or directors. Notwithstanding the combined limited
experience and time commitment of management, loss of the
services of any of these individuals would adversely affect
development of the Company's business and its likelihood of
continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's officers
and directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest
and non-arms length transactions may also arise in the
future in the event the Company's officers or directors are
involved in the management of any firm with which the
Company transacts business. The Company's Board of
Directors has adopted a resolution which prohibits the Company from
completing a merger with, or acquisition of, any entity in which management
serve as officers, directors or partners, or in which they or their
family members own or hold any ownership interest.
Management is not aware of any circumstances under which
this policy could be changed while current management is in
control of the Company. See "ITEM 5. DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS - CONFLICTS OF
INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE
ACQUISITION. Section 13 of the Securities Exchange Act of
1934 (the "Exchange Act"), requires companies
subject thereto to provide certain information about
significant acquisitions, including certified financial
statements for the company acquired, covering one or two
years, depending on the relative size of the acquisition.
The time and additional costs that may be incurred by some
target entities to prepare such statements may significantly
delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company. Acquisition prospects
that do not have or are unable to obtain the required
audited statements may not be appropriate for acquisition so
long as the reporting requirements of the 1934 Act are
applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION.
The Company has neither conducted, nor have others made
available to it, results of market research indicating that
market demand exists for the transactions contemplated by
the Company. Moreover, the Company does not have, and does
not plan to establish, a marketing organization. Even in
the event demand is identified for a merger or acquisition
contemplated by the Company, there is no assurance the Company will be
successful in completing any such business combination.
LACK OF DIVERSIFICATION. The Company's proposed
operations, even if successful, will in all likelihood
result in the Company engaging in a business combination
with only one business opportunity. Consequently, the
Company's activities will be limited to those engaged in by
the business opportunity which the Company merges with or
acquires. The Company's inability to diversify its activities into a number
of areas may subject the Company to economic fluctuations within a
particular business or industry and therefore increase the
risks associated with the Company's operations.
REGULATION. Although the Company will be subject
to regulation under the Securities Exchange Act of 1933,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940, insofar as the Company will
not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company
could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be
required to register as an investment company and could be
expected to incur significant registration and compliance
costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status
of the Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act would subject the
Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A
business combination involving the issuance of the Company's
common stock will, in all likelihood, result in shareholders of a private
company obtaining a controlling interest in the Company. Any such business
combination may require management of the Company to sell or
transfer all or a portion of the Company's common stock held
by them, or resign as members of the Board of Directors of
the Company. The resulting change in control of the Company
could result in removal of one or more present officers and
directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING
A BUSINESS COMBINATION. The Company's primary plan of
operation is based upon a business combination with a
private concern which, in all likelihood, would result in
the Company issuing securities to shareholders of such private company.
The issuance of previously authorized and unissued common
stock of the Company would result in reduction in percentage
of shares owned by present and prospective shareholders of
the Company and would most likely result in a change in
control or management of the Company.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter into a
business combination with an entity that desires to
establish a public trading market for its shares. A
business opportunity may attempt to avoid what it deems to
be adverse consequences of undertaking its own public
offering by seeking a business combination with the Company.
Such consequences may include, but are not limited to, time
delays of the registration process, significant expenses to be incurred in
such an offering, loss of voting control to public shareholders and the
inability or unwillingness to comply with various federal and state
securities laws enacted for the protection of investors. These securities
laws primarily relate to provisions regarding the registration of securities
which require full disclosure of the Company's business, management and
financial statements.
TAXATION. Federal and state tax consequences
will, in all likelihood, be major considerations in any
business combination the Company may undertake. Currently,
such transactions may be structured so as to result in tax-
free treatment to both companies, pursuant to various
federal and state tax provisions. The Company intends to
structure any business combination so as to minimize the
federal and state tax consequences to both the Company and
the target entity; however, there can be no assurance that
such business combination will meet the statutory
requirements of a tax-free reorganization or that the
parties will obtain the intended tax-free treatment upon a
transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both
federal and state taxes which may have an adverse effect on
both parties to the transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY
DISQUALIFY BUSINESS OPPORTUNITIES. Management of the
Company believes that any potential business opportunity
must provide audited financial statements for review, and
for the protection of all parties to the business
combination. One or more attractive business opportunities
may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses
associated with preparing audited financial statements.
BLUE SKY CONSIDERATIONS. Because the securities
registered hereunder have not been registered for resale
under the blue sky laws of any state, and the Company has no
current plans to register or qualify its shares in any
state, the holders of such shares and persons who desire to
purchase them in any trading market that might develop in
the future, should be aware that there may be significant
state blue sky restrictions upon the WESTERN SKY of new
investors to purchase the securities which could reduce the
size of the potential market. As a result of recent changes
in federal law, non-issuer trading or resale of the
Company's securities is exempt from state registration or
qualification requirements in most states. However, some
states may continue to attempt to restrict the trading or
resale of blind-pool or "blank-check" securities.
Accordingly, investors should consider any potential
secondary market for the Company's securities to be a
limited one.
PURCHASES BY AFFILIATES
Certain officers, directors, principal shareholders and
affiliates may purchase, for investment purposes, a portion
of the Shares offered hereby, which could, upon conversion,
increase the percentage of the Shares owned by such persons.
The purchases by these control persons may make it possible
for the Offering to meet the escrow amount.
NO ASSURANCE SHARES WILL BE SOLD
The 2,000,000 Common Shares are to be offered directly by
the Company, and no individual, firm, or corporation has
agreed to purchase or take down any of the shares. No
assurance can be given that any or all of the Shares will be
sold.
ARBITRARY OFFERING PRICE.
The Offering Price of the Shares bears no relation to book
value, assets, earnings, or any other objective criteria of
value. They have been arbitrarily determined by the Company.
There can be no assurance that, even if a public trading
market develops for the Company's securities, the Shares
will attain market values commensurate with the Offering
Price.
"BEST EFFORTS" OFFERING
The Shares are offered by the Company on a "best efforts"
basis, and no individual, firm or corporation has agreed to
purchase or take down any of the offered Shares. No
assurance can be given that any or all of the Shares will be
sold. Provisions have been made to deposit in escrow the
funds received from the purchase of Shares sold by the
Company
NO PUBLIC MARKET FOR COMPANY'S SECURITIES.
Prior to the Offering, there has been no public market for
the Shares being offered. There can be no assurance that an
active trading market will develop or that purchasers of the
Shares will be able to resell their securities at prices
equal to or greater than the respective initial public
offering prices. The market price of the Shares may be
affected significantly by factors such as announcements by
the Company or its competitors, variations in the Company's
results of operations, and market conditions in the retail,
electron commerce, and internet industries in general.
Movements in prices of stock may also affect the market
price in general. As a result of these factors, purchasers
of the Shares offered hereby may not be able to liquidate an
investment in the Shares readily or at all.
SHARES ELIGIBLE FOR FUTURE SALE
All of the 3,000,000 Shares, which are held by management,
have been issued in reliance on the private placement
exemption under the Securities Act of 1933, as amended
("Act"). Such Shares will not be available for sale in the
open market without separate registration except in reliance
upon Rule 144 under the Act. In general, under Rule 144 a
person (or persons whose shares are aggregated) who has
beneficially owned shares acquired in a non-public
transaction for at least one year, including persons who may
be deemed Affiliates of the Company (as that term is defined
under the Act) would be entitled to sell within any three-
month period a number of shares that does not exceed the
greater of 1% of the then outstanding shares of common
stock, or the average weekly reported trading volume on all
national securities exchanges and through NASDAQ during the
four calendar weeks preceding such sale, provided that
certain current public information is then available. If a
substantial number of the Shares owned by management were
sold pursuant to Rule 144 or a registered offering, the
market price of the Common Stock could be adversely
affected.
FORWARD-LOOKING STATEMENTS.
This Prospectus contains "forward looking statements"
within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Act of
1934, as amended, and as contemplated under the Private
Securities Litigation Reform Act of 1995, including
statements regarding, among other items, the Company's
business strategies, continued growth in the Company's
markets, projections, and anticipated trends in the
Company's business and the industry in which it operates.
The words "believe," "expect," "anticipate," "intends,"
"forecast," "project," and similar expressions identify
forward-looking statements. These forward-looking
statements are based largely on the Company's expectations
and are subject to a number of risks and uncertainties,
certain of which are beyond the Company's control. The
Company cautions that these statements are further qualified
by important factors that could cause actual results to
differ materially from those in the forward looking
statements, including those factors described under "Risk
Factors" and elsewhere herein. In light of these risks and
uncertainties, there can be no assurance that the forward-
looking information contained in this Prospectus will in
fact transpire or prove to be accurate. All subsequent
written and oral forward-looking statements attributable to
the Company or persons acting on its behalf are expressly
qualified in their entirety by this section.
UNCERTAINTY DUE TO YEAR 2000 PROBLEM.
The Year 2000 issue arises because many computerized
systems use two digits rather than four to identify a year.
Date sensitive systems may recognize the year 2000 as 1900
or some other date, resulting in errors when information
using the year 2000 date is processed. In addition, similar
problems may arise in some systems which use certain dates
in 1999 to represent something other than a date. The
effects of the Year 2000 issue may be experienced before,
on, or after January 1, 2000, and if not addressed, the
impact on operations and financial reporting may range from
minor errors to significant system failure which could
affect the Company's ability to conduct normal business
operations. This creates potential risk for all companies,
even if their own computer systems are Year 2000 compliant.
It is not possible to be certain that all aspects of the
Year 2000 issue affecting the Company, including those
related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.
