U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
PERFECTION PLUS, INC.
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(Name of Small Business Issuer in its charter)
NEVADA 88-0429314
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16133 VENTURA BOULEVARD, SUITE 635
ENCINO, CALIFORNIA 91436
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(Address of principal executive offices) (Zip code)
Issuer's telephone number: (818) 981-1796
Securities to be registered pursuant to Section 12(b) of the Act: none
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK, No par value
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(Title of Class)
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TABLE OF CONTENTS
Page
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PART I
Item 1. Description of Business . . . . . . . . . . . . . . . . . 3
Item 2. Plan of Operation . . . . . . . . . . . . . . . . . . . . 9
Item 3. Description of Property. . . . . . . . . . . . . . . . . . 15
Item 4. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . . . . 15
Item 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . . . . . 16
Item 6. Executive Compensation . . . . . . . . . . . . . . . . . . 18
Item 7. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . . . . . 19
Item 8. Description of Securities. . . . . . . . . . . . . . . . . 19
PART II
Item 1. Market Price for Common Equities and Related
Stockholder Matters . . . . . . . .. . . . . . . . . . . 20
Item 2. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 22
Item 3. Changes in and Disagreements with Accountants. . . . . . . 22
Item 4. Recent Sales of Unregistered Securities. . . . . . . . . . 22
Item 5. Indemnification of Directors and Officers. . . . . . . . . 24
PART F/S Financial Statements. . . . . . . . . . . . . . . . . . . . 25
PART III
Item 1. Index to Exhibits. . . . . . . . . . . . . . . . . . . . . 27
Signatures . . . . . . . . . . . . . . . . . . . . . . . . 27
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PART I
Item 1. Description of Business
Perfection Plus, Inc. (the "Company") was incorporated on June
22, 1999, under the laws of the State of Nevada to engage in any lawful
corporate activity, 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
shareholder, the Company never commenced any operational activities. 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
Board of Directors of the Company has elected to commence implementation of the
Company's principal business purpose described below under "Item 2 - Plan of
Operation." The proposed business activities described herein may classify the
Company as a "blank check" company.
Alan Schram is the sole shareholder of the Company and on June
22, 1999 was issued pursuant to Rule 506 of Reulgation D of the General Rules
and Regulations of the Securities and Exchange Commission 1,150 shares of common
stock for an aggregate purchase price of $1,150. The purchase price of common
stock of the Company acquired by Mr. Schram was $1.00 per share, was negotiated
between affiliated parties, and does not necessarily represent the price at
which the Company would offer its securities to others or the price others would
pay for such securities.
Alan Schram is the sole officer and director of the Company.
The Company has no employees nor are there any other persons than Mr. Schram who
devote any of their time to its affairs. All references herein to management of
the Company are to Mr. Schram. The inability at any time of Mr. Schram to devote
sufficient attention to the Company could have a material adverse impact on its
operations.
The Company is filing this registration statement on a voluntary
basis because the primary attraction of the Company as a merger partner or
acquisition vehicle will be its status as a public company. Any business
combination or transaction will likely result in a significant issuance of
shares and substantial dilution to present stockholders of the Company.
In addition, the Company is filing this registration statement
to enhance investor protection and to provide information if a trading market
commences. On December 11, 1997, the National Association of Securities Dealers,
Inc. (NASD) announced that its Board of Governors had approved a series of
proposed changes for the Over The Counter ("OTC") Bulletin Board and the OTC
market. The principal changes, which were approved by the Securities and
Exchange Commission on January 4, 1999, allow only those companies that report
their current financial information to the Securities and Exchange Commission,
banking, or insurance regulators to be quoted on the OTC Bulletin Board. The
rule provides for a phase-in period for those securities already quoted on the
OTC Bulletin Board.
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Risk Factors
The Company's business is subject to numerous risk factors, including
the following:
1. Lack of History.
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.
2. The Company's Proposed Operation is Speculative.
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 combination(s) 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.
3. 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 and public 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.
4. The Company has No Agreement for a Business Combination or Other
Transaction - No Standards for Business Combination.
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The Company has no arrangement, agreement or understanding with
respect to engaging in a merger with, joint venture with or acquisition of, a
private or public 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 evaluation by the Company.
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.
5. Continued Management Control, Limited Time Availability.
While seeking a business combination, management anticipates
devoting up to ten hours per month to the business of the Company. The Company's
sole officer has not entered into a written employment agreement with the
Company and is not expected to do so in the foreseeable future. The Company has
not obtained key man life insurance on its sole officer or director.
Notwithstanding the combined limited experience and time commitment of
management, loss of the services of any of this individual would adversely
affect development of the Company's business and its likelihood of continuing
operations. See "Item 5 - Directors, Executive Officers, Promoters and Control
Persons."
6. There May Be Conflicts of Interest. The sole officer and director of the
Company may in the future participate in business ventures which could be deemed
to 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 sole
officer or director is involved in the management of any firm with which the
Company transacts business. Management has adopted a policy that the Company
will not seek a merger with, or acquisition of, any entity in which management
serves as officer, director or partner.
7. Reporting Requirements May Delay or Preclude Acquisitions.
Sections 13 and 5(d) of the Securities Exchange Act of 1934 (the
"1934 Act") require companies subject thereto to provide certain information
about significant acquisitions, including certified financial statements for the
company acquired, covering one, two, or three 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.
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8. 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.
9. 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 a
business opportunity. Consequently, the Company's activities may be limited to
those engaged in by business opportunities 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.
10. Regulation.
Although the Company will be subject to regulation under the
1934 Act, 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.
11. Probable Change in Control and Management.
A business combination involving the issuance of the Company's
Common Shares 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 Shares held by him, or resign as a member of the
Board of Directors of the Company. The resulting change in control of the
Company could result in removal of the sole present officer and director of the
Company and a corresponding reduction in or elimination of his participation in
the future affairs of the Company.
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12. Reduction of Percentage Share Ownership Following 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 any such private company. The
issuance of previously authorized and unissued Common Shares of the Company
would result in reduction in percentage of shares owned by present and
prospective shareholders of the Company and may result in a change in control or
management of the Company.
13. 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 laws enacted for the
protection of investors.
14. 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.
15. 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, 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.
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16. Dilution.
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 sole shareholder.
17. No Trading Market.
There is no trading market for the Company's common stock at
present, and there has been no trading market to date. There is no assurance
that a trading market will ever develop or, if such market does develop, that it
will continue. The Company intends to request a broker-dealer to make
application to the NASD Regulation, Inc. to have the Company's securities traded
on the OTC Bulletin Board or published in print and electronic media, or either,
in the National Quotation Bureau LLC "Pink Sheet."
18. Required Year 2000 Compliance.
A business combination will, in all likelihood, result in the
Company disclosing additional Year 2000 matters. Many existing computer programs
use only two digits to identify a year in the date field. These programs were
designed and developed without considering the impact of the upcoming change in
the century. If not corrected, many computer applications could fail or create
erroneous results by or at the Year 2000. The Year 2000 issue affects virtually
all companies and organizations.
19. Disclosure by Public Companies Regarding the Year 2000 Issue.
The business combination will require specific Year 2000
disclosures. Management of the Company believes that any potential business
opportunity may require a disclosure that many companies must undertake major
projects to address the Year 2000 issue. The disclosure of the potential costs
and uncertainties will depend on a number of factors, including its software and
hardware and the nature of its industry. Companies also must coordinate with
other entities with which they electronically interact, both domestically and
globally, including suppliers, customers, creditors, borrowers, and financial
service organizations. If the Company does not successfully address its Year
2000 issues, the Company may face material adverse consequences. The Company
will be required to review, on an ongoing basis, whether it needs to disclose
anticipated costs, problems and uncertainties associates with Year 2000
consequences, particularly in their filings with the Securities and Exchange
Commission. The Company may have to disclose this information in the Securities
and Exchange Commission filings because (i) the form or report may require the
disclosure, or (ii) in addition to the information that the Company is
specifically required to disclose, the disclosure rules require disclosure of
any additional material information necessary to make the required disclosure
not misleading.
