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(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
COLUMBIALUM, LTD
(Name of small business issuer in its charter)
NEVADA 33-0850639
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
610 NEWPORT CENTER DRIVE
SUITE 800
NEWPORT BEACH, CALIFORNIA 92660
(Address of principal executive offices) (Zip code)
(949) 719-1977
(Registrant's telephone number, including area code)
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, par value $0.001
------------------------------
Title of Class
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TABLE OF CONTENTS
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PART I
Item 1 Description of Business.
Item 2 Management's Discussion and Analysis or Plan of Operation.
Item 3 Description of Property.
Item 4 Security Ownership of Certain Beneficial Owners and Management.
Item 5 Directors, Executive Officers, Promoters and Control Persons.
Item 6 Executive Compensation.
Item 7 Certain Relationships and Related Transactions.
Item 8 Description of Securities.
PART II
Item 1 Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters.
Item 2 Legal Proceedings.
Item 3 Changes In and Disagreements With Accountants.
Item 4 Recent Sales of Unregistered Securities.
Item 5 Indemnification of Directors and Officers.
PART F/S
Financial Statements.
PART III
Item 1 Index to Exhibits.
Item 2 Description of Exhibits.
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PART I
ITEM 1 - DESCRIPTION OF BUSINESS
The Company was organized under the Laws of the State of Nevada, on April 9,
1998, and is a "blank check" or "shell" company whose primary purpose is to
engage in a merger with, or acquisition of one or a small number of private
firms. Such firms are expected to be private corporations, partnerships or sole
proprietorships. Since inception, the primary activity of the Company has been
directed towards organizational efforts. The Company has not engaged in
preliminary efforts to identify possible merger or acquisition candidates and
has no market studies available to it. The Company has no business
opportunities under contemplation for acquisitions.
BUSINESS OBJECTIVES
The Company plans to seek one or more potential businesses that Management
believes warrant the Company's involvement. As a result of its limited
resources, the number of potential businesses available will be extremely
limited. The Company will not restrict its search to any particular industry.
Nevertheless, Management does not intend to become involved with a company that
is an "investment company" under the Investment Company Act of 1940; with a
company that is a broker or dealer of investment securities or commodities; or
with any company in which the officers, directors or shareholders of the target
company are officers or directors of the Company. These business objectives are
extremely general and are not intended to be restrictive upon the discretion of
Management. Except for the general limitations contained above, management has
not developed and does not intend to develop specific criteria to be followed in
the search for and selection of a business acquisition. Shareholders will
therefore have extremely limited information as to Management's specific
intentions and investors will be unable to determine even the industries which
Management might consider.
The target company may be (i) in its preliminary or developmental stage, (ii) a
"financially troubled" business or (iii) a going concern. It is impossible to
determine the capital requirements of the target business or whether such
business may require additional capital. Some target companies may seek to
establish a public trading market for their securities.
The analysis of potential business endeavors will be undertaken by or under the
supervision of Management. Management is comprised of individuals of varying
business experience, and Management will rely on its own collective business
judgment in evaluating businesses that the Company may acquire or participate.
See "Item 5 - Directors, Executive Officers, Promoters and Control Persons."
Locating and investigating specific business proposals may take an extended
period of time. If a business is located, the negotiation, drafting, and
execution of relevant agreements, disclosure documents and other instruments
will require substantial time, effort, and expense. The time periods of these
subsequent steps cannot be determined. If a specific business endeavor cannot
be located the costs incurred in the investigation are not likely to be
recovered. The failure to consummate an attempted transaction would likely
result in the loss of the costs incurred.
Applicable regulations require the reporting of certain information regarding
businesses acquired, including the filing of certified financial statements of
such companies. Thus, if during the pendency of this registration statement,
the Company determines that a material acquisition is probable, this document
will be appropriately revised, including the addition of audited financial
statements of the business to be acquired. Consequently, a target company that
does not have, or cannot obtain, audited financial statements will not likely be
considered by Management.
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Shareholders of the Company are relying totally upon the business judgment of
Management. Shareholders will not likely be consulted or provided any
disclosure documentation in connection with any acquisition engaged in by the
Company, unless required by state corporate law or the Federal securities laws.
Although Management does not anticipate a sale of their Company shares in
connection with an acquisition, in the event Management does enter into an
agreement to do so, the remaining shareholders of the Company may not be
afforded an equal opportunity to do so. As Management intends to offer a
controlling interest in the Company, it is probable that a change of control
will occur as a result of an acquisition engaged in by the Company. To the best
knowledge of the Company, there are no lock-up agreements or understandings
between the Company and its shareholders or among the shareholders which has the
effect of restricting the transferability of any shareholders stock holdings.
There are no arrangements, agreements, or understandings between non-management
shareholders and management under which non-management shareholders may directly
or indirectly participate in or influence the management of the Company's
affairs, and there are no agreements concerning the election of members of the
Board of Directors.
It is not presently anticipated that the Company will acquire or merge with a
business or company in which the Company's promoters, management or their
affiliates or associates directly or indirectly have an ownership interest,
however there is no agreement, policy, or understanding to prevent such a
transaction. In the event of such a non-arm's length transaction, Management
would seek an independent appraisal of the transaction. Notwithstanding the
foregoing, there is the potential that a conflict of interest will arise between
the Company and its management in which case Management's fiduciary duties may
be compromised. Any remedy available under state corporate law would, in such
an event, most likely be prohibitively expensive and time consuming.
Management has voluntarily elected to file this Form 10-SB with the Securities
and Exchange Commission pursuant to the recent requirement of the National
Association of Securities Dealers (NASD) that companies seeking to have their
securities quoted on the Over-The-Counter Bulletin Board must first be subject
to the reporting requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). As such, subsequent to the
effectiveness hereof, the Company will be filing periodic reports as required
under the Exchange Act. Management anticipates that the Company will continue
to voluntarily file periodic reports in the event that its obligation to file
such reports is suspended under the Exchange Act. Any potential target company
must have financial statements which can be audited and prepared as required by
Rule 310 of Regulation S-B and/or Regulation S-X.
A number of states have enacted statutes, rules and regulations limiting the
sale of securities of "blank check" companies in their respective jurisdictions.
Some states prohibit the initial offer and sale as well as any subsequent resale
of securities of shell companies to residents of their states. In such an
event, the shareholders of the Company, as well as the shareholders of any
target company, may be limited in their ability to resell shares of the Company.
To the best knowledge of the Company, the following states may have such
limitations (this list is not exhaustive and a significant number of other
states may also have such limitations): Connecticut, Georgia, Oregon,
Washington, and Florida.
COMPETITION
Inherent difficulties exist for any new company seeking to enter an established
field. The Company will remain an insignificant participant among the firms
which engage in mergers with and acquisitions of privately financed entities.
There are many established venture capital and financial concerns which have
significantly greater financial and personnel resources, technical expertise and
experience than the Company. The Company is also subject to competition from
numerous other recently formed public and private entities with business
objectives similar to those of the Company.
REGULATION
The Investment Company Act of 1940 ("Investment Act") defines an investment
company as an issuer which is or holds itself out as being engaged primarily in
the business of investing, reinvesting or trading of securities. The Company
does not intend to engage primarily in the activities of purchasing, trading or
selling securities and intends to conduct its activities so as to avoid being
classified as an "investment company" under the Investment Act. The Company
could be expected to incur significant registration and compliance costs if
required under the Investment Act, and the regulations promulgated thereunder.
Section 3(a) of the Investment Act provides exclusions from its application for
companies which are not primarily engaged in the business of investing,
reinvesting or trading in "investment securities". Management intends to
implement its business plan in a manner which will result in the availability of
this exception from the definition of "investment company". Accordingly,
Management will continue to review the Company's activities from time to time
with a view toward reducing the likelihood that the Company could be classified
as an "investment company".
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The Company's plan of business may involve changes in its capital structure,
management, control, and business, especially if it consummates its plan to
acquire or merge with another entity. Each of these areas are regulated by the
Investment Act, which regulations have the purported purpose of protecting
purchasers of investment company securities. Since the Company will not
register as an investment company, its shareholders will not be afforded these
purported protections.
Even if the Company restricts its activities as described above, it is possible
that it may be classified as an inadvertent investment company. This would be
most likely to occur if significant delays are experienced in locating a
business opportunity.
The Company intends to vigorously resist classification as an investment company
and to take advantage of any exemptions or exceptions from application of the
Investment Act, including an exception which allows an entity a one-time option
during any three (3) year period to claim an exemption as a "transient"
investment company. The necessity of asserting any such contention, or making
any other claim of exemption, could be time consuming, costly or even
prohibitive, given the Company's limited resources.
The Company intends to structure a merger or acquisition in such a manner as to
minimize Federal and state tax consequences to the Company and its shareholders,
and to any target company and its shareholders. Under Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"), a statutory merger or
consolidation is an exempt transaction and may be tax free to the companies and
their shareholders if effected in accordance with state law. A tax free
reorganization may require the Company to issue a substantial portion of its
securities in exchange for the securities or assets of a target firm.
Consequently, a tax free reorganization may result in substantial dilution of
the ownership interests of the present shareholders of the Company. Even if a
merger or consolidation is undertaken in accordance with the Code, there is no
assurance that tax regulations will not change and result in the Company or its
shareholders incurring a significant tax liability.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. The Commission has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions.
Such exceptions include any equity security listed on Nasdaq and any equity
security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for three years,
(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or (iii) average annual revenue
of at least $6,000,000, if such issuer has been in continuous operation for less
than three years. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated therewith.
EMPLOYEES
The Company presently has no employees other than its officers. Each of the
officers has employment and/or other business associations elsewhere. None of
the officers has allocated more than a minimal amount of time to the affairs of
the Company.
FACILITIES
Since its inception, the Company has maintained its offices rent free at the
office of its President, M. Richard Cutler, 610 Newport Center Drive, Suite 800,
Newport Beach, CA 92660. Mr. Cutler has agreed that the Company may remain
until consummation of a Business Combination. The Company will utilize a
minimal amount of space. There are no other preliminary agreements with respect
to future offices or facilities, however, following the consummation of an
acquisition, it is anticipated that the Company's offices will change to those
of the target company.
YEAR 2000 COMPLIANCE
As the Company does not have any material assets nor any computer systems, it
has not done an evaluation of its Year 2000 compliance. Management does not
anticipate that there will be any consequences, material or immaterial, negative
or positive, to the Company as a result of the Year 2000 computer problem. As a
result of a Business Combination or merger, however, the Company may inherit
computer systems that are not Year 2000 compliant, or enter into contracts or
business dealings with suppliers, contractors, or others that are not Year 2000
compliant. Management cannot anticipate the impact of such future occurrences.
Failure to satisfactorily address the Year 2000 issue could have a material
adverse effect on the Company.
