UNITED STATES
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
NEW-ERA TRADING GROUP, INC.
(Name of Small Business Issuer in its charter)
FLORIDA 65-0093914
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7511 N.W. FIRST COURT
PEMBROKE PINES, FLORIDA 33024
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (954) 894-3696 Facsimile number (954) 894-3676
Securities to be registered under Section 12(b) of the Act:
Not applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value per share
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Forward-looking Statements
This registration statement contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended, and is subject to the
safe harbors created by those sections. These forward-looking statements are
subject to significant risks and uncertainties, including information included
under Items 1 and 2 of this registration statement, which may cause actual
results to differ materially from those discussed in such forward-looking
statements. The forward-looking statements within this registration statement
are identified by words such as "believes", "anticipates", "expects",
"intends", "may", "will" and other similar expressions regarding the Company's
intent, belief and current expectations. However, these words are not the
exclusive means of identifying such statements. In addition, any statements
which refer to expectations, projections or other characterizations of future
events or circumstances and statements made in the future tense are forward-
looking statements. Readers are cautioned that actual results may differ
materially from those projected in the forward-looking statements as a result
of various factors, many of which are beyond the control of the Company. The
Company undertakes no obligation to publicly release the results of any
revisions to these forward-looking statements which may be made to reflect
events or circumstances occurring subsequent to the filing of this
registration statement with the Commission. Readers are urged to carefully
review and consider the various disclosures made by the Company in this
registration statement.
ITEM 1. DESCRIPTION OF BUSINESS
Business Development Since Inception
New-Era Trading Group, Inc., (the "Company") was incorporated in Florida in
December 1988, under the name "Gardner Marketing Services, Inc." Management
believes that from incorporation until 1992, the Company was essentially
dormant. In September 1992, the Company began an effort to develop an
import/export business. Initially, the Company imported a single consumer
product from Brazil. In March 1994, the founder of the Company and his wife
sold their entire stock interest in the Company to a third party and withdrew
from all involvement with the Company. In May 1994, the Company changed its
name to New-Era Trading Group, Inc. Subsequently, the Company added
importation and distribution of two additional Brazilian products (one of
which it also sought to distribute in Europe) and terminated importation of
its initial Brazilian product. Being unable to establish an adequate market,
quality control and gross profit margins for these products, the Company
terminated trade in the Brazilian products and undertook the importation and
distribution of a line of food products from Ecuador. The Company was unable
to raise sufficient additional capital to support the marketing effort for the
products or for any further business activity and ceased all business
operations in February 1998. In connection with the cessation of business,
the Company liquidated all of its assets (primarily a limited amount of office
furnishings and equipment). At the present time the Company has returned to
developmental and promotional stages. The Company is now a "shell" company
conducting no business operation, other than its limited efforts to seek
merger partners or acquisition candidates. The Company does not have any
employees or own any assets, other than its trademark, which one of the
Company's directors and former president expects to retain personally in any
Business Combination, in view of the expectation that the trademark is
unlikely to have any value to the business enterprise following any merger or
acquisition.
Planned Pursuit of a Business Combination
The Company plans to seek a merger, exchange of capital stock, asset
acquisition or other similar business combination (a "Business Combination")
with an operating or development stage business (the "Target Business") which
desires to employ the Company to become a reporting corporation under the
Securities Exchange Act of 1934, as amended, ("Exchange Act"). The Company
has elected to register it's common stock, $.01 value (the "Common Stock")
pursuant to this Form 10-SB registration statement on a voluntary basis in
order to create a reporting "shell" company. Concurrent with filing this
registration, the Company is seeking a securities broker-dealer to become a
market maker for the Company's Common Stock and to sponsor the quotation
thereof on the OTC Bulletin Board operated by the National Association of
Securities Dealers, Inc. The Company believes that registration (i.e.,
becoming a fully reporting company under the Exchange Act) and having its
Common Stock quoted on the OTC Bulletin Board, whether or not bid and asked
quotations are actually published from time to time, will make the Company
more attractive to a Target Business which is seeking a shell company with
which to merge or by which to be acquired. The sole cost to a Target Business
of merging with or being acquired by the Company, other than normal
professional fees related to the transaction and required filings with the
Commission, will be an obligation to pay off the Company's existing
liabilities of approximately $107,000. The Company's current directors and
officers, who coincidentally considered as a group are the Company's
controlling stockholders at the date of this registration statement, do not
expect to sell any Common Stock which they now own to the Target Business or
its affiliates in connection with a Business Combination. The payment of the
Company's accrued liabilities are expected to be the Target Business' entire
direct cost of entering into a Business Combination with the Company.
Reasons the Company may be Attractive as a Shell Company
The Company believes that the amount required to pay off its liabilities
(approximately $107,000) is less than the typical price currently being
charged by others to acquire control of a "fully reporting shell company".
The Company was not created from scratch to be a shell company. The Company
has a defined business history, audited financial statements and no contingent
liabilities or unknown liabilities. The Company has approximately 270
stockholders of record and 15,020,960 shares of Common Stock outstanding
(following a reverse stock split immediately prior to this registration
statement), all of which was issued between 1988 and 1998 to the founders, to
subsequent management and to investors in the Company's efforts to capitalize
and establish itself as a going concern. Of the issued and outstanding shares
of Common Stock, 6,455,820 shares are owned by "affiliates" of the Company
(directors, officers and persons who own more than ten percent) and are
therefore subject to public resale in compliance with Rule 144 of the
Securities Act of 1933, as amended (the "Securities Act") for so long as the
holders remain affiliates. Any persons who acquires or agrees to acquire,
otherwise in a public market transaction, shares of the Company's Common Stock
from these affiliates at a time they are affiliates will purchase a
"restricted security" which is subject to public resale only in compliance
with Rule 144. The Company's current affiliates do not expect to sell any of
their holdings in the Company to the affiliates of the Target Business, since
the stock held by the current affiliates is expected to become part of the
Company's "public float", after such persons cease to be the Company's
affiliates, and therefor facilitate development of a public trading market for
the Company's Common Stock. Sales by the Company's current affiliates of all
or part of their holdings in the Company to the affiliates of the Target
Business cannot be rule out altogether, because such future affiliates may
believe it is not necessary to have a public float of approximately one
million share to develop a public trading market and may accordingly desire to
purchase some or all of the holdings of current affiliates. The Company's
stockholders other than its current affiliates will not be able to participate
in any such sales to affiliates of the Target Business.
Activities Designed to Locate a Target Business
Upon the effectiveness of this registration statement and satisfaction of all
comments posed by the Commission's staff, the Company intends to seek (a) a
market maker to sponsor the quotation of the Company's Common stock on the OTC
Bulletin Board (if not previously identified) and (b) business opportunities
for the purpose of effectuating a Business Combination with a Target Business
which management believes to possess significant growth and profit potential.
The Company intends to seek opportunities demonstrating the potential of long
term growth as opposed to short term earnings. The Company may effect a
Business Combination with a Target Business which may be financially unstable,
in its early stages of development or growth and involve a high degree of
risk. The Company will not restrict its search to any specific business,
industry or geographical location, and the Company may participate in a
business venture of virtually any kind or nature. None of the Company's
present directors and officers expect to remain associated in any operational,
managerial or executive capacity with or as directors of the Company following
a Business Combination. Nor does present management of the Company expect to
be involved in management of or as an investor in the Target Business before a
Business Combination. Present management expects the management of the Target
Business will assume management of the Company following the Business
Combination. Presently, the Company has no plan, proposal, agreement,
understanding or arrangement and is not conducting any discussions to acquire
or merge with any specific business or company, and the Company has not
identified any specific business or company for investigation and evaluation.
Furthermore, the Company has no budget or funding set aside for that purpose.
Any investigation, discussion, negotiation and acquisition of a Target
Business, if any, will be paid for by the Company's present management.
Pursuant to resolution of the Company's board of directors, no Business
Combination may occur prior to the Company obtaining the requisite audited
financial statements required pursuant to Form 8-K (or its equivalent)
promulgated under the Exchange Act.
The discussion of the proposed business under this caption and throughout this
registration statement is purposefully general and is not meant to be
restrictive of the Company's virtually unlimited discretion to search for and
enter into a Business Combination.
Special Considerations
As a shell company, the Company faces special risks inherent in the
investigation, acquisition or involvement in a business opportunity, whether
it is in the development stage or is an operating company with a purported
history of success. Especially in a Business Combination with a Target
Company which is in the development stage, the Company expects to face all of
the unforeseen costs, expenses, problems and difficulties generally
experienced by such companies. And, the Target Company may have a "going
concern" qualification to its audit report. The Company is dependent upon its
directors and officers for efforts to effectuate a Business Combination.
Due to the Company's financial condition, the Target Business is expected to
be primarily motivated by a desire to establish a public trading market for
its shares, while avoiding what it might deem to be the adverse consequences
of undertaking a public offering itself, such as difficulty in obtaining an
underwriter, time delays, uncertainty of success and significant expenses
incurred to comply with the Securities Act that regulates initial public
offerings. A Target Business might desire, among other reasons, to create a
public market for their shares in order to enhance liquidity for current
shareholders, to facilitate raising capital through the public or private sale
of additional securities or to have securities eligible for public trading
with which to acquire additional businesses or assets. The Company's present
management expects any Target Business to require additional funding, of which
there is no assurance.
At the date of this registration statement, the Company's common stock is not
quoted in any public quotation medium (principally the "Pink Sheets" and the
OTC Bulletin Board) or traded in any public stock market (either NASDAQ or a
securities exchange). The Company's present management believes it is
unlikely a public trading market for the Company's Common Stock will develop
until after a Business Combination occurs, even if the Company obtains a
sponsoring market maker which is approved to publish quotations for the Common
Stock on the OTC Bulletin Board. There is no assurance that a viable public
trading market for the Company's Common Stock will ever develop either before
or after a Business Combination. Common Stock or other securities which the
Company issues in consideration for a Business Combination are expected to be
issued in a transaction not involving a public offering pursuant to an
exemption from registration under the Securities Act and therefore classified
as a "restricted security" subject to the limitations on resale, including a
one year holding period during which no public resales can be made without
registration, imposed by Rule 144 promulgated under the Securities Act. It is
likely that those persons receiving the restricted Common Stock will be
affiliates (directors, officers and principal stockholders) of the Target
Business and of the Company following the Business Combination; and, such
securities owned by them will continue to be subject to the limitations of
Rule 144 as long as the holders remain affiliates of the Company. Initially,
only the approximately one million shares of Common Stock which the Company
presently has issued and outstanding will be available for resale in a public
securities market, should one develop. Any of those shares held by persons
who continue to be after or become in connection with the Business Combination
affiliates of the Company will be resalable only in compliance with the
requirements of Rule 144. The Company does not expect to provide to any
stockholder with any right to register restricted Common Stock under the
Securities Act; but, any such registration would be within the discretion of
the Company's new management following a Business Combination. See "Market
for Common Equity and Related Stockholder Matters".
Unspecified Industry and Target Business
The Company is not limited to the type of business, the industry in which it
operates or the geographic location where it is located in its selection of a
Target Business. The Company's efforts in identifying a prospective Target
Business are expected to emphasize businesses primarily located in the United
States; however, the Company reserves the right to acquire a Target Business
located exclusively or primarily outside of the United States. In seeking a
Target Business, the Company will consider, without limitation, businesses
which (i) offer or provide services or develop, manufacture or distribute
goods in the United States or abroad, including, without limitation, in the
following areas: real estate, health care and health products, educational
services, environmental services, consumer-related products and services
(including amusement, entertainment and/or recreational services), personal
care services, voice and data information processing and transmission and
related technology development, or (ii) is engaged in wholesale or retail
distribution. The Company has not selected any particular industry,
geographic area or market or any Target Business on which to focus its
Business Combination efforts. Accordingly, the Company is only able to make
general disclosures concerning the risks and hazards of completing a Business
Combination with a Target Business since there is presently no current basis
for the Company to evaluate the possible merits or risks of the Target
Business or the particular industry in which the Company may ultimately
operate. To the extent the Company effects a Business Combination with a
financially unstable company or an entity in its early stage of development or
growth (including entities without established records of sales or earnings),
the Company will become subject to numerous risks inherent in the business and
operations of financially unstable and early stage or potential emerging
growth companies. In addition, to the extent that the Company effects a
Business Combination with a Target Business in an industry characterized by a
high level of risk, the Company will become subject to the currently
unascertainable risks of that industry. An extremely high level of risk
frequently characterizes certain industries which experience rapid growth,
changing or obsolescent technologies. Although present management will
endeavor to evaluate the merits and risks of the Target Business, there is no
assurances their evaluation will be complete or valid, or that current
management is qualified to make such evaluation.
