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 12 (g) OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSAMERICAN HOLDINGS, INC.
----------------------------------------------
(Name of Small Business Issuer in Its Charter)
NEVADA 77-0434471
-------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
468 N. Camden Drive, Suite 200, Beverly Hills, California 90210
--------------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(310) 285-1750
----------------
Telephone Number
Securities to be registered under Section 12(b) of the
Exchange Act:
None.
Securities to be registered under Section 12(g) of the
Exchange Act:
Common Stock, $0.001 par value
(Title of class)
<PAGE>2
TABLE OF CONTENTS
PART I Page
Item 1. Description of
Business..........................................................3
Item 2. Plan of
Operation.........................................................7
Item 3. Description of
Property..........................................................11
Item 4. Security Ownership of Certain Beneficial Owners and
Management........................................................12
Item 5. Directors, Executive Officers, Promoters and Control
Persons...........................................................13
Item 6. Executive Compensation............................................15
Item 7. Certain Relationships and Related
Transactions......................................................16
Item 8. Description of
Securities........................................................16
PART II
Item 1. Market for Common Equities and Related Stockholder
Matters...........................................................18
Item 2. Legal
Proceedings.......................................................19
Item 3. Changes in and Disagreements with
Accountants.......................................................20
Item 4. Recent Sales of Unregistered
Securities........................................................20
Item 5. Indemnification of Directors and
Officers..........................................................22
PART F/S
Financial Statements....................................................23/F-1
Table of Contents.......................................................23/F-1
PART III
Item 1. Index to
Exhibits.........................................................24
Signatures .................................................................24
<PAGE>3
PART I
Item 1. Description of Business
TransAmerican Holdings, Inc. (the "Company") was incorporated on July
22, 1996, under the laws of the State of Nevada to engage in any lawful
corporate activity, including, but not limited to, selected mergers and
acquisitions. The Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to its original
shareholders, the Company never commenced any operational activities. As such,
the Company can be defined as a "shell" company, whose sole purpose at this time
is to locate and consummate a merger or acquisition with a private entity. The
Board of Directors of the Company has elected to commence implementation of the
Company's principal business purpose described below under "Item 2 - Plan of
Operation." The proposed business activities described herein may classify the
Company as a "blank check" company.
The Company is filing this registration statement on a voluntary
basis because the primary attraction of the Company as a merger partner or
acquisition vehicle will be its status as a public company. Any business
combination or transaction will likely result in a significant issuance of
shares and substantial dilution to present stockholders of the Company.
In addition, the Company is filing this registration statement to
enhance investor protection and to provide information if a trading market
commences. On December 11, 1997, the National Association of Securities Dealers,
Inc. (NASD) announced that its Board of Governors had approved a series of
proposed changes for the Over The Counter ("OTC") Bulletin Board and the OTC
market. The principal changes, which was approved by the Securities and Exchange
Commission on January 4, 1999 allows only those companies that report their
current financial information to the Securities and Exchange Commission,
banking, or insurance regulators to be quoted on the OTC Bulletin Board. The
rule provides for a phase-in period for those securities already quoted on the
OTC Bulletin Board.
Risk Factors
The Company's business is subject to numerous risk factors, including
the following:
1. Lack of History. The Company has had no operating history nor any revenues
or earnings from operations. The Company has no significant assets or
financial resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the consummation of
a business combination. This may result in the Company incurring a net
operating loss which will increase continuously until the Company can
consummate a business combination with a profitable business opportunity.
There is no assurance that the Company can identify such a business
opportunity and consummate such a business combination.
2. The Company's Proposed Operations is Speculative. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. While management intends to seek business combination(s) with
entities having established operating histories, there can be no assurance
<PAGE>4
that the Company will be successful in locating candidates meeting such
criteria. In the event the Company completes a business combination, of
which there can be no assurance, the success of the Company's operations
may be dependent upon management of the successor firm or venture partner
firm and numerous other factors beyond the Company's control.
3. Scarcity of and Competition for Business Opportunities and Combinations.
The Company is and will continue to be an insignificant participant in the
business of seeking mergers with, joint ventures with and acquisitions of
small private and public entities. A large number of established and
well-financed entities, including venture capital firms, are active in
mergers and acquisitions of companies which may be desirable target
candidates for the Company. Nearly all such entities have significantly
greater financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, the Company will
also compete in seeking merger or acquisition candidates with numerous
other small public companies.