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If the Company determines that it should make a Year 2000
disclosure, applicable rules or regulations must be followed. If the Company has
not made an assessment of its Year 2000 issues or has not determined whether it
has material Year 2000 issues, a disclosure of this known uncertainty is
required. In addition, the Securities and Exchange Commission staff believes
that the determination as to whether the Company's Year 2000 issues should be
disclosed should be based on whether the Year 2000 issues are material to the
Company's business, operations, or financial condition, without regard to
related countervailing circumstances (such as Year 2000 remediation programs or
contingency plans). If the Year 2000 issues are determined to be material,
without regard to countervailing circumstances, the nature and potential impact
of the Year 2000 issues as well as the countervailing circumstances will be
required. As part of this disclosure, the following topics will be addressed:
o the Company's general plans to address the Year 2000 issues
relating to its business, its operations (including operating
systems) and, if material, its relationships with customers,
suppliers, and other constituents; and its timetable for
carrying out those plans; and
o the total dollar amount that the Company estimates will be spent
to remediate its year 2000 issues, if such amount is expected to
be material to the Company's business, operations or financial
condition, and any material impact these expenditures are
expected to have on the Company's results of operations,
liquidity and capital resources.
Item 2. Plan of Operation
The Company intends to seek to acquire assets or shares of an
entity actively engaged in business which generates revenues in exchange for its
securities. The Company has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's sole officer and director, 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.
The Company has no full time or part-time employees.
The sole officer and director anticipates devoting more
than ten (10%) percent of his time to Company activities. The Company's sole
officer has agreed to allocate a portion of said time to the activities of the
Company, without compensation. This officer anticipates that the business plan
of the Company can be implemented by him devoting minimal time per month to the
business affairs of the Company and, consequently, conflicts of interest may
arise with respect to the limited time commitment by this officer. See "Item 5 -
Directors, Executive Officers, Promoters and Control Persons - Resumes."
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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 advantages of an
Issuer who has complied with the 1934 Act. 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 may 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 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 benefits of an Issuer who has complied with the
1934 Act. Such 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.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
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 an Issuer who has complied with the 1934 Act 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 acquisition of a business opportunity,
including the costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and
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related reports and documents. The 1934 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 1934 Act.
Nevertheless, the sole officer and director of the Company has not conducted
market research and is not aware of statistical data which would support the
benefits of a merger or acquisition transaction for the owners of a business
opportunity.
The Company has made no determination as to whether or not it
will file periodic reports in the event its obligation to file such reports is
suspended under the 1934 Act. Alan Schram, the sole officer and director of the
Company, has agreed to provide the necessary funds, without interest, for the
Company to comply with the 1934 Act reporting requirements, provided that he is
an officer and director of the Company when the obligation is incurred.
The analysis of new business opportunities will be undertaken
by, or under the supervision of, the sole officer and director of the Company,
who is not 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 sole officer and
director, or by the Company's sole shareholder. 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 public recognition of acceptance of products,
services, or trades; name identification; and other relevant factors. The sole
Officer and director of the Company expect to meet personally with management
and key personnel of the business opportunity as part of his 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
merge 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 his own
efforts in accomplishing the business purposes of the Company. It is not
anticipated that any outside consultants or advisors 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 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 contracts or agreements with any outside consultants and none are
anticipated in the future.
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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 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.
It is anticipated that the Company will incur nominal expenses
in the implementation of its business plan described herein. Because the Company
has no capital with which to pay these anticipated expenses, present management
of the Company will pay these charges with his personal funds, as interest free
loans to the Company or as capital contributions. However, if loans, the only
opportunity which management has to have these loans repaid will be from a
prospective merger or acquisition candidate. Management has agreed that the
repayment of any loans made on behalf of the Company will not impede, or be made
conditional in any manner, to consummation of a proposed transaction.
The Company has no plans, proposals, arrangements, or
understanding with respect to the sale or issuance of additional securities
prior to the location of an acquisition or merger candidate.
Acquisition 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
sole shareholder of the Company will no longer be in control of the Company. In
addition, the Company's sole director may, as part of the terms of the
acquisition transaction, resign and be replaced by new directors without a vote
of the Company's sole shareholder or may sell his stock in the Company. Any
terms of sale of the shares presently held by the sole officer and/or director
of the Company will be also afforded to all other prospective shareholders of
the Company on similar terms and conditions. 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. 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.
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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 368(a)(1) or 351 of the Internal Revenue Code (the
"Code"). In order to obtain tax-free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more of the
voting stock of the surviving entity. In such event, the sole shareholder of the
Company, would retain less than 20% of the issued and outstanding shares of the
surviving entity, which would result in significant dilution in the equity of
such shareholder.
As part of the Company's investigation, the sole officer and
director of the Company will meet personally with management and key personnel,
may visit and inspect material facilities, obtain independent analysis of
verification of certain information provided, check references of management and
key personnel, and take other reasonable investigative measures, to the extent
of the Company's limited financial resources and management expertise. The
manner in which the Company participates in an opportunity will depend on the
nature of the opportunity, the respective needs and desires of the Company and
other parties, the management of the opportunity and the relative negotiation
strength of the Company and such other management.
With respect to any merger or acquisition, negotiations with
target company management is expected to focus on the percentage of the Company
which the 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 sole shareholder 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.
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As stated hereinabove, 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 1934
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 1934
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 will provide that the proposed transaction will be
voidable, at the discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision providing for
the acquisition entity to reimburse the Company for all costs associated with
the proposed transaction.
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.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933, as amended, and the 1934 Act, 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. The Company's Board
of Directors unanimously approved a resolution stating that it is the Company's
desire to be exempt from the Investment Company Act of 1940 under Regulation
3a-2 thereto.
14
<PAGE>
Lock-Up Agreement
The lone officer and director of the Company has executed and
delivered a "lock-up" letter agreement affirming that he shall not sell his
respective shares of the Company's common stock until such time as the Company
has entered into a merger or acquisition agreement, or the Company is no longer
classified as a "blank check" company, whichever first occurs.
Item 3. Description of Property
The Company has no properties and at this time has no agreements
to acquire any properties.
The Company presently occupies office space supplied by its
shareholder at 16133 Ventura Boulevard, Suite 635, Encino, California 91436.
This space is provided to the Company on a rent-free basis, and it is
anticipated that this arrangement will remain until such time as the Company
successfully consummates a merger or acquisition. Management believes that this
arrangement will meet the Company's needs for the foreseeable future.
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners.
The following table sets forth the security and beneficial ownership for
each class of equity securities of the Company beneficially owned by the sole
director and officer of the Company.
Name and Amount and
Address of Nature of
Title of Beneficial Beneficial Percent
Class Owner Owner of Class (1)
- --------- ---------- ----------- ---------
Common Alan Schram 1,150 100.0
16133 Ventura Boulevard, Ste 635
Encino, California 91436
Common All Officers and 1,150 100.0
Directors as a Group
(one [1] individual)
15
<PAGE>
(b) Security Ownership of Management.
Name and Amount and
Address of Nature of
Title of Beneficial Beneficial Percent
Class Owner Owner of Class (1)
- --------- ---------- ----------- ---------
Common Alan Schram 1,150 100.0
16133 Ventura Boulevard, Ste 635
Encino, California 91436
Common All Officers and 1,150 100.0
Directors as a Group
(one [1] individuals)
(1) Percent of class is based on 1,150 shares of Common Stock outstanding as of
February 7, 2000. The total of the Company's outstanding Common Shares are
held by 1 person.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and officers of the Company are as follows:
Name Age Position
---- --- --------
Alan Schram 29 President/Secretary/Director
The above listed officer and director will serve until the next
annual meeting of the shareholders or until his death, resignation, retirement,
removal, or disqualification, or until his successor has been duly elected and
qualified. Vacancies in the existing Board of Directors are filled by majority
vote of the remaining Directors. The sole Officer of the Company serve at the
will of the Board of Directors. There are no agreements or understandings for
the officer or director to resign at the request of another person and no
officer or director is acting on behalf of or will act at the direction of any
other person. There is no family relationship between any executive officer and
director of the Company.