Probable Lack of Business Diversification
The Company has no financial or other resources. While the Company may, under
certain circumstances, seek to effect a Business Combination with more than
one Target Business, as a result of its limited resources, the Company will,
in all likelihood, have the ability to effect only a single Business
Combination while it remains a shell company. Accordingly, the prospects for
the Company's success are expected to be entirely dependent upon the future
performance of a single business. Unlike certain entities that have the
resources to consummate several Business Combinations or entities operating in
multiple industries or multiple segments of a single industry, it is highly
likely that the Company will not have the resources to diversify its
operations or benefit from the possible spreading of risks or offsetting of
losses. The Company's probable lack of diversification could subject the
Company to numerous economic, competitive and regulatory developments, any or
all of which may have a material adverse impact upon the particular industry
in which the Company may operate after completing a Business Combination. The
prospects for the Company's success may be dependent upon the development or
market acceptance of a single or limited number of products, processes or
services. Accordingly, there is no assurance the Target Business will prove
to be commercially viable.
Limited Ability to Evaluate Target Business and Its Management
Although the Company intends to closely scrutinize the business and management
of a prospective Target Business in connection with evaluating the
desirability of effecting a Business Combination, there is no assurance the
scrutiny and resulting assessment of management will prove to be correct,
especially since none of the Company's current directors and officers are
professional business analysts. See "Directors, Executive Officers, Promoters
and Control Persons". Accordingly, the Company will be entirely dependent
upon the efforts, experience and ability of the management of the Target
Business who are unidentifiable at this time. In addition, there is no
assurance the future management will have the necessary skills, qualifications
or abilities to manage a publicly owned and traded company. The Company may
also seek to recruit additional managers to supplement the incumbent
management of the Target Business; but, any such recruitment would be within
the discretion and judgment of the Target Business' management. There is no
assurance the Company will have the ability to recruit additional managers, or
that additional managers will have the requisite skill, knowledge or
experience necessary or desirable to enhance the Target Business' incumbent
management.
No Opportunity for Stockholder Evaluation or Approval of Business Combinations
The Company's stockholders will not have an opportunity to evaluate the
specific merits and risks or and financial or other information about the
Target Business and will have no control over the decision to effect or not
effect a Business Combination with any potential Target Business.
Stockholders of the Company who are not directors and officers will, in all
likelihood, not have the opportunity to evaluate the Target Company until
after the Company has entered into an agreement to effectuate a Business
Combination. Even then, stockholders will have an opportunity to evaluate the
Target Company, only in the event stockholder approval is required by Florida
corporate law for the Business Combination; but, it is likely the Business
Combination will be structured in such a way as to avoid a requirement for
stockholder approval. As a result, non-affiliate shareholders of the Company
are expected to be almost entirely dependent on the judgment and experience of
the Company's current management in the selection and ultimate consummation of
a Business Combination. In addition, under Florida law, the form of Business
Combination could eliminate dissenters' rights (i.e., the right to receive
fair payment with respect to the Company's Common Stock) which stockholders
who are not in favor of the proposed Business Combination would have in the
event the Business Combination took another form. Since the Company's Common
Stock has little to no value at the present time, management believes that any
Business Combination will probably increase the value of the Common Stock to a
level in excess of the amount recoverable upon exercise of dissenters' rights.
The Company does not expect the Business Combination to involve a "control
share acquisition" as defined in Section 607.0902 of the Florida Business
Corporation Act, because the structure of the Business Combination is not
expected to hinge on the acquisition of outstanding securities. Control share
acquisitions disenfranchise the acquiring party for a period of time from
voting the acquired shares in favor of a business combination, thereby placing
the approval of the business combination in the hands of minority
stockholders. In the event the Business Combination would otherwise involve a
"control share acquisition", the Company's board of directors can be expected
to approve such acquisition, thereby removing it from application of the
control share acquisition statute. Such removal will eliminate the minority
stockholders' right to evaluate the Company's proposed Business Combination.
Selection of a Target Business and Structuring of a Business Combination
The Company cannot estimate the time that it will take to identify a Target
Business and complete a Business Combination. This process could require many
months or years. And, there is no assurance the Company will be able to
complete a Business Combination on terms favorable to the Company. The
Company might identify a Target Business and effectuate a Business Combination
which proves to be unsuccessful for any number of reasons and risk factors
which cannot be identified either at this time or at the date of the Business
Combination. If this occurs, the Company's its stockholders, including
present management, might not realize any value or only limited value in the
Common Stock which they own.
The Company's management anticipates that the selection of a Target Business
will be complex and involve risks, some of which will be and remain undefined.
Competition for better business opportunities among promoters of shell
companies is intense. Many promoters of shell companies have more experience
than the Company's present management has, having engaged in numerous business
combinations, having an established reputation and having an extensive network
of contact who refer possible Target Businesses to them. Many of the better
business opportunities are suitable for underwritten public offerings or other
conventional means of capital formation and have no interest in utilizing a
shell company to achieve a public trading market. The Company's search for a
Target Business requires maximum flexibility inasmuch as the Company will be
required to consider various factors and circumstances which may preclude
meaningful direct comparison among the various business enterprises, products
or services investigated. The Company's probable lack of diversification will
not permit the Company to offset potential losses from one venture against
potential profits from another. Management of the Company will have
unrestricted discretion in identifying and selecting a prospective Target
Business.
In evaluating a prospective Target Business, management expects to consider,
among other factors, the following factors which are not listed in any
particular order of priority or importance:
- financial condition and results of operations of the Target Business;
- growth potential and forecasted financial performance of the Target
Business and the industry in which it operates;
- experience and skill of management and availability of additional
personnel of the Target Business;
- capital requirements of the Target Business;
- the availability of a transaction exemption from registration pursuant
to the Securities Act and the proxy solicitation requirements of the Exchange
Act for the Business Combination;
- the location of the Target Business;
- competitive position of the Target Business;
- stage of development of the product, process or service of the Target
Business;
- degree of current or potential market acceptance of the product,
process or service of the Target Business;
- possible proprietary features and possible other protection of the
product, process or service of the Target Business, including trade secrets,
patents and copyrights;
- regulatory environment of the industry in which the Target Business
operates;
- costs associated with effecting the Business Combination; and
- percentage of equity required by stockholders of the Target Business.
The foregoing criteria are not intended to be exhaustive. The Company's
management expects any evaluation of the merits and risks of a particular
Business Combination will be based on other relevant considerations, in
addition to the above factors. The Company's management anticipates the
historical operations of a Target Business may not necessarily be indicative
of the potential for the future for a variety of reasons. The Company may
engage in a Business Combination with a newly organized firm or with a firm
which is entering a new phase of growth. These reasons include, but are not
limited to, possible start-up or development stage enterprise, possible need
to change marketing approach, possible future availability of capital,
possible changes in management and additional staffing and other reasons. The
Company will be dependent upon its new management inherited from the Target
Business to implement its business plan, identify problems and take effective
corrective action. The Company will incur further risks, because in many
instances, the product or service, as well as the management, of the Target
Business will not have been proven.
The Company's limited funds and the lack of full-time management will likely
make it impracticable to conduct a complete and exhaustive investigation and
analysis of a Target Business before the Company commits to a Business
Combination. Management decisions, therefore, will likely be made based
entirely upon information provided entirely by the Target Business, which may
not include detailed feasibility studies, independent analysis, market surveys
and the like which, if the Company had more funds available to it, would be
desirable to obtain. The Company's management expects to conduct a due
diligence review of the Target Business which will encompass, among other
things, meetings with its management, examination of its products or services,
inspection of facilities and review of financial statements and contracts
which are made available to the Company. The information provided by the
Target Company may prove to have been either negligently or intentionally
inaccurate or misleading and it is likely current management would not
discover it to be so. The time and costs required to select and evaluate a
Target Business (including conducting a due diligence review) and to structure
and consummate the Business Combination (including negotiating relevant
agreements and preparing requisite documents for filing pursuant to applicable
securities laws and state "blue sky" and corporation laws) cannot presently be
ascertained with any degree of certainty. The Company's management intends to
devote only a very small portion of their individual time to the affairs of
the Company and, accordingly, consummation of a Business Combination may
require a greater period of time than if management devoted its full time to
the Company's affairs. Each of the Company's directors and officers, being
its only personnel, have full time executive and professional occupations
outside of the Company. Any costs incurred by the Company will be contributed
by its management, which intends to limit the amount of such contributions to
a minimum. Management has not established a budget for expenses or a maximum
amount for contributions.
The Company anticipates that it will locate possible Target Businesses
primarily through the relationships of its management with other business
persons and professionals. Accordingly, the opportunities to identify
possible Target Businesses is expected to be more limited than they might
otherwise be if the Company advertised or its management had been engaged in
shell corporation promotion prior to the Company. The Company does not intend
to engage in any discussions with prospective Target Businesses until after
the effective date of this registration statement. The Company does not
intend to complete a Business Combination with a Target Business in which the
Company's management has a pecuniary interest. The Company does not intend to
advertise or promote itself in any financial or trade publications, but it may
utilize the Internet if an appropriate forum can be identified. Although
there are no current plans to do so, the Company may engage the services of
professional firms that specialize in finding business acquisitions, in which
case the Company or the Target Business would pay a finder's fee or other
compensation. Since the Company has no current plans to utilize any outside
consultants or advisors to assist in a Business Combination, no policies have
been adopted regarding their use, the criteria to be used in selecting such
consultants or advisors, the services they would provided, the term of
service, or the amount of fees that may be paid. Because of the limited
resources of the Company, it is likely that any such fee the Company agrees to
pay would be paid in shares of Common Stock or be paid in cash by the Target
Business. In no event will the Company pay a finder's fee or commission,
either in cash or stock, to a director or officer of the Company or any entity
with which he is affiliated, or otherwise compensate them in connection with
their efforts to locate a Target Business.
Expected Accounting Treatment of a Business Combination
The Company expects the Business Combination to be treated as a "reverse
merger" under generally accepted accounting principals and for reporting
purposes under the Exchange Act. Reverse merger treatment provides
essentially that the financial statements of the acquired company (the Target
Business) replace the Company's historical financial statements, with certain
adjustments to account for the Company's assets (none), liabilities
(approximately $107,000) and stockholders' equity.
Federal Income Tax Considerations
As a general rule, federal and state tax laws and regulations have a
significant impact upon the structuring of business combinations. The Company
will evaluate the possible tax consequences of any prospective Business
Combination and will endeavor to structure a Business Combination so as to
achieve the most favorable tax treatment to the Company, the Target Business
and their respective stockholders. There is no assurance that the Internal
Revenue Service or relevant state tax authorities will ultimately assent to
the Company's tax treatment of a particular consummated Business Combination.
To the extent the Internal Revenue Service or any relevant state tax
authorities ultimately prevail in recharacterizing the tax treatment of a
Business Combination, there may be adverse tax consequences to the Company,
the Target Business and their respective stockholders. Tax considerations, as
well as other relevant factors, will be evaluated in determining the precise
structure of a particular Business Combination, which could be effected
through various forms of a merger, consolidation or stock or asset
acquisition. The change in control and change in the Company's business, both
of which are expected to result with a Business Combination, will eliminate
the Company's net operating loss carry forwards for federal income tax
purposes.
Expected Dilution in Ownership of Current Stockholders and Change in Control
The Company expects to issue a substantial number of additional shares in
connection with the consummation of a Business Combination, perhaps as much as
ninety percent or more of the issued and outstanding share of the Company's
Common Stock following the Business Combination. Issuance of additional
shares by the Company would result in a decrease in the percentage ownership
of the Company's present stockholders. In addition, the issuance of
additional securities and their potential sale in any trading market which
might develop in the Company's Common Stock, for which there is presently no
trading market and there is no assurance one will develop, could depress the
price of the Company's Common Stock in any such market which may develop.
The management of the Target Business is expected to take control of the
Company and its present management will have no control. To the extent that
such additional shares are issued, dilution to the interests of the Company's
stockholders will occur. There is no assurance as to the experience or
qualification of the Target Business' management.
Impact of Having No Funds or Resources
The Company does not have any funds or resources. The Company's management is
not obligated to provide any funding to assist with the search for a Target
Business or a resulting Business Combination. The Company is either unable,
due to its financial condition and prospects, or unwilling at the present time
either to borrow or sell securities for funding purposes. Any such borrowing
or capital formation will be dependent upon the management of the Target
Business. The unwillingness and inability of the Company to borrow funds for
infusion of capital into a Target Business may have a material adverse effect
on the Company's ability to consummate a Business Combination with a desirable
Target Business. Any borrowing or sale of securities, or both, are expected
to be dependent upon the results of the Business Combination, the financial
condition and prospects of the Company thereafter and the Company's future
management.
Impact of Compliance with Federal Securities Laws
Securities of the Company which are issued in the Business Combination will be
issued in reliance upon exemptions from registration under applicable federal
and state securities laws. The Company intends primarily to target only those
companies where an exemption from registration would be available. Since the
Target Business has not been identified, there is no assurances the Company
will be able to rely on such exemptions. Registration of securities typically
requires significant costs and time delays are typically encountered. If
registration of the securities is required, the costs thereof would have to be
paid by the Target Business.