4. The Company has No Agreement for a Business Combination or Other
Transaction - No Standards for Business Combination. The Company has no
arrangement, agreement or understanding with respect to engaging in a
merger with, joint venture with or acquisition of, a private or public
entity. There can be no assurance the Company will be successful in
identifying and evaluating suitable business opportunities or in concluding
a business combination. Management has not identified any particular
industry or specific business within an industry for evaluation by the
Company. There is no assurance the Company will be able to negotiate a
business combination on terms favorable to the Company. The Company has not
established a specific length of operating history or a specified level of
earnings, assets, net worth or other criteria which it will require a
target business opportunity to have achieved, and without which the Company
would not consider a business combination in any form with such business
opportunity. Accordingly, the Company may enter into a business combination
with a business opportunity having no significant operating history,
losses, limited or no potential for earnings, limited assets, negative net
worth or other negative characteristics.
5. Continued Management Control, Limited Time Availability. While seeking a
business combination, management anticipates devoting up to ten hours per
month to the business of the Company. None of the Company's officers has
entered into a written employment agreement with the Company and none is
expected to do so in the foreseeable future. The Company has not obtained
key man life insurance on any of its officers or directors. Notwithstanding
the combined limited experience and time commitment of management, loss of
the services of any of these individuals would adversely affect development
of the Company's business and its likelihood of continuing operations. See
"Item 5 - Directors, Executive Officers, Promoters and Control Persons."
6. There May Be Conflicts of Interest. Officers and directors of the Company
may in the future participate in business ventures which could be deemed to
compete directly with the Company. Additional conflicts of interest and
non-arms length transactions may also arise in the future in the event the
Company's officers or directors are involved in the management of any firm
with which the Company transacts business. Management has adopted a policy
<PAGE>5
that the Company will not seek a merger with, or acquisition of, any entity
in which management serve as officers, directors or partners, or in which
they or their family members own or hold any ownership interest.
7. Reporting Requirements May Delay or Preclude Acquisitions. Sections 13 and
5(d) of the Securities Exchange Act of 1934 (the "1934 Act"), require
companies subject thereto to provide certain information about significant
acquisitions, including certified financial statements for the company
acquired, covering one, two, or three years, depending on the relative size
of the acquisition. The time and additional costs that may be incurred by
some target entities to prepare such statements may significantly delay or
essentially preclude consummation of an otherwise desirable acquisition by
the Company. Acquisition prospects that do not have or are unable to obtain
the required audited statements may not be appropriate for acquisition so
long as the reporting requirements of the 1934 Act are applicable.
8. Lack of Market Research or Marketing Organization. The Company has neither
conducted, nor have others made available to it, results of market research
indicating that market demand exists for the transactions contemplated by
the Company. Moreover, the Company does not have, and does not plan to
establish, a marketing organization. Even in the event demand is identified
for a merger or acquisition contemplated by the Company, there is no
assurance the Company will be successful in completing any such business
combination.
9. Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a
business combination with a business opportunity. Consequently, the
Company's activities may be limited to those engaged in by business
opportunities which the Company merges with or acquires. The Company's
inability to diversify its activities into a number of areas may subject
the Company to economic fluctuations within a particular business or
industry and therefore increase the risks associated with the Company's
operations.
10. Regulation. Although the Company will be subject to regulation under the
1934 Act, management believes the Company will not be subject to regulation
under the Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities. In the
event the Company engages in business combinations which result in the
Company holding passive investment interests in a number of entities, the
Company could be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register as an
investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from
the Securities and Exchange Commission as to the status of the Company
under the Investment Company Act of 1940 and, consequently, any violation
of such Act would subject the Company to material adverse consequences.
11. Probable Change in Control and Management. A business combination involving
the issuance of the Company's Common Shares will, in all likelihood, result
in shareholders of a private company obtaining a controlling interest in
the Company. Any such business combination may require management of the
Company to sell or transfer all or a portion of the Company's Common Shares
<PAGE>6
held by them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could result in
removal of one or more present officers and directors of the Company and a
corresponding reduction in or elimination of their participation in the
future affairs of the Company.
12. Reduction of Percentage Share Ownership Following Business Combination. The
Company's primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in the
Company issuing securities to shareholders of any such private company. The
issuance of previously authorized and unissued Common Shares of the Company
would result in reduction in percentage of shares owned by present and
prospective shareholders of the Company and may result in a change in
control or management of the Company.