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RISK FACTORS
AN INVESTMENT IN THE SECURITIES OF THE COMPANY PRESENTS CERTAIN MATERIAL RISKS
TO INVESTORS. ANY INVESTOR IN THE COMPANY IS ENCOURAGED TO CAREFULLY CONSIDER
THE FOLLOWING RISKS BEFORE PURCHASING THE SECURITIES OF THE COMPANY.
1. SHELL CORPORATION. This type of company is commonly called a "shell"
corporation because the company does not have any assets or operations and has
been formed for the specific purpose of acquiring all or substantially all of
the ownership of an existing business. These transactions are consummated by
issuing or transferring large blocks of the Company's equity shares to the
principals of the business that is acquired. Any such issuance will involve
significant dilution in the equity interest in the Company held by the
pre-reorganization shareholders of the Company with the result that the
pre-reorganization shareholders of the Company will have a substantially lower
aggregate interest in the outstanding shares of the Company after giving effect
to the reorganization. See, "Description of Business." Prospective investors
should be aware that privately-held companies often times merge or reorganize
with a public shell as a means of "going-public" without having to incur the
time, expense and disclosure obligations normally associated with the
going-public process. In the event the Company merges with a privately-held
company subsequent to the effectiveness of this registration statement,
investors will not have had the benefit of receiving disclosure of such
company's operations and financial condition prior to making their investment.
See, "Description of Business." Prospective investors should also be aware that
management of the Company, acting in compliance with the Bylaws of the Company
and Nevada Corporation Law, intends to structure any reorganization with an
operating business in a manner that will allow the Board of Directors of the
Company to approve the selection of the operating business and all of the terms
of the reorganization, including the appointment of the successor officers and
directors, without the need or request for shareholder approval. See,
"Description of Business."
2. RISK OF PROPOSED NEW BUSINESS; LACK OF ASSETS, REVENUES OR OPERATIONS.
The Company was only recently formed and has no material assets, revenues or
operations. Since inception management of the Company has paid, without
reimbursement, expenses of the Company. Management expects that the Company's
working capital requirements will be nominal and will be satisfied through
additional capital contributions by management as required. The report of the
Company's independent auditors on the Company's December 31, 1999 financial
statements includes a qualification regarding the Company's ability to continue
as a going concern. In its report, the Company's independent auditors state
that the Company needs an additional capital infusion in order to fund current
expenditures, acquire business opportunities and achieve profitable operations,
and that such factors raise substantial doubt about the Company's ability to
continue as a going concern.
3. RELIANCE ON MANAGEMENT; LACK OF EXPERIENCE. The Company is dependent on
its officers and directors' personal abilities to evaluate business
opportunities that may be presented in the future. Since management has not
identified a proposed business or industry in which it will search for an
acquisition target, it is unlikely that management will have any prior
experience in the technical aspects of the industry or the business within that
industry which may be acquired. See, "Description of Business" and
"Management."
4. MINIMAL TIME COMMITMENT OF MANAGEMENT. The current officers and
directors engage in other activities and will devote only a minimal amount of
their time to the Company. See, "Management."
5. CONTROL BY MANAGEMENT. Management of the Company presently owns
82% of the outstanding Common Stock of the Company. Therefore,
until such time as the Company acquires an operating business, management of the
Company will have the power to elect all of the Company's Board of Directors,
amend the Company's Certificate of Incorporation, and approve a merger,
consolidation with another company or sale of all or substantially all of the
Company's assets. See, "Principal Shareholders" and "Description of
Securities."
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6. PREFERRED STOCK. The Company is authorized to issue 2,000,000 shares of
$0.001 par value preferred stock ("Preferred Stock"). The Preferred Stock may
be issued from time to time in one or more series, and the Board of Directors,
without action by the holders of the Common Stock, may fix or alter the voting
rights, redemption provisions, (including sinking fund provisions), dividend
rights, dividend rates, liquidation preferences, conversion rights and any other
rights preferences, privileges and restrictions of any wholly unissued series of
Preferred Stock. The Board of Directors, without stockholder approval, can
issue shares of Preferred Stock with rights that could adversely affect the
rights of the holders of Common Stock. No shares of Preferred Stock presently
are outstanding, and the Company has no present plans to issue any such shares.
The issuance of shares of Preferred Stock could adversely affect the voting
power of holders of Common Stock and could have the effect of delaying,
deferring or preventing a change in control of the Company or other corporate
action.
7. COMPETITION. Numerous large, well-financed firms with large cash
reserves are engaged in the acquisition of companies and businesses. The
Company expects competition to be intense for available target businesses.
8. LACK OF FACILITIES. The Company's office is located within a suite of
offices leased by the legal firm employing the Company's President. The use of
the facilities is provided to the Company at no charge and the Company does not
intend to rent other office space until an acquisition target business is
identified and acquired. The lack of any separate facilities for the Company's
operations may work to the Company's future detriment. See, "Property."
9. POTENTIAL SALES PURSUANT TO RULE 144. All 1,000,000 shares of Common
Stock currently outstanding are "restricted securities" as that term is defined
in Rule 144 promulgated under the Securities Act of 1933, as amended. In
addition, all 1,000,000 shares of Common Stock are eligible for resale under
Rule 144. In general, under Rule 144 a person (or persons whose shares are
aggregated) who has satisfied a one-year holding period may, under certain
circumstances, sell within any three month period, a number of shares which does
not exceed the greater of 1% of the then outstanding shares of 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 is not an affiliate of the
Company and who has satisfied a two-year holding period. The Company is unable
to predict the effect that sales of the Company's securities under Rule 144 or
otherwise, may have on the then prevailing market price of the Common Stock; it
can be expected, however, that the sale of any substantial number of shares of
Common Stock would have a depressive effect on the market price of the Common
Stock.
10. MARKET FOR THE COMMON STOCK OF THE COMPANY. The Company's securities do
not currently, and have not in the past, traded on any active or liquid public
market. Thus, there is currently no market for the Company's securities and
there can be no assurance that a trading market will develop or, if one
develops, that it will continue. Even if a trading market should develop, the
market may be substantially limited or unsustained. There are currently no
plans, proposals, arrangements or understandings with any person with regard to
the development of a trading market in any of the Company's securities.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Management believes that the Company has minimal cash requirements during the
next 12 months. The Company does not anticipate any significant changes in the
number of its employees, does not plan to engage in research and development and
does not plan to purchase or sell plant or equipment.
The Company is a "blank check" or "shell" company and as such expects to
concentrate primarily on the identification and evaluation of prospective merger
or acquisition "target" entities including private corporations, partnerships or
sole proprietorships. Management believes that target companies will be limited
to privately financed companies and expects to be precluded from other public
companies.
Management intends to identify prospects through present associations such as
its officers and directors, attorneys, and similar persons. The Company does
not anticipate engaging the services of professional firms that specialize in
business acquisitions and reorganizations. Nor does Management intend to hire
independent consultants or advisors for merger related services. In the event
that professional firms specializing in business acquisitions and
reorganizations, consultants, or advisors are engaged, they may be paid, in
addition to customary fees, a finder's fee for introductions resulting in a
business combination or merger. The finder's fee may be up to ten percent (10%)
of the value of the transaction, and may be payable in equity securities of the
Company. It is not anticipated that finder's fees or other acquisition related
compensation will be paid to Management or their affiliates. If incurred, there
is currently a minimal amount of funds available to pay consulting or other
service fees, and the proceeds of future financings or funds from the target
company would be utilized.
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Management expects to conduct a preliminary evaluation of target companies.
Such preliminary evaluations are not expected to be an in-depth evaluation of
the target company's operations. Nevertheless, this evaluation should provide a
sufficient overview to eliminate many prospects from further consideration.
Shareholders will not likely be consulted or provided any disclosure
documentation in connection with any acquisition engaged in by the Company,
unless required by state corporate law or the Federal securities laws.
The specific method or form by which a Business Combination may be structured
cannot be determined at this time. It could involve a merger or consolidation;
merger or consolidation of the acquired business into a subsidiary of the
Company; an exchange of shares of stock, with or without payment in cash; or an
acquisition of assets. Although Management does not anticipate a sale of their
Company shares in connection with an acquisition, in the event Management does
enter into an agreement to do so, the remaining shareholders of the Company may
not be afforded an equal opportunity to do so. As Management intends to offer a
controlling interest in the Company, it is probable that a change of control
will occur as a result of an acquisition engaged in by the Company.
It is not presently anticipated that the Company will acquire or merge with a
business or company in which the Company's promoters, management or their
affiliates or associates directly or indirectly have an ownership interest,
however there is no agreement, policy, or understanding to prevent such a
transaction. In the event of such a non-arm's length transaction, Management
would seek an independent appraisal of the transaction. Notwithstanding the
foregoing, there is the potential that a conflict of interest will arise between
the Company and its management in which case Management's fiduciary duties may
be compromised. Any remedy available under state corporate law would, in such
an event, most likely be prohibitively expensive and time consuming. There are
no arrangements, agreements, or understandings between non-management
shcreholders and management under which non-management shareholders may directly
or indirectly participate in or influence the management of the Company's
affairs, and there are no agreements concerning the election of members of the
Board of Directors.
A merger will likely be made through the exchange of the Company's stock which
has been authorized but unissued (and perhaps the balance of the Company's
assets) for stock of the target company. The Company has not established a
specific minimum level of earnings or assets which a target company must
satisfy. Moreover, Management may identify a target company which is generating
losses or which has negative equity, which may have a material adverse effect on
the price of the Company's common shares.
Negotiations with target company management can be expected to focus on the
percentage of the Company which target company shareholders would acquire in
exchange for their shareholdings in the target company. The Company's
shareholders will, in all likelihood, hold no more than a relatively small
percentage of the common shares of the Company following any merger or
acquisition. This percentage may be subject to even further 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 exact terms and format of any acquisition will be determined by the
Company's Management and, unless required by law, the Company's shareholders
will not have the opportunity to vote on the acquisition. The Company may be
required to file or maintain a registration statement to register any securities
to be issued in connection with any acquisition.
There are no plans, proposals, arrangements or understandings with respect to
the sale of additional securities to affiliates or others following the
registered distribution but prior to the location of a business opportunity.
If the Company does not consummate a transaction after expenditure of time and
funds in investigation and analysis of a business opportunity, the losses
incurred may adversely affect the Company's ability to carry out its business
objectives. It is also possible that the Company may expend all of its
resources without ever successfully acquiring any business opportunity.
The Company is not currently a party to any loan agreements or understandings.
It is not presently anticipated that the Company will become a party to any loan
agreement or understanding as a result of a Business Combination. Following the
consummation of a Business Combination, the Company may, in Management's
discretion, enter into loan agreements or understandings in the course of
funding its growth and/or operations.