The Company's Year 2000 plans are based on management's
best estimates. Based on currently available information,
management does not believe that the Year 2000 issues will
have a material adverse impact on the Company's financial
condition or results of operations; however, because of the
uncertainties in this area, no assurances can be given in
this regard.
USE OF PROCEEDS
Following the sale of the 2,000,000 Shares Offered by
the Company there will be a gross proceeds of $100,000,
(less certain expenses of this offering). These proceeds
will be used to provide start-up and working capital for the
Company.
The following table sets forth the use of proceeds from
this offering (based on the minimum and maximum offering
amounts):
Use of Proceeds Minimum Offering Maximum Offering
Amount Percent Amount Percent
Working Capital $ 20,000 100 % $100,000 100 %
Total $ 20,000 100 % $100,000 100 %
Management anticipates expending these funds for the
purposes indicated above. To the extent that expenditures
are less than projected, the resulting balances will be
retained and used for general working capital purposes or
allocated according to the discretion of the Board of
Directors. Conversely, to the extent that such expenditures
require the utilization of funds in excess of the amounts
anticipated, supplemental amounts may be drawn from other
sources, including, but not limited to, general working
capital and/or external financing. The net proceeds of this
offering that are not expended immediately may be deposited
in interest or non-interest bearing accounts, or invested in
government obligations, certificates of deposit, commercial
paper, money market mutual funds, or similar investments.
DETERMINATION OF OFFERING PRICE
The offering price is not based upon the Company's net
worth, total asset value, or any other objective measure of
value based upon accounting measurements. The offering
price is determined by the Board of Directors of the Company
and was determined arbitrarily based upon the amount of
funds needed by the Company to start-up the business, and
the number of shares that the initial shareholders were
willing to allow to be sold.
DILUTION
"Net tangible book value" is the amount that results
from subtracting the total liabilities and intangible assets
of an entity from its total assets. "Dilution" is the
difference between the public offering price of a security
and its net tangible book value per Share immediately after
the Offering, giving effect to the receipt of net proceeds
in the Offering. As of January 28, 2000, the net tangible
book value of the Company was $3000 or $.001 per Share.
Giving effect to the sale by the Company of all offered
Shares at the public offering price, the pro forma net
tangible book value of the Company would be $100,000 or $.02
per Share, which would represent an immediate increase of
$.02 in net tangible book value per Share and $.03 per Share
dilution per share to new investors. Dilution of the book
value of the Shares may result from future share offerings
by the Company.
The following table illustrates the pro forma per Share
dilution:
Assuming Maximum
Shares Sold
Offering Price (1) $.05
Net tangible book value per share
before Offering (2) $.001
Increase Attributable to purchase
of stock by new investors (3) $.02
Net tangible book value per Share
after offering (4) $ .02
Dilution to new investors (5) $.03
Percent Dilution to new investors (6,7) 60%
(1) Offering price before deduction of offering expenses,
calculated on a "Common Share Equivalent" basis.
(2) The net tangible book value per share before the
offering ($0.001) is determined by dividing the number of
Shares outstanding prior to this offering into the net
tangible book value of the Company.
(3) The net tangible book value after the offering is
determined by adding the net tangible book value before the
offering to the estimated proceeds to the Corporation from
the current offering (assuming all the Shares are
subscribed), and dividing by the number of common shares
outstanding.
(4) The net tangible book value per share after the
offering ($103,000) is determined by dividing the number of
Shares that will be outstanding, assuming sale of all the
Shares offered, after the offering into the net tangible
book value after the offering as determined in note 3 above.
(5) The Increase Attributable to purchase of stock by new
investors is derived by taking the net tangible book value
per share after the offering ($.02) and subtracting from it
the net tangible book value per share before the offering
($.001) for an increase of $.02.
(6) The dilution to new investors is determined by
subtracting the net tangible book value per share after the
offering ($.02) from the offering price of the Shares in
this offering ($.05), giving a dilution value of ($.03).
(7) The Percent Dilution to new investors is determined by
dividing the Dilution to new investors ($.03) by the
offering price per Share ($.05) giving a dilution to new
investors of 60%.
PLAN OF DISTRIBUTION
The Company will sell a maximum of 2,000,000 Shares of its
common stock, par value $.001 per Share to the public on a
"best efforts" basis. The minimum purchase required of an
investor is $300.00. There can be no assurance that any of
these Shares will be sold. The gross proceeds to the Company
will be $100,000.00 if all the Shares offered are sold. No
commissions or other fees will be paid, directly or
indirectly, by the Company, or any of its principals, to any
person or firm in connection with solicitation of sales of
the shares, certain costs are to be paid in connection with
the offering (see "Use of Proceeds"). The public offering
price of the Shares will be modified, from time to time, by
amendment to this Prospectus, in accordance with changes in
the market price of the Company's common stock. These
securities are offered by the Company subject to prior sale
and to approval of certain legal matters by counsel.
OPPORTUNITY TO MAKE INQUIRES.
The Company will make available to each Offeree, prior to
any sale of the Shares, the opportunity to ask questions and
receive answers from the Company concerning any aspect of
the investment and to obtain any additional information
contained in this Memorandum, to the extent that the Company
possesses such information or can acquire it without
unreasonable effort or expense.
EXECUTION OF DOCUMENTS.
Each person desiring to subscribe to the Shares must
complete, execute, acknowledge, and delivered to the Company
a Subscription Agreement, which will contain, among other
provisions, representations as to the investor's
qualifications to purchase the common stock and his ability
to evaluate and bear the risk of an investment in the
Company. By executing the subscription agreement, the
subscriber is agreeing that if the Subscription Agreement it
is excepted by the Company, such a subscriber will be, a
shareholder in the Company and will be otherwise bound by
the articles of incorporation and the bylaws of the Company
in the form attached to this Prospectus.
Promptly upon receipt of subscription documents by the
Company, it will make a determination as to whether a
prospective investor will be accepted as a shareholder in
the Company. The Company may reject a subscriber's
Subscription Agreement for any reason. Subscriptions will be
rejected for failure to conform to the requirements of this
Prospectus (such as failure to follow the proper
subscription procedure), insufficient documentation, over
subscription to the Company, or such other reasons other as
the Company determines to be in the best interest of the
Company. If a subscription is rejected, in whole or in
part, the subscription funds, or portion thereof, will be
promptly returned to the prospective investor without
interest by depositing a check (payable to said investor) in
the amount of said funds in the United States mail,
certified returned-receipt requested. Subscriptions may not
be revoked, cancelled, or terminated by the subscriber,
except as provided herein.
LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such
action by or against the Company has been threatened.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The names, ages, and respective positions of the
directors, officers, and significant employees of the
Company are set forth below. All these persons have held
their positions since January 28, 2000. There are no other
persons which can be classified as a promoter or controlling
person of the Company.
John E. Dhonau. President.
Mr. Dhonau has over twenty years of experience in marketing and business. Mr.
Dhonau has held positions as president, national marketing director, and
regional marketing director in several national marketing organizations. Mr.
Dhonau has had experience in the multi-level marketing industry, having held
positions in A.L. Williams, Primerica, World Marketing Alliance, World Class
Network and VisionQuest International. Mr. Dhonau also served as president of
World Class Network, which developed tour packages for World Class Network.
In October 1995, Mr. Dhonau also founded a cold-rendering manufacturing firm
servicing the agricultural organic ferilizer and feed industry, raising $2.5
million. This business allows the conversion of blood and animal parts to be
converted to feed cattle and chicken.
In October 1998, Mr. Dhonau was appointed President of a creative Internet e-
commerce solution leading the way into the development and marketing of retail
products over the World Wide Web.
Mr. Dhonau has attended the University of Cincinnati with an emphasis in
accounting and marketing. In 1984, Mr. Dhonau received the Charlie Hustle Award
from Ashland Oil Company for the largest contribution to the growth of the
company.
Shawn F. Hackman. Secretary
Mr. Hackman, an attorney , is admitted to practice law in Iowa and Nevada State
Courts. Mr. Hackman is also admitted to practice law in the U.S. District Court
of Nevada. He practices primarily in Corporate and Securities Law. Mr. Hackman
holds a B.A in Finance and a J.D from the University of Iowa.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this
Prospectus, the outstanding Shares of common stock of the
Company owned of record or beneficially by each person who
owned of record, or was known by the Company to own
beneficially, more than 5% of the Company's Common Stock,
and the name and share holdings of each officer and director
and all officers and directors as a group.
Title of Class Name of Beneficial Amount and Nature Percent of Class
Owner (1) of Beneficial Owner (2)
Common Stock John E. Dhonau 1,500,000 50%
Common Stock Shawn F. Hackman 1,500,000 50%
None of the Officers, Directors or existing shareholders have
the right to acquire any amount of the Shares
within sixty days from options, warrants, rights, conversion
privilege, or similar obligations.
DESCRIPTION OF SECURITIES
General Description
The securities being offered are shares of common stock.
The Articles of Incorporation authorize the issuance of
25,000,000 shares of common stock, with a par value of
$.001. The holders of the Shares: (a) have equal ratable
rights to dividends from funds legally available therefore,
when, as, and if declared by the Board of Directors of the
Company; (b) are entitled to share ratably in all of the
assets of the Company available for distribution upon
winding up of the affairs of the Company; (c) do not have
preemptive subscription or conversion rights and there are
no redemption or sinking fund applicable thereto; and (d)
are entitled to one non-cumulative vote per share on all
matters on which shareholders may vote at all meetings of
shareholders. These securities do not have any of the
following rights: (a) cumulative or special voting rights;
(b) preemptive rights to purchase in new issues of Shares;
(c) preference as to dividends or interest; (d) preference
upon liquidation; or (e) any other special rights or
preferences. In addition, the Shares are not convertible
into any other security. There are no restrictions on
dividends under any loan other financing arrangements or
otherwise. See a copy of the Articles of Incorporation, and
amendments thereto, and Bylaws of the Company, attached as
Exhibit 3.1 and Exhibit 3.2, respectively, to this Form SB-
2. As of the date of this Form SB-2, the Company has
3,000,000 Shares of common stock outstanding.