13. Disadvantages of Blank Check Offering. The Company may enter into a
business combination with an entity that desires to establish a public
trading market for its shares. A business opportunity may attempt to avoid
what it deems to be adverse consequences of undertaking its own public
offering by seeking a business combination with the Company. Such
consequences may include, but are not limited to, time delays of the
registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders and the inability
or unwillingness to comply with various federal and state laws enacted for
the protection of investors.
14. Taxation. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so as
to minimize the federal and state tax consequences to both the Company and
the target entity; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal and state
taxes which may have an adverse effect on both parties to the transaction.
15. Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company believes that any potential
business opportunity must provide audited financial statements for review,
for the protection of all parties to the business combination. One or more
attractive business opportunities may choose to forego the possibility of a
business combination with the Company, rather than incur the expenses
associated with preparing audited financial statements.
16. Dilution. Any merger or acquisition effected by the Company can be expected
to have a significant dilutive effect on the percentage of shares held by
the Company's then shareholders.
17. No Trading Market. There is no trading market for the Company's common
stock at present, and there has been no trading market to date. There is no
assurance that a trading market will ever develop or, if such market does
develop, that it will continue. The Company intends to request a
broker-dealer to make application to the NASD Regulation, Inc. to have the
<PAGE>7
Company's securities traded on the OTC Bulletin Board or published in print
and electronic media, or either, in the National Quotation Bureau LLC "Pink
Sheet."
Item 2. Plan of Operation
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues in exchange for its
securities. The Company has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between the Company and
such other company as of the date of this registration statement.
The Company has no full time or part-time employees.
None of the officers and directors anticipates devoting more than ten
(10%) percent of his or her time to Company activities. The Company's President
and it's Treasurer/Secretary have agreed to allocate a portion of said time to
the activities of the Company, without compensation. These officers anticipate
that the business plan of the Company can be implemented by their devoting
minimal time per month to the business affairs of the Company and, consequently,
conflicts of interest may arise with respect to the limited time commitment by
such officers. See "Item 5 - Directors, Executive Officers, Promoters and
Control Persons - Resumes."
General Business Plan
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to it by persons or firms who or which desire to seek the advantages of an
Issuer who has complied with the 1934 Act. The Company will not restrict its
search to any specific business, industry, or geographical location and the
Company may participate in a business venture of virtually any kind or nature.
This discussion of the proposed business is purposefully general and is not
meant to be restrictive of the Company's virtually unlimited discretion to
search for and enter into potential business opportunities. Management
anticipates that it may be able to participate in only one potential business
venture because the Company has nominal assets and limited financial resources.
See "Item F/S - Financial Statements." This lack of diversification should be
considered a substantial risk to shareholders of the Company because it will not
permit the Company to offset potential losses from one venture against gains
from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity
in which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, management believes that there are numerous
firms seeking the benefits of an Issuer who has complied with the 1934 Act. Such
benefits may include facilitating or improving the terms on which additional
<PAGE>8
equity financing may be sought, providing liquidity for incentive stock options
or similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes), for all shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a controlling ownership
interest in an Issuer who has complied with the 1934 Act without incurring the
cost and time required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and accounting
costs in connection with acquisition of a business opportunity, including the
costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The 1934 Act, specifically requires that any merger or
acquisition candidate comply with all applicable reporting requirements, which
include providing audited financial statements to be included within the
numerous filings relevant to complying with the 1934 Act. Nevertheless, the
officers and directors of the Company have not conducted market research and are
not aware of statistical data which would support the benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The Company has made no determination as to whether or not it will
file periodic reports in the event its obligation to file such reports is
suspended under the 1934 Act. Najib E. Choufani, an officer and director of the
Company, has agreed to provide the necessary funds, without interest, for the
Company to comply with the 1934 Act reporting requirements, provided that he is
an officer and director of the Company when the obligation is incurred.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officers and directors of the Company, none of
whom is a professional business analyst. Management intends to concentrate on
identifying preliminary prospective business opportunities which may be brought
to its attention through present associations of the Company's officers and
directors, or by the Company's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the public recognition of acceptance of products, services, or trades; name
identification; and other relevant factors. Officers and directors of the
Company expect to meet personally with management and key personnel of the
business opportunity as part of their investigation. To the extent possible, the
Company intends to utilize written reports and personal investigation to
evaluate the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be obtained within a
reasonable period of time after closing of the proposed transaction.