Resumes
Alan Schram
- -----------
Mr. Schram has been the sole shareholder and has been the President and a
director of the Company since inception in 1999. Mr. Schram is an investment
consultant and advises private clients on investment matters. Mr. Schram is a
graduate of the University of California in Los Angeles.
16
<PAGE>
Previous Blank Check Companies - Current
Blank Check Companies
The sole officer and director of the Company has not been an
officer and director in any other blank check offerings. The sole officer and
director, however, anticipates becoming involved with additional blank check
companies who may file registration statements under the Securities Act of 1933,
as amended, and the 1934 Act, or either. In addition, the sole officer and
director of the Company may become involved in additional blank check companies
which may request a broker-dealer to request clearance from the NASD Regulation,
Inc. for trading clearance in the applicable quotation medium.
Conflicts of Interest
The Company's management is associated with other firms involved
in a range of business activities. Consequently, there are potential inherent
conflicts of interest in his acting as officer and director of the Company.
Insofar as the officer and director is engaged in other business activities,
management anticipates it will devote only a minor amount of time to the
Company's affairs.
The lone officer and director of the Company is now and may in
the future become a shareholder, officer or director of other companies which
may be engaged in business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in the future
with respect to such individual acting on behalf of the Company or other
entities. Moreover, additional conflicts of interest may arise with respect to
opportunities which come to the attention of such individual in the performance
of his duties or otherwise. The Company does not currently have a right of first
refusal pertaining to opportunities that come to management's attention insofar
as such opportunities may relate to the Company's proposed business operations.
The lone officer and director is, so long as he is an officer or
director of the Company, subject to the restriction that all opportunities
contemplated by the Company's plan of operation which come to their attention,
either in the performance of their duties or in any other manner, will be
considered opportunities of, and be made available to the Company and the
companies that they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the officer or director.
If the Company or the companies in which the sole officer and director is
affiliated with both desire to take advantage of an opportunity, then said
officer and director would abstain from negotiating and voting upon the
opportunity. However, the sole director may still individually take advantage of
opportunities if the Company should decline to do so. Except as set forth above,
the Company has not adopted any other conflict of interest policy with respect
to such transactions.
17
<PAGE>
Item 6. Executive Compensation.
The Company's sole officer and/or director did not receive any
compensation for his respective services rendered unto the Company, nor has
he received such compensation in the past. He has agreed to act without
compensation until authorized by the Board of Directors, which is not expected
to occur until the Company has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this registration
statement, the Company has no funds available to pay directors. Further, the
director is accruing any compensation pursuant to any agreement with the
Company.
It is possible that, after the Company successfully consummates
a merger or acquisition with an unaffiliated entity, that entity may desire to
employ or retain the Company's sole management member for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such person. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to the sole member of management
will not be a consideration in the Company's decision to undertake any proposed
transaction. The sole member of management has agreed to disclose to the
Company's Board of Directors any discussions concerning possible compensation to
be paid to them by any entity which proposes to undertake a transaction with the
Company and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.
18
<PAGE>
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted by the Company
for the benefit of its employees.
Item 7. Certain Relationships and Related Transactions.
There have been no related party transactions, or any other
transactions or relationships required to be disclosed pursuant to Item 404 of
Regulation S-B.
Alan Schram has agreed to provide the necessary funds,
without interest, for the Company to comply with the 1934 Act provided that he
is an officer and director of the Company when the obligation is incurred. All
advances will be interest-free.
Item 8. Description of Securities.
The Company's authorized capital stock consists of 25,000
shares of Common Stock, no par value. There are 1,150 Common Shares issued and
outstanding as of the date of this filing.
Common Stock
- ------------
All shares of Common Stock have equal voting rights and, when
validly issued and outstanding, are entitled to one vote per share in all
matters to be voted upon by shareholders. The shares of Common Stock have no
preemptive, subscription, conversion or redemption rights and may be issued only
as fully-paid and non-assessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any. All shares of the Company's Common Stock issued and outstanding are
fully-paid and non-assessable. Holders of the Common Stock are entitled to share
pro rata in dividends and distributions with respect to the Common Stock, as may
be declared by the Board of Directors out of funds legally available therefor.
19
<PAGE>
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters.
There is no trading market for the Company's Common Stock at
present and there has been no trading market to date. There is no assurance that
a trading market will ever develop or, if such a market does develop, that it
will continue. The Company intends to request a broker-dealer to make
application to the NASD Regulation, Inc. to have the Company's securities traded
on the OTC Bulletin Board Systems or published, in print and electronic media,
or either, in the National Quotation Bureau LLC "Pink Sheets."
(a) Market Price. The Company's Common Stock is not quoted at the present
time.
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
For the initial listing in the NASDAQ Small Cap market, a
company must have net tangible assets of $4 million or market capitalization of
$50 million or a net income (in the latest fiscal year or two of the last fiscal
years) of $750,000, a public float of 1,000,000 shares with a market value of $5
million. The minimum bid price must be $4.00 and there must be 3 market makers.
In addition, there must be 300 shareholders holding 100 shares or more, and the
company must have an operating history of at least one year or a market
capitalization of $50 million.
20
<PAGE>
For continued listing in the NASDAQ SmallCap market, a company
must have net tangible assets of $2 million or market capitalization of $35
million or a net income (in the latest fiscal year or two of the last fiscal
years) of $500,000, a public float of 500,000 shares with a market value of $1
million. The minimum bid price must be $1.00 and there must be 2 market makers.
In addition, there must be 300 shareholders holding 100 shares or more.
Management intends to strongly consider undertaking a
transaction with any merger or acquisition candidate which will allow the
Company's securities to be traded without the aforesaid limitations. However,
there can be no assurances that, upon a successful merger or acquisition, the
Company will qualify its securities for listing on NASDAQ or some other national
exchange, or be able to maintain the maintenance criteria necessary to insure
continued listing. The failure of the Company to qualify its securities or to
meet the relevant maintenance criteria after such qualification in the future
may result in the discontinuance of the inclusion of the Company's securities on
a national exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter market. As a
result, a shareholder may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, the Company's securities.
(b) Holders.
There is one (1) holder of the Company's Common Stock. In 1999,
the Company issued 1,150 of its Common Shares for cash. All of the issued and
outstanding shares of the Company's Common Stock were issued in accordance with
the exemption from registration afforded by Section 4(2) of the Securities Act
of 1933, as amended.
As of the date of this report, none of the issued and
outstanding shares of the Company's Common Stock are eligible for sale under
Rule 144 promulgated under the Securities Act of 1933, as amended, subject to
certain limitations included in said Rule. The sole officer and director of the
Company has executed and delivered to the Company a "lock-up" letter affirming
that he shall not sell his 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.
21
<PAGE>
As of the date of this registration statement, none of the
Company's Common Stock are eligible for sale under Rule 144 promulgated under
the Securities Act of 1933, as amended. In general, under Rule 144, a person (or
persons whose shares are aggregated), who has satisfied a one year holding
period, under certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent of the then
outstanding Common Stock or the average weekly trading volume during the four
calendar weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation by a person
who has satisfied a two-year holding period and who is not, and has not been for
the preceding three months, an affiliate of the Company.
(c) Dividends.
The Company has not paid any dividends to date, and has no plans
to do so in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the
Company.
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
The Company has not changed accountants since its formation and
there are no disagreements with the findings of said accountants.
Item 4. Recent Sales of Unregistered Securities.
(a) Securities sold.