Allocation of Management Time and Conflicts of Interest
The Company's directors and officers are employed full time in executive or
professional positions and business activities with enterprises other than the
Company. Each of the Company's directors and officers expects to devote
minimal time to the affairs of the Company in the search for a Target Business
and consummation of a Business Combination. They expect the interests of
their respective other enterprises or practices to take priority over the
Company's needs and interests. Furthermore, the Company's directors and
officers may come upon, discover or be presented with business opportunities
which could be Target Businesses for the Company and yet divert such
opportunities to their own employers, business activities or clients other
than the Company. With respect both to the allocation of their respective
time and efforts and to steering of business opportunities toward or away from
the Company, the Company's directors and officers will have a conflict of
interest which they will in all likelihood be unable to resolve in a
commercially or professionally equitable manner. Management expects any
business opportunity which would be desirable as both a Target Business for
the Company and an acquisition for the other business activity of a Company
director or officer's other employer, business activity or client will be
directed away from the Company. Accordingly, the Company can expect to
consider only those business opportunities which are undesirable to or do not
have a "fit" with such other employer, business activity or client. The
Company's directors and officers have not been, are not now and do not expect
to become directors and officers of other shell companies; but, there is no
assurance one or more of them will not do so in the future, including at a
time while the Company is still looking for a Target Business.
Investment Company Act and Other Regulation
The Company does not intend to effect a Business Combination which would
result in its classification as an "investment company" under the Investment
Company Act of 1940 (the "Investment Act"). The Company does not intend to
acquire less than eighty percent of the outstanding securities of the Target
Business, such acquisition being for purposes of being in control of the
Target Business. Accordingly, the Company does not anticipate the resale of
any securities of the Target Business in the public securities market, except
the sale of securities to be issued and sold pursuant to a registration
statement under the Securities Act. Furthermore, the Company does not believe
the status of any securities acquired in the Target Business as restricted
securities will have any impact on or consequences to the Company, because the
Company expects such securities to be acquired for long term investment and
for purposes of directly operating and exercising control over the Target
Business.
The Company may acquire a Target Business in an industry which is regulated or
licensed by federal, state or local authorities. The Company cannot predict
what regulations and licensing requirements, if any, to which the Company
could become subject. Compliance with such regulations can be expected to be
a time consuming and expensive process.
Penny Stock Regulations - State Blue Sky Restrictions - Restrictions on
Marketability
The U.S. Securities and Exchange Commission (the "Commission") has adopted
regulations which generally define a "penny stock" to be any equity security
with a market price (as defined) less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exceptions. The
Company expects its Common Stock to be covered by the penny stock rules, at
least initially and perhaps indefinitely. The penny stock rules impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited
investors (generally institutions with assets in excess of $5,000,000 or
individuals with either a net worth in excess of $1,000,000 or an annual
income exceeding $200,000 individually or $300,000 jointly with their spouse).
For transactions covered by the penny stock rules, the broker-dealers must
make a special suitability determination for the purchase and receive the
purchaser's written agreement of the transaction prior to the sale.
Consequently, the rule may adversely affect the ability of broker-dealers sell
the Company's securities, and even their interest in handling such securities
sales, and also may adversely affect the ability of stockholders of the
Company to sell their shares in the public securities market.
In addition, the Securities and Exchange Commission has adopted a number of
other rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-
1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-9 under the Exchange Act.
During any period the Company's Common Stock is a "penny stock", these rules
will apply to the Company and to its Common Stock. The rules may further
adversely affect the ability of the Company's stockholders to sell their
shares in any public market which might develop.
Stockholders should be aware that, according to Commission Release No. 34-
29093, the market for penny stocks has suffered in recent years from patterns
of fraud and abuse. Such patterns include (i) control of the market for the
security by one or a few broker-dealers who are often related to the promoter
or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler
room" practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a
position to dictate the behavior of the market or of broker-dealers who
participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to the Company's securities.
No public trading market in the Company's securities presently exists. In
light of the restrictions concerning shell companies contained in many state
blue sky laws and regulations, it is not likely that a trading market will be
created in the Company's securities until such time as a Business Combination
occurs with a Target Business. There is no assurance a public trading market
will develop for the Company's Common Stock following a Business Combination.
The Company presently has 15,020,960 shares of Common Stock outstanding, all
of which are "restricted securities", as defined under Rule 144 under the
Securities Act, in that such shares were issued in transactions not involving
a public offering. Notwithstanding that all the issued and outstanding shares
are "restricted securities", 12,965,575 shares have been held for more than
two years, including 9,385,005 shares held by non-affiliates and 3,580,570
shares held by affiliates of the Company. Because the 12,965,575 shares have
been outstanding for more than two years, only the 3,580,570 shares held by
affiliates are subject to the requirements and limitations of Rule 144; and,
even the shares held by affiliates will be relieved of such requirements and
limitations upon termination of the holders' affiliation with the Company,
which could be expected as a result of a business combination. The 2,055,385
shares approved for issued on February 21, 2000, primarily in liquidation of
outstanding common stock purchase options and warrants, will not become
eligible for resale to the public by the various holders until after February
21, 2001. Out of the 2,055,385 shares recently approved for issuance,
1,452,820 shares are held by affiliates.
Competition for Target Businesses
The Company expects to encounter intense competition from other shell
companies. Many of these shell companies have promoters and management who
have extensive experience and contacts in the shell company arena. Many of
these competitors possess financial, marketing, technical, personnel and other
resources which the Company does not have. There is no assurance the Company
will be able to compete successfully for a more attractive Target Business.
Accordingly, the Company may be forced to select a less attractive Target
Business, which may involve more risk and uncertainty and less potential and
opportunity for the stockholders to realize value in the Common Stock.
Management believes the Company's status as a fully reporting public company
will make it more attractive compared to publicly owned shell companies which
are not fully reporting. A recent change in the eligibility rules for
quotation on the OTC Bulletin Board are resulting in removal from quotation of
companies who are not fully reporting. The Company believes this rule change
will result in a decrease in the number of shell companies quoted in that
medium and concurrently spur management of such shell companies to file
registration statements in the same manner as the Company is filing this
registration statement, especially if the shell company is or has been quoted
on the OTC Bulletin Board.
Uncertainty of Competitive Environment of Target Business
In the event that the Company succeeds in effecting a Business Combination,
the Company will, in all likelihood, become subject to intense competition
from competitors of the Target Business. In particular, certain industries
which experience rapid growth frequently attract an increasingly larger number
of competitors, including competitors with increasingly greater financial,
marketing, technical and other resources than the initial competitors in the
industry. The degree of competition characterizing the industry of any
prospective Target Business cannot presently be ascertained. There can be no
assurances that, subsequent to a Business Combination, the Company will have
the resources to compete effectively, especially to the extent that the Target
Business is in a high-growth industry.
Federal Securities Law Compliance
Fully reporting companies, like the Company beginning on the effective date of
this registration statement, are required by the Exchange Act to furnish
stockholders certain information about material acquisitions, including
audited financial statements for a Target Business with respect to one or more
fiscal years, depending upon whether or not the Target Business is a small
business issuer. Consequently, the Company's policy is to only effect a
Business Combination with a Target Business that has available the appropriate
audited financial statements. Maintenance of compliance with the regular
annual, quarterly and other reporting requirements, and with the proxy
solicitation rules for annual and special meetings of stockholders (including
the solicitation of consents) is expensive and time consuming. There is no
assurance the Target Business will have the resources to remain in compliance
with these requirements. A failure to remain in compliance will disqualify
the Company from quotation of its Common Stock on the OTC Bulletin Board.
Employees
The Company has no personnel. The Company's limited activities related to
efforts to recruit a market maker, register under the Exchange Act and
complete a Business Combination are being conducted by the directors and
officers around their full time employment by other businesses or their normal
professional practices.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company is presently a development stage company conducting no
business operation, other than its efforts to effect a Business Combination
with a Target Business which the Company considers to have significant growth
potential. Since the Company terminated its business operation in February
1998, the Company has neither engaged in any operations nor generated any
revenue. It receives no cash flow. The Company will carry out its plan of
business as discussed above. See "Description of Business". The Company does
not have any liquidity and capital resources prior to the consummation of a
Business Combination or whether its Target Business with which the Company
effectuates a Business Combination will have any liquidity or capital
resource, or that it will not diminish that which it has at the date of a
Business Combination. The continuation of the Company's business is dependent
upon its management's voluntary coverage of the expenses of its limited
activities, which coverage can be terminated at any time, effectuate a
Business Combination and ultimately, engage in future profitable operations.
Presently, the Company does not have any resources or funding commitments to
meet expected expenses for the next 12 months. The Company does not generate
any cash revenue or receive any type of cash flow. Possible expenses for the
next twelve months cannot be estimated at the present time. Any funding
voluntarily provided by current management will be represented by promissory
notes bearing simple interest at prime plus 2% or by the issue of Common
Stock.
Prior to the occurrence of a Business Combination, the Company may be required
to raise capital through the sale or issuance of additional securities in
order to ensure that the Company can meet its operating costs prior to the
effectuation of a Business Combination. As of the date of this registration
statement, no commitments of any kind to provide additional funds have been
obtained, and the current management is under no obligation to provide such
funds. There are no agreements or understandings of any kind with respect to
any loans from such persons on behalf of the Company. Accordingly, there is
no assurance that any additional funds will be available to the Company to
allow it to cover its necessary expenses. In the event the Company can no
longer borrow funds from its current management, and the Company elects to
raise additional capital prior to the effectuation of a Business Combination,
it expects to do so through the private placement of restricted securities
rather than through a public offering. The Company does not currently
contemplate making any securities offering, a Regulation S offering or
borrowing any money from third parties who are not part of current management.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no facilities or properties. The Company's limited activities
related to efforts register under the Exchange Act, to recruit a market maker
and complete a Business Combination are being conducted from the offices of
the directors and officers at which their full time employment is located, as
well as from their homes. The address of the Company's office at its
president's home, and its telephone number at that address are for convenience
and as a personal accommodation while seeking a Target Business.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The names of directors and officers and the name of each person who owns
legally and beneficially more than five percent of the Company's issued and
outstanding Common Stock at the date of this Prospectus, the address of each
such person, the number of shares which each owns and the percentage of the
outstanding Common Stock represented by such shares is set forth in the
following table.
Name Number of shares Percentage
J. Stuart Grant
311 Palmetto Lane 3,218,000 (1) 21.43
Largo, Florida 33770
Steven L. Hocke
7511 N.W. First Court 2,122,500 (2) 14.13
Pembroke Pines, Florida 33024
Ronald L. Mallett
2716 Victorian Oaks Drive 580,000 (3) 3.86
Jacksonville, Florida 32223
Jackson L. Morris
3116 West North A Street 535,320 (4) 3.56
Tampa, Florida 33609-1544
Directors and officers
as a group (4 persons) 6,455,820 42.98
Sergia Quijano
2140 Taylor Street, Apt. 903 765,000 (5) 5.09
San Francisco, California 94133
(1) 2,505,500 shares acquired more than two years ago.
(2) 1,847,500 shares acquired more than two years ago. Beneficial ownership
of 1,047,500 shares held jointly by Mr. Hocke and his wife.
(3) 500,000 shares acquired more than two years ago.
(4) 150,000 shares acquired more than two years ago.
(5) All shares acquired more than two years ago.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The names, ages and terms of office of directors and executive officers of the
Company are set forth in the following table.
Name Age All positions with Company Director since
J. Stuart Grant 40 Director 1992
Steven L. Hocke 47 Director and President 1995
Ronald L. Mallett 49 Director and Chief Financial Officer 1997
Jackson L. Morris 56 Director and Secretary 1997
Each director is elected by holders of a majority of the Common Stock to serve
for a term of one year and until his successor is elected and qualified.
Directors were last elected by the stockholders in 1996 and those directors
have continued in office until the present time. Officers serve at the will
of the board. Directors have been compensated for their services by the
issuance of the Options which have been converted into a lesser number of
shares of Common Stock. The Company does not have any agreement to pay
compensation to its presently incumbent directors or officers. Any future
compensation payable to directors will be in the discretion of the board of
directors taking office following a Business Combination. The presently
incumbent directors and officers expect to resign in connection with a
Business Combination; provided, the retiring board expects to elect the
persons designated by the board of the Target Business as directors to fill
vacancies created by such resignations. None of the presently incumbent
directors and officers are, nor have they been within the last five years,
directors or officers of shell companies, except for Mr. Hocke who was for
period of approximately five months a director of Fuji Electrocell Corp. and
in which capacity he was not involved in locating a merger partner for that
company.
J. Stuart Grant is a director and the controlling stockholder. Mr. Grant
joined the Company in 1992 and served as its president from that time until
June 1999. Mr. Grant is the founder, a director and president on a full time
basis of 1 Global City.Com, Inc., a Florida corporation, which is developing a
Web site on the Internet, provides Web design and development services and
information technology services to others and is distributing business card
size cd-roms. Between February and November 1998, when Mr. Grant founded 1
Global City.Com, Inc., Mr. Grant essentially was not employed. Mr. Grant was
employed with Home Federal Bank from 1986 to 1987 as a branch manager and with
Barnett Bank from 1987 to 1988 in the commercial credit department. He was
employed as a registered representative with the investment banking firms of
Shearson, Lehman Brothers from 1988 to 1990, with Smith Barney from 1990 to
1991 and with Raymond James and Associates from 1991 to 1992. In the
securities brokerage business, Mr. Grant customers were primarily individual
investors. Mr. Grant earned a Bachelor of Business Administration degree
(1986) from Morehead State University in Kentucky.