Non-Cumulative Voting
The holders of Shares of Common Stock of the Company do not
have cumulative voting rights, which means that the holders
of more than 50% of such outstanding Shares, voting for the
election of directors, can elect all of the directors to be
elected, if they so choose. In such event, the holders of
the remaining Shares will not be able to elect any of the
Company's directors.
Dividends
The Company does not currently intend to pay cash dividends.
The Company's proposed dividend policy is to make
distributions of its revenues to its stockholders when the
Company's Board of Directors deems such distributions
appropriate. Because the Company does not intend to make
cash distributions, potential shareholders would need to
sell their shares to realize a return on their investment.
There can be no assurances of the projected values of the
shares, nor can there be any guarantees of the success of
the Company.
A distribution of revenues will be made only when, in the
judgment of the Company's Board of Directors, it is in the
best interest of the Company's stockholders to do so. The
Board of Directors will review, among other things, the
investment quality and marketability of the securities
considered for distribution; the impact of a distribution of
the investee's securities on its customers, joint venture
associates, management contracts, other investors, financial
institutions, and the company's internal management, plus
the tax consequences and the market effects of an initial or
broader distribution of such securities.
Possible Anti-Takeover Effects of Authorized but Unissued
Stock
Upon the completion of this Offering, the Company's
authorized but unissued capital stock will consist of
20,000,000 shares (assuming the entire offering is sold) of
common stock. One effect of the existence of authorized but
unissued capital stock may be to enable the Board of
Directors to render more difficult or to discourage an
attempt to obtain control of the Company by means of a
merger, tender offer, proxy contest, or otherwise, and
thereby to protect the continuity of the Company's
management. If, in the due exercise of its fiduciary
obligations, for example, the Board of Directors were to
determine that a takeover proposal was not in the Company's
best interests, such shares could be issued by the Board of
Directors without stockholder approval in one or more
private placements or other transactions that might prevent,
or render more difficult or costly, completion of the
takeover transaction by diluting the voting or other rights
of the proposed acquirer or insurgent stockholder or
stockholder group, by creating a substantial voting block in
institutional or other hands that might undertake to support
the position of the incumbent Board of Directors, by
effecting an acquisition that might complicate or preclude
the takeover, or otherwise.
Transfer Agent
The Company intends to engage the services of Pacific Stock
Transfer Company, P.O. Box 93385 Las Vegas, Nevada 89193
(702) 361-3033 Fax (702) 732-7890.
INTEREST OF NAMED EXPERTS AND COUNSEL
No named expert or counsel was hired on a contingent
basis. No named expert or counsel will receive a direct
or indirect interest in the small business issuer. No named
expert or counsel was a promoter, underwriter,
voting trustee, director, officer, or employee of the small
business issuer.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
No director of the Company will have personal liability to
the Company or any of its stockholders for monetary damages
for breach of fiduciary duty as a director involving any act
or omission of any such director since provisions have been
made in the Articles of Incorporation limiting such
liability. The foregoing provisions shall not eliminate or
limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith
or, which involve intentional misconduct or a knowing
violation of law, (iii) under applicable Sections of the
Nevada Revised Statutes, (iv) the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statutes
or, (v) for any transaction from which the director derived
an improper personal benefit.
The By-laws provide for indemnification of the directors,
officers, and employees of the Company in most cases for any
liability suffered by them or arising out of their
activities as directors, officers, and employees of the
Company if they were not engaged in willful misfeasance or
malfeasance in the performance of his or her duties;
provided that in the event of a settlement the
indemnification will apply only when the Board of Directors
approves such settlement and reimbursement as being for the
best interests of the Corporation. The Bylaws, therefore,
limit the liability of directors to the maximum extent
permitted by Nevada law (Section 78.751).
The officers and directors of the Company are accountable to
the Company as fiduciaries, which means they are required to
exercise good faith and fairness in all dealings affecting
the Company. In the event that a shareholder believes the
officers and/or directors have violated their fiduciary
duties to the Company, the shareholder may, subject to
applicable rules of civil procedure, be able to bring a
class action or derivative suit to enforce the shareholder's
rights, including rights under certain federal and state
securities laws and regulations to recover damages from and
require an accounting by management.. Shareholders who have
suffered losses in connection with the purchase or sale of
their interest in the Company in connection with such sale
or purchase, including the misapplication by any such
officer or director of the proceeds from the sale of these
securities, may be able to recover such losses from the
Company.
The registrant undertakes the following:
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the "Act") may be
permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
ORGANIZATION WITHIN LAST FIVE YEARS
The names of the promoters of the registrant are the
officers and directors as disclosed elsewhere in this Form
SB-2. None of the promoters have received anything of value
from the registrant.
DESCRIPTION OF BUSINESS
1. Company /Business Summary
WESTERN SKY CORP. (the "Company"), was incorporated on
January, 2000, under the laws of the State of Nevada, to
engage in any lawful corporate undertaking, including, but
not limited to, selected mergers and acquisitions. The
Company has been in the developmental stage since inception
and has no operations date. Other than issuing shares to
its original shareholders, the Company never commenced any
operational activities.
The Company was formed by John E. Dhonau, the initial
director, for the purpose of creating a corporation which
could be used to consummate a merger or acquisition. Mr.
Dhonau serves as President and Director. Mr. Dhonau
determined next to proceed with filing a Form SB-2.
Mr. Dhonau, the President and Director, elected to
commence implementation of the Company's principal business
purpose, described below under "Item 2, Plan of Operation".
As such, the Company can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate
a merger or acquisition with a private entity.
The proposed business activities described herein
classify the Company as a "blank check" company. Many
states have enacted statutes, rules and regulations limiting
the sale of securities of "blank check" companies in their
respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in the
Company's securities until such time as the Company has
successfully implemented its business plan described herein.
Accordingly, each shareholder of the Company has executed
and delivered a "lock-up" letter agreement, affirming that
he/she will not sell his/her respective shares of the
Company's common stock until such time as the Company has
successfully consummated a merger or acquisition and the
Company is no longer classified as a "blank check" company.
In order to provide further assurances that no trading will
occur in the Company's securities until a merger or
acquisition has been consummated, each shareholder has
agreed to place his/her respective stock certificate with
the Company's legal counsel, who will not release these
respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully
consummated. However, while management believes that the procedures
established to preclude any sale of the Company's securities prior
to closing of a merger or acquisition will be sufficient, there can be no
assurances that the procedures established herein will unequivocally limit
any shareholder's ability to sell their respective securities before such
closing. The Company's business is subject to numerous risk
factors, including the following:
ITEM 2. PLAN OF OPERATION
The Registrant intends to seek to acquire assets or
shares of an entity actively engaged in business which
generates revenues, in exchange for its securities. The
Registrant has no particular acquisitions in mind and has
not entered into any negotiations regarding such an
acquisition. None of the Company's officers, directors,
promoters or affiliates have engaged in any preliminary
contact or discussions with any representative of any other
company regarding the possibility of an acquisition or
merger between the Company and such other company as of the
date of this registration statement.
While the Company will attempt to obtain audited
financial statements of a target entity, there is no
assurance that such audited financial statements will be
available. The Board of Directors does intend to obtain
certain assurances of value of the target entity's assets
prior to consummating such a transaction, with further
assurances that an audited statement would be
provided within seventy-five days after closing of such a
transaction. Closing documents relative thereto will
include representations that the value of the assets
conveyed to or otherwise so transferred will not materially
differ from the representations included in such closing
documents.
The Registrant has no full time employees. The
Registrant's two officers have agreed to allocate a portion
of their time to the activities of the Registrant, without
compensation. Management anticipates that the business plan
of the Company can be implemented by each officer devoting
approximately 10 hours per month to the business affairs of
the Company and, consequently, conflicts of interest may
arise with respect to the limited time commitment by
such officers. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS."
The Company is filing this registration statement on a
voluntary basis because the primary attraction of the
Registrant as a merger partner or acquisition vehicle will
be its status as an SEC reporting company. Any business
combination or transaction will likely result in a
significant issuance of shares and substantial dilution to
present stockholders of the Registrant.
The Articles of Incorporation of the Company
provides that the Company may indemnify officers and/or
directors of the Company for liabilities, which can include
liabilities arising under the securities laws. Therefore,
assets of the Company could be used or attached to satisfy
any liabilities subject to such indemnification. See "ITEM
12, INDEMNIFICATION OF IRECTORS AND OFFICERS."
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and,
if such investigation warrants, acquire an interest in
business opportunities presented to it by persons or firms
who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. The Company will not
restrict its search to any specific business, industry, or
geographical location and the Company may participate in a business
venture of virtually any kind or nature. This discussion of the proposed
business is purposefully general and is not meant to be restrictive of
the Company's virtually unlimited discretion to search for
and enter into potential business opportunities. Management
anticipates that it will be able to participate in only one
potential business venture because the Company has nominal assets and limited
financial resources. See Item F/S, "Financial Statements." This lack
of diversification should be considered a substantial risk
to shareholders of the Company because it will not permit
the Company to offset potential losses from one venture
against gains from another.