Management of the Company, while not especially experienced in
matters relating to the new business of the Company, will rely upon their own
efforts in accomplishing the business purposes of the Company. It is not
anticipated that any outside consultants or advisors will be utilized by the
Company to effectuate its business purposes described herein. However, if the
Company does retain such an outside consultant or advisor, any cash fee by such
<PAGE>9
party will need to be paid by the prospective merger acquisition candidate, as
the Company has no cash assets with which to pay such obligation. There have
been no contracts or agreements with any outside consultants and none are
anticipated in the future.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
corporate life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional capital, may desire to have its shares publicly traded, or
may seek other advantages which the Company may offer. However, the Company does
not intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. Because the Company has no
capital with which to pay these anticipated expenses, present management of the
Company will pay these charges with their personal funds, as interest free loans
to the Company or as capital contributions. However, if loans, the only
opportunity which management has to have these loans repaid will be from a
prospective merger or acquisition candidate. Management has agreed among
themselves that the repayment of any loans made on behalf of the Company will
not impede, or be made conditional in any manner, to consummation of a proposed
transaction.
The Company has no plans, proposals, arrangements, or understanding
with respect to the sale or issuance of additional securities prior to the
location of an acquisition or merger candidate.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition,
the Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, the Company's
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of the Company's shareholders or may
sell their stock in the Company. Any terms of sale of the shares presently held
by officers and/or directors of the Company will be also afforded to all other
shareholders of the Company on similar terms and conditions. Any and all such
sales will only be made in compliance with the securities laws of the United
States and any applicable state.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from registration
under applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of its transaction, the Company may agree to
register all or a part of such securities immediately after the transaction is
consummated or at specified times thereafter. If such registration occurs, of
which there can be no assurance, it will be undertaken by the surviving entity
after the Company has successfully consummated a merger or acquisition and the
Company is no longer considered a "shell" company. The issuance of substantial
additional securities and their potential sale into any trading market which may
develop in the Company's securities may have a depressive effect on the value of
<PAGE>10
the Company's securities in the future, if such a market develops, of which
there is no assurance.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company, would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis of verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise. The manner in which the
Company participates in an opportunity will depend on the nature of the
opportunity, the respective needs and desires of the Company and other parties,
the management of the opportunity and the relative negotiation strength of the
Company and such other management.
With respect to any merger or acquisition, negotiations with target
company management is expected to focus on the percentage of the Company which
the target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The Company
is subject to all of the reporting requirements included in the 1934 Act.
Included in these requirements is the affirmative duty of the Company to file
independent audited financial statements as part of its Form 8-K to be filed
with the Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as the Company's audited financial statements included in
its annual report on Form 10-K (or 10-KSB, as applicable). If such audited
financial statements are not available at closing, or within time parameters
necessary to insure the Company's compliance with the requirements of the 1934
Act, or if the audited financial statements provided do not conform to the
<PAGE>11
representations made by the candidate to be acquired in the closing documents,
the closing documents will provide that the proposed transaction will be
voidable, at the discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision providing for
the acquisition entity to reimburse the Company for all costs associated with
the proposed transaction.
Competition
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial resources
and limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's competitors.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933, as amended, and the 1934 Act, management believes the
Company will not be subject to regulation under the Investment Company Act of
1940 insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences. The Company's Board
of Directors unanimously approved a resolution stating that it is the Company's
desire to be exempt from the Investment Company Act of 1940 under Regulation
3a-2 thereto.
Lock-Up Agreement
The Chairman of the Board and the President of the Company have
executed and delivered a "lock-up" letter agreement affirming that they shall
not sell their respective shares of the Company's common stock until such time
as the Company has entered into a merger or acquisition agreement, or the
Company is no longer classified as a "blank check" company, whichever first
occurs.
Item 3. Description of Property
The Company has no properties and at this time has no agreements to
acquire any properties.
The Company presently occupies office space supplied by a shareholder
at 468 N. Camden Drive, Suite 200, Beverly Hills, CA 90210. This space is
provided to the Company on a rent-free basis, and it is anticipated that this
arrangement will remain until such time as the Company successfully consummates
a merger or acquisition. Management believes that this arrangement will meet the
Company's needs for the foreseeable future.
<PAGE>12
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
The following table sets forth the security and beneficial ownership
for each class of equity securities of the Company beneficially owned by all
directors and officers of the Company.