Steven L. Hocke is a director and, since February 1998, the president of the
Company, has been for the past fifteen years and is now an independent
mortgage broker. From 1994 to the present, Mr. Hocke has been affiliated as
an independent mortgage broker with Mid America Funding Corporation at its
office in Fort Lauderdale, Florida. From 1985 to 1994, Mr. Hocke was
affiliated as an independent mortgage broker with Residential Mortgage
Services, Inc. in Fort Lauderdale, Florida. Mr. Hocke also has a real estate
sales license and is affiliated with Jalmark Real Estate in Pembroke Pines,
Florida. Mr. Hocke is a director and vice president of 1 Global City.Com,
Inc. He earned a B.S. degree in elementary education (1975) from Valparaiso
University in Valparaiso, Indiana and a M.E. degree in education (1986) from
Nova University, in Davie, Florida.
Ronald L. Mallett, a director and treasurer of the Company, is a Vice
President and the General Manager of Thigpen Heating & Cooling, Inc. of
Jacksonville, Florida, employment which he started in June 1997. From 1990 to
June 1997, Mr. Mallett was a vice president of Certified Air Contractors, Inc.
of Jacksonville, Florida. Both Thigpen Heating & Cooling, Inc. and Certified
Air Contractors, Inc. are regional heating, air conditioning and refrigeration
contractors with annual sales of approximately $4 million and $3 million,
respectively. Mr. Mallett's duties with each company include sales and
operations. Mr. Mallett is a member of the Occupational License Tax Equity
Study Commission, a post appointed by the mayor of Jacksonville, Florida, for
one year beginning 1995. From 1990 to 1995, Mr. Mallett was the president of
Jacksonville Air Conditioning Contractors Association and in 1990 and 1991 he
was a member of the board of the American Subcontractors Association, North
Florida Chapter. Beginning in 1994 to the present Mr. Mallett has served on
several committees of the Associated General Contractors of North Florida and
was elected to the board of that organization in 1996. Mr. Mallett is a
director and the executive vice president of 1 Global City.Com, Inc. Mr.
Mallett retired from the U.S. Marine Corps in 1990 with the rank of Captain
after twenty-three years of service. Mr. Mallett earned a B.S. degree in
occupational education (1985) from Southern Illinois University.
Jackson L. Morris, Esq., a director and secretary of the Company, is an
attorney in private practice since 1992. He practiced law in Tampa and St.
Petersburg, Florida with the law firm of Harris, Barrett, Mann & Dew in 1991
and 1992. Mr. Morris was a founding member of the St. Petersburg, Florida law
firm of Greene & Mastry, P.A. in 1984, practicing law with that firm until
1991 and with its predecessor from 1982 to 1984. Mr. Morris' law practice has
been primarily in the areas of general corporate, securities and contract law.
Mr. Morris is a member of The Florida Bar, The State Bar of Georgia (inactive)
and The District of Columbia Bar. He is admitted to practice before the
United States Tax Court and Supreme Court of the United States of America.
Mr. Morris is a director of Stampede Worldwide, Inc., a company whose stock is
publicly traded and quoted on the OTC Bulletin Board under the symbol "CRNC".
Mr. Morris is a director, the secretary and general counsel of 1 Global
City.Com, Inc. Mr. Morris earned a B.A. degree in economics (1966) and a
Juris Doctor degree (1969) from the Emory University in Atlanta, Georgia and a
L.L.M. degree in federal taxation (1974) from Georgetown University Law
Center. The Commission has brought a civil suit against Mr. Morris alleging
that he sold 50,000 shares common stock in violation of the registration
requirements of the Securities Act. Mr. Morris received the shares as
compensation for legal services rendered in connection with a shell company
reverse merger. The suit seeks an injunction and penalty against Mr. Morris.
ITEM 6. EXECUTIVE COMPENSATION
Mr. Hocke has not been paid any cash compensation or received any non cash
compensation for serving as the Company's president beginning June 1998 to the
present. Mr. Grant was not paid any cash compensation in 1997 or 1998. The
Company transferred a 1992 Lexus ES300 (subject to a $9,000 lien and on which
Mr. Grant had been making payments for eight months) and $2,000 to Mr. Grant
in February 1998 in lieu of accrued compensation and Mr. Grant released the
Company from its obligation to pay the balance of accrued compensation.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has not engaged in any related party transactions with its
directors or officers within the twelve months preceding this registration
statement, except as described under Item 6 and the transfer in liquidation in
February and March 1998 of certain office furnishings and equipment having
minimal values to its directors and officers as compensation for services and
reimbursement.
ITEM 8. LEGAL PROCEEDINGS
At the date of this registration statement, no suits are pending against the
Company. All of the Company's trade debts are in default and its creditors
could file suites for collection at any time. Five trade creditors have
obtained judgments in Pinellas County, Florida against the Company for amounts
due, plus interest, costs and attorneys fees. The suits which have been
reduced to judgment are set forth in the following table:
Creditor's name Case No. Court Amount at December 31
Evatone, Inc. 97-7015 CI Circuit Court $18,476.95 (1)
Xerox Corporation 98-000354 County Court $7,263.33 (2)
Old Dominion
Freight Lines, Inc. 98-002454 Small Claims $6,251.19
Yellow Freight
Systems, Inc. 97-4639 Small Claims $3,727.75
On the Grill
Magazine 97-5771 Small Claims - (3)
(1) This judgment is for the quotation for the full project, which was only
about one-half completed before work was suspended by the plaintiff due the
Company's non payment.
(2) The Company believes this judgment is for the balance of the lease
contract, without credit for the returned copy machine.
(3) The Company believes this plaintiff is no longer in business. No counsel
is currently representing the plaintiff. The original contract was for
$5,000, which was partially paid by the Company and by Mr. Grant pursuant to
his personal guarantee. The Company is unable to determine the amount due a
December 31, 1999.
The amounts of all such judgments and claims are reflected on the Company's
balance sheet at December 31, 1999.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
No public trading market presently exists for the Company's Common Stock. The
Company has no present plans, proposals, arrangements or understandings with
any person with regard to the development of a trading market for the
Company's Common Stock. The Company plans to seek out a securities broker-
dealer who will agree to sponsor the Company's Common Stock for quotation on
the OTC Bulletin Board. There is no assurance any such broker-dealer can be
recruited or a public trading market for the Company's Common Stock will ever
develop, either before or after a Business Combination. The Company has not
registered its Common Stock under the blue sky laws of any state. The holders
of shares of Common Stock and persons who may desire to purchase shares of
Common Stock in any trading market that might develop in the future, should be
aware that there may be significant "penny stock" and state blue-sky law
restrictions upon the ability of stockholders to sell their shares and of
purchasers to purchase the shares of Common Stock. Some jurisdictions may not
allow the trading or resale of blind-pool or "blank-check" securities under
any circumstances. Accordingly, stockholders should consider any secondary
market for the Company's securities which may develop to be a limited one.
Number of Stockholders and Status of Stock
At the date of this registration statement the Company has approximately 280
stockholders of record holding a total of 15,020,960 shares of its Common
Stock. All of the Common Stock was acquired more than two years, except
2,055,385 shares which were approved for issue on February 21, 2000 in
liquidation of common stock purchase options and warrants on a basis of one
share for two options/warrants. Of the shares acquired more than two years
ago, 3,580,570 shares are held by directors and officers and are subject to
the requirements and limitations of Rule 144, until such persons cease to be
affiliates of the Company. In general, under Rule 144, as currently in
effect, subject to the satisfaction of certain other conditions, a person,
including an affiliate of the Company (or persons whose shares are
aggregated), who has beneficially owned restricted shares of Common Stock for
at least one year is entitled to sell, within any three-month period, a number
of shares that does not exceed the greater of 1% of the total number of
outstanding shares of the same class or, if the Common Stock is traded on a
national securities exchange or the NASDAQ system, the average weekly trading
volume during the four calendar weeks preceding the sale. A person who has not
been an affiliate of the Company for at least the three months immediately
preceding the sale and who has beneficially owned restricted shares of Common
Stock for at least two years is entitled to sell such shares under Rule 144
without regard to any of the limitations described above. In the event the
Company becomes delinquent in filing reports under the Exchange Act, Rule 144
would not be available for the resale of any shares owned by affiliates or
owned by non-affiliates of the Company for less than two years.
Transfer Agent
The Company's transfer agent is Executive Registrar & Transfer Agency, Inc.,
Phoenix, Arizona.
Dividends
The Company has not paid any dividends on its Common Stock to date and does
not presently intend to pay cash dividends prior to the consummation of a
Business Combination. The payment of cash dividends in the future, if any,
will be contingent upon the Company's revenues and earnings, if any, capital
requirements and general financial condition subsequent to the consummation of
a Business Combination. The payment of any dividends subsequent to a Business
Combination will be within the discretion of the Company's then board of
directors. It is the expectation of the current board of directors that the
Company will retain all earnings, if any, for use in the Company's business
operations; and, accordingly, the current board of directors does not
anticipate the Company paying any cash dividends in the foreseeable future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
During the twelve months preceding the date of this registration statement,
the Company issued an aggregate of 3,925,385 shares in April 2000 to
directors, officers and certain other existing stockholders as compensation,
as reimbursement of loans and advances and to liquidate outstanding common
stock purchase options and warrants. The Company claims reliance upon Section
4(2) of the Securities Act for an exemption from registration for these
transactions. Of the shares issued in April, 1,870,000 shares issued to
directors and officers are deemed to have been acquired on February 15, 1998,
the date on which the issue was approved by the board of directors as
compensation and in reimbursement of loans and advances. Certificates
representing the shares were not issued until April 2000 as a result of an
unpaid balance of fees due to the Company's transfer agent.
ITEM 11. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 25,000,000 shares of
Common Stock, $.01 par value per share. A total of 15,020,960 shares are
issued and outstanding on the date of this registration statement. The
holders of the Common Stock (i) have equal and ratable rights with all holders
of issued and outstanding Common Stock to dividends from funds legally
available therefor, when, as and if declared by the Board of Directors of the
Company; (ii) are entitled to share ratably with holders of issued and
outstanding Common Stock in all of the assets of the Company available for
distribution to holders of Common Stock, after distribution of the liquidation
preference on the Common Stock, upon liquidation, dissolution or winding up of
the affairs of the Company; (iii) do not have preemptive, subscription or
conversion rights; (iv) have no redemption or sinking fund provisions
applicable thereto; and (v) have one vote on election of each director and
other matters submitted to a vote of stockholders. All shares of Common Stock
outstanding are duly authorized, legally issued, fully paid and non-
assessable.
Management anticipates that a share consolidation (reverse stock split) will
be necessary in connection with any Business Combination it may accomplish in
the future. Management is unable to predict the extent of any such share
consolidation, which will be based upon negotiations with the Target Business'
management.
The Company does not have any common stock purchase options, warrants or other
rights to purchase Common Stock and no securities convertible into Common
Stock outstanding.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company may indemnify a director and must indemnify an officer who is made
party to a proceeding because he is or was a director or officer against
liability incurred in the proceeding if he acted in a manner he believed in
good faith to in or not opposed to the best interests of the Company and, in
the case of any criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful. A director or officer's conduct with respect to an
employee benefit plan for a purpose he believed in good faith to be in the
interests of the participants in and beneficiaries of the plan is conduct that
satisfies the requirements of Florida law regarding indemnification. The
Company may not indemnify a director or an officer in connection with a
proceeding by or in the right of the Company in which the director or officer
was adjudged liable to the Company or in connection with any other proceeding
in which the director or officer was adjudged liable on the basis that
personal benefit was improperly received by him. Indemnification in a
proceeding by or in the right of the Company is limited to reasonable expenses
incurred in connection with the proceeding. To the extent a director or
officer is successful on the merits or otherwise in the defense of any
proceeding to which was a party, or in defense of any claim, issue or matter
therein, because he is or was a director of the Company, the Company must
indemnify the director or officer against reasonable expenses incurred by him
in connection with the proceeding. The Company may pay or reimburse the
reasonable expenses incurred by a director or officer in advance of final
disposition of a proceeding, provided the director furnishes the Company with
written affirmation of his good faith and a written undertaking to repay any
advances if it is ultimately determined that he is not entitled to
indemnification. The board or special legal counsel must make a determination
in each case of indemnification of a director, but not of an officer, that
indemnification is permissible in the circumstances because the director has
met the required standard of conduct.
Article XI of the Company's Bylaws also contain provisions for
indemnification of directors and officers. See, Exhibit 3.2.
ITEM 13. FINANCIAL STATEMENTS
Independent Auditor's Report Page
Balance Sheets Page
Statements of Operations Page
Statement of Stockholders' Equity (Deficit) Page
Statements of Cash Flows Page
Notes to Financial Statements Page
Independent Auditors' Report
Board of Directors
New-Era Trading Group, Inc.