The Company may seek a business opportunity with
entities which have recently commenced operations, or which
wish to utilize the public marketplace in order to raise
additional capital in order to expand into new products or
markets, to develop a new product or service, or for other
corporate purposes. The Company may acquire assets and
establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
The primary method the Company will use to find
potential merger or acquisition candidates will be to run
classified ads in the Wall Street Journal periodically
seeking companies which are looking to merge with a public
shell.
The Company anticipates that the selection of a
business opportunity in which to participate will be complex
and extremely risky. Due to general economic conditions,
rapid technological advances being made in some industries
and shortages of available capital, management believes that
there are numerous firms seeking the perceived benefits of a
publicly registered corporation. Such perceived benefits may
include facilitating or improving the terms on which
additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to
key employees, providing liquidity (subject to restrictions
of applicable statutes) for all shareholders and other
factors. Business opportunities may be available in many
different industries and at various stages of development,
all of which will make the task of comparative investigation
and analysis of such business opportunities extremely
difficult and complex.
The Company has, and will continue to have, no capital with
which to provide the owners of business opportunities with
any significant cash or other assets. However, management
believes the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a
controlling ownership interest in a publicly registered
company without incurring the cost and time required to
conduct an initial public offering. The owners of the
business opportunities will, however, incur significant
legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs
of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and
related reports and documents. The Securities Exchange Act
of 1934 (the "34 Act"), specifically requires that any
merger or acquisition candidate comply with all
applicable reporting requirements, which include providing
audited financial statements to be included within the
numerous filings relevant to complying with the 34 Act.
Nevertheless, the officers and directors of the Company have
not conducted market research and are not aware of
statistical data which would support the perceived benefits
of a merger or acquisition transaction
for the owners of a business opportunity.
The analysis of new business opportunities will be
undertaken by, or under the supervision of, the officers and
directors of the Company, none of whom is a professional
business analyst. Management intends to concentrate on
identifying preliminary prospective business opportunities
which may be brought to its attention through present
associations of the Company's two officers, or by the
Company's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the
available technical, financial and managerial resources;
working capital and other financial requirements; history of
operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience
of management services which may be available and the depth
of that management; the potential for further research,
development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth
or expansion; the potential for profit; the perceived public
recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. Management will
meet personally with management and key personnel of the
business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written
reports and personal investigation to evaluate the above
factors. The Company will not acquire or merger with any
company for which audited financial statements cannot be
obtained within a reasonable period of time after closing of
the proposed transaction.
Management of the Company, while not especially
experienced in matters relating to the new business of the
Company, will rely upon their own efforts and, to a much
lesser extent, the efforts of the Company's shareholders, in
accomplishing the business purposes of the Company. It is
not anticipated that any outside consultants or advisors,
other than the Company's legal counsel and accountants, will be
utilized by the Company to effectuate its business purposes described
herein. However, if the Company does retain such an outside consultant or
advisor, any cash fee earned by such party will need to be paid by the
prospective merger/acquisition candidate, as the Company has no cash assets
with which to pay such obligation. There have been no discussions,
understandings, contracts or agreements with any outside consultants and
none are anticipated in the future. In the past, the
Company's management has never used outside consultants or
advisors in connection with a merger or acquisition.
The Company will not restrict its search for any
specific kind of firms, but may acquire a venture which is
in its preliminary or development stage, which is already in
operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status
of any business in which the Company may become engaged, in
that such business may need to seek additional capital, may desire
to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer. However, the Company does not
intend to obtain funds in one or more private placements to finance
the operation of any acquired business opportunity until
such time as the Company has successfully consummated such a
merger or acquisition. The Company also has no plans to
conduct any offerings under Regulation S.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular
business acquisition, the Company may become a party to a
merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It
may also acquire stock or assets of an existing business.
On the consummation of a transaction, it is probable that
the present management and shareholders of the Company will
no longer be in control of the Company. In addition, the
Company's directors may, as part of the terms of the
acquisition transaction, resign and be replaced by new
directors without a vote of the Company's shareholders.
It is anticipated that the Company's principal
shareholders may actively negotiate or otherwise consent to
the purchase of a portion of their common stock as a
condition to, or in connection with, a proposed merger or
acquisition transaction. Any terms of sale of the shares
presently held by officers and/or directors of the Company
will be also afforded to all other shareholders of the
Company on similar terms and conditions. The policy set
forth in the preceding sentence is based on an understanding
between the two members of management, and these two persons
are not aware of any circumstances under which this policy
would change while they are still officers and directors of
the Company. Any and all such sales will only be made in
compliance with the securities laws of the United States and
any applicable state.
It is anticipated that any securities issued in
any such reorganization would be issued in reliance upon
exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree
to register all or a part of such securities immediately
after the transaction is consummated or at specified times thereafter.
If such registration occurs, of which there can be no assurance, it will be
undertaken by the surviving entity after the Company has
successfully consummated a merger or acquisition and the
Company is no longer considered a "shell" company. Until
such time as this occurs, the Company will not attempt to
register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading
market which may develop in the Company's securities may have a depressive
effect on the value of the Company's securities in the future, if such a
market develops, of which there is no assurance.
While the actual terms of a transaction to which
the Company may be a party cannot be predicted, it may be
expected that the parties to the business transaction will
find it desirable to avoid the creation of a taxable event
and thereby structure the acquisition in a so-called "tax-
free" reorganization under Sections 368a or 351 of the
Internal Revenue Code (the "Code").
With respect to any merger or acquisition,
negotiations with target company management is expected to
focus on the percentage of the Company which target company
shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities,
the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage
ownership may be subject to significant reduction in the
event the Company acquires a target company with substantial
assets. Any merger or acquisition effected by the Company
can be expected to have a significant dilutive effect on the
percentage of shares held by the Company's then-
shareholders.
The Company will participate in a business
opportunity only after the negotiation and execution of
appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements
will require some specific representations and warranties by
all of the parties thereto, will specify certain events of
default, will detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to and
after such closing, will outline the manner of bearing
costs, including costs associated with the Company's
attorneys and accountants, will set forth remedies on
default and will include miscellaneous other terms.
As stated herein above, the Company will not
acquire or merge with any entity which cannot provide
independent audited financial statements within a reasonable
period of time after closing of the proposed transaction.
The Company is subject to all of the reporting requirements
included in the 34 Act. Included in these requirements is
the affirmative duty of the Company to file independent audited
financial statements as part of its Form 8-K to be filed with the
Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as the Company's audited financial statements included
in its annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with
the requirements of the 34 Act, or if the audited financial
statements provided do not conform to the representations
made by the candidate to be acquired in the closing
documents, the closing documents may provide that the
proposed transaction will be voidable, at the discretion of
the present management of the Company.
The Company's officers and shareholders have
verbally agreed that they will advance to the Company any
additional funds which the Company needs for operating
capital and for costs in connection with searching for or
completing an acquisition or merger. These persons have
further agreed that such advances will be made in proportion
to each person's percentage ownership of the Company. These
persons have also agreed that such advances will be made
interest free without expectation of repayment unless the
owners of the business which the Company acquires or merges
with agree to repay all or a portion of such advances.
There is no dollar cap on the amount of money which such
persons will advance to the Company. The Company will not
borrow any funds from anyone other than its current
shareholders for the purpose of repaying advances made by
the shareholders, and the Company will not borrow
any funds to make any payments to the Company's promoters,
management or their affiliates or associates.
The Board of Directors has passed a resolution
which prohibits the Company from completing an acquisition
or merger with any entity in which any of the Company's
Officers, Directors, principal shareholders or their
affiliates or associates serve as officer or director or
hold any ownership interest. Management is not aware of any
circumstances under which this policy, through their own initiative may be
changed.
There are no arrangements, agreements or
understandings between non-management shareholders and
management under which non-management management of the
Company's affairs. There is no agreement that non-
management shareholders will exercise their voting rights to
continue to re-elect the current directors, however, it is
expected that they will do so based on the existing friendship among such
persons.
COMPETITION
The Company will remain an insignificant participant among
the firms which engage in the acquisition
of business opportunities. There are many established
venture capital and financial concerns which have
significantly greater financial and personnel resources and
technical expertise than the Company. In view of the
Company's combined extremely limited financial resources and
limited management availability, the Company will continue
to be at a significant competitive disadvantage compared to the
Company's competitors.
YEAR 2000 COMPLIANCE
The Company is aware of the issues associated with
the programming code in existing computer systems as the
year 2000 approaches. The Company has assessed these issues
as they relate to the Company, and since the Company
currently has no operating business and does not use any
computers, and since it has no customers, suppliers or other
constituents, it does not believe that there are any
material year 2000 issues to disclose in this Form 10-SB.
DESCRIPTION OF PROPERTY
The Company does not currently own any property.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no relationships, transactions, or proposed
transactions to which the registrant was or is to be a
party, in which any of the named persons set forth in Item
404 of Regulation SB had or is to have a direct or indirect
material interest.
MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
The Shares have not previously been traded on any
securities exchange. At the present time, there are no
assets available for the payment of dividends on the Shares.
EXECUTIVE COMPENSATION
(a) No officer or director of the Company is receiving any
remuneration at this time.
(b) There are no annuity, pension or retirement benefits
proposed to be paid to officers, directors, or employees of
the corporation in the event of retirement at normal
retirement date pursuant to any presently existing plan
provided or contributed to by the corporation or any of its
subsidiaries.
(c) No remuneration is proposed to be in the future
directly or indirectly by the corporation to any officer or
director under any plan which is presently existing.