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Some target companies may not need additional capital but may desire to merge
with the Company for purpose of establishing a public trading market for its
shares. In such event, Management of the target company may desire to avoid the
delays, expenses, and other perceived adverse consequences of undertaking a
public offering. Such a merger, in all likelihood, would involve the exchange
of the Company's stock, including the authorized but unissued stock with the
outstanding shares of the target company.
As the Company does not have any material assets nor any computer systems, it
has not done an evaluation of its Year 2000 compliance. Management does not
anticipate that there will be any consequences, material or immaterial, negative
or positive, to the Company as a result of the Year 2000 computer problem. As a
result of a Business Combination or merger, however, the Company may inherit
computer systems that are not Year 2000 compliant, or enter into contracts or
business dealings with suppliers, contractors, or others that are not Year 2000
compliant. Management cannot anticipate the impact of such future occurrences.
Failure to satisfactorily address the Year 2000 issue could have a material
adverse effect on the Company.
Management has voluntarily elected to file this Form 10-SB with the Securities
and Exchange Commission pursuant to the recent requirement of the National
Association of Securities Dealers (NASD) that companies seeking to have their
securities quoted on the Over-The-Counter Bulletin Board must first be subject
to the reporting requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). As such, subsequent to the
effectiveness hereof, the Company will be filing periodic reports as required
under the Exchange Act. Management anticipates that the Company will continue
to voluntarily file periodic reports in the event that its obligation to file
such reports is suspended under the Exchange Act. Any potential target company
must have financial statements which can be audited and prepared as required by
Rule 310 of Regulation S-B and/or Regulation S-X.
ITEM 3 - DESCRIPTION OF PROPERTY
Since its inception, the Company has maintained its offices rent free at the
office of its President, M. Richard Cutler, 610 Newport Center Drive, Suite 800,
Newport Beach, CA 92660. Mr. Cutler has agreed that the Company may remain
until consummation of a Business Combination. The Company will utilize a
minimal amount of space.
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 10, 2000, certain information
with respect to the Company's equity securities owned of record or beneficially
by (i) each Director of the Company; (ii) each person who owns beneficially more
than 5% of each class of the Company's outstanding equity securities; and (iii)
all Directors and Executive Officers as a group.
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COMMON STOCK
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Title Percent of
of Class Name and Address of Beneficial Owner Common Stock Outstanding
- ----------------------------------------- ------------------------------------ ------------- ------------
Common Stock M. Richard Cutler 630,500 63.05%
610 Newport Center Drive
Suite 800
Newport Beach, CA 92660
Common Stock Brian A. Lebrecht 194,000 19.40%
610 Newport Center Drive
Suite 800
Newport Beach, CA 92660
Common Stock Vi Bui 145,500 14.55%
610 Newport Center Drive
Suite 800
Newport Beach, CA 92660
All Directors and Officers as a Group (2) 824,500 82.45%
======= =====
</TABLE>
The Company believes that the beneficial owners of securities listed above,
based on information furnished by such owners, have sole investment and voting
power with respect to such shares, subject to community property laws where
applicable. Beneficial ownership is determined in accordance with the rules of
the Commission and generally includes voting or investment power with respect to
securities. Shares of stock subject to options or warrants currently
exercisable, or exercisable within 60 days, are deemed outstanding for purposes
of computing the percentage of the person holding such options or warrants, but
are not deemed outstanding for purposes of computing the percentage of any other
person.
ITEM 5 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the names and ages of the current directors and
executive officers of the Company, the principal offices and positions with the
Company held by each person and the date such person became a director or
executive officer of the Company. The executive officers of the Company are
elected annually by the Board of Directors. The directors serve one year terms
and until their successors are elected. The executive officers serve terms of
one year or until their death, resignation or removal by the Board of Directors.
There are no family relationships between any of the directors and executive
officers. In addition, there was no arrangement or understanding between any
executive officer and any other person pursuant to which any person was selected
as an executive officer.
The directors and executive officers of the Company are as follows:
Name Age Positions
- ---- --- ---------
M. Richard Cutler 41 President, Treasurer, Director (1998)
Brian A. Lebrecht 30 Secretary (1998)
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M. RICHARD CUTLER, 41, is President, Treasurer and a Director of the Company,
and has been since its inception. Mr. Cutler founded the Cutler Law Group in
August 1996. Mr. Cutler has practiced in the general corporate and securities
area since his graduation from law school. Mr. Cutler is a graduate of Brigham
Young University (B.A., magna cum laude, 1981); and Columbia University School
of Law (J.D. 1984). While at Columbia, Mr. Cutler was honored as a Harlan Fiske
Stone Scholar, was Managing Editor of the Columbia Journal of Law and Social
Problems, received a Recognition of Achievement with Honors in Foreign and
International Law, Parker School of Foreign and Comparative Law and was honored
for best senior writing for "United States v. Ross: A Solution to the Automobile
Container Dilemma?" published in the Columbia Journal of Law & Social Problems
in 1983. Mr. Cutler was admitted to the State Bar of Texas in 1984 and the
State Bar of California in 1990. After law school, Mr. Cutler joined the
national law firm of Jones, Day, Reavis & Pogue where he practiced in the
corporate, securities and mergers and acquisitions departments. Mr. Cutler
subsequently spent five years in the corporate and securities department of
Akin, Gump, Strauss, Hauer & Feld, a Dallas law firm. Subsequently, Mr. Cutler
was with the Los Angeles office of Kaye, Scholer, Fierman, Hayes & Handler, a
New York based law firm, where he continued his general business and securities
practice. In 1991, Mr. Cutler founded the law firm of Horwitz, Cutler & Beam,
where he practiced corporate and securities law for five years. Mr. Cutler has
been admitted to the U.S. Federal District Courts, Central and Northern
Districts of California, as well as the U.S. Court of Appeals, Ninth Circuit.
Mr. Cutler is the author of "Comparative Conflicts of Law: Effectiveness of
Contractual Choice of Forum," published in the Texas International Law Journal
in 1985. Mr. Cutler also serves the Company as corporate and securities
counsel. See "Certain Transactions."
BRIAN A. LEBRECHT, 30, is Secretary of the Company, and has been since its
inception. Mr. Lebrecht joined the Cutler Law Group in December 1996, and
assists clients primarily in the areas of corporate finance and mergers and
acquisitions, including private placements, public and private offerings,
Securities and Exchange Commission and Blue Sky compliance and reporting
requirements, asset and stock purchases, and general corporate practice. His
clientele includes emerging growth companies in the areas of health care,
finance, clothing and apparel, Internet commerce, retail, gas and service
stations, giftwares, manufacturers representatives, mail order, high-technology
manufacturing, and a wide array of service industries. He is an adjunct
professor of Business Law at the University of California, San Diego Extension,
is active with the Service Corps of Retired Executives (SCORE) and the Greater
San Diego Chamber of Commerce Small Business Development Center (SBDC), and is a
licensed California Real Estate Broker. Mr. Lebrecht is a graduate of the
University of San Diego with a Bachelors in Business Administration in 1991, and
a J.D. and M.B.A. in 1995, and is licensed to practice law in the State of
California and the United Stated District Court for the Southern District of
California. Immediately prior to joining the Law Offices of M. Richard Cutler,
Brian was the proprietor of The Law Offices of Brian A. Lebrecht in San Diego,
California, focusing on business transactions, formations, and acquisitions as
well as estate planning. His past experiences include a position in the legal
department of the Federal Home Loan Mortgage Corporation (Freddie Mac) in
Washington, D.C., a position within the General Counsel's office of a major
Southern California construction supplier, and representation of consumer
interests before the California State Contractors License Board and the
California State Banking Department, culminating in published works in the
California Regulatory Law Reporter.
As Management intends to offer a controlling interest in the Company, it is
probable that a change of management control will occur as a result of an
acquisition engaged in by the Company.
ITEM 6 - EXECUTIVE COMPENSATION
The Company has not paid its executive officers any remuneration since inception
to date nor does it intend to until such time as the Company acquires an
operating business. The Company provides no compensation to its directors and
does not intend to until such time, if ever, as the Company acquires an
operating business.
The Company's President, M. Richard Cutler, also serves as corporate and
securities counsel to the Company. There are currently no amounts due and owing
to Mr. Cutler for legal fees, and it is not anticipated that there will be any
amounts due and owing at the time of selection of a Business Combination
candidate.
Since the officers and directors are also the current shareholders they may be
expected to receive financial gain if a target company makes arrangements to
acquire a sufficient amount of stock to obtain control of the Company. Since
Management cannot now predict the form or structure of any possible Business
Combination, investors should be aware that additional compensation with
Management could be negotiated in connection with a Business Combination. These
arrangements could include consulting agreements, membership on Boards or
committees, legal services or other arrangements. Consequently, there can be no
present prediction of all compensation that might ultimately be paid to
Management.
11
<PAGE>
SUMMARY COMPENSATION TABLE
The Summary Compensation Table shows certain compensation information for
services rendered in all capacities from inception through February 10, 2000.
Other than as set forth herein, no executive officer's salary and bonus exceeded
$100,000 in any of the applicable years. The following information includes the
dollar value of base salaries, bonus awards, the number of stock options granted
and certain other compensation, if any, whether paid or deferred.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
-------------------- ------------------------------
Awards Payouts
------------------ -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) SARS (#) ($) ($)
M. Richard Cutler 2000 -0- -0- -0- -0- -0- -0- -0-
1999 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0- -0-
Brian A. Lebrecht 2000 -0- -0- -0- -0- -0- -0- -0-
1999 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
-------------------
<S> <C> <C> <C> <C>
NUMBER OF SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/SAR'S
OPTIONS/SAR'S GRANTED TO EMPLOYEES EXERCISE OF BASE PRICE
NAME GRANTED (#) IN FISCAL YEAR ($/SH) EXPIRATION DATE
- ----------------- --------------------- -------------------- ----------------------- ---------------
M. Richard Cutler -0- -0- N/A N/A
Brian A. Lebrecht -0- -0- N/A N/A
- ----------------- --------------------- -------------------- ----------------------- ---------------
</TABLE>
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company will not enter into any transactions with any officer, director or
controlling shareholder of the Company until such time, if ever, as the Company
acquires an operating business. At such time, it is expected that the Company
will experience a change in control, including a complete change in the Board of
Directors and management of the Company.
Certain conflicts of interest now exist and will continue to exist between the
Company and its officers and directors due to the fact that each has other
business interests to which he devotes his primary attention. Each officer and
director may continue to do so notwithstanding the fact that Management time
should be devoted to the business of the Company. Each of the Company's
officers and directors are or may become involved in other personal and business
ventures.
12
<PAGE>
The officers, directors and founders are and may become, in their individual
capacities, controlling shareholders and/or partners of other entities engaged
in a variety of businesses. Thus, there exists potential for conflicts of
interest, including, among other things, time, effort, and corporate
opportunity, involved in anticipation with such other business entities and
transactions. Conflicts may arise if a target company or its principals seek to
acquire some or all of the stock holdings of present Management.