7511 N.W. First Court
Pembroke Pines, Florida 33024
We have audited the accompanying balance sheets of New Era Trading Group, Inc.
as of December 31, 1999 and the related statements of operations, changes in
stockholders' equity, and cash flows for the years ended December 31, 1999 and
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial 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 New Era Trading Group, Inc.
as of December 31, 1999 and the results of its operations and cash flows for
the years ended December 31, 1999 and 1998 in conformity with generally
accepted accounting principles.
/s/ Costales & Costales, P.A.
Certified Public Accountants
Miami, Florida
March 20, 2000
New-Era Trading Group, Inc.
Balance Sheet
December 31, 1999
Assets
Current assets:
Cash $ -
Accounts receivable -
Inventory -
Total current assets -
Equipment, net of accumulated deprecation -
Other assets -
Deferred offering costs -
Deposits -
Total other assets -
Total $ -
Liabilities and Stockholders' Equity
Current liabilities $ 107,353
Long-term liabilities -
Total liabilities 107,353
Stockholders' equity
Common stock, $.01 par value,
25,000 shares authorized,
11,260,575 shares issued
and outstanding $ 112,606
Additional paid-in capital 1,646,042
Accumulated deficit (1,628,357)
Treasury stock (237,644)
Total stockholders' equity (107,353)
Total liabilities and stockholders' equity $ -
Read independent auditors' report. The accompanying notes are an integral
part of the financial statements.
New-Era Trading Group, Inc.
Statement of Operations
Year ended December 31,
1999 1998
Revenue:
Sales $ - $ 34,461
Other - -
Cost of goods 139
Gross profit (loss) - 34,322
Costs and Expenses:
Selling expenses - 32,736
General and administrative - 65,454
Interest 22,535 100
22,535 98,290
Net Loss (22,353) $(63,968)
Primary net loss per
common share $ (0.00) $ (0.01)
Read independent auditors' report. The accompanying notes are an integral
part of the financial statements.
New-Era Trading Group, Inc.
Statement of Changes in Stockholders' Equity
Years ended December 31, 1999 and 1998
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
Balance,
December 31, 1997 11,110,575 $ 111,106 $ 1,626,161 $ (1,542,036)
Issuance of stock 150,000 1,500 19,881
Net loss for the year (63,968)
Balance,
December 31, 1998 11,260,575 112,606 1,646,042 (1,606,004)
Issuance of stock
Net loss for the year (22,353)
Balance,
December 31, 1999 11,260,575 $ 112,606 1,646,042 $ (1606,004)
Read independent auditors' report. The accompanying notes are an integral
part of the financial statements.
New-Era Trading Group, Inc.
Statement of Cash Flows
Years Ended December 31, 1999 and 1998
December 31,
1999 1998
Operating activities
Net loss $ (22,353) $ (63,968)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Depreciation and amortization - 10,039
Loss on retirement of equipment - 19,378
(Increase) decrease in:
Other assets - 72,775
Increase (decrease) in:
Accounts payable 22,353 (4,588)
Accrued expenses - (10,724)
Total adjustments 22,353 86,880
Net cash provided (used)
by operating activities - 22,912
Financing activities
Payments on notes payable - (45,714)
Issuance of stock - 21,381
Net cash used by
financing activities - (24,333)
Net increase (decrease) in cash - (1,421)
Cash, beginning of year - 1,421
Cash, end of year $ -
Supplemental disclosures of cash flow
information and noncash investing
and financing activities
Cash paid during year for interest $ 100
Stock exchanged for debt $ 21,381
Read independent auditors' report. The accompanying notes are an integral
part of the financial statements.
New-Era Trading Group, Inc.
Notes to Financial Statements
Years Ended December 31, 1999 and 1998
1. Background Information
New Era Trading Group, Inc. (the "Company") (f/k/a Gardner Marketing Services,
Inc.) was incorporated in Florida on December 15, 1988. The Company was
essentially dormant until 1992, at which time the Company began import/export
operations of torches used to decorative outdoor lighting. In 1994, the
Company ceased distribution of the torches and began import/export operations
of solid and gelatin cane sugar and alcohol fuels for cooking and warming food
and lighting charcoal. The distribution of the latter was ceased in 1996 and
the Company has remained essentially dormant since. The Company's
headquarters is located in Largo, Florida.
2. Summary of Significant Accounting Policies
The significant accounting polices followed are:
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.
Equipment is recorded at cost. Depreciation is calculated by the
straight-line method over the estimated useful lives of the assets of
approximately five to seven years. Additions to and major improvements of
equipment are capitalized. Maintenance and repair expenditures are charged to
expense and incurred. As equipment is sold or retired, the applicable cost
and accumulated depreciation are eliminated from the accounts, and any gain or
loss is recorded.
Inventories are stated at the lower of cost of market. Cost is
determined by the first-in, first-out (FIFO) method.
Advertising costs are charged to operations when incurred. For the years
ended December 31, 1999 and 1998, advertising expense amounted to $0 and
$32,736, respectively.
Net loss per common share is based upon the weighted average common
shares outstanding during each period.
Read Independent Auditors' Report
New Era Trading Group, Inc.
Notes to Financial Statements
Years Ended December 31, 1999 and 1998
3. Deferred Offering Cost
Deferred Offering Cost consists of costs incurred by the Company in the
process of a public offering. All costs were expensed in 1998.
4. Advances Payable
Notes were paid off and advances were forgiven in 1998.
5. Income Taxes
The Company has a net operating loss carryover available for future periods of
approximately $804,000. This carryover will expire in 2007 and 2010. The
Company shows a net loss for December 31, 1998.
6. Stockholders' Equity
On January 21, 1989, the Company authorized and issued 100 shares of common
stock for a $1 par value. On October 18, 1993, the Company increased the
authorized shares of common stock to 2,500,000 shares with a par value of
$.01. Also on October 18, 1993, the Company's Board of Directors declared a
stock split (9,000 for 1) of its outstanding common stock.
The Company has issued 2,715,000 options to purchase shares of the Company's
common stock at $.20 per share. These options will expire in the years 1999
through 2001.
During February 1996, the Board of Directors authorized a 5-for-1 stock split
of common stock to stockholders of record as of February 10, 1996.
7. Lease Commitments
Rent expense amounted to $0 and $139 for the years ended December 31, 1999 and
1998, respectively.
There are no outstanding lease commitments.
Read Independent Auditors' Report
New Era Trading Group, Inc.
Notes to Financial Statements
Years Ended December 31, 1999 and 1998
8. Subsequent Events
Effective on February 21, 2000, the Company issued 4,025,385 shares of its
common stock. Part of theses shares were issued to eliminate all outstanding
common stock purchase options and part were issued to pay outstanding loans
and advances by affiliates. Immediately following the share issuance, the
Company declared a 1 to 15.12096 share consolidation, which reduced the number
of issued and outstanding shares of common stock to 1,000,000 from 15,120,960.
The par value was not changed by the share consolidation.
Read Independent Auditors' Report
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(1) Independent auditors' report on the Financial Statements at and for
the years ended December 31, 1999 and 1998.
(2) Financial Statements at and for the years ended December 31, 1999
and 1998.
(3) Notes to Financial Statements
(b) Exhibits
Sequential Page No.
3.1 Articles of Incorporation, as amended
3.2 Bylaws
27 Financial Data Schedule
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.
New-Era Trading Group, Inc.
By: /s/ Steven L. Hocke April 26, 2000
Steven L. Hocke
President and Chief Executive
and Operating Officer
/s/ J. Stuart Grant April 25, 2000
J. Stuart Grant, Director
/s/ Steven L. Hocke April 26, 2000
Steven L. Hocke
President and Chief Executive
and Operating Officer
/s/ Ronald L. Mallett April 26, 2000
Ronald L. Mallett, Director
and Principal and Accounting Financial Officer
/s/ Jackson L. Morris April 26, 2000
Jackson L. Morris, Director
EXHIBITS
Exhibit 3.1 Restated Articles of Incorporation
ARTICLES OF INCORPORATION OF GARDNER MARKETING SERVICES, INC.
The undersigned, for the purposes of forming a corporation under the
Florida General Corporation Act, do hereby adopt the following articles of
incorporation:
ARTICLE ONE
The name of the corporation is GARDNER MARKETING SERVICES, INC.
ARTICLE TWO
The duration of the corporation is perpetual.
ARTICLE THREE
The general purpose for which the corporation is organized is to
conduct any lawful business for which corporations may be incorporated
under the Florida General Corporation Act.
ARTICLE FOUR
The aggregate number of shares which the corporation is authorized to
issue is One Hundred. Such shares shall be of a single class, and shall
have a par value of One Dollar ($1.00).
ARTICLE FIVE
The street address of the initial registered office of the corporation
is 1100 Cleveland Street, Suite 900, Clearwater, Florida 33515. The name
of its initial registered agent at such address is Brian P. Gardner.
ARTICLE SIX
The number of directors constituting the initial Board of Directors of
the corporation is two. The name and address of each person who is to
serve as a member of the initial Board of Directors is: BRIAN P. GARDNER,
President and PATRICIA K. GARDNER, Vice-President, The Pines, 1575 Greenlea
Drive, Apt. 1, Clearwater, Florida 34615.
ARTICLE SEVEN
The corporation is authorized to issue only one class of stock, and
all issued stock shall be held of record by not more than ten persons.
ARTICLE EIGHT
The name and address of each incorporator is: BRIAN P. GARDNER and
PATRICIA K. GARDNER, Vice-President, The Pines, 1575 Greenlea Drive, Apt.
1, Clearwater, Florida 34615.
ARTICLE NINE
The corporation shall indemnify any Officer or Director or any former
Officer or Director, to the full extent permitted by law.
ARTICLE TEN
This corporation reserves the right to amend or repeal any provision
contained in these Articles of Incorporation, or any amendment hereto, by a
vote of the Board of Directors, and any right conferred upon the
shareholders is subjec to reservation.
Executed by the undersigned at St. Petersburg, Florida on December 12,
1988.
/s/ Brian P. Gardner
BRIAN P. GARDNER
/s/ Patricia K. Gardner
PATRICIA K. GARDNER
STATE OF FLORIDA :
COUNTY OF PINELLAS :
Before me, a notary public authorized to take acknowledgments in the
state and county set forth above, personally appeared BRIAN P. GARDNER and
PATRICIA K. GARDNER, know to me and by me to be the persons who executed
the foregoing Articles of Incorporation and they acknowledged before me
that they executed those Articles of Incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal in the county
and state aforesaid this 12th day of December, 1988.
/s/ [signature not legible]
NOTARY PUBLIC
NOTARY PUBLIC: STATE OF FLORIDA AT LARGE
MY COMMISSION EXPIRES JULY 20, 1992
BONDED THRU HUCKLEBERRY & ASSOCIATES
ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF GARDNER MARKETING
SERVICES, INC.
Pursuant to the provisions of Section 607.1003(6), Fla. Stat., the
Florida Business Corporation Act, Gardner Marketing Services, Inc. does
hereby amend its Articles of Incorporation as follows:
1. The name of the corporation is Gardner Marketing Services, Inc.
2. This Amendment to the Articles of Incorporation was duly approved
and adopted on October 18, 1993, by a vote of a majority of the
stockholders as a whole pursuant to Section 607.0726, Fla. Stat., by
written consent without a meeting, pursuant to Section 607.0704, Fla.
Stat., being suffient in all respects for approval hereof.
3. The corporation has thirty-five or fewer stockholders.
4. Article Four of the Articles of Incorporation is hereby amended to
increase the authorized shares of the Corporation to Two Million Five
Hundred Thousand (2,500,000) shares from One Hundred (100) shares, all
being of the same class of common stock, and to decrease the par value of
the common stock to $.01 per share from $1.00 per share.
5. Article Seven of the Articles of Incorporation is hereby deleted
in its entirety.
IN WITNESS WHEREOF, the undersigned, President of Gardner Marketing
Services, Inc., has executed the within Articles of Amendment this 18th day
of October, 1993 and caused said Articles to be filed in the office of the
Secretary of State of the State of Florida, effective upon the filing
thereof.
Gardner Marketing Services, Inc.
By: /s/ J. Stuart Grant
J. Stuart Grant, President
(CORPORATE SEAL)
ATTEST:
/s/ Sergio Quijano
Secretary
STATE OF FLORIDA }
COUNTY OF PINELLAS } ss:
The foregoing instrument was acknowledged before me this 2nd day of
November, 1993, by J. Stuart Grant, as President of Gardner Marketing
Services, Inc., on behalf of the Corporation. His is personally know to me
or who produced FL DL (as Florida driver's license) as identification, and
did take an oath.
/s/ Stephanie L. Franczyk
Stephanie L. Franczyk
Notary Public (print name)
Serial Number: CC320119
[SEAL]
ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF GARDNER MARKETING
SERVICES, INC.