FINANCIAL STATEMENTS
The Financial Statements required by Item 310 of Regulation
S-B are attached as Exhibit 99.1 to this Form SB-2.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Information on this item is set forth in Propsectus under
the heading "Disclosure of Commission Position on
Indemnification for Securities Act Liabilities."
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Information on this item is set forth in the Prospectus
under the heading "Use of Proceeds."
RECENT SALES OF UNREGISTERED SECURITIES
On January 17, 2000, 1,500,000 shares were issued to
John E. Dhonau and 1,500,000 to Shawn F. Hackman under Rule
4(2).
EXHIBITS
The Exhibits required by Item 601 of Regulation S-B, and an
index thereto, are attached.
UNDERTAKINGS
The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or
sells securities, a post-effective amendment to this
registration statement to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement; and
Notwithstanding the forgoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation From the low or high end of
the estimated maximum offering range may be reflected in the
form of prospects filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in the volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act,
treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the
end of the offering.
Provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations
and registered in such names as required by the underwriter
to permit prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the pursuant to the
foregoing provisions, or otherwise, the small business
issuer has been advised "Act") may be permitted to
directors, officers and controlling persons of the small
business issuer that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the
small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the
securities being registered, the small business issuer will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
WESTERN SKY
FINANCIAL STATEMENTS
Western Sky Corp.
(A Development Stage Company)
FINANCIAL STATEMENTS
February 11, 2000
TABLE OF CONTENTS
PAGE #
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 2
STATEMENT OF OPERATIONS 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-9
INDEPENDENT AUDITORS' REPORT
Board of Directors February 14, 2000
Western Sky Corp.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Western Sky Corp.
(A Development Stage Company), as of February 11, 2000 and the related
statements of operations, stockholders' equity and cash flows for the period
January 28, 2000 (inception) to February 11, 2000. 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 accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. 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 Western Sky Corp. (A Development
Stage Company), as of February 11, 2000, and the results of its operations and
cash flows for the period January 28, 2000 (inception) to February 11, 2000,
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 #5 to the financial
statements, the Company has suffered recurring losses from operations and 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 described in Note #5. These financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/S/________________________
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702) 361-8414
Western Sky Corp.
(A Development Stage Company)
February 11, 2000
BALANCE SHEET
ASSETS
CURRENT ASSETS
Cash $ 0
TOTAL CURRENT ASSETS $ 0
OTHER ASSETS $ 0
TOTAL OTHER ASSETS $ 0
TOTAL ASSETS $ 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $ 0
TOTAL CURRENT LIABILITIES $ 0
STOCKHOLDERS' EQUITY (Note #4)
Common stock
Par value $0.001
Authorized 25,000,000 shares
Issued and outstanding at
February 11, 2000 -
3,000,000 shares $ 3,000
Additional Paid-In Capital 0
Deficit accumulated during
The Development stage -3,000
TOTAL STOCKHOLDERS' EQUITY $ 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0
The accompanying notes are an integral part of these financial statements
Western Sky Corp.
(A Development Stage Company)
January 28, 2000 (inception), to February 11, 2000
STATEMENT OF OPERATIONS
INCOME
Revenue $ 0
EXPENSES
General and
Administrative $ 3,000
TOTAL EXPENSES $ 3,000
NET PROFIT/LOSS (-) $ -3,000
Net Profit/Loss(-)
per weighted share
(Note #1) $ -.001
Weighted average
Number of common
shares outstanding 3,000,000
The accompanying notes are an integral part of these financial statements
Western Sky Corp.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital
Deficit
January 28, 2000
Issued for
Services 3,000,000 $ 3,000 $ 0
Net loss
January 28,
2000 (inception)
to
February 11, 2000 -3,000
Balance,
February 11, 2000 3,000,000 $ 3,000 $ 0 $ -3,000
The accompanying notes are an integral part of these financial statements
Western Sky Corp.
(A Development Stage Company)
January 28, 2000 (inception), to February 11, 2000
STATEMENT OF CASH FLOWS
Cash Flows from
Operating Activities
Net Loss $ -3,000
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services +3,000
Changes in assets and
Liabilities 0
----------
Net cash used in
Operating activities $ 0
Cash Flows from
Investing Activities 0
Cash Flows from
Financing Activities 0
-----------
Net Increase (decrease) $ 0
Cash,
Beginning of period 0
-----------
Cash, End of Period $ 0
-----------
The accompanying notes are an integral part of these financial statements
Western Sky Corp.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 11, 2000
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 28, 2000, under the laws of the State of
Nevada as Western Sky Corp. The Company currently has no operations and in
accordance with SFAS #7, is considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing bank that
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents. There are no cash
equivalents as of February 11, 2000.
Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109
(SFAS #109) "Accounting for Income Taxes". A deferred tax asset or liability
is recorded for all temporary difference between financial and tax reporting.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of Start-Up
Activities" which provides guidance on the financial reporting of start-up
costs and organization costs. It requires most costs of start-up activities
and organization costs to be expensed as incurred. SOP 98-5 is effective for
fiscal years beginning after December 15, 1998. With the adoption of
SOP 98-5, there has been little or no effect on the company's financial
statements.
Loss Per Share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per
share is computed by dividing losses available to common stockholders by the
weighted average number of common shares outstanding during the period.
Diluted loss per share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common stock. As of
February 11, 2000, the Company had no dilative common stock equivalents such as
stock options.
Year End
The Company has selected December 31st as its fiscal year-end.
Policy in Regards to Issuance of Common Stock in a Non-Cash Transaction
The Company's accounting policy for issuing shares in a non-cash transaction
is to issue the equivalent amount of stock equal to the fair market value of
the assets or services received.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended
February 11, 2000, due to the net loss and no state income tax in Nevada, the
state of the Company's domicile and operations. The Company's total deferred
tax asset as of February 11, 2000 is as follows:
Net operation loss carry forward $ 0
Valuation allowance $ 0
Net deferred tax asset $ 0
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 25,000,000 shares
with a par value $.001 per share.
Preferred Stock
The corporation has no preferred stock.
On January 28, 2000, the Company issued 3,000,000 shares of its $0.001 par
value common stock to its directors for services of $3,000.00.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern. The stockholders/officers and or directors have committed to
advancing the operating costs of the Company interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer
of the corporation provides office services without charge. 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 interest. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares
of common stock.
To Whom It May Concern: February 14, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant consents to
the inclusion of their report of February 14, 2000, on the Financial
Statements of Western Sky Corp., as of February 11, 2000, in any filings
that are necessary now or in the near future with the U.S. Securities and
Exchange Commission.
Very truly yours,
/S/________________________
Barry L. Friedman
Certified Public Accountant
Articles Of Incorporation
Of
WESTERN SKY
Know all men by these present that the undersigned have this
day voluntarily associated ourselves together for the
purpose of forming a corporation under and pursuant to the
provisions of Nevada Revised Statutes 78.010 to Nevada
Revised Statues 78.090 inclusive as amended and state and
certify that the articles of incorporation are as follows:
First: Name
The name of the corporation is WESTERN SKY, (The
"Corporation").
Second: Registered Office and Agent
The address of the registered office of the corporation in
the State Of Nevada is 3360 West Sahara Ave., Suite 200, in
the city of Las Vegas, County of Nevada 89102. The name and
address of the corporation's registered agent in the State
of Nevada is Shawn F. Hackman, Esq.,3360 West Sahara Ave.,
Suite 200, Las Vegas, NV 89102 , at said address, until
such time as another agent is duly authorized and appointed
by the corporation.
Third: Purpose and Business
The purpose of the corporation is to engage in any lawful
act or activity for which corporations may now or hereafter
be organized under the Nevada Revised Statutes of the State
of Nevada, including, but not limited to the following:
The Corporation may at any time exercise such rights,
privileges, and powers, when not inconsistent with the
purposes and object for which this corporation is organized;
The Corporation shall have power to have succession by its
corporate name in perpetuity, or until dissolved and its
affairs wound up according to law;
The Corporation shall have power to sue and be sued in any
court of law or equity;
The Corporation shall have power to make contracts;
The Corporation shall have power to hold, purchase and
convey real and personal estate and to mortgage or lease any
such real and personal estate with its franchises. The power
to hold real and personal estate shall include the power to
take the same by devise or bequest in the State of Nevada,
or in any other state, territory or country;
The corporation shall have power to appoint such officers
and agents as the affairs of the Corporation shall requite
and allow them suitable compensation;
The Corporation shall have power to make bylaws not
inconsistent with the constitution or laws of the United
States, or of 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
the calling and holding of meetings of stockholders;
The Corporation shall have the power to wind up and dissolve
itself, or be wound up or dissolved;
The Corporation shall have the power to adopt and use a
common seal or stamp, or to not use such seal or stamp and
if one is used, to alter the same. The use of a seal or
stamp by the corporation on any corporate documents is not
necessary. The Corporation may use a seal or stamp, if it
desires, but such use or non-use shall not in any way affect
the legality of the document;
The Corporation 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, or for any other lawful purpose of
its incorporation; to issue bonds, promissory notes, bills
of exchange, debentures and other obligations and evidence
of indebtedness, payable at a specified time or times, or
payable upon the happening of a specified event or events,
whether secured by mortgage, pledge or otherwise, or
unsecured, for money borrowed, or in payment for property
purchased, or acquired, or for another lawful object;
The Corporation shall have the power to guarantee, purchase,
hold, sell, assign, transfer, mortgage, pledge or otherwise
dispose of the shares of the capital stock of, or any bonds,
securities or evidence in indebtedness created by any other
corporation or corporations in the State of Nevada, or any
other state or government and, while the owner of such
stock, bonds, securities or evidence of indebtedness, to
exercise all the rights, powers and privileges of ownership,
including the right to vote, if any;
The Corporation shall have the power to purchase, hold, sell
and transfer shares of its own capital stock and use
therefor its capital, capital surplus, surplus or other
property or fund;
The Corporation shall have to conduct business, have one or
more offices and hold, purchase, mortgage and convey real
and personal property in the State of Nevada and in any of
the several states, territories, possessions and
dependencies of the United States, the District of Columbia
and in any foreign country;
The Corporation shall have the power to do all and
everything necessary and proper for the accomplishment of
the objects enumerated in its articles of incorporation, or
any amendments 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 purposes of the Corporation, whether
or not such business is similar in nature to the purposes
set forth in the articles of incorporation of the
Corporation, or any amendment thereof;
The Corporation shall have the power to make donations for
the public welfare or for charitable, scientific or
educational purposes;
The Corporation shall have the power to enter partnerships,
general or limited, or joint ventures, in connection with
any lawful activities.