<TABLE>
<S> <C> <C> <C>
Name and Address of Number of Shares Percent
Title of Class Beneficial Owner Beneficially Owned of Class (1)
-------------- ------------------------------- ------------------- ------------
Common Najib E. Choufani 9,200,000 81.4%
468 N. Camden Dr., Suite 200
Beverly Hills, CA 90210
Common Michael Savage 500,000 4.4%
468 N. Camden Dr., Suite 200
Beverly Hills, CA 90210
Common Fred E. Tannous -0- -0-
468 N. Camden Dr., Suite 200
Beverly Hills, CA 90210
Common Frederick Manlunas -0- -0-
468 N. Camden Dr., Suite 200
Beverly Hills, CA 90210
Common All directors and officers as a
group (4 persons) 9,700,000 85.8%
(b) Security Ownership of Management
Name and Address of Number of Shares Percent
Title of Class Beneficial Owner Beneficially Owned of Class (1)
---------------- ---------------------------- ------------------- ------------
Common Najib E. Choufani 9,200,000 81.4%
468 N. Camden Dr., Suite 200
Beverly Hills, CA 90210
Common Michael Savage 500,000 4.4%
468 N. Camden Dr., Suite 200
Beverly Hills, CA 90210
Common Fred E. Tannous -0- -0-
468 N. Camden Dr., Suite 200
Beverly Hills, CA 90210
<PAGE>13
Name and Address of Number of Shares Percent
Title of Class Beneficial Owner Beneficially Owned of Class (1)
---------------- ---------------------------- ------------------- ------------
Common Frederocl Manlunas -0- -0-
468 N. Camden Dr., Suite 200
Beverly Hills, CA 90210
Common All directors and officers as a
group (4 persons) 9,700,000 85.8%
</TABLE>
(1) Percent of class is based on 11,350,000 shares of Common Stock issued and
outstanding as of March 1, 2000. The total of the Company's outstanding
Common Shares are held by 36persons.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth certain information with respect to
the directors and executive officers of the Company:
Name Age Position
------------------- --- ----------------------------
Najib E. Choufani 59 Chairman and Sec/Treas.
Michael Savage 78 President/Secretary/Director
Fred E. Tannous 33 Director
Frederick Manlunas 31 Director
The above listed officers and directors will serve until the next
annual meeting of the shareholders or until their death, resignation,
retirement, removal, or disqualification, or until their successors have been
duly elected and qualified. Vacancies in the existing Board of Directors are
filled by majority vote of the remaining Directors. Officers of the Company
serve at the will of the Board of Directors. There are no agreements or
understandings for any officer or director to resign at the request of another
person and no officer or director is acting on behalf of or will act at the
direction of any other person. Except for said relationships, there is no family
relationship between any executive officer and director of the Company.
Resumes
Najib E. Choufani. Mr. Choufani has been Secretary, Treasurer and Chairman of
the Board of TransAmerican Holdings, Inc. since January 2000 He is also
President and Director of Uni Financial Group, Inc. as well as Nagimo, Ltd., an
international advisory and financial services firm located in London, and its US
subsidiary, Nagimo America, Inc. He has over 30 years of experience in
international business transactions including commercial banking, insurance,
construction, and contract negotiations. During the past eight years, Mr.
Choufani was successful in structuring, negotiating and promoting fourteen
transactions amounting to over $230 million with royal dignitaries and
businessmen from Kuwait, Saudi Arabia and the United Arab Emirates (UAE). From
1989 to 1991, he was Chairman and General Manager of Euromed Bank, a commercial
bank associated with Credit Lyonnais of France, located in Lebanon. From 1982 to
1989, he was Chairman and General Manager of Prosperity Bank of Lebanon, S.A.L.,
also located in Lebanon. During this period (civil wartime), Mr. Choufani was
still successful in developing strategic relationships with banks, business
associates and wealthy individuals from the Gulf Region to attract over $100
million in deposits. In his banking capacity, he was extensively involved in
various aspects of monetary policy and banking affairs as well as advising on
economic policy. From 1979 to 1991, Mr. Choufani was President of Oriental
Insurance & Reinsurance Co., S.A.L. where he was successful in growing the
<PAGE>14
company by over 300% to become one of the most successful local insurance
underwriter with an asset base of approximately $50 million. In addition to
being the sole representative for Lebanon and the entire Middle East of Iran
Insurance Co., Mr. Choufani was the representative responsible for structuring a
$500 million multi-year development project between the Lebanese government and
China Harbours Engineering Co. for the construction of a wide-range harbor in
Lebanon. Mr. Choufani holds a Bachelors degree from Cairo University.