M. Richard Cutler, attorney at law, has acted as corporate and securities
counsel to the corporation. Mr. Cutler owns 630,500 shares of the Company and
is an officer and director. Mr. Lebrecht owns 194,000 shares of the Company's
common stock and works with Mr. Cutler at the Cutler Law Group.
If a prospective Business Combination candidate required the sale of some or all
of the shareholdings of the officers and directors, the officers and directors
would be free to negotiate and effect such sales. Consequently, the Company's
Management would receive pecuniary gain which may not be available to other
shareholders.
The Company has no specified procedure for the resolution of current or
potential conflicts of interest between the Company, its officers, and directors
or affiliated entities. Shareholders who believe that the Company has been
harmed by failure of an officer or director to appropriately resolve any
conflict of interest may be able to bring a suit to enforce their rights or the
Company's rights.
Management may be issued additional securities of the Company at the discretion
of the Board of Directors in accordance with their fiduciary obligations under
state corporate law.
BLANK CHECK ACTIVITIES
Management is involved in six other blank check companies. In 1994, Wellspring
Investments, Inc., a Delaware corporation, was formed as a blank check, or shell
company. In March 1999, Wellspring filed a Form 10-SB with the Securities and
Exchange Commission. As of the date hereof, Wellspring does not have any
material business operations and has not completed a Business Combination
transaction.
In 1998, AGM, Inc., a Nevada corporation, was formed as a blank check, or shell
company. In October 1999, AGM filed a Form 10-SB with the Securities and
Exchange Commission, and has received confirmation from the SEC that its filing
will not be reviewed and will be effective in December 1999. On January 18,
2000, AGM was acquired by Lakota Technologies, Inc., a Colorado corporation.
In 1998, Conchology, Inc., a Nevada corporation, was formed as a blank check,
or shell company. In November 1999, Conchology filed a Form 10-SB with
the Securities and Exchange Commission, and has received confirmation from the
SEC that its filing will not be reviewed and will be effective in January
2000. Conchology does not have any material business operations and has not
completed a Business Combination transaction.
In 1998, Society of Economic Assurance, Inc., a Nevada corporation, was
formed as a blank check, or shell company. In January, 2000, Society filed
a Form 10-SB with the Securities and Exchange Commission, and has received
confirmation from the SEC that its filing will not be reviewed and will
be effective in March 2000. Society does not have any material business
operations and has not completed a Business Combination transaction.
1n 1998, Conus Holdings, Inc., a Nevada corporation, was formed as a blank
check, or shell company. On or about February 10, 2000, Conus will file a Form
10-SB with the Securities and Exchange Commission. Conus does not have any
material business operations and has not completed a Business Combination
Transaction.
1n 1998, Malacology, Inc., a Nevada corporation, was formed as a blank check, or
shell company. On or about February 10, 2000, Malacology will file a Form 10-SB
with the Securities and Exchange Commission. Malacology does not have any
material business operations and has not completed a Business Combination
Transaction.
ITEM 8 - DESCRIPTION OF SECURITIES
The Company's securities do not currently, and have not in the past, traded on
any active or liquid public market. Thus, there is currently no market for the
Company's securities and there can be no assurance that a trading market will
develop or, if one develops, that it will continue. Even if a trading market
should develop, the market may be substantially limited or unsustained. There
are currently no plans, proposals, arrangements or understandings with any
person with regard to the development of a trading market in any of the
Company's securities. To the best knowledge of the Company, there are no
lock-up agreements or understandings between the Company and its shareholders or
among the shareholders which has the effect of restricting the transferability
of any shareholders stock holdings.
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of 20,000,000
shares of common stock, $0.001 par value per share. The holders of each share
of common stock (i) have equal rights to dividends from funds legally available
therefore, when, as and if declared by the Company's Board of Directors, (ii)
are entitled to share in all assets of the Company available for distribution,
(iii) do not have pre-emptive, subscription or conversion rights and (iv) are
entitled to one non-cumulative vote at all shareholder meetings.
All shares of common stock now outstanding are fully paid for and
non-assessable.
Stockholders have no cumulative voting rights, which means that Stockholders
owning more than 50% of the outstanding stock can vote to elect all directors.
Accordingly, the remaining Stockholders would not be able to elect any of the
Company's directors.
13
<PAGE>
Management has voluntarily elected to file this Form 10-SB with the Securities
and Exchange Commission pursuant to the recent requirement of the National
Association of Securities Dealers (NASD) that companies seeking to have their
securities quoted on the Over-The-Counter Bulletin Board must first be subject
to the reporting requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). As such, subsequent to the
effectiveness hereof, the Company will be filing periodic reports as required
under the Exchange Act. Management anticipates that the Company will continue
to voluntarily file periodic reports in the event that its obligation to file
such reports is suspended under the Exchange Act.
PREFERRED STOCK
The Company is authorized to issue up to 2,000,000 shares of Preferred Stock,
par value $0.001. The Preferred Stock of the Company can be issued in one or
more series as may be determined from time to time by the Board of Directors
without further stockholder approval. In establishing a series the Board of
Directors shall give to it a distinctive designation so as to distinguish it
from the shares of all other series and classes, shall fix the number of shares
in such series, and the preferences, rights and restrictions thereof. All
shares of any one series shall be alike in every particular. No shares of
Preferred Stock have been issued.
NON-CUMULATIVE VOTING
The Articles of Incorporation and Bylaws of the Company specify that
shareholders will not have the right to accumulate their shares for the purpose
of electing directors of the Company. Consequently, all directors of the
Company will be elected by the present majority shareholders.
COMMON STOCK DIVIDENDS
The Company does not presently anticipate that it will pay dividends on its
Common Stock at any time in the foreseeable future. The payment of dividends
will depend, among other things, upon the earnings, assets, general financial
condition, and other factors. In the event that the Company successfully
completes a merger or acquisition as contemplated hereunder, the Management of
the acquired company will, in all likelihood, have sole and exclusive authority
to determine whether Common Stock dividends will be paid thereafter.
The Company intends to furnish holders of its common stock annual reports
containing audited financial statements and to make public quarterly reports
containing unaudited financial information.
TRANSFER AGENT
The Company acts as its own transfer agent.
14
<PAGE>
PART II
ITEM 1 - MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
MARKET INFORMATION
The Company's securities do not currently, and have not in the past, traded on
any active or liquid public market. Thus, there is currently no market for the
Company's securities and there can be no assurance that a trading market will
develop or, if one develops, that it will continue. Even if a trading market
should develop, the market may be substantially limited or unsustained. There
are currently no plans, proposals, arrangements or understandings with any
person with regard to the development of a trading market in any of the
Company's securities.
Management has voluntarily elected to file this Form 10-SB with the Securities
and Exchange Commission pursuant to the recent requirement of the National
Association of Securities Dealers (NASD) that companies seeking to have their
securities quoted on the Over-The-Counter Bulletin Board must first be subject
to the reporting requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). As such, subsequent to the
effectiveness hereof, the Company will be filing periodic reports as required
under the Exchange Act. Management anticipates that the Company will continue
to voluntarily file periodic reports in the event that its obligation to file
such reports is suspended under the Exchange Act.
A number of states have enacted statutes, rules and regulations limiting the
sale of securities of "blank check" companies in their respective jurisdictions.
Some states prohibit the initial offer and sale as well as any subsequent resale
of securities of shell companies to residents of their states. In such an
event, the shareholders of the Company, as well as the shareholders of any
target company, may be limited in their ability to resell shares of the Company.
To the best knowledge of the Company, the following states may have such
limitations (this list is not exhaustive and a significant number of other
states may also have such limitations): Connecticut, Georgia, Oregon,
Washington, and Florida.
To the best knowledge of the Company, there are no lock-up agreements or
understandings between the Company and its shareholders or among the
shareholders which has the effect of restricting the transferability of any
shareholders stock holdings.
STOCKHOLDERS
As of February 10, 2000, the Company had 1,000,000 shares of Common Stock
outstanding and held by 9 shareholders of record.
DIVIDENDS
The Company has not paid cash dividends on its Common Stock in the past and does
not anticipate doing so in the foreseeable future.
ITEM 2 - LEGAL PROCEEDINGS
The Company is not presently, but may from time to time be involved in various
claims, lawsuits, disputes with third parties, actions involving allegations of
discrimination, or breach of contract actions incidental to the operation of its
business. The Company is not currently involved in any such litigation which it
believes could have a materially adverse effect on its financial condition or
results of operations.
ITEM 3 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Effective January 28, 2000, Haskell & White LLP, Certified Public Accountants,
were engaged by the Company as their principal auditors to audit the
Company's financial statements. There have been no changes in accountants
or disagreements of the type required to be reported under this Item 3 between
the Company and its independent auditors since their date of engagement.
15
<PAGE>
ITEM 4 - RECENT SALES OF UNREGISTERED SECURITIES
In April 1998, the Company issued 1,000,000 shares of Common Stock, for total
consideration valued at $1,000, to 9 parties, including 630,500 shares to M.
Richard Cutler and 194,000 shares to Brian A. Lebrecht. There was no
underwriter involved in this issuance. The issuance was conducted pursuant to
Section 4(2) under the Securities Act of 1933. The Company has conducted
no other issuances of securities.
ITEM 5 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation Laws of the State of Nevada and the Company's Bylaws provide for
indemnification of the Company's Directors for liabilities and expenses that
they may incur in such capacities. In general, Directors and Officers are
indemnified with respect to actions taken in good faith in a manner reasonably
believed to be in, or not opposed to, the best interests of the Company, and
with respect to any criminal action or proceeding, actions that the indemnitee
had no reasonable cause to believe were unlawful. Furthermore, the personal
liability of the Directors is limited as provided in the Company's Articles of
Incorporation.
The Company does not currently maintain a policy of Directors and Officers
Liability Insurance.
16
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The Financial Statements required by this Item are included at the end of this
report beginning on Page F-1.
PART III
ITEM 1 - INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
3.1 Articles of Incorporation of the Company.
3.2 Bylaws of the Company.
23.1 Consent of Haskell & White LLP,
Independent Certified Public Accountants.
27.1 Financial Data Schedule
ITEM 2 - DESCRIPTION OF EXHIBITS
Not applicable
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Columnbialum, Ltd.
Dated: February 11, 2000 /s/ M. Richard Cutler
------------------------------
By: M. Richard Cutler
Its: President
17
<PAGE>
Financial Statements
COLUMBIALUM, LTD.
(A DEVELOPMENT STAGE ENTERPRISE)
As of December 31, 1999,
and the Year Then Ended,
the Period From Inception,
April 9, 1998, through December 31, 1998,
and the Period From Inception,
April 9, 1998, through December 31, 1999
18
<PAGE>
COLUMBIALUM, LTD
(A Development Stage Enterprise)
TABLE OF CONTENTS
PAGE
-----
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS
Balance Sheets 2
Statements of Operations 3
Statements of Stockholders' Equity (Deficit) 4
Statements of Cash Flows 5
Notes to Financial Statements 6
19
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Columbialum, Ltd.