Fourth: Capital Stock
Classes and Number of Shares. The total number of shares of
all classes of stock, which the corporation shall have
authority to issue Twenty Five Million (25,000,000) shares
of Common Stock, par value of $0.001 per share (The "Common
Stock") and no Preferred Stock.
Powers and Rights of Common Stock
Preemptive Right. No shareholders of the Corporation holding
common stock shall have any preemptive or other right to
subscribe for any additional un-issued or treasury shares of
stock or for other securities of any class, or for rights,
warrants or options to purchase stock, or for scrip, or for
securities of any kind convertible into stock or carrying
stock purchase warrants or privileges unless so authorized
by the Corporation;
Voting Rights and Powers. With respect to all matters upon
which stockholders are entitled to vote or to which
stockholders are entitled to give consent, the holders of
the outstanding shares of the Common Stock shall be entitled
to cast thereon one (1) vote in person or by proxy for each
share of the Common Stock standing in his/her name;
Dividends and Distributions
Cash Dividends. Subject to the rights of holders of
Preferred Stock, holders of Common Stock shall be entitled
to receive such cash dividends as may be declared thereon by
the Board of Directors from time to time out of assets of
funds of the Corporation legally available therefor;
Other Dividends and Distributions. The Board of Directors
may issue shares of the Common Stock in the form of a
distribution or distributions pursuant to a stock dividend
or split-up of the shares of the Common Stock;
Other Rights. Except as otherwise required by the Nevada
Revised Statutes and as may otherwise be provided in these
Articles of Incorporation, each share of the Common Stock
shall have identical powers, preferences and rights,
including rights in liquidation;
Preferred Stock The powers, preferences, rights,
qualifications, limitations and restrictions pertaining to
the Preferred Stock, or any series thereof, shall be such as
may be fixed, from time to time, by the Board of Directors
in its sole discretion, authority to do so being hereby
expressly vested in such board.
Issuance of the Common Stock and the Preferred Stock. The
Board of Directors of the Corporation may from time to time
authorize by resolution the issuance of any or all shares of
the Common Stock and the Preferred Stock herein authorized
in accordance with the terms and conditions set forth in
these Articles of Incorporation for such purposes, in such
amounts, to such persons, corporations, or entities, for
such consideration and in the case of the Preferred Stock,
in one or more series, all as the Board of Directors in its
discretion may determine and without any vote or other
action by the stockholders, except as otherwise required by
law. The Board of Directors, from time to time, also may
authorize, by resolution, options, warrants and other rights
convertible into Common or Preferred stock (collectively
"securities.") The securities must be issued for such
consideration, including cash, property, or services, as the
Board or Directors may deem appropriate, subject to the
requirement that the value of such consideration be no less
than the par value if the shares issued. Any shares issued
for which the consideration so fixed has been paid or
delivered shall be fully paid stock and the holder of such
shares shall not be liable for any further call or
assessment or any other payment thereon, provided that the
actual value of such consideration is not less that the par
value of the shares so issued. The Board of Directors may
issue shares of the Common Stock in the form of a
distribution or distributions pursuant to a stock divided or
split-up of the shares of the Common Stock only to the then
holders of the outstanding shares of the Common Stock.
Cumulative Voting. Except as otherwise required by
applicable law, there shall be no cumulative voting on any
matter brought to a vote of stockholders of the Corporation.
Fifth: Adoption of Bylaws.
In the furtherance and not in limitation of the powers
conferred by statute and subject to Article Sixth hereof,
the Board of Directors is expressly authorized to adopt,
repeal, rescind, alter or amend in any respect the Bylaws of
the Corporation (the "Bylaws").
Sixth: Shareholder Amendment of Bylaws.
Notwithstanding Article Fifth hereof, the bylaws may
also be adopted, repealed, rescinded, altered or amended in
any respect by the stockholders of the Corporation, but only
by the affirmative vote of the holders of not less than
fifty-one percent (51%) of the voting power of all
outstanding shares of voting stock, regardless of class and
voting together as a single voting class.
Seventh: Board of Directors
The business and affairs of the Corporation shall be
managed by and under the direction of the Board of
Directors. Except as may otherwise be provided pursuant to
Section 4 or Article Forth hereof in connection with rights
to elect additional directors under specified circumstances,
which may be granted to the holders of any class or series
of Preferred Stock, the exact number of directors of the
Corporation shall be determined from time to time by a bylaw
or amendment thereto, providing that the number of directors
shall not be reduced to less that two (2). The directors
holding office at the time of the filing of these Articles
of Incorporation shall continue as directors until the next
annual meeting and/or until their successors are duly
chosen.
Eighth: Term of Board of Directors.
Except as otherwise required by applicable law, each
director shall serve for a term ending on the date of the
third Annual Meeting of Stockholders of the Corporation (the
"Annual Meeting") following the Annual Meeting at which such
director was elected. All directors, shall have equal
standing.
Not withstanding the foregoing provisions of this
Article Eighth each director shall serve until his successor
is elected and qualified or until his death, resignation or
removal; no decrease in the authorized number of directors
shall shorten the term of any incumbent director; and
additional directors, elected pursuant to Section 4 or
Article Forth hereof in connection with rights to elect such
additional directors under specified circumstances, which
may be granted to the holders of any class or series of
Preferred Stock, shall not be included in any class, but
shall serve for such term or terms and pursuant to such
other provisions as are specified in the resolution of the
Board or Directors establishing such class or series
Ninth: Vacancies on Board of Directors
Except as may otherwise be provided pursuant to Section
4 of Article Forth hereof in connection with rights to elect
additional directors under specified circumstances, which
may be granted to the holders of any class or series of
Preferred Stock, newly created directorships resulting from
any increase in the number of directors, or any vacancies on
the Board of Directors resulting from death, resignation,
removal, or other causes, shall be filled solely by the
quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for
the remainder of the full term of directors in which the new
directorship was created or the vacancy occurred and until
such director's successor shall have been elected and
qualified or until such director's death, resignation or
removal, whichever first occurs.
Tenth: Removal of Directors
Except as may otherwise be provided pursuant to Section
4 or Article Fourth hereof in connection with rights to
elect additional directors under specified circumstances,
which may be granted to the holders of any class or series
of Preferred Stock, any director may be removed from office
only for cause and only by the affirmative vote of the
holders of not less than fifty-one percent (51%) of the
voting power of all outstanding shares of voting stock
entitled to vote in connection with the election of such
director, provided, however, that where such removal is
approved by a majority of the Directors, the affirmative
vote of a majority of the voting power of all outstanding
shares of voting stock entitled to vote in connection with
the election of such director shall be required for approval
of such removal. Failure of an incumbent director to be
nominated to serve an additional term of office shall not be
deemed a removal from office requiring any stockholder vote.
Eleventh: Stockholder Action
Any action required or permitted to be taken by the
stockholders of the Corporation must be effective at a duly
called Annual Meeting or at a special meeting of
stockholders of the Corporation, unless such action
requiring or permitting stockholder approval is approved by
a majority of the Directors, in which case such action may
be authorized or taken by the written consent of the holders
of outstanding shares of Voting Stock having not less than
the minimum voting power that would be necessary to
authorize or take such action at a meeting of stockholders
at which all shares entitled to vote thereon were present
and voted, provided all other requirements of applicable law
these Articles have been satisfied.
Twelfth: Special Stockholder Meeting
Special meetings of the stockholders of the Corporation
for any purpose or purposes may be called at any time by a
majority of the Board of Directors or by the Chairman of the
Board or the President. Special meeting may not be called by
any other person or persons. Each special meeting shall be
held at such date and time as is requested by the person or
persons calling the meeting, within the limits fixed by law.
Thirteenth: Location of Stockholder Meetings.
Meetings of stockholders of the Corporation may be held
within or without the State of Nevada, as the Bylaws may
provide. The books of the Corporation may be kelp (subject
to any provision of the Nevada Revised Statutes) outside the
State of Nevada at such place or places as may be designated
from time to time by the Board of Directors or in the
Bylaws.
Fourteenth: Private Property of Stockholders.
The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent
whatever and the stockholders shall not be personally liable
for the payment of the corporation's debts.
Fifteenth: Stockholder Appraisal Rights in Business
Combinations.
To the maximum extent permissible under the Nevada
Revised Statutes of the State of Nevada, the stockholders of
the Corporation shall be entitled to the statutory appraisal
rights provided therein, with respect to any business
Combination involving the Corporation and any stockholder
(or any affiliate or associate of any stockholder), which
required the affirmative vote of the Corporation's
stockholders.
Sixteenth: Other Amendments.