Pursuant to the provisions of Section 607.1003(6), Fla. Stat., the
Florida Business Corporation Act, Gardner Marketing Services, Inc. does
hereby amend its Articles of Incorporation as follows:
1. The name of the corporation is Gardner Marketing Services, Inc.
2. The name of the corporation is changed to New-Era Trading Group,
Inc.
3. This Amendment to the Articles of Incorporation was, upon the
recommendation of the Board of Directors, duly approved and adopted on May
16, 1994, by a vote of a majority of the stockholders as a whole, pursuant
to Section 607.0726, Fla. Stat. by written consent without a meeting
pursuant to Section 607.0704, Fla. Stat., being sufficient in all respects
for approval hereof.
4. The corporation has thirty-five or fewer stockholders.
IN WITNESS WHEREOF, the undersigned, J. Stuart Grant, as President of
Gardner Marketing Services, Inc., now named New-Era Trading Group, Inc.,
has executed the within Articles of Amendment this 16th day of May, 1994
and caused said Articles to be filed in the office of the Secretary of
State of the State of Florida, effective upon the filing thereof.
Gardner Marketing Services, Inc.
By: /s/ J. Stuart Grant
J. Stuart Grant, President
(CORPORATE SEAL)
ATTEST:
/s/ Jackson L. Morris
Secretary
STATE OF FLORIDA
COUNTY OF PINELLAS
The foregoing instrument was acknowledged before me this 16th day of
May, 1994, by J. Stuart Grant, as President of New-Era Trading Group, Inc.,
on behalf of the Corporation. His is personally know to me or who produced
_________ (as Florida driver's license) as identification, and did take an
oath.
/s/ Sandra L. Shaddock
Sandra L. Shaddock
Notary Public (print name)
Serial Number: CC201366
[SEAL]
ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF NEW-ERA TRADING
GROUP, INC.
Pursuant to the provisions of Section 607.1003, Fla. Stat., the
Florida Business Corporation Act, New-Era Trading Group, Inc. does hereby
amend its Articles of Incorporation, as amended, as follows:
1. This Amendment to the Articles of Incorporation was, upon the
recommendation of the Board of Directors, duly approved and adopted on
October 18, 1995, by a vote of 1,730,500 shares constituting a majority of
the shares entitled to vote thereon by written consent without a meeting
pursuant to Section 607.0704, Fla. Stat., being sufficient in all respects
for approval hereof and there being no class of securities entitled to vote
as a class.
2. Article Fourth of the Articles of Incorporation, as amended, of
the Corporation is hereby amended to increase the authorized capital stock
of the Corporation Twenty-five Million (25,000,000) shares from Two Million
Five Hundred Thousand (2,500,000) shares, being all of one class of Common
Stock.
IN WITNESS WHEREOF, the undersigned, J. Stuart Grant, President of
New-Era Trading Group, Inc., has executed the within Articles of Amendment
this 24th day of October, 1995 and caused said Articles to be filed in the
office of the Secretary of State of the State of Florida, effective upon
the filing thereof.
New-Era Trading Group, Inc.
By: /s/ J. Stuart Grant
J. Stuart Grant, President
(CORPORATE SEAL)
ATTEST:
/s/ Jackson L. Morris
Secretary
Exhibit 3.2 Bylaws
1BYLAWS OF GARDNER MARKETING SERVICES, INC.
AS AMENDED JANUARY 2, 1994
ARTICLE I. GENERAL
The provisions of this document constitute the Bylaws of GARDNER MARKETING
SERVICES, INC.1, a Florida corporation, hereinafter referred to as the Cor-
poration, which Bylaws shall be utilized to govern the management and op-
eration of the Corporation.
ARTICLE II. OFFICES AND AGENCY
Section 1. Registered Office and Registered Agent. The registered office
of the Corporation shall be located in the State of Florida at such place
as may be fixed from time to time by the Board of Directors of the Corpora-
tion, the members of which shall be hereinafter referred to as Directors,
upon filing of such notices as may be required by law, and the registered
agent shall have a business office identical with such registered office.
Section 2. Other Offices. The Corporation may have other offices within
or outside the State of Florida at such place or places as the Board of Di-
rectors may from time to time determine.
ARTICLE III. STOCKHOLDERS
Section 1. Closing Transfer Books. For the purpose of determining stock-
holders entitled to notice of, or to vote at, any meeting of stockholders
or any adjournment thereof, or entitled to receive payment of any dividend,
or in order to make a determination of stockholders for any other purpose,
the Board of Directors may provide that the stock transfer books shall be
closed for a stated period not to exceed, in any case, sixty (60) days. If
the stock transfer books shall be closed for the purpose of determining
stockholders entitled to notice of, or to vote at, a meeting of stockhold-
ers, such books shall be closed for at least ten (10) days immediately pre-
ceding such meeting.
Section 2. Fixing Record Date. In lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date as the record date
for any determination of stockholders, such date in any case to be not more
than sixty (60) days and, in case of a meeting of stockholders, not less
than ten (10) days prior to the date on which the particular action requir-
ing such determination of stockholders is to be taken.
Section 3. Other Determination of Stockholders. If the stock transfer
books are not closed and no record date is fixed for the determination of
stockholders entitled to notice of or to vote at a meeting of stockholders
or stockholders entitled to receive payment of a dividend the date on which
notice of the meeting is mailed or the date on which the resolution of the
Board of Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of stockholders.
Section 4. Adjourned Meetings. When a determination of stockholders enti-
tled to vote at any meeting of stockholders has been made as provided in
this Article, such determination shall apply to any adjournment thereof,
unless the Board of Directors fixes a new record date for the adjourned
meeting.
Section 5. Record of Stockholders.
(a) If the Corporation has six or more stockholders of record, the officer
or agent having charge of the stock transfer books for shares of the Corpo-
ration shall make, at least ten (10) days before each meeting of stockhold-
ers, a complete list of the stockholders entitled to vote at such meeting
or any adjournment thereof, with the address of and the number and class
and series, if any, of shares held by each. The list shall be kept on file
at the registered office of the Corporation, at the principal place of
business of the Corporation or at the office of the transfer agent or reg-
istrar of the Corporation for a period of ten (10) days prior to such meet-
ing and shall be subject to inspection by any stockholder at any time dur-
ing usual business hours. The list shall also be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of
any stockholder at any time during the meeting.
(b) If the requirements of paragraph (a) above have not been substantially
complied with, the meeting, on demand of any stockholder in person or by
proxy, shall be adjourned until the requirements are complied with. If no
such demand is made, failure to comply with the requirements of paragraph
(a) shall not affect the validity of any action at such meeting.
ARTICLE IV. STOCKHOLDERS' MEETINGS
Section 1. Annual Meetings. The annual meeting of the stockholders for
the election of Directors and for the transaction of such other business as
may properly come before the meeting, shall be held each year within three
months after the end of the fiscal year, or at such other time as the Board
of Directors or stockholders shall direct; provided, however, that the an-
nual meeting for any year shall be held at no later than thirteen (13)
months after the last preceding annual meeting of stockholders.
Section 2. Special Meetings. Special meetings of the stockholders for any
purpose may be called at any time by the President of the Corporation,
Board of Directors, or the holders of not less than ten percent (10%) of
all shares entitled to vote at the meeting.
Section 3. Place of Meetings. All meetings of the stockholders shall be
at the principal place of business of the Corporation or at such other
place, either within or without the State of FLORIDA, as the Board of Di-
rectors or the stockholders may from time to time designate.
Section 4. Notice. Written or printed notice stating the place, day and
hour of any meeting and, in case of a special meeting, the purpose or pur-
poses for which the meeting is called, shall be given to each stockholder
of record entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the meeting, by or at the direction of the
President, the Secretary or other persons calling the meeting. Notice to
stockholders shall be given by personal delivery, by first class U.S. Mail
or by telephone facsimile with receipt confirmed; and, if mailed, such no-
tice shall be deemed to be delivered when deposited, the deposit thereof
certified by the Secretary of the Corporation, in the United States mail
addressed to the stockholder at his address as it appears on the stock
transfer books of the Corporation, with postage thereon prepaid.
Section 5. Adjourned Meetings. A majority of the stockholders present,
whether or not a quorum exists, may adjourn any meeting of the stockholders
to another time and place. Notice of any such adjourned meeting, or of the
business to be transacted thereat need not be given of any adjourned meet-
ing if the time and place of the adjourned meeting are announced at the
time of the adjournment, unless the time of the adjourned meeting is more
than thirty days after the meeting at which the adjournment is taken.
Section 6. Waiver of Notice. A written waiver of notice signed by any
stockholder, whether before or after any meeting, shall be equivalent to
the giving of timely notice to said stockholder. Attendance of a stock-
holder at a meeting shall constitute a waiver of notice of such meeting and
a waiver of any and all objections to the place of the meeting, the time of
the meeting, or the manner in which it has been called or convened, except
when a stockholder attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because
the meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice.
Section 7. Quorum and Voting.
(a) Stockholders representing a majority of the shares entitled to vote in
attendance at any meeting of stockholders, shall constitute a quorum for
the transaction of business at such meeting, unless otherwise specifically
provided by these Bylaws or applicable law. When a specified item of busi-
ness is required to be voted on by a class or series of stock, a majority
of the shares of such class or series shall constitute a quorum for the
transaction of such item of business by that class or series. Attendance
shall be either in person, by proxy, or by telephonic or radio connection
whereby the distant stockholder and those stockholders present in person
all hear and may speak to and be heard on the matters raised therein.
(b) If a quorum is present, the affirmative vote of a majority of the
shares represented at the meeting and entitled to vote on the subject mat-
ter shall be the act of the stockholders, unless the vote of a greater num-
ber or voting by classes is required by the Articles of Incorporation,
these Bylaws or applicable law.
(c) After a quorum has been established at a stockholders' meeting, the
subsequent withdrawal of stockholders, so as to reduce the number of stock-
holders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or
any adjournment thereof. The affirmative vote of a majority of the shares
then represented at the meeting and entitled to vote on the subject matter
shall be the act of the stockholders unless otherwise provided by the Arti-
cles of Incorporation, these Bylaws or applicable law.
(d) A person entitled to vote shares at a meeting of the stockholders
shall be deemed to have attended such meeting in person if such person has
attended by telephone or radio connection whereby the distant person and
the other stockholders present at such meeting all hear and may speak to
and be heard on the matters raised therein.
Section 8. Voting of Shares.
(a) Each outstanding share, regardless of class, shall be entitled to one
vote on each matter submitted to a vote at a meeting of stockholders.
(b) Treasury shares, shares of stock of the Corporation owned by another
corporation of which the majority of the voting stock is owned or con-
trolled by the Corporation, and shares of stock of the Corporation held by
it in a fiduciary capacity shall not be voted, directly or indirectly, at
any meeting, and shall not be counted in determining the total number of
outstanding shares at any given time.
(c) A stockholder may vote either in person or by proxy executed in writ-
ing by the stockholder or his duly authorized attorney-in-fact.
(d) Shares standing in the name of another corporation, domestic or for-
eign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate stockholder; or, in the absence of any applicable bylaw,
by such person as the Board of Directors of the corporate stockholder may
designate. Proof of such designation may be made by presentation of a cer-
tified copy of the bylaws or other instrument of the corporate stockholder.
In the absence of any such designation, or in case of conflicting designa-
tion by the corporate stockholder, the chairman of the board, president,
any vice president, secretary and treasurer of the corporate stockholder
shall be presumed to possess, in that order, authority to vote such shares.
(e) Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such
shares into his name. Shares standing in the name of a trustee may be
voted by him, either in person or by proxy, but no trustee shall be enti-
tled to vote shares held by him in trust without a transfer of such shares
into his name.
(f) Shares standing in the name of a receiver may be voted by such re-
ceiver, and shares held by or under the control of a receiver may be voted
by such receiver without the transfer thereof into his name if authority to
do so is contained in an appropriate order of the court by which such re-
ceiver was appointed.
(g) A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee or his nominee shall be entitled to vote the
shares so transferred.
(h) On and after the date on which written notice of redemption of redeem-
able shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with ir-
revocable instruction and authority to pay the redemption price to the
holders thereof upon surrender of certificates therefor, such shares shall
not be entitled to vote on any matter and shall not be deemed to be out-
standing shares.
Section 9. Proxies.
(a) Every stockholder entitled to vote at a meeting of stockholders, or to
express consent or dissent without a meeting or a stockholder's duly au-
thorized attorney-in-fact, may authorize another person or persons to act
for him by proxy.
(b) Every proxy must be signed by the stockholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven (11) months from the
date thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the stockholder executing it, except as other-
wise provided by law.
(c) The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the stockholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of
such incompetence or of such death is received by the corporate officer re-
sponsible for maintaining the list of stockholders.
(d) If a proxy for the same shares confers authority upon two or more per-
sons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present, then that one, may exercise all the
powers conferred by the proxy; but if the proxy holders present at the
meeting are equally divided as to the right and manner of voting in any
particular case, the voting of such shares shall be prorated.
(e) If a proxy expressly provides, any proxy holder may appoint, in writ-
ing, a substitute to act in his place.