We have audited the accompanying balance sheet of Columbialum, Ltd. (a
Development Stage Enterprise) (the "Company") as of December 31, 1999,
and the related statements of operations, stockholders' equity (deficit) and
cash flows for the year then ended, the period from inception, April 9,
1998, through December 31, 1998, and the period from inception, April 9,
1998, through December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
1999, and the results of its operations and its cash flows for the year then
ended, the period from inception, April 9, 1998, through December 31,
1998, and the period from inception, April 9, 1998, through 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 to the
financial statements, the Company has no operations and no liquid resources.
Such matters raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans regarding those matters are also described
in Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Haskell & White LLP
HASKELL & WHITE LLP
January 31, 2000
20
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEET
ASSETS
<S> <C>
December 31,
1999
---------------
Cash $ -
---------------
Total assets $ -
===============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Payable to related party (Note 1) $ 520
---------------
Total liabilities 520
---------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value; 2,000,000 shares
authorized; no shares issued and outstanding -
Common stock, $0.001 par value; 20,000,000 shares
authorized; 1,000,000 shares issued and outstanding 1,000
Deficit accumulated during the development stage (1,520)
---------------
Total stockholders' equity (deficit) (520)
---------------
Total liabilities and stockholders' equity
(deficit) $ -
===============
</TABLE>
See Accompanying Notes to Financial Statements.
21
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
<S> <C> <C> <C>
Period From Period From
Inception, Inception
YEAR April 9, 1998, April 9, 1998,
ENDED Through Through
DECEMBER 31, December 31, December 31,
1999 1998 1999
-------------- --------------- ---------------
GENERAL AND ADMINISTRATIVE EXPENSES $ 135 $ 1,385 $ 1,520
-------------- --------------- ---------------
NET LOSS $ 135 $ 1,385 $ 1,520
============== =============== ===============
</TABLE>
See Accompanying Notes to Financial Statements.
22
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<S> <C> <C> <C> <C>
Common Stock Accumulated
Shares Amount Deficit Total
------------ ------------ --------- -------
BALANCES, April 9, 1998 - $ - $ - $ -
Issuance of common stock
for services 1,000,000 1,000 - 1,000
Net loss for the period from
inception, April 9, 1998,
through December 31, 1998 - - (1,385) (1,385)
------------ ------------ --------- -------
BALANCES, December 31, 1998 1,000,000 1,000 (1,385) (385)
Net loss for the year ended
December 31, 1999 - - (135) (135)
------------ ------------ --------- -------
BALANCES, December 31, 1999 1,000,000 $ 1,000 $ (1,520) $ (520)
============ ============ ========= =======
</TABLE>
See Accompanying Notes to Financial Statements.
23
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<S> <C> <C> <C>
Period From Period From
Inception, Inception
YEAR April 9, 1998, April 9, 1998,
ENDED Through Through
DECEMBER 31, December 31, December 31,
1999 1998 1999
-------------- ---------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (135) $ (1,385) $ (1,520)
Issuance of common stock of services - 1,000 1,000
Increase in payable to related party 135 385 520
-------------- ---------------- ----------------
Net cash used by
operating activities - - -
-------------- ---------------- ----------------
NET INCREASE (DECREASE) IN CASH - - -
-------------- ---------------- ----------------
CASH, BEGINNING OF PERIOD - - -
-------------- ---------------- ----------------
CASH, END OF PERIOD $ - $ - $ -
============== ================ ================
</TABLE>
See Accompanying Notes to Financial Statements.
24
<PAGE>
COLUMBIALUM, LTD.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
1. BUSINESS, CAPITAL STRUCTURE, AND SIGNIFICANT ACCOUNTING POLICIES
Business
Columbialum, Ltd. (A Development Stage Enterprise) (the "Company") was
incorporated on April 9, 1998 under the laws of the State of Nevada. The
Company intends to develop operating opportunities through business combinations
or mergers. To date, the Company has not conducted any significant operations,
and its activities have focused primarily on incorporation activities and
organizational efforts. Expenses related to these activities have been paid by
an entity owned by the Company's majority stockholder. As a result, the Company
has recorded a $520 payable to the related party as of December 31, 1999. Since
the Company has not yet commenced any principal operations, and has not yet
earned significant revenues, the Company is considered to be a
development stage enterprise as of December 31, 1999.
Capital Structure
On April 10, 1998, the Company's Board of Directors approved the issuance
of 1,000,000 common to the Company's founders for services which were valued at
a nominal amount approximating fair value ($1,000 recorded as general and
administrative expenses in the accompanying statement of operations). Of these
shares, 824,500 shares were issued to two officers of the Company. As of
December 31, 1999, these two officers have a 63.05% and a 19.40% ownership
interest and no other stockholder has greater than a 15% ownership interest.
Management 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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
25
<PAGE>
1. BUSINESS, CAPITAL STRUCTURE, AND SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Going Concern and Management's Plans
The Company has not commenced significant operations and has no liquid
resources. Such matters raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans with respect to these
conditions are to search for additional sources of capital and new operating
opportunities through business combinations or mergers. In the interim, the
Company will require minimal overhead, and key administrative and management
functions will be provided by stockholders. Accordingly, the accompanying
financial statements have been presented under the assumption that the Company
will continue as a going concern.
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
APR 09 1998
No C7816-98
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
COLUMBIALUM, LTD.
FIRST: The name of the corporation is Columbialum, Ltd.
SECOND: It's resident agent and registered office in the State of
Nevada is as follows: State Agent and Transfer Syndicate, Inc. located at 318 N.
Carson Street, Suite 214, Carson City, Nevada 89701.
THIRD: This Corporation is authorized to issue two classes of shares of
stock to be designated as "Common Stock" and "Preferred Stock". The total
number of shares of Common Stock which this Corporation is authorized to issue
is Twenty Million (20,000,000) shares, par value $0.001. The total number of
shares of Preferred Stock which this Corporation is authorized to issue is Two
Million (2,000,000) shares, par value $0.001.
The shares of Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the Corporation (the "Board of
Directors") is expressly authorized to provide for the issue of all or any of
the shares of the Preferred Stock in one or more series, and to fix the number
of shares and to determine or alter for each such series, such voting powers,
full or limited, or no voting powers, and such designations, preferences, and
relative, participating, optional, or other rights and such qualifications,
limitations, or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of such shares (a "Preferred Stock Designation") and as may be permitted
by the General Corporation Law of the State of Nevada. The Board of Directors
is also expressly authorized to increase or decrease (but not below the number
of shares of such series then outstanding) the number of shares of any series
subsequent to the issue of shares of that series. In case the number of shares
of any such series shall be so decreased, the shares constituting such decrease
shall resume the status that they had prior to the adoption of the resolution
originally fixing the number of shares of such series.
FOURTH: The governing body of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the bylaws of the corporation.
The names and addresses of the first board of directors which shall consist
of one (1) member are as follows:
M. Richard Cutler
610 Newport Center Drive
Suite 800
Newport Beach, CA 92660
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FIFTH: The name and address of the incorporator signing the Articles of
Incorporation is as follows:
M. Richard Cutler
610 Newport Center Drive
Suite 800
Newport Beach, CA 92660
SIXTH: The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by paragraph 1 of Section 78.037 of
the General Corporation Law of the State of Nevada, as the same may be amended
and supplemented.
SEVENTH: The corporation shall, to the fullest extent permitted by
Section 78.751 of the General Corporation Law of the State of Nevada, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all
expenses, liabilities, or other matters referred to in or covered by said
section.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Nevada, does make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hands this 23rd day of March, 1998.
/s/ M. Richard Cutler
M. Richard Cutler, Incorporator
STATE OF CALIFORNIA )
) SS.
COUNTY OF ORANGE )
On this 23 day of March, 1998, before me, the undersigned Notary Public,
personally appeared M. Richard Cutler, personally known to me (or prove to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within Instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Kerry E. Fennell
Notary Public
Kerry E. Fennell
Commission # 1150186
Notary Public-California
Orange County
My Comm. Expires Sep 1, 2001
BYLAWS
OF
COLUMBIALUM, LTD.
a Nevada corporation
27
<PAGE>
BYLAWS
OF
COLUMBIALUM, LTD.
a Nevada corporation
ARTICLE I
OFFICES 1
Section 1. Principal Office 1
Section 2. Other Offices 1
ARTICLE II
DIRECTORS - MANAGEMENT 1
Section 1. Powers, Standard of Care 1
A. Powers 1
B. Standard of Care; Liability 1
C. Exception for Close Corporation 2
Section 2. Number and Qualification of Directors 2
Section 3. Election and Term of Office of Directors 2
Section 4. Vacancies 2
Section 5. Removal of Directors 3
Section 6. Place of Meetings 3
Section 7. Annual Meetings 4
Section 8. Other Regular Meetings 4
Section 9. Special Meetings/Notices 4
Section 10. Waiver of Notice 5
Section 11. Quorums 5
Section 12. Adjournment 5
Section 13. Notice of Adjournment 5
Section 14. Board of Directors Provided by
Articles or Bylaws 5
Section 15. Directors Action by Unanimous
Written Consent 5
Section 16. Compensation of Directors 6
Section 17. Committees 6
Section 18. Meetings and Action of Committees 6
Section 19. Advisory Directors 6
ARTICLE III
OFFICERS 6
Section 1. Officers 6
Section 2. Election of Officers 7
Section 3. Subordinate Officers, Etc. 7
Section 4. Removal and Resignation of Officers 7
Section 5. Vacancies 7
Section 6. Chairman of the Board 7
Section 7. President and Chief Executive Officer 7
Section 8. Vice President 8
Section 9. Secretary 8
Section 10. Chief Financial Officer 8
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ARTICLE IV
SHAREHOLDERS' MEETINGS 9
Section 1. Place of Meetings 9
Section 2. Annual Meeting 9
Section 3. Special Meetings 9
Section 4. Notice of Meetings - Reports 10
Section 5. Quorum 11
Section 6. Adjourned Meeting and Notice Thereof 11
Section 7. Waiver or Consent by Absent Shareholders 11
Section 8. Maintenance and Inspection of Bylaws 12
Section 9. Annual Report to Shareholders 12
Section 10. Financial Statements 13
Section 11. Annual Statement of General Information 13
ARTICLE IX
AMENDMENTS TO BYLAWS 14
Section 1. Amendment by Shareholders 14
Section 2. Amendment by Directors 14
Section 3. Record of Amendments 14
ARTICLE X
MISCELLANEOUS 14
Section 1. Shareholders' Agreements 14
Section 2. Effect of Shareholders' Agreements 14
Section 3. Subsidiary Corporations 15
Section 4. Accounting Year 15
Section 5. Form 15
29
<PAGE>
BYLAWS
OF
COLUMBIALUM, LTD.