The Company has sold and issued its securities during the three
year period preceding the date of this registration statement. All of the shares
of Common Stock of the Company were sold and issued on June 22, 1999 and have
been issued for investment purposes in a "private transaction" and are
"restricted" shares as defined in Rule 144 under the Securities Act of 1933, as
amended. These shares may not be offered for public sale except under Rule 144,
or otherwise, pursuant to said Act.
In summary, Rule 144 applies to affiliates (that is, control
persons) and non-affiliates when they resell restricted securities (those
purchased from the issuer or an affiliate of the issuer in nonpublic
transactions). Non-affiliates reselling restricted securities, as well as
affiliates selling restricted or nonrestricted securities, are not considered to
be engaged in a distribution and, therefore, are not deemed to be underwriters
as defined in Section 2(11) of the Securities Act of 1933, as amended, if six
conditions are met:
22
<PAGE>
(1) Current public information must be available about the
issuer unless sales are limited to those made by non-affiliates after
two years.
(2) When restricted securities are sold, generally there must be
a one-year holding period.
(3) When either restricted or nonrestricted securities are sold
by an affiliate after one year, there are limitations on the amount of
securities that may be sold; when restricted securities are sold by
non-affiliates between the first and second years, there are identical
limitations; after two years, there are no volume limitations for
resales by non-affiliates.
(4) Except for sales of restricted securities made by
non-affiliates after two years, all sales must be made in brokers'
transactions as defined in Section 4(4) of the Securities Act of 1933,
as amended, or a transaction directly with a "market maker" as that term
is defined in Section 3(a)(38) of the 1934 Act.
(5) Except for sales of restricted securities made by
non-affiliates after two years, a notice of proposed sale must be filed
for all sales in excess of 500 shares or with an aggregate sales price
in excess of $10,000.
(6) There must be a bona fide intention to sell within a
reasonable time after the filing of the notice referred to in (5) above.
(b) Underwriters and other purchasers.
There were no underwriters in connection with the sale and
issuance of any securities.
The sole shareholder has had a pre-existing personal or business
relationship with the Company or its officer and director. By reason of his
business experience, he has been involved financially and by virtue of a time
commitment in business projects with the officer of the Company. Further, the
sole shareholder has established a pre-existing personal relationship with the
officer and director of the Company. The following is the name of the
shareholder and the number of shares purchased by him.
23
<PAGE>
Name Number of Shares
---- ----------------
Alan Schram 1,150
(c) Consideration.
Each of the shares of stock were sold for cash. Each shareholder
paid $1.00 per share for the shares, the Company sold and issued 1,150 shares,
and the aggregate consideration received by the Company was $1,150.00.
(d) Exemption from Registration Relied Upon.
The sale and issuance of the shares of stock was exempt from
registration under the Securities Act of 1933, as amended, by virtue of section
4(2) as a transaction not involving a public offering. The sole shareholder had
acquired the shares for investment and not with a view for distribution to the
public. From the date of the issuance to the date of this report, there were no
transfers of the stock sold and issued.
Item 5. Indemnification of Directors and Officers.
Except for acts or omissions which involve intentional
misconduct, fraud or known violation of law or for the payment of dividends in
violation of Nevada Revised Statutes, there shall be no personal liability of a
director or officer to the Company, or its stockholders for damages for breach
of fiduciary duty as a director or officer. The Company may indemnify any person
for expenses incurred, including attorneys fees, in connection with their good
faith acts if they reasonably believe such acts are in and not opposed to the
best interests of the Company and for acts for which the person had no reason to
believe his or her conduct was unlawful. The Company may indemnify the officers
and directors for expenses incurred in defending a civil or criminal action,
suit or proceeding as they are incurred in advance of the final disposition of
the action, suit or proceeding, upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount of such expenses if it is
ultimately determined by a court of competent jurisdiction in which the action
or suit is brought determined that such person is fairly and reasonably entitled
to indemnification for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to officers, directors or
persons controlling the Company pursuant to the foregoing, the Company has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is therefore unenforceable.
24
<PAGE>
PART F/S
The Company's balance sheets as of December 31, 1999 and the related
statements of operations, stockholders' equity and cash flows for the period
June 22, 1999 (inception) to December 31, 1999, have been examined to the extent
indicated in their report by Merdinger, Fruchter, Rosen & Corso, P.C.,
independent certified accountants, and have been prepared in accordance with
generally accepted accounting principles and pursuant to Regulation S-B as
promulgated by the Securities and Exchange Commission and are included herein,
on the following pages, in response to Part F/S of this Form 10-SB.
25
<PAGE>
INDEX
PAGE
INDEPENDENT AUDITORS' REPORT F/S-1
BALANCE SHEET F/S-2
STATEMENT OF OPERATIONS F/S-3
STATEMENT OF STOCKHOLDER'S EQUITY F/S-4
STATEMENT OF CASH FLOWS F/S-5
NOTES TO FINANCIAL STATEMENT F/S-6-7
26
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF PERFECTION PLUS, INC.:
We have audited the accompanying balance sheet of Perfection Plus, Inc. (A
Development Stage Company) as of December 31, 1999 and the related statements of
operations, stockholder's equity and cash flows for the period from June 22,
1999 (inception) to December 31, 1999. These financials statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Perfection Plus, Inc. as of
December 31, 1999 and the results of its operations and its cash flows for the
period from June 22, 1999 (inception) to December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 of the
accompanying financial statements, the Company has no established source of
revenue, which raises substantial doubt about its ability to continue as a going
concern. Management's plan in regard to these matters is also discussed in Note
1. These financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
MERDINGER, FRUCHTER ROSEN & CORSO, P.C.
Certified Public Accountants
Los Angeles, California
February 8, 2000
F/S-1
<PAGE>
PERFECTION PLUS, INC.
(A Development Stage Company)
BALANCE SHEET
December 31,
1999
---------------
ASSETS
TOTAL ASSETS $ -
===============
LIABILITIES AND STOCKHOLDER'S EQUITY
TOTAL LIABILITIES -
----------------
----------------
STOCKHOLDER'S EQUITY:
Common stock, No par value;
25,000 shares authorized;
1,150 shares issued and outstanding 1,150
Deficit accumulated during the development stage (1,150)
---------------
TOTAL STOCKHOLDER'S EQUITY -
---------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ -
===============
The accompanying notes are an integral part of the financial statement.
F/S-2
<PAGE>
PERFECTION PLUS, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the period
from June 22,
1999
(inception) to
December 31,
1999
-----------------
REVENUE $ -
ADMINISTRATIVE EXPENSES 1,150
-----------------
NET LOSS $ (1,150)
=================
NET LOSS PER COMMON SHARE - basic and diluted $ (1.00)
=================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING - basic and diluted 1,150
=================
The accompanying notes are an integral part of the financial statement.
F/S-3
<PAGE>
PERFECTION PLUS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
Common Stock
------------------- Accumulated
Shares Amount Deficit Total
------- -------- ------------ --------
<S> <C> <C> <C> <C>
Balance, June 22, 1999 - $ - $ - $ -
Issuance of common stock for
cash on June 22, 1999 at
$1.00 per share 1,150 1,150 1,150
Net loss - - (1,150) (1,150)
------- ------ --------- --------
Balance, December 31, 1999 1,150 $1,150 $ (1,150) $ -
====== ====== ========= ========
</TABLE>
The accompanying notes are integral part of the financial statement.
F/S-4
<PAGE>
PERFECTION PLUS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period
from June 22,
1999
(inception) to
December 31,
1999
-----------------
NET CASH FLOWS USED IN OPERATING ACTIVITIES:
Net Loss $ (1,150)
-----------------
NET CASH FLOWS PROVIDED FROM
FINANCING ACTIVITIES:
Issuance of common stock for cash 1,150
-----------------
Net change in cash -
Cash and cash equivalents - beginning of period -
-----------------
Cash and cash equivalents - end of period $ -
=================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year-
Interest paid $ -
=================
Income taxes paid $ -
=================
The accompanying notes are an integral part of the financial statement.