The Corporation reserves the right to adopt, repeal,
rescind, alter or amend in any respect any provision
contained in these Articles of Incorporation in the manner
now or hereafter prescribed by applicable law and all rights
conferred on stockholders herein granted subject to this
reservation.
Seventeenth: Term of Existence.
The Corporation is to have perpetual existence.
Eighteenth: Liability of Directors.
No director of this Corporation shall have personal
liability to the Corporation or any of its stockholders for
monetary damages for breach of fiduciary duty as a director
or officers involving any act or omission of any such
director or officer. The foregoing provision shall not
eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the Corporation
or its stockholders, (ii) for acts or omissions not in good
faith or, which involve intentional misconduct or a knowing
violation of law, (iii) under applicable Sections of the
Nevada Revised Statutes, (iv) the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statutes
or, (v) for any transaction from which the director derived
an improper personal benefit. Any repeal or modification of
this Article by the stockholders of the Corporation shall be
prospective only and shall not adversely affect any
limitation on the personal liability of a director or
officer of the Corporation for acts or omissions prior to
such repeal or modification.
Nineteenth: Name and Address of first Directors and
Incorporators.
The name and address of the incorporators of the
Corporation and the first Directors of the Board of
Directors of the Corporation which shall be one (1) in
number is as follows:
DIRECTOR #1
Shawn F. Hackman
3360 West Sahara Ave
Suite 200
Las Vegas, NV 89102
I, Shawn F. Hackman, being the first director and Incorporator
herein before named, for the purpose of forming a
corporation pursuant to the Nevada Revised Statutes of the
State of Nevada, do make these Articles, hereby declaring
and certifying that this is my act and deed and the facts
herein stated are true and accordingly have hereunto set my
hand this 3rd day of January , 2000.
By:
_____________________________
Verification
State Of Nevada )
)ss.
County Of Clark )
On this 7th day of January, 2000 , before me, the
undersigned, a Notary Public in and for said State,
personally appeared Shawn F. Hackman personally known to me (or
proved to me on the basis of satisfactory evidence) to be
the person who subscribed his name to the Articles of
Incorporation and acknowledged to me that he executed the
same freely and voluntarily and for the use and purposes
therein mentioned.
By: _______________________________
Notary Public in and for said
County and State
BYLAWS
OF
WESTERN SKY
Article I: Offices
The principal office of WESTERN SKY ("Corporation") in
the Sate of Nevada shall be located in Las Vegas, County of
Clark. The Corporation may have such other offices, either
within or without the State of Nevada, as the Board of
Directors my designate or as the business of the Corporation
my require from time to time.
Article II: Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders shall be held during the first ten (10) days in
the month of June in each year, or on such other date during
the calendar year as may be designated by the Board of
Directors. If the day fixed for the annual meeting shall be
a legal holiday in the Sate of Nevada, such meeting shall be
held on the next succeeding business day. If the election
of Directors shall be held on the day designated herein for
any annual meeting of the shareholders or at any adjournment
thereof, the Board of Directors shall cause the election to
be held at a special meeting of the shareholders as soon
thereafter as conveniently may be.
Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or by
the Board of Directors, and shall be called by the President
at the request of the holders of not less than ten percent
(10%) of all the outstanding shares of the Corporation
entitled to vote at the meeting.
Section 3. Place of Meeting. The Board of Directors my
designate any place, either within our without the State of
Nevada, unless otherwise prescribed by statute, as the place
of meeting for any annual meeting or for any special
meeting. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any place,
either within our without the State of Nevada, unless
otherwise prescribed by statute, as the place for the
holding of such meeting. If no designation is made, the
place of meeting shall be the principal office of the
Corporation.
Section 4. Notice of Meeting. Written 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 unless otherwise prescribed by statute, be
delivered not less than ten (10) nor more than sixty (60)
days before the date of the meeting, to each shareholder of
record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the
United States Mail, addressed to the shareholder at his
address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record.
For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive
payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of
Directors of the Corporation may provide that the stock
transfer books shall be closed for a stated period, but not
to exceed in any case fifty (50) days. If the stock
transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at
a meeting of shareholders, such books shall be closed for at
least fifteen (15) days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any
case to be not more than thirty (30) days and, in case of a
meeting of shareholders, not less than ten (10) days, prior
to the date on which the particular action requiring such
determination of shareholders is to be taken. If the stock
transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for
such determination of shareholders. When a determination
of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
Section 6. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the
Corporation shall make a complete list of shareholders
entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged in alphabetical order, with
the address of and the number of shares held by each. Such
lists shall be produced and kept open at the time and place
of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the
purposes thereof.
Section 7. Quorum. A majority of the outstanding shares of
the Corporation entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of
shareholders. If less than a majority of the outstanding
shares are represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to
time without further notice. At such adjourned meeting at
which a quorum shall be present or represented, any business
may be transacted which might have been transacted at the
meeting as originally noticed. The shareholders present at
a duly organized meeting may continue to transact business
until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Section 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in
writing by the shareholder or by his or duly authorized
attorney-in-fact. Such proxy shall be filed with the
secretary of the Corporation before or at the time of the
meeting. A meeting of the Board of Directors my be had by
means of telephone conference or similar communications
equipment by which all persons participating in the meeting
can hear each other, and participation in a meeting under
such circumstances shall constitute presence at the meeting.
Section 10. Voting of Shares by Certain Holders. Shares
standing in the name of another Corporation may be voted by
such officer, agent or proxy as the Bylaws of such
Corporation may prescribe or, in the absence of such
provision, as the Board of Directors of such Corporation may
determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him either in person or by
proxy, without a transfer of such shares into his name.
Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be
entitled to vote shares held by him without a transfer of
such shares into his name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name, if authority to do so be contained in
an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into
the name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
Shares of its own stock belonging to the Corporation shall
not be voted directly or indirectly, at any meeting, and
shall not be counted in determining the total number of
outstanding shares at any given time.
Section 11. Informal Action by Shareholders. Unless
otherwise provided by law, any action required to be taken
at a meeting of the shareholders, or any other action which
may be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof.
Article III: Board of Directors
Section 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number
of Directors of the Corporation shall be fixed by the Board
of Directors, but in no event shall be less than one ( 1 ).
Each Director shall hold office until the next annual
meeting of shareholder and until his successor shall have
been elected and qualified.
Section 3. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than
this Bylaw immediately after, and at the same place as, the
annual meeting of shareholders. The Board of Directors may
provide, by resolution, the time and place for the holding
of additional regular meetings without notice other than
such resolution.
Section 4. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the
President or any two Directors. The person or persons
authorized to call special meetings of the Board of
Directors may fix the place for holding any special meeting
of the Board of Directors called by them.
Section 5. Notice. Notice of any special meeting shall be
given at least one (1) day previous thereto by written
notice delivered personally or mailed to each Director at
his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the
United Sates mail so addressed, with postage thereon
prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to
the telegraph company. Any Directors may waive notice of
any meeting. The attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting, except
where a Director attends a meeting for the express purpose
of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 6. Quorum. A majority of the number of Directors
fixed by Section 2 of the Article III shall constitute a
quorum for the transaction of business at any meeting of the
Board of Directors, but if less than such majority is
present at a meeting, a majority of the Directors present
may adjourn the meeting from time to time without further
notice.
Section 7. Manner of Acting. The act of the majority of
the Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 8. Action Without a Meeting. Any action that may
be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the
action so to be taken, shall be signed before such action by
all of the Directors.
Section 9. Vacancies. 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, unless otherwise provided
by law. A Director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office.
Any Directorship to be filled by reason of an increase in
the number of Directors may be filled by election by the
Board of Directors for a term of office continuing only
until the next election of Directors by the shareholders.
Section 10. Compensation. By resolution of the Board of
Directors, each Director may be paid his expenses, if any,
of attendance at each meeting of the Board of Directors, and
may be paid a stated salary as a Director or a fixed sum for
attendance at each meeting of the Board of Directors or
both. No such payment shall preclude any Director from
serving the Corporation in any other capacity and receiving
compensation thereof.
Section 11. 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 action 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 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: Officers
Section 1. Number. The officers of the Corporation shall
be a President, one or more Vice Presidents, a Secretary and
a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as
may be deemed necessary may be elected or appointed by the
Board of Directors, including a Chairman of the Board. In
its discretion, the Board of Directors may leave unfilled
for any such period as it may determine any office except
those of President and Secretary. Any two or more offices
may be held by the same person. Officers may be Directors
or shareholders of the Corporation.
Section 2. Election and Term of Office. The officers of
the Corporation to be elected by the Board of Directors
shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of
officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be.
Each officer shall hold office until his successor shall
have been duly elected and shall have qualified, or until
his death, or until he shall resign or shall have been
removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent may be removed by
the Board of Directors whenever, in its judgement, 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, and such appointment shall be
terminable at will.
Section 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise,
may be filled by the Board of Directors for the unexpired
portion of the term.
Section 5. President. The President shall be the
principal executive officer of the Corporation and, subject
to the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the
Corporation. He shall, when present, preside at all
meetings of the shareholders and of the Board of Directors,
unless there is a Chairman of the Board, in which case the
Chairman shall preside. He may sign, with the Secretary or
any other proper officer of the Corporation thereunto
authorized by the Board of Directors, certificates for
shares of the Corporation, any deed, mortgages, bonds,
contract, or other instruments which the Board of Directors
has authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated
by the Board of Directors or by there Bylaws to some other
officer or agent of the Corporation, or shall be required by
law to be otherwise signed or executed; and in general shall
perform all duties incident to the office of President and
such other duties as may be prescribed by the Board of
Directors from time to time.