A NEVADA CORPORATION
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office for the transaction
of business of the Corporation is hereby fixed and located at 610 Newport Center
Drive, Suite 800, Newport Beach, CA 92660. The location may be changed by the
Board of Directors in their discretion, and additional offices may be
established and maintained at such other place or places, either within or
outside of Nevada, as the Board of Directors may from time to time designate.
Section 2. Other Offices. Branch or subordinate offices may at any
time be established by the Board of Directors at any place or places where the
Corporation is qualified to do business.
ARTICLE II
DIRECTORS - MANAGEMENT
Section 1. Powers, Standard of Care.
A. Powers: Subject to the provisions of the Nevada Corporations Code
(hereinafter the "Act"), and subject to any limitations in the Articles of
Incorporation of the Corporation relating to action required to be approved by
the Shareholders, or by the outstanding shares, the business and affairs of the
Corporation shall be managed and all corporate powers shall be exercised by or
under the direction of the Board of Directors. The Board of Directors may
delegate the management of the day-to-day operation of the business of the
Corporation to a management company or other persons, provided that the business
and affairs of the Corporation shall be managed, and all corporate powers shall
be exercised, under the ultimate direction of the Board.
B. Standard of Care; Liability:
(i) Each Director shall exercise such powers and otherwise perform such
duties, in good faith, in the matters such Director believes to be in the best
interests of the Corporation, and with such care, including reasonable inquiry,
using ordinary prudence, as a person in a like position would use under similar
circumstances.
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(ii) In performing the duties of a Director, a Director shall be
entitled to rely on information, opinions, reports, or statements, including
financial statements and other financial data, in which case prepared or
presented by:
(a) One or more officers or employees of the Corporation whom the
Director believes to be reliable and competent in the matters presented,
(b) Counsel, independent accountants or other persons as to which the
Director believes to be within such person's professional or expert competence,
or
(c) A Committee of the Board upon which the Director does not serve, as
to matters within its designated authority, which committee the Director
believes to merit confidence, so long as in any such case the Director acts in
good faith, after reasonable inquiry when the need therefor is indicated by the
circumstances and without knowledge that would cause such reliance to be
unwarranted.
C. Exception for Close Corporation. Notwithstanding the provisions of
Section 1 of this Article, in the event that the Corporation shall elect to
become a close corporation, its Shareholders may enter into a Shareholders'
Agreement. Said Agreement may provide for the exercise of corporate powers and
the management of the business and affairs of the Corporation by the
Shareholders; provided, however, such agreement shall, to the extent and so long
as the discretion or powers of the Board of Directors in its management of
corporate affairs is controlled by such agreement, impose upon each Shareholder
who is a party hereof, liability for managerial acts performed or omitted by
such person pursuant thereto otherwise imposed upon Directors; and the Directors
shall be relieved to that extent from such liability.
Section 2. Number and Qualification of Directors. The authorized
number of Directors of the Corporation shall be at least one (1) but not more
than seven (7) until changed by a duly adopted amendment to the Articles of
Incorporation or by an amendment to this Section 2 of Article II of these
Bylaws, adopted by the vote or written consent of Shareholders entitled to
exercise majority voting power as provided in the Act.
Section 3. Election and Term of Office of Directors. Directors shall
be elected at each annual meeting of the Shareholders to hold office until the
next annual meeting. Each Director, including a Director elected to fill a
vacancy, shall hold office until the expiration of the term for which elected
and until a successor has been elected and qualified.
Section 4. Vacancies.
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A. Vacancies on the Board of Directors may be filled by a majority of
the re-maining Directors, though less than a quorum, or by a sole remaining
Director, except that a vacancy created by the removal of a Director by the vote
or written consent of the Shareholders, or by a court order, may be filled only
by the vote of a majority of the shares entitled to vote, represented at a duly
held meeting at which a quorum is present, or by the written consent of holders
of the majority of the outstanding shares entitled to vote. Each Director so
elected shall hold office until the next annual meeting of the Shareholders and
until a successor has been elected and qualified.
B. A vacancy or vacancies on the Board of Directors shall be deemed to
exist in the event of the death, resignation or removal of any Director, or if
the Board of Directors by resolution declares vacant the office of a Director
who has been declared of unsound mind by an order of court or convicted of a
felony.
C. The Shareholders may elect a Director or Directors at any time to
fill any vacancy or vacancies not filled by the Directors, but any such election
by written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
D. Any Director may resign, effective on giving written notice to the
Chairman of the Board, the President, the Secretary, or the Board of Directors,
unless the notice specifies a later time for that resignation to become
effective. If the resignation of a Director is effective at a future time, the
Board of Directors may, prior to the effective date of a Director's resignation,
elect a successor to take office when the resignation becomes effective.
E. No reduction of the authorized number of Directors shall have the
effect of removing any Director before that Director's term of office expires.
Section 5. Removal of Directors.
A. The entire Board of Directors, or any individual Director, may be
removed from office as provided by the Act. In such case, the remaining
members, if any, of the Board of Directors may elect a successor Director to
fill such vacancy for the remaining unexpired term of the Director so removed.
B. No Director may be removed (unless the entire Board is removed) when
the votes cast against removal or not consenting in writing to such removal
would be sufficient to elect such Director if voted cumulatively at an election
at which the same total number of votes were cast (or, if such action is taken
by written consent, all shares entitled to vote, were voted) and the entire
number of Directors authorized at the time of the Directors most recent
election were then being elected; and when by the provisions of the Articles of
Incorporation the holders of the shares of any class or series voting as a
class or series are entitled to elect one or more Directors, any Director so
elected may be removed only by the applicable vote of the holders of the shares
of that class or series.
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Section 6. Place of Meetings. Regular meetings of the Board of
Directors shall be held at any place within or outside the state that has been
designated from time to time by resolution of the Board. In the absence of such
resolution, regular meetings shall be held at the principal executive office of
the Corporation. Special meetings of the Board shall be held at any place
within or outside the state that has been designated in the notice of the
meeting, or, if not stated in the notice or there is no notice, at the principal
executive office of the Corporation. Any meeting, regular or special, may be
held by conference telephone or similar communication equipment, so long as all
Directors participating in such meeting can hear one another, and all such
Directors shall be deemed to have been present in person at such meeting.
Section 7. Annual Meetings. Immediately following each annual meeting
of Shareholders, the Board of Directors shall hold a regular meeting for the
purpose of organization, the election of officers and the transaction of other
business. Notice of this meeting shall not be required. Minutes of any meeting
of the Board, or any committee thereof, shall be maintained as required by the
Act by the Secretary or other officer designated for that purpose.
Section 8. Other Regular Meetings.
A. Other regular meetings of the Board of Directors shall be held
without call at such time as shall from time to time be fixed by the Board of
Directors. Such regular meetings may be held without notice, provided the time
and place of such meetings has been fixed by the Board of Directors, and further
provided the notice of any change in the time of such meeting shall be given to
all the Directors. Notice of a change in the determination of the time shall be
given to each Director in the same manner as notice for such special meetings of
the Board of Directors.
B. If said day falls upon a holiday, such meetings shall be held on the
next succeeding day thereafter.
Section 9. Special Meetings/Notices.
A. Special meetings of the Board of Directors for any purpose or
purposes may be called at any time by the Chairman of the Board or the President
or any Vice President or the Secretary or any two Directors.
B. Notice of the time and place for special meetings shall be delivered
personally or by telephone to each Director or sent by first class mail or
telegram, charges prepaid, addressed to each Director at his or her address as
it is shown in the records of the Corporation. In case such notice is mailed,
it shall be deposited in the United States mail at least four days prior to the
time of holding the meeting. In case such notice is delivered personally, or by
telephone or telegram, it shall be delivered personally or be telephone or to
the telegram company at least 48 hours prior to the time of the holding of the
meeting. Any oral notice given personally or by telephone may be communicated
to either the Director or to a person at the office of the Director who the
person giving the notice has reason to believe will promptly communicate same to
the Director. The notice need not specify the purpose of the meeting, nor the
place, if the meeting is to be held at the principal executive office of the
Corporation.
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<PAGE>
Section 10. Waiver of Notice.
A. The transactions of any meeting of the Board of Directors, however
called, noticed, or wherever held, shall be as valid as though had at a meeting
duly held after the 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, a consent to holding the meeting or an approval of the
minutes thereof. Waivers of notice or consent need not specify the purposes of
the meeting. All such waivers, consents and approvals shall be filed with the
corporate records or made part of the minutes of the meeting.
B. Notice of a meeting shall also be deemed given to any Director who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice to such Director.
Section 11. Quorums. A majority of the authorized number of Directors
shall constitute a quorum for the transaction of business, except to adjourn as
provided in Section 12 of this Article II. Every act or decision done or made
by a majority of the Directors present at a meeting duly held at which a quorum
was present shall be regarded as the act of the Board of Directors, subject to
the provisions of the Act. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of Directors, if
any action taken is approved by at least a majority of the required quorum for
that meeting.
Section 12. Adjournment. A majority of the directors present, whether
or not constituting a quorum, may adjourn any meeting to another time and place.
Section 13. Notice of Adjournment. Notice of the time and place of the
holding of an adjourned meeting need not be given, unless the meeting is
adjourned for more than 24 hours, in which case notice of such time and place
shall be given prior to the time of the adjourned meeting to the Directors who
were not present at the time of the adjournment.
Section 14. Board of Directors Provided by Articles or Bylaws. In the
event only one Director is required by the Bylaws or the Articles of
Incorporation, then any reference herein to notices, waivers, consents, meetings
or other actions by a majority or quorum of the Board of Directors shall be
deemed or referred as such notice, waiver, etc., by the sole Director, who shall
have all rights and duties and shall be entitled to exercise all of the powers
and shall assume all the responsibilities otherwise herein described, as given
to the Board of Directors.
Section 15. Directors Action by Unanimous Written Consent. Any action
required or permitted to be taken by the Board of Directors may be taken without
a meeting and with the same force and effect as if taken by a unanimous vote of
Directors, if authorized by a writing signed individually or collectively by all
members of the Board of Directors. Such consent shall be filed with the regular
minutes of the Board of Directors.
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<PAGE>
Section 16. Compensation of Directors. Directors, and members as such,
shall not receive any stated salary for their services, but by resolution of the
Board of Directors, a fixed sum and expense of attendance, if any, may be
allowed for attendance at each regular and special meeting of the Board of
Directors; provided, however, that nothing contained herein shall be construed
to preclude any Director from serving the Corporation in any other capacity as
an officer, employee or otherwise receiving compensation for such services.