F/S-5
<PAGE>
PERFECTION PLUS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
--------------------
Perfection Plus, Inc. ("Company") is currently a development stage
company under the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 7. The Company was incorporated under the laws
of the State of Nevada on June 22, 1999.
Basis of Presentation
---------------------
The accompanying financial statement has been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company
has no established source of revenue. This factor raises substantial
doubt about the Company's ability to continue as a going concern.
Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern. The financial statement
does not include any adjustments relating to the recoverability and
classification of recorded asset amount, or amounts and classification
of liabilities that might be necessary should the Company be unable to
continue in existence. It is management's objective to seek additional
capital through a merger with an existing operating company.
Use of 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 Cash Equivalents
-------------------------
The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.
Concentration of Credit Risk
----------------------------
From time to time the Company places its cash in what it believes to
be credit-worthy financial institutions. However, cash balances exceed
FDIC insured levels at various times during the year.
F/S-6
<PAGE>
PERFECTION PLUS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Income Taxes
------------
Income taxes are provided for based on the liability method of
accounting pursuant to SFAS No. 109, "Accounting for Income Taxes".
Deferred income taxes, if any, are recorded to reflect the tax
consequences on future years of differences between the tax bases of
assets and liabilities and their financial reporting amounts at each
year-end.
Loss Per Share
--------------
The Company presents loss per share in accordance with SFAS No. 128,
"Loss Per Share," which requires presentation of basic loss per share
("Basic LPS") and diluted loss per share ("Diluted LPS"). The
computation of basic loss per share is computed by dividing loss
available to common stockholders by the weighted average number of
outstanding common shares during the period. Diluted loss per share
gives effect to all dilutive potential common shares outstanding
during the period. The computation of diluted LPS does not assume
conversion, exercise or contingent exercise of securities that would
have an antidilutive effect on earnings.
Comprehensive Income
--------------------
SFAS No. 131, "Reporting Comprehensive Income," establishes standards
for the reporting and display of comprehensive income and its
components in the financial statements. As of December 31, 1999, the
Company has no items that represent comprehensive income and,
therefore, has not included a schedule of Comprehensive Income in the
accompanying financial statement.
Impact of Year 2000 Issue
-------------------------
As of December 31, 1999, the Company does not have any computer
systems or customers and suppliers. Therefore, the issue of the year
2000 has no effect on the Company's current activities.
NOTE 2 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. The
sole officer and director of the Company provides office services
without charge. Such costs are immaterial to the financial statement
and, accordingly, have not been reflected therein. The officer and
director of the Company is involved in other business activities and
may, in the future, become involved in other business opportunities.
If a business opportunity becomes available for the Company, such
persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for
the resolution of such conflicts.
F/S-7
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PART III
Item 1. Exhibit Index
Sequential
No. Page No.
--- ----------
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation 35
3.2 Bylaws 40
(12) Lock-Up Agreement
12.1 Alan Schram 53
(27) Financial Data Schedule
27.1 Financial Data Schedule 54
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 10, 2000 PERFECTION PLUS, INC.
By: /s/ Alan Schram
-------------------
Alan Schram
President
27
EXHIBIT 3.1
Filed #C15393-99
JUN 22 1999
IN THE OFFICE OF
DEAN HELLER
SECRETARY OF STATE
ARTICLES OF INCORPORATION OF
PERFECTION PLUS, INC.
a Nevada corporation
I, the undersigned, being the original incorporator herein named, for the
purpose of forming a corporation under the General Corporation Laws of the State
of Nevada, to do business both within and without the State of Nevada, do make
and file these Articles of Incorporation, hereby declaring and certifying that
the facts herein stated are true:
ARTICLE I
NAME
The name of the corporation is PERFECTION PLUS, INC
ARTICLE II
RESIDENT AGENT & REGISTERED OFFICE
Section 2.01. Resident Agent. The name and address of the Resident Agent
for service of process is Nevada Corporate Headquarters, Inc., 6300 West Sahara,
Suite 101, Las Vegas, Nevada 89146. Mailing Address: P.O. Box 27740, Las Vegas,
NV 89126.
Section 2.02. Registered Office. The address of its Registered Office is
5300 West Sahara, Suite 101, Las Vegas, Nevada 89146,
Section 2,03. Other Offices. The Corporation may also maintain offices for
the transaction of any business at such other places within or without the State
of Nevada as it may from time to time determine. Corporate business of every
kind and nature may be conducted, and meetings of directors and stockholders
held outside the State of Nevada with the same effect as if in the State of
Nevada,
ARTICLE III
PURPOSE
The corporation is organized for the purpose of engaging in any lawful
activity, within or without the State of Nevada.
ARTICLE IV
SHARES OF STOCK
Section 4.01 Number and Class. The total number of shares of authorized
capital stock of the Corporation shall consist of a single class of twenty-five
thousand (25,000) shares of common stock, no par value.
The Common Stock may be issued from time to time without action by the
stockholders. The Common Stock may be issued for such consideration as may be
fixed from time to time by the Board of Directors.
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The Board of Directors may issue such shares of Common Stock in one or more
series, with such voting powers, designations, preferences and rights or
qualifications, limitations or restrictions thereof as shall be stated in the
resolution or resolutions adopted by them.
Section 4.02. No Preemptive Rights. Holders of the Common Stock of the
corporation shall not have any preference, preemptive right. or right of
subscription to acquire any shares of the corporation authorized, issued or
sold, or to be authorized, issued or sold, and convertible into shares of the
Corporation, nor to any right of subscription thereto, other than to the extent,
If any, the Board of Directors may determine from time to time.
Section 4.03. Non-Assessability of Shares. The Common Stock of the
corporation, after the amount of the subscription price has been paid, in money,
property or services, as the directors shall determine, shall not be subject to
assessment to pay the debts of the corporation, nor for any other purpose, and
no stock issued as fully paid shall ever be assessable or assessed, and the
Articles of Incorporation shall not be amended in this particular.
ARTICLE V
DIRECTORS
Section 5.01. Governing Board. The members of the Governing Board of the
Corporation shall be styled as directors.
Section 5.02. Initial Board of Directors. The initial Board of Directors
shall consist of one (1) member. The name and address of the initial member of
the Board of Directors is as follows:
NAME ADDRESS
Cort W. Christie P.O. Box 27740
Las Vegas, Nevada 89126
This individual shall serve as Director until the first annual meeting of
the stockholders or until his successor(s) shall have been elected and
qualified.
Section 5.03. Change in Number of Directors. The number of directors may be
increased or decreased by a duly adopted amendment to the Bylaws of the
corporation.
ARTICLE V1
INCORPORATOR
The name and address of the incorporator is Nevada Corporate Headquarters,
Inc., P.O. Box 27740, Las Vegas, Nevada 89126.
ARTICLE VII
PERIOD OF DURATION
The corporation is to have a perpetual existence.
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ARTICLE VIII
DIRECTORS' & OFFICERS' LIABILITY
A director or officer of the corporation shall not be personally liable
to this corporation or its stockholders for damages for breach of fiduciary duty
as a director or officer, but this Article shall not eliminate or limit the
liability of a director or officer for (i) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law or (ii) the unlawful
payment of distributions. 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.
ARTICLE IX
INDEMNITY
Every person who was or is a party to, or is threatened to be made a
party to, or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he, or a
person of whom he is the legal representative, is or was a director or officer
of the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise, shall be indemnified and
hold harmless to the fullest extent legally permissible under the laws of the
State of Nevada from time to time against all expenses, liability and loss
(including attorneys' fees, judgments, fines and amounts paid or to be paid In
settlement) reasonably incurred or suffered by him in connection therewith. Such
right of indemnification shall be a contract right which may be enforced in any
manner desired by such person. The expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall not be exclusive of any other
right which such directors, officers or representatives may have or hereafter
acquire, and, without limiting the generality of such statement, they shall be
entitled to their respective rights of indemnification under any by-law,
agreement, vote of stockholders, provision of law, or otherwise, as well as
their rights under this Article.