Section 10. Voting Trusts. Any number of stockholders of the Corporation
may create a voting trust for the purpose of conferring upon a trustee or
trustees the right to vote or otherwise represent their shares for a period
not to exceed ten (10) years, as provided by law. A counterpart of the
voting trust agreement and a copy of the record of the holders of voting
trust certificates shall be deposited with the Corporation at its regis-
tered office as provided by law. These documents shall be subject to the
same right of examination by a stockholder of the Corporation, in person or
by agent or attorney, as are the books and records of the Corporation and
shall also be subject to examination by any holder of record of voting
trust certificates, either in person or by agent or attorney, at any rea-
sonable time for any proper purpose.
Section 11. Stockholders' Agreements. Two or more stockholders of the
Corporation may enter a written agreement, signed by the parties thereto,
providing for the exercise of voting rights in the manner provided in the
agreement or relating to any phase of the affairs of the Corporation as
provided by law. Nothing therein shall impair the right of the Corporation
to treat the stockholders of record as entitled to vote the shares standing
in their names.
Section 12. Action by Stockholders Without a Meeting.
(a) Any action required by law, these Bylaws, or the Articles of Incorpo-
ration of the Corporation to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of out-
standing stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted. If any class of
shares is entitled to vote thereon as a class, such written consent shall
be required of the holders of a majority of the shares of each class of
shares entitled to vote as a class thereon and of the total shares entitled
to vote thereon.
(b) Within ten (10) days after obtaining such authorization by written
consent, notice shall be given to those stockholders who have not consented
in writing. The notice shall fairly summarize the material features of the
authorized action and, if the action be a merger, consolidation or sale or
exchange of assets for which dissenters rights are provided under law, the
notice shall contain a clear statement of the right of stockholders dis-
senting therefrom to be paid the fair value of their shares upon compliance
with further provisions of the law regarding the rights of dissenting
stockholders.
Section 13. New Business. Any Stockholder of record may make a proposal of
new business to be acted upon at an annual or special meeting of Stockhold-
ers, only if and provided written notice of such proposed new business is
filed with the Secretary of the Corporation not less than five business
days prior to the day of meeting, but no other proposal shall be acted upon
at such meeting.
ARTICLE V. DIRECTORS
Section 1. Function. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the Corporation shall be
managed under the direction of, the Board of Directors, except as may oth-
erwise be provided by the Articles of Incorporation, these Bylaws or appli-
cable law. The Board of Directors shall make appropriate delegations of
authority to the officers and, to the extent permitted by law, by appropri-
ate resolution, the Board of Directors may authorize one or more committees
to act on its behalf when it is not in session.
Section 2. Qualification. Directors need not be residents of the State of
Florida or stockholders of the Corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of Directors.
Section 4. Duties of Directors.
(a) A Director shall be expected to attend meetings, whether annual, or
special, of the Board of Directors and of any committee to which the Direc-
tor has been appointed.
(b) A Director shall perform his duties as a Director, including his du-
ties as a member of any committee of the Board of Directors upon which he
may serve, in good faith, in a manner he reasonably believes to be in the
best interests of the Corporation, and with such care as an ordinarily pru-
dent person in a like position would use under similar circumstances.
(c) In performing his duties, a Director shall be entitled to rely on in-
formation, opinions, reports or statements, including financial statements
and other financial data, in each case prepared or presented by:
(1) One or more officers or employees of the Corporation whom the Director
reasonably believes to be reliable and competent in the matters presented;
(2) Counsel, public accountants or other persons as to matters which the
Director reasonably believes to be within such persons' professional or ex-
pert competence; or
(3) A committee of the Board of Directors upon which he does not serve,
duly designated in accordance with a provision of the Articles of Incorpo-
ration or these Bylaws, as to matters within its designated authority,
which committee the Director reasonably believes to merit confidence.
(d) A Director shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause such reli-
ance described above to be unwarranted.
(e) A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a Director of the Cor-
poration.
Section 5. Number. The number of Directors of the Corporation shall be
three (3). This number may be increased or decreased from time to time by
amendment to these Bylaws or by the election of additional directors, but
no decrease shall have the effect of shortening the term of any incumbent
Director.
Section 6. Election and Term.
(a) Each person named in the Articles of Incorporation as a member of the
initial Board of Directors shall hold office until the first annual meeting
of stockholders and until his successor shall have been elected and quali-
fied or until his earlier resignation, removal from office or death.
(b) At the first meeting of stockholders and at each annual meeting there-
after, the stockholders shall elect Directors to hold office until the next
succeeding annual meeting. Each Director shall hold office for the term
for which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
Section 7. Removal of Directors.
(a) At a meeting of stockholders called expressly for that purpose, any
Director or the entire Board of Directors may be removed, with or without
cause, by a vote of the holders of a majority of the shares then entitled
to vote in an election of Directors.
(b) If less than the entire Board of Directors is to be removed and if cu-
mulative voting is permitted by the Articles of Incorporation, no one of
the Directors may be removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the
entire Board of Directors.
Section 8. Resignation of Director. A Director may resign from the Board
of Directors by providing written notification of such resignation to the
President of the Corporation, and such resignation shall become effective
immediately upon receipt by the President of said written notification or
at such later date as may be specified in the notification.
Section 9. Vacancies. Any vacancy occurring in the membership of the
Board of Directors, including any vacancy created by reason of an increase
in the number of Directors, may be filled by the affirmative vote of a ma-
jority of the remaining Directors though less than a quorum of the Board of
Directors. A Director so elected shall hold office until the next election
of Directors by the stockholders.
ARTICLE VI. DIRECTORS' MEETINGS
Section 1. Regular Meetings. The Board of Directors shall hold, without
notice, a regular meeting immediately after the adjournment of the annual
meeting of stockholders and such other regular meetings as they may, by
resolution, designate from time to time.
Section 2. Special Meetings. Special meetings of the Board of Directors
may be called at any time by the President of the Corporation or by any two
Directors.
Section 3. Place of Meeting. All meetings of the Board of Directors shall
be held at the principal place of business of the Corporation or at such
other place, either within or without the State of Florida, as the Direc-
tors may from time to time designate; provided, however, no such meeting
shall be held outside the State of Florida if at least two (2) Directors
object in writing not less than three (3) days before such meeting.
Section 4. Notice of Meeting. Written or printed notice stating the
place, day and hour of any special meeting of the Board of Directors must
be given to each Director not less than five (5) nor more than thirty (30)
days before the meeting, by or at the direction of the President or other
persons calling the meeting. Notice shall be given either personally or by
telegram, cablegram or first class mail; and if mailed, the notice shall be
deemed to be given when deposited in the United States mail addressed to
the Director at his address, as it appears in the records of the Corpora-
tion, with postage thereon prepaid. Except as otherwise specified in these
Bylaws, the notice need not specify the business to be transacted at, nor
the purpose of, any meeting.
Section 5. Waiver of Notice. A written waiver of notice signed by any Di-
rector, whether before or after any meeting, shall be equivalent to the
giving of timely notice to said Director. Attendance of a Director at a
meeting shall constitute a waiver of notice of such meeting and waiver of
any and all objections to the place of the meeting, the time of the meet-
ing, or the manner in which it has been called or convened, except when a
Director attends a meeting for the express purpose, as stated at the begin-
ning of the meeting, of objecting to the transaction of business because
the meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any annual or special meeting of the Di-
rectors need be specified in any written waiver of notice.
Section 6. Presumption of Assent. A Director of the Corporation who is
present at a meeting of the Board of Directors at which action on any cor-
porate matter is taken shall be presumed to have assented to the action
taken, unless he votes against such action or abstains from voting in re-
spect thereto because of an asserted conflict of interest.
Section 7. Adjourned Meeting. A majority of the Directors present,
whether or not a quorum exists, may adjourn any meeting of the Board of Di-
rectors to another time and place. Notice of any such adjourned meeting
shall be given to the Directors who were not present at the time of the ad-
journment and, unless the time and place of the adjourned meeting are an-
nounced at the time of the adjournment, to the other Directors.
Section 8. Quorum. A majority of the number of Directors fixed by these
Bylaws shall constitute a quorum for the transaction of business at any
meeting of the Directors, unless otherwise specifically provided by the Ar-
ticles of Incorporation, these Bylaws or applicable law. Attendance shall
be either in person or by telephonic or radio connection whereby the dis-
tant Director and those Directors present in person all hear and may speak
to and be heard on the matters raised therein.
Section 9. Voting. Each Director who is entitled to vote and who is pre-
sent at any meeting of the Board of Directors shall be entitled to one (1)
vote on each matter submitted to a vote of the Directors. An affirmative
vote, of a majority of the Directors present at a meeting of Directors at
which a quorum is present, shall constitute the approval, ratification and
confirmation of the Board of Directors.
Section 10. Proxies Prohibited. No Director may authorize another person
or entity to act in said Director's stead by proxy or otherwise.
Section 11. Action by Directors Without a Meeting. Any action required or
which may be taken at a meeting of the Directors, or of a committee
thereof, may be taken without a meeting if a consent in writing, setting
forth the action so to be taken, shall be signed by all of the Directors or
all of the members of the committee, as the case may be. Such consent
shall have the same effect as a unanimous vote.
Section 12. Directors' Conflicts of Interest.
(a) No contract or other transaction between the Corporation and one or
more of its Directors or any other corporation, firm, association or entity
in which one or more of the Directors are directors or officers or are
financially interested shall be either void or voidable because of such
relationship or interest, or because such Director or Directors are present
at the meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction, or because
his or their votes are counted for such purpose, if:
(1) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose,
even though less than a majority of the quorum, without counting the votes
or consents of such interested Directors; or
(2) The fact of such relationship or interest is disclosed or known to the
stockholders entitled to vote, and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(3) The contract or transaction is fair and reasonable as to the Corpora-
tion at the time it is authorized by the Board of Directors, a committee or
the stockholders.
(b) Common or interested Directors may be counted in determining the pres-
ence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transac-
tion.
(c) The position of director, officer or employee of a not-for-profit cor-
poration held by a Director of the Corporation shall not be deemed to cre-
ate a conflict of interest for such Director, with respect to approval of
dealings between the Corporation and the not-for-profit corporation.
(d) In the event all Directors of the Corporation are directors, officers
or employees of or have a financial interest in another corporation, firm,
association or entity, the vote or consent of all Directors shall be
counted for purposes of approving any contract or transaction between the
Corporation and such other corporation, firm, association or entity.
Section 13. Procedure. The Board of Directors may adopt their own rules
of procedure which shall not be inconsistent with the Articles of Incorpo-
ration, these Bylaws or applicable law.
ARTICLE VII. EXECUTIVE AND OTHER COMMITTEES
Section 1. Designation. The Board of Directors, by resolution adopted by
a majority of the full Board of Directors may designate from among its mem-
bers an executive committee and one or more other committees. The Board of
Directors, by resolution adopted in accordance with this section, may des-
ignate one or more Directors as alternate members of any such committee,
who may act in the place and stead of any absent member or members at any
meeting of such committee.
Section 2. Powers. Any committee designated as provided above shall have
and may exercise all the authority granted to it by the Board of Directors,
except that no committee shall have the authority to:
(a) Approve or recommend to stockholders actions or proposals required by
law to be approved by stockholders;
(b) Designate candidates for the office of Director, for purposes of proxy
solicitation or otherwise;
(c) Fill vacancies on the Board of Directors or any committee thereof;
(d) Amend the Bylaws;
(e) Authorize or approve the reacquisition of shares unless pursuant to a
general formula or method specified by the Board of Directors; or
(f) Authorize or approve the issuance or sale of, or any contract to issue
or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authori-
zation for the issuance or sale of shares, or any contract therefor, and,
in the case of a series, the designation thereof, may, pursuant to a gen-
eral formula or method specified by the Board of Directors by resolution or
by adoption of a stock option or other plan, authorize a committee to fix
the terms of any contract for the sale of the shares and to fix the terms
upon which such shares may be issued or sold, including, without limita-
tion, the price, the rate or manner of payment of dividends, provisions for
redemption, sinking fund, conversion, voting or preferential rights, and
provisions for other features of a class of shares, or a series of a class
of shares, with full power in such committee to adopt any final resolution
setting forth all the terms thereof and to authorize the statement of the
terms of a series for filing with the Department of State.
ARTICLE VIII. OFFICERS
Section 1. Designation. The officers of the Corporation shall consist of
a president, one or more vice presidents (if determined to be necessary by
the Board of Directors), a secretary and a treasurer. The Corporation
shall also have such other officers, assistant officers and agents as may
be deemed necessary or appropriate by the Board of Directors from time to
time. Any two or more offices may be held by the same person. The failure
to elect a president, vice president, secretary or treasurer shall not af-
fect the existence of the Corporation. The office of the president may, in
the discretion of the Board of Directors, be divided into the office of the
chief executive officer and the office of the chief operating officer, pro-
vided, that the office of the chief executive officer shall be the office
of the president for purposes of state and federal laws requiring such of-
fice or the signature of such officer.