Section 17. Committees. Committees of the Board of Directors may be
appointed by resolution passed by a majority of the whole Board. Committees
shall be composed of two or more members of the Board of Directors. The Board
may designate one or more Directors as alternate members of any committee, who
may replace any absent member at any meeting of the committee. Committees shall
have such powers as those held by the Board of Directors as may be expressly
delegated to it by resolution of the Board of Directors, except those powers
expressly made non-delegable by the Act.
Section 18. Meetings and Action of Committees. Meetings and action of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article II, Sections 6, 8, 9, 10, 11, 12, 13 and 15, with such
changes in the context of those Sections as are necessary to substitute the
committee and its members for the Board of Directors and its members, except
that the time of the regular meetings of the committees may be determined by
resolution of the Board of Directors as well as the committee, and special
meetings of committees may also be given to all alternate members, who shall
have the right to attend all meetings of the committee. The Board of Directors
may adopt rules for the government of any committee not inconsistent with the
provisions of these Bylaws.
Section 19. Advisory Directors. The Board of Directors from time to
time may elect one or more persons to be Advisory Directors, who shall not by
such appointment be members of the Board of Directors. Advisory Directors shall
be available from time to time to perform special assignments specified by the
President, to attend meetings of the Board of Directors upon invitation and to
furnish consultation to the Board of Directors. The period during which the
title shall be held may be prescribed by the Board of Directors. If no period
is prescribed, the title shall be held at the pleasure of the Board of
Directors.
ARTICLE III
OFFICERS
Section 1. Officers. The principal officers of the Corporation shall
be a President, a Vice President, a Secretary, and a Chief Financial Officer who
may also be called Treasurer. The Corporation may also have, at the discretion
of the Board of Directors, a Chairman of the Board, one or more Vice Presidents,
one or more Assistant Secretaries, one or more Assistant Treasurers, and such
other officers as may be appointed in accordance with the provisions of Section
3 of this Article III. Any number of offices may be held by the same person.
Section 2. Election of Officers. The principal officers of the
Corporation, except such officers as may be appointed in accordance with the
provisions of Section 3 or Section 5 of this Article, shall be chosen by the
Board of Directors, and each shall serve at the pleasure of the Board of
Directors, subject to the rights, if any, of an officer under any contract of
employment.
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Section 3. Subordinate Officers, Etc. The Board of Directors may
appoint such other officers as the business of the Corporation may require, each
of whom shall hold office for such period, have such authority and perform such
duties as are provided in the Bylaws or as the Board of Directors may from time
to time determine.
Section 4. Removal and Resignation of Officers.
A. Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by a
majority of the Directors at that time in office, at any regular or special
meeting of the Board of Directors, or, except in the case of an officer chosen
by the Board of Directors, by any officer upon whom such power of removal may be
conferred by the Board of Directors.
B. Any officer may resign at any time by giving written notice to the
Board of Directors. Any resignation shall take effect on the date of the
receipt of that notice or at any later time specified in that notice; and,
unless otherwise specified in that notice, the acceptance of the resignation
shall not be necessary to make it effective. Any resignation is without
prejudice to the rights, if any, of the Corporation under any contract to which
the officer is a party.
Section 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the Bylaws for regular appointments to that office.
Section 6. Chairman of the Board.
A. The Chairman of the Board, if such an officer be elected, shall, if
present, preside at the meetings of the Board of Directors and exercise and
perform such other powers and duties as may, from time to time, be assigned by
the Board of Directors or prescribed by the Bylaws. If there is no President,
the Chairman of the Board shall, in addition, be the Chief Executive Officer of
the Corporation and shall have the powers and duties prescribed in Section 7 of
this Article III.
Section 7. President and Chief Executive Officer. Subject to such
supervisory powers, if any, as may be given by the Board of Directors to the
Chairman of the Board, if there is such an officer, the President along with the
Chief Executive Officer of the Corporation shall, subject to the control of the
Board of Directors, have general supervision, discretion and control of the
business and officers of the Corporation. The President or the Chief Executive
Officer shall preside at all meetings of the Shareholders and, in the absence of
the Chairman of the Board, or if there be none, at all meetings of the Board of
Directors. The President and Chief Executive Officer, jointly, shall have the
general powers and duties of management usually vested in the office of
President and Chief Executive Officer of a corporation, each shall be ex officio
a member of all the standing committees, including the Executive Committee, if
any, and shall have such other powers and duties as may be prescribed by the
Board of Directors or the Bylaws.
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Section 8. Vice President. In the absence or disability of the
President or Chief Executive Officer, the Vice Presidents, if any, in order of
their rank as fixed by the Board of Directors, or if not ranked, the Vice
President designated by the Board of Directors, shall perform all the duties of
the President or Chief Executive Officer, as the case may be, and when so
acting, shall have all the powers of, and be subject to all the restrictions
upon, the President or the Chief Executive Officer. The Vice Presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them, respectively, by the Board of Directors or the Bylaws, the
President, the Chief Executive Officer, or the Chairman of the Board.
Section 9. Secretary.
A. The Secretary shall keep, or cause to be kept, a book of minutes of
all meetings of the Board of Directors and Shareholders at the principal office
of the Corporation or such other place as the Board of Directors may order. The
minutes shall include the time and place of holding the meeting, whether regular
or special, and if a special meeting, how authorized, the notice thereof given,
and the names of those present at Directors' and committee meetings, the number
of shares present or represented at Shareholders' meetings and the proceedings
thereof.
B. The Secretary shall keep, or cause to be kept, at the principal
office of the Corporation or at the office of the Corporation's transfer agent,
a share register, or duplicate share register, showing the names of the
Shareholders and their addresses; the number and classes or shares held by each;
the number and date of certificates issued for the same; and the number and date
of cancellation of every certificate surrendered for cancellation.
C. The Secretary shall give, or cause to be given, notice of all the
meetings of the Shareholders and of the Board of Directors required by the
Bylaws or by law to be given. The Secretary shall keep the seal of the
Corporation in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or by the Bylaws.
Section 10. Chief Financial Officer or Treasurer.
A. The Chief Financial Officer shall keep and maintain, or cause to be
kept and maintained, in accordance with generally accepted accounting
principles, adequate and correct accounts of the properties and business
transactions of the Corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, earnings (or surplus) and
shares issued. The books of account shall, at all reasonable times, be open to
inspection by any Director.
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B. The Chief Financial Officer shall deposit all monies and other
valuables in the name and to the credit of the Corporation with such
depositaries as may be designated by the Board of Directors. The Chief
Financial Officer shall disburse the funds of the Corporation as may be ordered
by the Board of Directors, shall render to the President and Directors, whenever
they request it, an account of all of the transactions of the Chief Financial
Officer and of the financial condition of the Corporation, and shall have such
other powers and perform such other duties as may be prescribed by the Board of
Directors or the Bylaws.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings. Meetings of the Shareholders shall be
held at any place within or outside the state of Nevada designated by the Board
of Directors. In the absence of any such designation, Shareholders' meetings
shall be held at the principal executive office of the Corporation.
Section 2. Annual Meeting.
A. The annual meeting of the Shareholders shall be held, each year, as
follows:
Time of Meeting: 10:00 A.M.
Date of Meeting: Second Tuesday in April
B. If this day shall be a legal holiday, then the meeting shall be held
on the next succeeding business day, at the same time. At the annual meeting,
the Shareholders shall elect a Board of Directors, consider reports of the
affairs of the Corporation and transact such other business as may be properly
brought before the meeting.
C. If the above date is inconvenient, the annual meeting of
Shareholders shall be held each year on a date and at a time designated by the
Board of Directors within ninety days of the above date upon proper notice to
all Shareholders.
Section 3. Special Meetings.
A. Special meetings of the Shareholders for any purpose or purposes
whatsoever, may be called at any time by the Board of Directors, the Chairman of
the Board, the President, or by one or more Shareholders holding shares in the
aggregate entitled to cast not less than 10% of the votes at any such meeting.
Except as provided in paragraph B below of this Section 3, notice shall be given
as for the annual meeting.
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B. If a special meeting is called by any person or persons other than
the Board of Directors, the request shall be in writing, specifying the time of
such meeting and the general nature of the business proposed to be transacted,
and shall be delivered personally or sent by registered mail or by telegraphic
or other facsimile transmission to the Chairman of the Board, the President, any
Vice President or the Secretary of the Corporation. The officer receiving such
request shall forthwith cause notice to be given to the Shareholders entitled to
vote, in accordance with the provisions of Sections 4 and 5 of this Article,
indicating that a meeting will be held at the time requested by the person or
persons calling the meeting, not less than 35 nor more than 60 days after the
receipt of the request. If the notice is not given within 20 days after receipt
of the request, the person or persons requesting the meeting may give the notice
in the manner provided in these Bylaws. Nothing contained in this paragraph of
this Section shall be construed as limiting, fixing or affecting the time when a
meeting of Shareholders called by action of the Board of Directors may be held.
Section 4. Notice of Meetings - Reports.
A. Notice of any Shareholders meetings, annual or special, shall be
given in writing not less than 10 days nor more than 60 days before the date of
the meeting to Shareholders entitled to vote thereat by the Secretary or the
Assistant Secretary, or if there be no such officer, or in the case of said
Secretary or Assistant Secretary's neglect or refusal, by any Director or
Shareholder.
B. Such notices or any reports shall be given personally or by mail or
other means of written communication as provided in the Act and shall be sent to
the Shareholder's address appearing on the books of the Corporation, or supplied
by the Shareholder to the Corporation for the purpose of notice, and in the
absence thereof, as provided in the Act by posting notice at a place where the
principal executive office of the Corporation is located or by publication at
least once in a newspaper of general circulation in the county in which the
principal executive office is located.
C. Notice of any meeting of Shareholders shall specify the place, the
day and the hour of meeting, and (i) in case of a special meeting, the general
nature of the business to be transacted and that no other business may be
transacted, or (ii) in the case of an annual meeting, those matters which the
Board of Directors, at the date of mailing of notice, intends to present for
action by the Shareholders. At any meetings where Directors are elected, notice
shall include the names of the nominees, if any, intended at the date of notice
to be presented for election.
D. Notice shall be deemed given at the time it is delivered personally
or deposited in the mail or sent by other means of written communication. The
officer giving such notice or report shall prepare and file in the minute book
of the Corporation an affidavit or declaration thereof.
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E. If action is proposed to be taken at any meeting for approval of (i)
contracts or transactions in which a Director has a direct or indirect financial
interest, (ii) an amendment to the Articles of Incorporation, (iii) a
reorganization of the Corporation, (iv) dissolution of the Corporation, or (v) a
distribution to preferred Shareholders, the notice shall also state the general
nature of such proposal.
Section 5. Quorum.
A. The holders of a majority of the shares entitled to vote at a
Shareholders' meeting, present in person, or represented by proxy, shall
constitute a quorum at all meetings of the Shareholders for the transaction of
business except as otherwise provided by the Act or by these Bylaws.