Without limiting the application of the foregoing, the stockholders or
Board of Directors may adopt by-laws from time to time with respect to
indemnification, to provide at all times the fullest indemnification permitted
by the laws of the State of Nevada, and may cause the corporation to purchase
and maintain insurance on behalf of any person who is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other
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enterprises against any liability asserted against such person and incurred in
any such capacity or arising out of such status, whether or not the corporation
would have the power to indemnity such person.
The indemnification provided in this Article shall continue as to a
person who has ceased to be a director, officer, employee or agent, and shall
inure to the benefit of the heirs, executors and administrators of such person,
ARTICLE X
AMENDMENTS
Subject at all times to the express provisions of Section 4.03 which
cannot be amended, this corporation reserves the right to amend, alter, change,
or repeal any provision contained in these Articles of Incorporation or its
Bylaws, in the manner now or hereafter prescribed by statute or by these
Articles of Incorporation or said Bylaws, and all rights conferred upon the
stockholders are granted subject to this reservation.
ARTICLE XI
POWERS OF DIRECTORS
In furtherance and not in limitation of the powers conferred by statute
the Board of Directors is expressly authorized:
(1) Subject to the Bylaws, if any, adopted by the stockholders, to make,
alter or repeal the Bylaws of the corporation;
(2) To authorize and cause to be executed mortgages and liens, with or
without limit as to amount, upon the real and personal property of the
corporation;
(3) To authorize the guaranty by the corporation of securities, evidences
of indebtedness and obligations of other persons, corporations and business
entities;
(4) To set apart out of any of the funds of the corporation available for
distributions a reserve or reserves for any proper purpose and to abolish any
such reserve;
(5) By resolution, to designate one or more committees, each committee to
consist of at least one director of the corporation, which, to the extent
provided in the resolution or in the Bylaws of the corporation, shall have and
may exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be stated in the Bylaws of the
corporation or as may be determined from time to time by resolution adopted by
the Board of Directors; and
(6) To authorize the corporation by its officers or agents to exercise all
such powers and to do all such acts and things as may be exercised or done by
the corporation, except and to the extent that any such statute shall require
action by the stockholders of the corporation with regard to the exercising of
any such power or the doing of any such act or thing. In addition to the powers
and authorities hereinbefore or by statute expressly conferred upon them, the
Board of Directors may exercise all such powers and do all such acts and things
as may be exercised or done by the corporation, except as otherwise provided
herein and by law.
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IN WITNESS WHEREOF, I have hereunto set my hand this 16 day of JUNE,
1999, hereby declaring and certifying that the facts stated hereinabove are
true.
/s/ Cort W. Christie
-------------------------------------------
Cort W. Christie
(For Nevada Corporate Headquarters, Inc.)
ACKNOWLEDGMENT
STATE OF NEVADA)
) SS:
COUNTY OF CLARK)
On this 16 day of JUNE, 1999, personally appeared before me, a Notary
Public (or judge or other authorized person, as the case may be), CORT W.
CHRISTIE, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
[Notary Seal]
/s/ Lynn Osmera
------------------------------------
I, NEVADA CORPORATE HEADQUARTERS, INC. hereby accept as Resident Agent for the
previously named Corporation on 16 day of JUNE, 1999.
[illegible]
----------------------------------
Office Administrator
On this 16 day of JUNE, 1999.
5
EXHIBIT 3.2
A Nevada Corporation
BYLAWS OF
PERFECTION PLUS, INC.
ARTICLE I
Stockholders
Section 1. Annual Meeting. Annual meetings of the stockholders, commencing with
the year 1997, shall be held on the 22ND day of JUNE each year if not a legal
holiday and, if a legal holiday, then on the next secular day following, or at
such other time as may be set by the Board of Directors from time to time, at
which the stockholders shall elect by vote a Board of Directors and transact
such other business as may properly be brought before the meeting.
Section 2. Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation, may be called by the President or the Secretary by resolution
of the Board of Directors or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose of the
proposed meeting.
Section 3. Place of Meetings. All annual meetings of the stockholders shall be
held at the registered office of the corporation or at such other place within
or without the State of Nevada as the directors shall determine. Special
meetings of the stockholders may be held at such time and place within or
without the State of Nevada as shall be stated in the notice of the meeting, or
in a duly executed waiver of notice thereof. Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the notice.
Section 4. Quorum, Adjourned Meetings. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by
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proxy, shall have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. 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 notified.
Section 5. Voting. Each stockholder of record of the corporation holding stock
which is entitled to vote at this meeting shall be entitled at each meeting of
stockholders to one vote for each share of stock standing in his name on the
books of the corporation. Upon the demand of any stockholder, the vote for
directors and the vote upon any question before the meeting shall be by ballot.
When a quorum is present or represented at any meeting, the vote of the holders
of a majority of the stock having voting power present in person or represented
by proxy shall be sufficient to elect directors or to decide any question
brought before such meeting, unless the question is one upon which by express
provision of the statutes or of the Articles of Incorporation, a different vote
is required in which case such express provision shall govern and control the
decision of such question.
Section 6. Proxies. At any meeting of the stockholders any stockholder may be
represented and vote by a proxy or proxies appointed by an instrument *in
writing. In the event that any such instrument in writing shall designate two or
more persons to act as proxies, a majority of such persons present at the
meeting, or, if only one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument upon all of the
persons so designated unless the instrument shall otherwise provide. No proxy or
power of attorney to vote shall be used to vote at a meeting of the stockholders
unless it shall have been filed with the secretary of the meeting. All questions
regarding the qualification of voters, the validity of proxies and the
acceptance or rejection of votes shall be decided by the inspectors of election
who shall be appointed by the Board of Directors, or if not so appointed, then
by the presiding officer of the meeting.
Section 7. Action Without Meeting. Any action which may be taken by the vote of
the stockholders at a meeting may be taken without a meeting if authorized by
the written consent of stockholders holding at least a majority of the voting
power, unless the provisions of the statutes or of the Articles of Incorporation
require a greater proportion of voting power to authorize such action in which
case such greater proportion of written consents shall be required.
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ARTICLES II
Directors
Section 1. Management of Corporation. The business of the corporation shall be
managed by its Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised or done by the stockholders.
Section 2. Number, Tenure, and Qualifications. The number of directors which
shall constitute the whole board shall be at least one. The number of directors
may from time to time be increased or decreased to not less than one nor more
than fifteen. The directors shall be elected at the annual meeting of the
stockholders and except as provided in Section 2 of this Article, each director
elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 3. Vacancies. Vacancies in the Board of Directors including those caused
by an increase in the number of directors, may be filled by a majority of the
remaining directors, though less than a quorum, or by a sole remaining director,
and each director so elected shall hold office until his successor is elected at
an annual or a special meeting of the stockholders. The holders of two-thirds of
the outstanding shares of stock entitled to vote may at any time peremptorily
terminate the term of office of all or any of the directors by vote at a meeting
called for such purpose or by a written statement filed with the secretary or,
in his absence, with any other officer.
Such removal shall be effective immediately, even if successors are not elected
simultaneously.
A vacancy or vacancies in the Board of Directors shall be deemed to exist in
case of the death, resignation or removal of any directors, or if the authorized
number of directors be increased, or if the stockholders fail at any annual or
special meeting of stockholders at which any director or directors are elected
to elect the full authorized number of directors to be voted for at that
meeting.
If the Board of Directors accepts the resignation of a director tendered to take
effect at a future time, the Board or the stockholders shall have power to elect
a successor to take office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of his term of office.