Section 6. Vice President. In the absence of the President
or in the event of his death, inability or refusal to act,
the Vice President shall perform the duties of the
President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.
The Vice President shall perform such other duties as from
time to time may be assigned to him by the President or by
the Board of Directors, If there is more than one Vice
President, each Vice President shall succeed to the duties
of the President in order of rank as determined by the Board
of Directors. If no such rank has been determined, then
each Vice President shall succeed to the duties of the
President in order of date of election, the earliest date
having the first rank.
Section 7. Secretary. The Secretary shall: (a) keep the
minutes of the Board of Directors in one or more minute
books provided for the purpose; (b) see that all notices
are duly given in accordance with the provisions of the
Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all
documents, the execution of which on behalf of the
Corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder
which shall be furnished to the Secretary by such
shareholder; (e) sign with the President certificates for
share of the Corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the
Corporation, and (g) in general perform all duties incident
to the office of the Secretary and such other duties as from
time to time may be assigned to him by the President or by
the Board of Directors.
Section 8. Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the Corporation; (b) receive and give
receipts for moneys due and payable to the Corporation in
such banks, trust companies or other depositories as shall
be selected in accordance with the provisions of Article VI
of these Bylaws; and (c) in general perform all of the
duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to him by the
President or by the Board of Directors. If required by the
Board of Directors, the Treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such
sureties as the Board of Directors shall determine.
Section 9. Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors, and no
officer shall be prevented from receiving such salary by
reason of the fact that he is also a Director of the
Corporation.
Article V: Indemnity
Section 1. Definitions. For purposes of this Article,
"Indemnitee" shall mean each Director or Officer who was or
is a party to, or is threatened to be made a party to, or is
otherwise involved in, any Proceeding (as hereinafter
defined), by reason of the fact that he or she is or was a
Director or Officer of this Corporation or is or was serving
in any capacity at the request of this Corporation as a
Director, Officer, employee, agent, partner, or fiduciary
of, or in any other capacity for, another corporation,
partnership, joint venture, trust, or other enterprise. The
term "Proceeding" shall mean any threatened, pending or
completed action or suit (including, without limitation, an
action, suit or proceeding by or in the right of this
Corporation), whether civil, criminal, administrative or
investigative.
Section 2. Indemnification. Each Indemnitee shall be
indemnified and held harmless by this Corporation for all
actions taken by him or her, and for all omissions
(regardless of the date of any such action or omission), to
the fullest extent permitted by Nevada law, against all
expense, liability and loss (including, without limitation,
attorney fees, judgments, fines, taxes, penalties, and
amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Indemnitee in connection with
any Proceeding. Indemnification pursuant to this Section
shall continue as to an Indemnitee who has ceased to be a
Director or Officer and shall inure to the benefit of his or
her heirs, executors and administrators. This Corporation
may, by action of its Board of Directors, and to the extent
provided in such action, indemnify employees and other
persons as though they were Indemnitees. The rights to
indemnification as provided in this Article shall be non-
exclusive of any other rights that any person may have or
hereafter acquire under an statute, provision of this
Corporation's Articles of Incorporation or Bylaws,
agreement, vote of stockholders or Directors, or otherwise.
Section 3. Financial Arrangements. This Corporation may
purchase and maintain insurance or make other financial
arrangements on behalf of any person who is or was a
Director, Officer, employee or agent of this Corporation, or
is or was serving at the request of this Corporation in such
capacity for another corporation, partnership, joint
venture, trust or other enterprise for any liability
asserted against him or her and liability and expenses
incurred by him or her in such capacity, whether or not this
Corporation has the authority to indemnify him or her
against such liability and expenses.
The other financial arrangements which may be made by this
Corporation may include, but are not limited to, (a)
creating a trust fund; (b) establishing a program of self-
insurance; (c) securing its obligation of indemnification by
granting a security interest or other lien on any of this
Corporation's assets, and (d) establishing a letter of
credit, guarantee or surety. No financial arrangement made
pursuant to this section may provide protection for a person
adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable for
intentional misconduct, fraud, or a knowing violation of
law, except with respect to advancing expenses or
indemnification ordered by a court. Any insurance or other
financial arrangement made on behalf of a person pursuant to
this section may be provided by this Corporation or any
other person approved by the Board of Directors, even if all
or part of the other person's stock or other securities is
owned by this Corporation. In the absence of fraud:
(a) the decision of the Board of Directors as to the
propriety of the terms and conditions of any insurance or
other financial arrangement made pursuant to this section,
and the choice of the person to provide the insurance or
other financial arrangement is conclusive; and
(b) the insurance or other financial arrangement is not
void or voidable; does not subject any Director approving it
to personal liability for his action; and even if a Director
approving the insurance or other financial arrangement is a
beneficiary of the insurance or other financial arrangement.
Section 4. Contract of Indemnification. The provisions of
this Article relating to indemnification shall constitute a
contract between this Corporation and each of its Directors
and Officers, which may be modified as to any Director or
Officer only with that person's consent or as specifically
provided in this section. Notwithstanding any other
provision of the Bylaws relating to their amendment
generally, any repeal or amendment of this Article which is
adverse to any Director or Officer shall apply to such
Director or Officer only on a prospective basis and shall
not limit the rights of an Indemnitee to indemnification
with respect to any action or failure to act occurring prior
to the time of such repeal or amendment. Notwithstanding any
other provision of these Bylaws, no repeal or amendment of
these Bylaws shall affect any or all of this Article so as
to limit or reduce the indemnification in any manner unless
adopted by (a) the unanimous vote of the Directors of this
Corporation then serving, or (b) the stockholders as set
forth in Article XII hereof; provided that no such amendment
shall have retroactive effect inconsistent with the
preceding sentence.
Section 5. Nevada Law. References in this Article to
Nevada law or to any provision thereof shall be to such law
as it existed on the date these Bylaws were adopted or as
such law thereafter may be changed; provided that (a) in the
case of any change which expands the liability of an
Indemnitee or limits the indemnification rights or the
rights to advancement of expenses which this Corporation may
provide, the rights to limited liability, to indemnification
and to the advancement of expenses provided in this
Corporation's Articles of Incorporation, these Bylaws, or
both shall continue as theretofore to the extent permitted
by law; and (b) if such change permits this Corporation,
without the requirement of any further action by
stockholders or Directors, to limit further the liability of
Indemnitees or to provide broader indemnification rights or
rights to the advancement of expenses than this Corporation
was permitted to provide prior to such change, liability
thereupon shall be so limited and the rights to
indemnification and advancement of expenses shall be so
broadened to the extent permitted by law. The Corporation
shall indemnify its Directors, officers and employees as
follows:
Article VI: Contracts, Loans, Checks, and Deposits
Section 1. Contracts. The Board of Directors may authorize
any office or officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name
of and on behalf of the Corporation, and such authority may
be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the
Board of Directors. Such authority may be general or
confined to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the
Corporation, shall be signed by such officer or officers,
agent or agents of the Corporation and in such manner as
shall from time to time be determined by resolution of the
Board of Directors.
Section 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to
the credit of the Corporation in such banks, trust companies
or other depositories as the Board of Directors may select.
Article VII: Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form
as shall be determined by the Board of Directors. Such
certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by
the Board of Directors so to do, and sealed with the
corporate seal. All certificates for shares shall be
consecutively numbered or otherwise identified. The name
and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the
Corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificate for
a like number of shares shall have been surrendered and
cancelled, expect that in case of a lost, destroyed or
mutilated certificate a new one may be issued therefore upon
such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books
of the Corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with
the Secretary of the Corporation, and on surrender for
cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the Corporation
shall be deemed by the Corporation to be the owner thereof
for all purposes, Provided, however, that upon any action
undertaken by the shareholder to elect S Corporation status
pursuant to Section 1362 of the Internal Revenue Code and
upon any shareholders agreement thereto restricting the
transfer of said shares so as to disqualify said S
Corporation status, said restriction on transfer shall be
made a part of the Bylaws so long as said agreements is in
force and effect.
Article VIII: Fiscal Year
The fiscal year of the Corporation shall begin on the 1st
day of January and end on the 31st day of December of each
year.
Article IX: Dividends
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares
in the manner and upon the terms and condition provided by
law and its Articles of Incorporation.
Article X: Corporate Seal
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon
the name of the Corporation and the state of incorporation
and the words "Corporate Seal."
Article XI: Waiver of Notice
Unless otherwise provided by law, whenever any notice is
required to be given to any shareholder or Director of the
Corporation under the provision of the Articles of
Incorporation or under the provisions of the applicable
Business Corporation Act, a waiver thereof in writing,
signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
Article XII: Amendments
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by the Board of Directors at any
regular or special meeting of the Board of Directors, or by
the shareholder as any regular or special meeting of the
shareholders.
The above Bylaws are certified to have been adopted by the
Board of Directors of the Corporation on the ________ day of
________, 2000.
Shawn F. Hackman, Director
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorize, in the City of Las Vegas, State of
Nevada, on January 18, 2000.
WESTERN SKY. INC..
By: /s/ __________
John E. Dhonau, President
Special Power of Attorney
The undersigned constitute and appoint _______________ their
true and lawful attorney-in-fact and agent with full power
of substitution, for him and in his name, place, and stead,
in any and all capacities, to sign any and all amendments,
including post-effective amendments, to this Form SB-2
Registration Statement, and to file the same with all
exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting such
attorney-in-fact the full power and authority to do and
perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully and to all
intents and purposes as he might or could do in person,
hereby ratifying and confirming all that such attorney-in-
fact may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates stated:
Signature
Title
Date