B. The Shareholders present at a duly called or held meeting at which a
quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Shareholders to leave less than a
quorum, if any action taken (other than adjournment) is approved by a majority
of the shares required to constitute a quorum.
Section 6. Adjourned Meeting and Notice Thereof.
A. Any Shareholders' meeting, annual or special, whether or not a
quorum is present, may be adjourned from time to time by the vote of the
majority of the shares represented at such meeting, either in person or by
proxy, but in the absence of a quorum, no other business may be transacted at
such meeting.
B. When any meeting of Shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at a meeting at which the
adjournment is taken, unless a new record date for the adjourned meeting is
fixed, or unless the adjournment is for more than 45 days from the date set for
the original meeting, in which case the Board of Directors shall set a new
record date. Notice of any adjourned meeting shall be given to each Shareholder
of record entitled to vote at the adjourned meeting in accordance with the
provisions of Section 4 of this Article. At any adjourned meeting, the
Corporation may transact any business which might have been transacted at the
original meeting.
Section 7. Waiver or Consent by Absent Shareholders.
A. The transactions of any meeting of Shareholders, either annual or
special, however called and noticed, shall be valid as though had at a meeting
duly held after regular call and notice, if a quorum be present either in person
or by proxy, and if, either before or after the meeting, each of the
Shareholders entitled to vote, not present in person or by proxy, sign a written
waiver of notice, or a consent to the holding of such meeting or an approval of
the minutes thereof.
40
<PAGE>
B. The waiver of notice or consent need not specify either the business
to be transacted or the purpose of any regular or special meeting of
Shareholders, except that if action is taken or proposed to be taken for
approval of any of those matters specified in Section E of Section 4 of this
Article, the waiver of notice or consent shall state the general nature of such
proposal. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
C. Attendance of a person at a meeting shall also constitute a waiver
of notice of such meeting, except when the person objects, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened, and except that attendance at a meeting is not a
waiver of any right to object to the consideration of matters not included in
the notice. A Shareholder or Shareholders of the Corporation holding at least
5% in the aggregate of the outstanding voting shares of the Corporation may (i)
inspect, and copy the records of Shareholders' names and addresses and
shareholdings during usual business hours upon five days prior written demand
upon the Corporation, and/or (ii) obtain from the transfer agent by paying such
transfer agent's usual charges for such a list, a list of the Shareholders'
names and addresses who are entitled to vote for the election of Directors, and
their shareholdings, as of the most recent record date for which such list has
been compiled or as of a date specified by the Shareholders subsequent to the
day of demand. Such list shall be made available by the transfer agent on or
before the later of five days after the demand is received or the date specified
therein as the date as of which the list is to be compiled. The record of
Shareholders shall also be open to inspection upon the written demand of any
Shareholder or holder of a voting trust certificate, at any time during usual
business hours, for a purpose reasonably related to such holder's interest as a
Shareholder or as a holder of a voting trust certificate. Any inspection and
copying under this Section may be made in person or by an agent or attorney of
such Shareholder or holder of a voting trust certificate making such demand.
Section 8. Maintenance and Inspection of Bylaws. The Corporation shall
keep at its principal executive office, or if not in this state, at its
principal business office in this state, the original or a copy of the Bylaws
amended to date, which shall be open to inspection by the Shareholders at all
reasonable times during office hours. If the principal executive office of the
Corporation is outside the state and the Corporation has no principal business
office in this state, the Secretary shall, upon written request of any
Shareholder, furnish to such Shareholder a copy of the Bylaws as amended to
date.
Section 9. Annual Report to Shareholders.
A. Provided the Corporation has 100 Shareholders or less, the Annual
Report to Shareholders referred to in the Act is expressly dispensed with, but
nothing herein shall be interpreted as prohibiting the Board of Directors from
issuing annual or other period reports to Shareholders of the Corporation as
they deem appropriate.
41
<PAGE>
B. Should the Corporation have 100 or more Shareholders, an Annual
Report to Shareholders must be furnished not later than 120 days after the end
of each fiscal period. The Annual Report to Shareholders shall be sent at least
15 days before the annual meeting of the Shareholders to be held during the next
fiscal year and in the manner specified in Section 4 of Article V of these
Bylaws for giving notice to Shareholders of the Corporation. The Annual Report
to Shareholders shall contain a Balance Sheet as of the end of the fiscal year
and an Income Statement and Statement of Changes in Financial Position for the
fiscal year, accompanied by any report of independent accountants or, if there
is no such report, the certificate of an authorized officer of the Corporation
that the statements were prepared without audit from the books and records of
the Corporation.
Section 10. Financial Statements.
A. A copy of any annual financial statement and any Income Statement of
the Corporation for each quarterly period of each fiscal year, and any
accompanying Balance Sheet of the Corporation as of the end of each such period,
that has been prepared by the Corporation shall be kept on file at the principal
executive office of the Corporation for 12 months from the date of its
execution, and each such statement shall be exhibited at all reasonable times to
any Shareholder demanding an examination of such statement or a copy shall be
made for any such Shareholder.
B. If a Shareholder or Shareholders holding at least 5% of the
outstanding shares of any class of stock of the Corporation make a written
request to the Corporation for an Income Statement of the Corporation for the
three month, six month or nine month period of the then current fiscal year
ended more than 30 days prior to the date of the request, and a Balance Sheet of
the Corporation at the end of such period, the Chief Financial Officer shall
cause such statement to be prepared, if not already prepared, and shall deliver
personally or mail such statement or statements to the person making the request
within 30 days after the receipt of such request. If the Corporation has not
sent to the Shareholders its Annual Report for the last fiscal year, this report
shall likewise be delivered or mailed to such Shareholder or Shareholders within
30 days after such request.
C. The Corporation also shall, upon the written request of any
Shareholder, mail to the Shareholder a copy of the last annual, semi-annual or
quarterly Income Statement which it has prepared and a Balance Sheet as of the
end of such period. This quarterly Income Statement and Balance Sheet referred
to in this Section shall be accompanied by the report thereon, if any, of any
independent accountants engaged by the Corporation or the certificate of
authorized officer of the Corporation such that financial statements were
prepared without audit from the books and records of the Corporation.
42
<PAGE>
Section 11. Annual Statement of General Information. The Corporation
shall, in a timely manner, in each year, file with the Secretary of State of
Nevada, on the prescribed form, the statement setting forth the authorized
number of Directors, the names and complete business or residence addresses of
all incumbent Directors, the names and complete business or residence addresses
of the Chief Executive Officer, Secretary and Chief Financial Officer, the
street address of its principal executive office or principal business office in
this state and the general type of business constituting the principal business
activity of the Corporation, together with a designation of the agent of the
Corporation for the purpose of the service of process, all in compliance with
the Act.
ARTICLE IX
AMENDMENTS TO BYLAWS
Section 1. Amendment by Shareholders. New Bylaws may be adopted or
these Bylaws may be amended or repealed by the vote or written consent of
holders of a majority of the outstanding shares entitled to vote; provided,
however, that if the Articles of Incorporation of the Corporation set forth the
number of authorized Directors of the Corporation, the authorized number of
Directors may be changed only by amendment to the Articles of Incorporation.
Section 2. Amendment by Directors. Subject to the rights of the
Shareholders to adopt, amend or repeal the Bylaws, as provided in Section 1 of
this Article IX, and the limitations of the Act, the Board of Directors may
adopt, amend or repeal any of these Bylaws other than an amendment to the Bylaws
changing the authorized number of Directors.
Section 3. Record of Amendments. Whenever an amendment or new Bylaw is
adopted, it shall be copies in the corporate book of Bylaws with the original
Bylaws, in the appropriate place. If any Bylaw is repealed, the fact of repeal
with the date of the meeting at which the repeal was enacted or written assent
was filed shall be stated in the corporate book of Bylaws.
ARTICLE X
MISCELLANEOUS
Section 1. Shareholders' Agreements. Notwithstanding anything
contained in this Article X to the contrary, in the event the Corporation elects
to become a close corporation, an agreement between two or more Shareholders
thereof, if in writing and signed by the parties thereto, may provide that in
exercising any voting rights, the shares held by them shall be voted as provided
therein or in the Act, and may otherwise modify the provisions contained in
Article IV, herein as to Shareholders' meetings and actions.
Section 2. Effect of Shareholders' Agreements. Any Shareholders'
Agreement authorized by the Act, shall only be effective to modify the terms of
these Bylaws if the Corporation elects to become a close corporation with the
appropriate filing of an amendment to its Articles of Incorporation as required
by the Act and shall terminate when the Corporation ceases to be a close
corporation. Any other provisions of the Act or these Bylaws may be altered or
waived thereby, but to the extent they are not so altered or waived, these
Bylaws shall be applicable.
Section 3. Subsidiary Corporations. Shares of the Corporation owned by
a subsidiary shall not be entitled to vote on any matter.
43
<PAGE>
Section 4. Accounting Year. The accounting year of the Corporation
shall be fixed by resolution of the Board of Directors.
Section 5. Form. The corporate seal shall be circular in form, and
shall have inscribed thereon the name of the Corporation, the date of its
incorporation, and the word "Nevada" to indicate the Corporation was
incorporated pursuant to the laws of the State of Nevada.
44
<PAGE>
CERTIFICATE OF SECRETARY
I, the undersigned, certify that:
1. I am the duly elected and acting secretary of COLUMBIALUM, LTD., a
Nevada corporation; and
2. The foregoing Bylaws, consisting of 16 pages, are the Bylaws of this
Corporation as adopted by the Board of Directors in accordance with the Nevada
Business Corporation Act and that such Bylaws have not been amended and are in
full force and effect.
IN WITNESS WHEREOF, I have subscribed my name and affixed the seal of this
Corporation on April 10, 1998.
/s/ Brian A. Lebrecht
_________________________________
Brian A. Lebrecht, Secretary
INDEPENDENT AUDITORS' CONSENT
We agree to the inclusion in this Form 10-SB of our report, dated January 31,
2000, on our audit of the financial statements of Columbialum, Ltd. as of
December 31, 1999, and the year then ended, the period from inception,
April 9, 1998, through December 31, 1998, and the period from inception,
April 9, 1998, through December 31, 1999.
/s/ Haskell & White LLP
HASKELL & WHITE LLP
Irvine, California
February 11, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's statements of operations, balance sheets and statements of cash flows
and is qualified by reference to such financial statements contained within the
Company's Form 10-SB.
</LEGEND>
<CIK> 0001106207
<NAME> Columbialum, Ltd.
<MULTIPLIER> 1
<CAPTION>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 520
<BONDS> 0
0
0
<COMMON> 1000
<OTHER-SE> 0
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<SALES> 0
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<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
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<INCOME-CONTINUING> 0
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</TABLE>