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Section 4. Annual and Regular Meetings. Regular meetings of the Board of
Directors shall be held at any place within or without the State which has been
designated from time to time by resolution of the Board or by written consent of
all members of the Board. In the absence of such designation regular meetings
shall be held at the registered office of the corporation. Special meetings of
the Board may be held either at a place so designated or at the registered
office.
Regular meetings of the Board of Directors may be held without call or notice at
such time and at such place as shall from time to time be fixed and determined
by the Board of Directors.
Section 5. First Meeting. The first meeting of each newly elected Board of
Directors shall be held immediately following the adjournment of the meeting of
stockholders and at the place thereof. No notice of such meeting shall be
necessary to the directors in order legally to constitute the meeting, provided
a quorum be present. In the event such meeting is not so held, the meeting may
be held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors.
Section 6. Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman or the President or by any Vice-President or by any two
directors.
Written notice of the time and place of special meetings shall be delivered
personally to each director, or sent to each director by mail or by other form
of written communication, charges prepaid, addressed to him at his address as it
is shown upon the records or if such address is not readily ascertainable, at
the place in which the meetings of the directors are regularly held. In case
such notice is mailed or telegraphed, it shall be deposited in the United States
mail or delivered to the telegraph company at least three (3) days prior to the
time of the holding of the meeting. In case such notice is hand delivered as
above provided, it shall be so delivered at least twenty-four (24) hours prior
to the time of the holding of the meeting. Such mailing, telegraphing or
delivery as above provided shall be due, legal and personal notice to such
director.
Section 7. Business of Meetings. The transactions of any meeting of the Board of
Directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if a quorum be
present, and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice, or a consent to holding such meeting,
or an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
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Section 8. Quorum, Adjourned Meetings. A majority of the authorized number of
directors shall be necessary to constitute a quorum for the transaction of
business, except to adjourn as hereinafter provided. Every act or decision done
or made by a majority of the directors present at a meeting duly held at which a
quorum is present shall be regarded as the act of the Board of Directors, unless
a greater number be required by law or by the Articles of Incorporation. Any
action of a majority, although not at a regularly called meeting, and the record
thereof, if assented to in writing by all of the other members of the Board
shall be as valid and effective in all respects as if passed by the Board in
regular meeting.
A quorum of the directors may adjourn any directors meeting to meet again at a
stated day and hour; provided, however, that in the absence of a quorum, a
majority of the directors present at any directors meeting, either regular or
special, may adjourn from time to time until the time fixed for the next regular
meeting of the Board.
Notice of the time and place of holding an adjourned meeting need not be given
to the absent directors if the time and place be fixed at the meeting adjourned.
Section 9. Committees. The Board of Directors may, by resolution adopted by a
majority of the whole Board, designate one or more committees of the Board of
Directors, each committee to consist of at least one or more of the directors of
the corporation which, to the extent provided in the resolution, shall have and
may exercise the power of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorize the seal
of the corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be determined from
time to time by the Board of Directors. The members of any such committee
present at any meeting and not disqualified from voting may, whether or not they
constitute a quorum, unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any absent or disqualified
member. At meetings of such committees, a majority of the members or alternate
members shall constitute a quorum for the transaction of business, and the act
of a majority of the members or alternate members at any meeting at which there
is a quorum shall be the act of the committee.
The committees shall keep regular minutes of their proceedings and report the
same to the Board of Directors.
Section 10. Action Without Meeting. Any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if a written consent thereto is signed by all members of
the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
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Section 11. Special Compensation. The directors may be paid their expenses of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like reimbursement and
compensation for attending committee meetings.
ARTICLE Ill
Notices
Section 1. Notice of Meetings. Notices of meetings shall be in writing and
signed by the President or a Vice-President or the Secretary or an Assistant
Secretary or by such other person or persons as the directors shall designate.
Such notice shall state the purpose or purposes for which the meeting is called
and the time and the place, which may be within or without this State, where it
is to be held. A copy of such notice shall be either delivered personally to or
shall be mailed, postage prepaid, to each stockholder of record entitled to vote
at such meeting not less than ten (10) nor more than sixty (60) days before such
meeting. If mailed, it shall be directed to a stockholder at his address as it
appears upon the records of the corporation and upon such mailing of any such
notice, the service thereof shall be complete and the time of the notice shall
begin to run from the date upon which such notice is deposited in the mail for
transmission to such stockholder. Personal delivery of any such notice to any
officer of a corporation or association, or to any member of a partnership shall
constitute delivery of such notice to such corporation, association or
partnership. In the event of the transfer of stock after delivery of such notice
of and prior to the holding of the meeting it shall not be necessary to deliver
or mail notice of the meeting to the transferee.
Section 2. Effect of Irregularly Called Meetings. Whenever all parties entitled
to vote at any meeting, whether of directors or stockholders, consent, either by
a writing on the records of the meeting or filed with the secretary, or by
presence at such meeting and oral consent entered on the minutes, or by taking
part in the deliberations at such meeting without objection, the doings of such
meeting shall be as valid as if had at a meeting regularly called and noticed,
and at such meeting any business may be transacted which is not excepted from
the written consent or to the consideration of which no objection for want of
notice is made at the time, and if any meeting be irregular for want of notice
or of such consent, provided a quorum was present at such meeting, the
proceedings of said meeting may be ratified and approved and rendered likewise
valid and the irregularity or defect therein waived by a writing signed by all
parties having the right to vote at such meeting; and such consent or approval
of stockholders may be by proxy or attorney, but all such proxies and powers of
attorney must be in writing.
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Section 3. Waiver of Notice. Whenever any notice whatever is required to be
given under the provisions of the statutes, of the Articles of Incorporation or
of these Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE IV
Officers
Section 1. Election. The officers of the corporation shall be chosen by the
Board of Directors and shall be a President, a Secretary and a Treasurer, none
of whom need be directors. Any person may hold two or more offices. The Board of
Directors may appoint a Chairman of the Board, Vice-Chairman of the Board, one
or more vice presidents, assistant treasurers and assistant secretaries.
Section 2. Chairman of the Board. The Chairman of the Board shall preside at
meetings of the stockholders and the Board of Directors, and shall see that all
orders and resolutions of the Board of Directors are carried into effect.
Section 3. Vice-Chairman of the Board. The Vice-Chairman shall, in the absence
or disability of the Chairman of the Board, perform the duties and exercise the
powers of the Chairman of the Board and shall perform such other duties as the
Board of Directors may from time to time prescribe.
Section 4. President. The President shall be the chief executive officer of the
corporation and shall have active management of the business of the corporation.
He shall execute on behalf of the corporation all instruments requiring such
execution except to the extent the signing and execution thereof shall be
expressly designated by the Board of Directors to some other officer or agent of
the corporation.
Section 5. Vice-President. The Vice-President shall act under the direction of
the President and in the absence or disability of the President shall perform
the duties and exercise the powers of the President. They shall perform such
other duties and have such other powers as the President or the Board of
Directors may from time to time prescribe. The Board of Directors may designate
one or more Executive Vice-Presidents or may otherwise specify the order of
seniority of the Vice-Presidents. The duties and powers of the President shall
descend to the Vice-Presidents in such specified order of seniority.
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Section 6. Secretary. The Secretary shall act under the direction of the
President. Subject to the direction of the President he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the President or the Board of
Directors.
Section 7. Assistant Secretaries. The Assistant Secretaries shall act under the
direction of the President. In order of their seniority, unless otherwise
determined by the President or the Board of Directors, they shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
Section 8. Treasurer. The Treasurer shall act under the direction of the
President. Subject to the direction of the President he shall have custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the President or the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
corporation.
If required by the Board of Directors, he shall give the corporation a bond in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his office and for
the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation.
Section 9. Assistant Treasurers. The Assistant Treasurers in the order of their
seniority, unless otherwise determined by the President or the Board of
Directors, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer. They shall perform such other
duties and have such other powers as the President or the Board of Directors may
from time to time prescribe.
Section 10. Compensation. The salaries and compensation of all officers of the
corporation shall be fixed by the Board of Directors.