Section 2. Duties. The officers of the Corporation shall have the follow-
ing duties.
(a) President. The President shall be the Chief Executive Officer of the
Corporation, shall have general and active management of the business and
affairs of the Corporation subject to the directions of the Board of Direc-
tors, and shall preside at all meetings of the stockholders and Board of
Directors.
(b) Vice President. In the absence of the President or in the event of
his death, inability or refusal to act, the Vice President (or in the event
there is more than one vice president, the vice presidents in the order
designated at the time of their election, or in the absence of any designa-
tion, then in the order of their election) shall perform the duties of the
President and, when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. Any Vice President may sign,
with the Secretary or an Assistant Secretary, certificates for shares of
the Corporation, and shall perform such other duties as from time to time
may be assigned to him by the President or by the Board of Directors.
(c) Secretary. The Secretary shall have custody of, and maintain, all of
the corporate records except the financial records; shall record the min-
utes of all meetings of the stockholders and Board of Directors; send out
all notices of meetings; and perform such other duties as may be prescribed
by the Board of Directors or the President.
(d) Treasurer. The Treasurer shall have custody of all corporate funds
and financial records, shall keep full and accurate accounts of receipts
and disbursements and render accounts thereof at the annual meetings of
stockholders and whenever else required by the Board of Directors or the
President, and shall perform such other duties as may be prescribed by the
Board of Directors or the President.
Section 3. Election. All officers shall be elected by the Board of Direc-
tors.
Section 4. Tenure. Each officer shall take and hold office from the date
of his election until the next annual meeting of the Board of Directors and
until his successor shall have been duly elected and qualified or until his
earlier resignation, removal from office or death.
Section 5. Resignation of Officers. Any officer or agent elected or ap-
pointed by the Board of Directors may resign such office by providing writ-
ten notification of such resignation to the President (or if the President
is resigning, to the Vice President) of the Corporation.
Section 6. Removal of Officers.
(a) Any officer or agent elected or appointed by the Board of Directors
may be removed by the Board of Directors whenever in its judgment the best
interests of the Corporation will be served thereby.
(b) Any officer or agent elected by the stockholders may be removed only
by vote of the stockholders, unless the stockholders shall have authorized
the Directors to remove such officer or agent.
(c) Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment
of an officer or agent shall not of itself create contract rights.
Section 7. Vacancies. Any vacancy, however occurring, in any office, may
be filled by the Board of Directors.
ARTICLE IX. STOCK CERTIFICATES
Section 1. Issuance. Every holder of shares in the Corporation shall be
entitled to have a certificate, representing all shares to which he is en-
titled. No certificate shall be issued for any share until such share is
fully paid.
Section 2. Form.
(a) Certificates representing shares in this Corporation shall be signed
by the President or Vice President and the Secretary or an Assistant Secre-
tary and may be sealed with the seal of this Corporation or a facsimile
thereof. The signatures of the President or Vice President and the Secre-
tary or Assistant Secretary may be facsimiles if the certificate is manu-
ally signed on behalf of a transfer agent or a registrar, other than the
Corporation itself or an employee of the Corporation. In case any officer
who signed or whose facsimile signature has been placed upon such certifi-
cate shall have ceased to be such officer before such certificate is is-
sued, it may be issued by the Corporation with the same effect as if he
were such officer at the date of its issuance.
(b) If there is more than one class of stock, every certificate represent-
ing shares issued by the Corporation shall set forth or fairly summarize
upon the face or back of the certificate, or shall state that the Corpora-
tion will furnish to any stockholder upon request and without charge a full
statement of: the designations, preferences, limitations and relative
rights of the shares of each class or series authorized to be issued; the
variations in the relative rights and preferences between the shares of
each series so far as the same have been fixed and determined; and the au-
thority of the Board of Directors to fix and determine the relative rights
and preferences of subsequent series.
(c) Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such
shares are restricted as to transfer and shall set forth or fairly summa-
rize upon the certificate, or shall state that the Corporation will furnish
to any stockholder upon request and without charge a full statement of,
such restrictions.
(d) Each certificate representing shares shall state upon the face
thereof: the name of the Corporation; that the Corporation is organized un-
der the laws State of Florida; the name of the person or persons to whom
issued; the number and class, if any, of shares, and the designation of the
series, if any, which such certificate represents; and the par value of
each share represented by such certificate, or a statement that the shares
are without par value.
Section 3. Transfers of Stock. Transfers of stock shall be made only upon
the stock transfer books of the Corporation, kept at the registered office
of the Corporation or at its principal place of business, or at the office
of its transfer agent or registrar; and before a new certificate is issued,
the old certificate shall be surrendered for cancellation and shall be
properly endorsed by the holder of record or by his duly authorized attor-
ney. The Board of Directors may, by resolution, open a share register in
any state of the United States and may employ an agent or agents to keep
such register and to record transfers of shares therein.
Section 4. Registered Owner. Registered stockholders only shall be enti-
tled to be treated by the Corporation as the holders in fact of the stock
standing in their respective names, and the Corporation shall not be bound
to recognize any equitable or other claim to or interest in any share on
the part of any other person, whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of the State of
Florida.
Section 5. Lost, Stolen or Destroyed Certificates. The Corporation shall
issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate:
(a) Makes proof in affidavit form that it has been lost, destroyed or
wrongfully taken;
(b) Requests the issuance of a new certificate before the Corporation has
notice that the certificate has been acquired by a purchaser for value in
good faith and without notice of any adverse claim;
(c) Gives bond or other security in such form as the Corporation may di-
rect to indemnify the Corporation, the transfer agent and registrar against
any claim that may be made on account of the alleged loss, destruction or
theft of a certificate; and
(d) Satisfies any other reasonable requirements imposed by the Corpora-
tion.
Section 6. Fractional Shares or Scrip. The Corporation may, but shall not
be obliged to, issue a certificate for a fractional share, which shall en-
title the holder to exercise voting rights, to receive dividends thereon,
and to participate in any of the assets of the Corporation in the event of
liquidation. In lieu of fractional shares, the Board of Directors may pro-
vide for the issuance of scrip in registered or bearer form which shall en-
title the holder to receive a certificate for a full share upon the surren-
der of such scrip aggregating a full share.
Section 7. Shares of Another Corporation. Shares owned by the Corporation
in another corporation, domestic or foreign, may be voted by such officer,
agent or proxy as the Board of Directors may determine or, in the absence
of such determination, by the President of the Corporation.
ARTICLE X. DIVIDENDS
Section 1. Declaration. The Board may from time to time declare, and the
Corporation may pay, dividends on its shares in cash, property or its own
shares, except when the Corporation is insolvent, when the payment thereof
would render the Corporation insolvent, or when the declaration or payment
thereof would be contrary to any restrictions contained in the Articles of
Incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unre-
stricted earned surplus of the Corporation or out of capital surplus, how-
soever arising, but each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share
paid from such surplus shall be disclosed to the stockholders receiving the
same concurrently with the distribution.
(b) Dividends may be declared and paid in the Corporation's own treasury
shares.
(c) Dividends may be declared and paid in the Corporation's own authorized
but unissued shares out of any unreserved and unrestricted surplus of the
Corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof, and there shall be
transferred to stated capital, at the time such dividend is paid, an amount
of surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Di-
rectors by resolution adopted at the time such dividend is declared, and
there shall be transferred to stated capital, at the time such dividend is
paid, an amount of surplus equal to the aggregate stated value so fixed in
respect of such shares; and the amount per share so transferred to stated
capital shall be disclosed to the stockholders receiving such dividend con-
currently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the hold-
ers of shares of any other class unless the Articles of Incorporation so
provide or such payment is authorized by the affirmative vote or the writ-
ten consent of the holders of at least a majority of the outstanding shares
of the class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated
capital of the Corporation shall not be construed to be a share dividend
within the meaning of this section.
Section 2. Holders of Record. The holders of record shall be determined
as provided in Article III of these Bylaws.
ARTICLE XI. INDEMNIFICATION OF
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
Section 1. Indemnification For Actions, Suits or Proceedings.
(a) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed ac-
tion, suit or proceeding, whether civil, criminal, administrative or inves-
tigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a Director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partner-
ship, joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or pro-
ceeding, including any appeal thereof, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the Corporation, and with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The adverse
termination of any action, suit or proceeding by judgment, order, settle-
ment, conviction, or a plea of nolo contendere or its equivalent, shall not
of itself create a presumption that the person did not act in good faith
and in a manner in which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any criminal ac-
tion or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) The Corporation shall indemnify any person who was or is threatened to
be made a party to any threatened, pending or completed action or suit by
or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a Director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partner-
ship, joint venture, trust or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation; provided, however, that no indemnification
shall be made in respect to any claim, issue or matter as to which such
person shall have been adjudged to be liable for negligence or misconduct
in the performance of his duty to the Corporation unless and only to the
extent that the court in which such action or suit was brought shall deter-
mine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is firmly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
(c) To the extent that a Director, officer, employee or agent of the Cor-
poration has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably in-
curred by him in connection therewith.
(d) Any indemnification under subsections (a) or (b) (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the ap-
plicable standard of conduct set forth in subsections (a) or (b). Such de-
termination shall be made:
(1) By the Board of Directors by a majority vote of a quorum consisting of
Directors who were not parties to such action, suit or proceeding, or
(2) If such a quorum is not obtainable, or even if obtainable, a quorum of
disinterested Directors so directs, by independent legal counsel in a writ-
ten opinion, or
(3) By the stockholders by a majority vote of a quorum consisting of
stockholders who were not parties to such action, suit or proceeding.
(e) Expenses (including attorneys' fees) incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in ad-
vance of the final disposition of such action, suit or proceeding as au-
thorized in the manner provided in subsection (d) upon receipt of an under-
taking by or on behalf of the Director, officer, employee or agent to repay
such amount, unless it shall ultimately be determined that he is entitled
to be indemnified by the Corporation as authorized in this section.
Section 2. Other Indemnification. The indemnification provided by these
Articles shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any Bylaw, agreement, vote of stockhold-
ers or disinterested Directors, or otherwise, both as to actions in his of-
ficial capacity and as to actions in another capacity while holding such
position and shall continue as to a person who has ceased to be a Director,
officer, employee or agent and shall inure to the benefit of the heirs, ex-
ecutors and administrators of such a person.
Section 3. Liability Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a Director, officer, em-
ployee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another corpo-
ration, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation shall
have indemnified him against such liability under the provisions of this
Article XI.
ARTICLE XII. BOOKS AND RECORDS
Section 1. Books and Records.
(a) This Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its stockholders,
Board of Directors and committees of Directors.
(b) This Corporation shall keep at its registered office or principal
place of business, or at the office of its transfer agent or registrar, a
record of its stockholders, giving the names and addresses of all stock-
holders and the number, class and series, if any, of the shares held by
each.
(c) Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Stockholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor
at least six (6) months immediately preceding his demand or shall be the
holder of record of, or the holder of record of voting trust certificates
for, at least five percent (5%) of the outstanding shares of any class or
series of the Corporation, upon written demand stating the purpose thereof,
shall have the right to examine, in person or by agent or attorney, at any
reasonable time or times, for any proper purpose, its relevant books and
records of accounts, minutes and records of stockholders and to make ex-
tracts therefrom.
Section 3. Financial Information.
(a) Not later than four (4) months after the close of each fiscal year,
the Corporation shall prepare a balance sheet showing in reasonable detail
the financial condition of the Corporation as of the close of its fiscal
year, and a profit and loss statement showing the results of the operations
of the Corporation during its fiscal year.
(b) Upon the written request of any stockholder or holder of voting trust
certificates for shares of the Corporation, the Corporation shall mail to
such stockholder or holder of voting trust certificates a copy of the most
recent such balance sheet and profit and loss statement.
(c) The balance sheets and profit and loss statements shall be filed in
the registered office of the Corporation in Florida, shall be kept for at
least five (5) years, and shall be subject to inspection during business
hours by any stockholder or holder of voting trust certificates, in person
or by agent.
ARTICLE XIII. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be circu-
lar in form and shall have inscribed thereon the name of the Corporation,
the state of incorporation and the year of incorporation.
ARTICLE XIV. AMENDMENT TO BYLAWS
Section 1. By Stockholder. The stockholders, by the affirmative vote of a
majority of the voting stock, shall have the power to alter, amend, and re-
peal the Bylaws of this Corporation or to adopt additional Bylaws and any
Bylaw so adopted may specifically provide that such Bylaw can only be al-
tered, amended or repealed by the stockholders.
Section 2. By Directors. The Board of Directors, by affirmative vote of a
majority of the Board of Directors, shall have the power to adopt addi-
tional Bylaws or to alter, amend, and repeal the Bylaws of this Corpora-
tion, except when any Bylaw adopted by the stockholders specifically pro-
vides that such Bylaw can only be altered, amended, or repealed by the
stockholders.
Exhibit 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 107,353
<BONDS> 0
0
0
<COMMON> 112,606
<OTHER-SE> (237,644)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,535
<INCOME-PRETAX> (22,535)
<INCOME-TAX> (22,535)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,535)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