8
<PAGE>
Section 11. Removal, Resignation. The officers of the corporation shall hold
office at the pleasure of the Board of Directors. Any officer elected or
appointed by the Board of Directors may be removed at any time by the Board of
Directors. Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise shall be filled by the Board of Directors.
ARTICLE V
Capital Stock
Section 1. Certificates. Every stockholder shall be entitled to have a
certificate signed by the President or a Vice-President and the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares owned by him in the corporation. If
the corporation shall be authorized to issue more than one class of stock or
more than one series of any class, the designations, preferences and relative,
participating, optional or other special rights of the various classes of stock
or series thereof and the qualifications, limitations or restrictions of such
rights, shall be set forth in full or summarized on the face or back of the
certificate, which the corporation shall issue to represent such stock.
If a certificate is signed (1) by a transfer agent other than the corporation or
its employees or (2) by a registrar other than the corporation or its employees,
the signatures of the officers of the corporation may be facsimiles. In case any
officer who has signed or whose facsimile signature has been placed upon a
certificate shall cease to be such officer before such certificate is issued,
such certificate may be issued with the same effect as though the person had not
ceased to be such officer. The seal of the corporation, or a facsimile thereof,
may, but need not be, affixed to certificates of stock.
Section 2. Surrendered, Lost or Destroyed Certificates. The Board of Directors
may direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost or destroyed upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost or destroyed.
9
<PAGE>
Section 3. Replacement Certificates. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation, if it is satisfied that all
provisions of the laws and regulations applicable to the corporation regarding
transfer and ownership of shares have been complied with, to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 4. Record Date. The Board of Directors may fix *in advance a date not
exceeding sixty (60) days nor less than ten (10) days preceding the date of any
meeting of stockholders, or the date for the payment of any distribution, or the
date for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining the consent of stockholders for any purpose, as a record date for the
determination of the stockholders entitled to notice of and to vote at any such
meeting, and any adjournment thereof, or entitled to receive payment of any such
distribution, or to give such consent, and in such case, such stockholders, and
only such stockholders as shall be stockholders of record on the date so fixed,
shall be entitled to notice of and to vote at such meeting, or any adjournment
thereof, or to receive payment of such distribution, or to receive such
allotment of rights, or to exercise such rights, or to give such consent, as the
case may be, notwithstanding any transfer of any stock on the books of the
corporation after any such record date fixed as aforesaid.
Section 5. Registered Owner. The corporation shall be entitled to recognize the
person registered on its books as the owner of shares to be the exclusive owner
for all purposes including voting and distribution, and the corporation shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Nevada.
ARTICLE VI
General Provisions
Section 1. Registered Office. The registered office of this corporation shall be
in the County of Clark, State of Nevada.
The corporation may also have offices at such other places both within and
without the State of Nevada as the Board of Directors may from time to time
determine or the business of the corporation may require.
10
<PAGE>
Section 2. Distributions. Distributions upon the capital stock of the
corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Distributions may be paid in cash, in property or in shares of
the capital stock, subject to the provisions of the Articles of Incorporation.
Section 3. Reserves. Before payment of any distribution, there may be set aside
out of any funds of the corporation available for distributions such sum or sums
as the directors from time to time, in their absolute discretion, think proper
as a reserve or reserves to meet contingencies, or for equalizing distributions
or for repairing or maintaining any property of the corporation or for such
other purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 4. Checks, Notes. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
Section 6. Corporate Seal. The corporation may or may not have a corporate seal,
as may from time to time be determined by resolution of the Board of Directors.
If a corporate seal is adopted, it shall have inscribed thereon the name of the
corporation and the words "Corporate Seal" and "Nevada". The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE VII
Indemnification
Section 1. Indemnification of Officers and Directors, Employees and Other
Persons. Every person who was or is a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or a person of
whom he is the legal representative is or was a director or officer of the
corporation or is or was serving at the request of the corporation or for its
benefit as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest extent legally permissible under
the general corporation law of the State of Nevada from time to time against all
expenses, liability and loss (including attorneys' fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and
11
<PAGE>
directors incurred in defending a civil or criminal action, suit or proceeding
must be paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. Such right of indemnification shall be a
contract right which may be enforced in any manner desired by such person. Such
right of indemnification shall not be exclusive of any other right which such
directors, officers or representatives may have or hereafter acquire and,
without limiting the generality of such statement, they shall be entitled to
their respective rights of indemnification under any bylaw, agreement, vote of
stockholders, provision of law or otherwise, as well as their rights under this
Article.
Section 2. Insurance. The Board of Directors may cause the corporation to
purchase and maintain insurance on behalf of any person who is or was a director
or officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred in any such
capacity or arising out of such status, whether or not the corporation would
have the power to indemnify such person.
Section 3. Further Bylaws. The Board of Directors may from time to time adopt
further Bylaws with respect to indemnification and may amend these and such
Bylaws to provide at all times the fullest indemnification permitted by the
General Corporation Law of the State of Nevada.
ARTICLE VIII
Amendments
Section 1. Amendments by Stockholders. The Bylaws may be amended by a majority
vote of all the stock issued and outstanding and entitled to vote for the
election of directors of the stockholders, provided notice of intention to amend
shall have been contained in the notice of the meeting.
Section 2. Amendments by Board of Directors. The Board of Directors by a
majority vote of the whole Board at any meeting may amend these Bylaws,
including Bylaws adopted by the stockholders, but the stockholders may from time
to time specify particular provisions of the Bylaws which shall not be amended
by the Board of Directors.
12
<PAGE>
>
APPROVED AND ADOPTED this 22ND day of JUNE 1999
/s/ Alan Schram
----------------------------
SECRETARY
CERTIFICATE OF SECRETARY
I hereby certify that I am the Secretary of PERFECTION PLUS, INC. and
that the foregoing Bylaws, consisting of 13 pages, constitute the code of Bylaws
of PERFECTION PLUS, INC. as duly adopted at a regular meeting of the Board of
Directors of the corporation held June 22, 1999.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 22ND day of
JUNE, 1999.
/s/ Alan Schram
----------------------------
SECRETARY
13
EXHIBIT 12.1
February 7, 2000
Perfection Plus, Inc.
16133 Ventura Boulevard, Suite 635
Encino, California 91436
Re Perfection Plus, Inc
Gentlemen:
The undersigned is the record owner of 1,150 shares of the common stock of
Perfection Plus, Inc., no par value (the "Shares), such Shares are eligible for
sale under Rule 144 promulgated under the Securities Act of 1933, as amended,
subject to certain limitations included in said Rule.
The undersigned agrees as follows:
1. The undersigned will not sell, contract to sell, or make any other
disposition of, or grant any purchase option for the sale of, any of
the shares of the common stock owned by the undersigned, directly or
indirectly, until such time as the Company has entered into a merger
or acquisition or the Company is no longer classified as a "blank
check" company, as that term is defined in the Form 10SB 12G on file
with the Securities and Exchange Commission, whichever first occurs.
2. The undersigned acknowledges that Pacific Stock Transfer Company, 5855
S. Pecos Road, Suite D, Las Vegas, Nevada 89120, the transfer agent
for the Company, has been advised of the restrictions described herein
and that any attempts by the undersigned to violate said restriction
may result in legal action(s) by the Company. The undersigned further
agrees, upon the request of the Company, that in addition to any other
restrictions reflecting that the Shares have not been registered under
the Securities Act of 1933, as amended, may be placed on individual
certificates issued.
Very truly yours,
/s/ ALAN SCHRAM
ALAN SCHRAM
Perfection Plus, Inc. Board Director
cc: Pacific Stock Transfer Company
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUN-22-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
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0
0
<COMMON> 1,150
<OTHER-SE> (1,150)
<TOTAL-LIABILITY-AND-EQUITY> 0
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<LOSS-PROVISION> 0
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