Michael Savage. Mr. Savage has been President, Chief Executive Officer and
Director of TransAmerican Holdings since January 2000. For over fifty years he
has been active in various aspects of finance. His experience includes the
pioneering of the equipment leasing business through his founding of General
Leasing Corporation in 1952. In 1960, Mr. Savage founded and was President and
Chief Executive Officer of Capital Reserve Corporation, a financial services
company traded on the American Stock Exchange. He has lectured extensively to
various business groups on the topic of equipment leasing, marketing and design
development topics. Mr. Savage has consistently undertaken curricula in
business, architecture, and psychology at the University of Southern California
and University of California at Los Angeles since 1947.
Fred E. Tannous. Mr. Tannous has been a Director of the TransAmerican Holdings,
Inc. since November, 1999. He is currently a member of the Structured Finance
team at the corporate treasury of Hughes Electronics Corporation.. From 1996
until October 1999, he served as Treasurer and Chief Financial Officer of
Colorado Casino Resorts, Inc, a publicly-traded company with hotel and casino
operations in Colorado. He was instrumental in creating its public status and
raising over $25 million in private equity and nearly $40 million in debt
financing to fund the development of its latest $25 casino project. From 1994 to
1996, he was Managing Director of F.E. Tannous & Co. Investment Management Group
in Beverly Hills, California where he managed private equity funds. Mr. Tannous
consulted extensively to start-up Internet and technology ventures by developing
business plans, generating pro-forma financials, advising on business strategy
and capital structure, and raising capital through private placements and public
offerings. Mr. Tannous received an MBA in finance and accounting from the
University of Chicago Graduate School of Business. He also holds a Masters and
Bachelors degree in Electrical Engineering in from the University of Southern
California.
Eric Manlunas. Mr. Manlunas has been a Director of TransAmerican Holdings since
November 1999. He is one of the founders, Chairman of the Board and Chief
Executive Officer of Sitestar Corporation. Sitestar is a publicly traded
company, originally formed in 1997 as Intefoods Consolidated, Inc. to capitalize
on the growing consolidation opportunities within the food industry. Today,
Sitestar is a diversified Internet holding company that participates, through
its wholly owned Web-based subsidiaries, in emerging segments of the Internet
such as e-commerce, value-added content, ISP and portal/community. Prior, Mr.
Manlunas was with the retail consulting division of Arthur Andersen, LLP from
1991 to 1995. He also served as Chief Investment Officer of Gateway Holdings,
Inc., a Nevada corporation specializing in venture capital investments from 1996
to 1998. He was also the Managing Partner of Glenhills Capital Partners, a
California private equity partnership from 1997 to 1998. He also serves as a
Director on the Boards of MenuDirect Corporation, Global Sourcing Group, and
Xcel Medical Pharmacy. Mr. Manlunas holds a Bachelor's degree in Journalism from
Florida International University and an MBA in finance from Pepperdine
University in Malibu, California.
<PAGE>15
Previous Blank Check Companies - Current Blank Check Companies
Other than Mr. Tannous, the officers and directors of the Company
have not been officers and directors in any other blank check offerings. The
officers and directors, however, do anticipate becoming involved with additional
blank check companies who may file registration statements under the Securities
Act of 1933, as amended, and the 1934 Act, or either. In addition, the officers
and directors of the Company may become involved in additional blank check
companies which may request a broker-dealer to request clearance from the NASD
Regulation, Inc. for trading clearance in the applicable quotation medium.
Fred Tannous, a director of the Company, is a principal shareholder,
President and a director of Centurion Communications Corporation ("Centurion"),
a blank check company. The initial business purposes of Centurion is to engage
in a business combination with an unidentified company or companies. Until
completion of a business combination, Centurion will be classified as a blank
check.
Conflicts of Interest
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.
The officers and directors of the Company are now and may in the
future become shareholders, officers or directors of other companies which may
be engaged in business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in the future
with respect to such individuals acting on behalf of the Company or other
entities. Moreover, additional conflicts of interest may arise with respect to
opportunities which come to the attention of such individuals in the performance
of their duties or otherwise. The Company does not currently have a right of
first refusal pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to the Company's proposed business
operations.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all opportunities
contemplated by the Company's plan of operation which come to their attention,
either in the performance of their duties or in any other manner, will be
considered opportunities of, and be made available to the Company and the
companies that they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the officer or director.
If the Company or the companies in which the officers and directors
are affiliated with both desire to take advantage of an opportunity, then said
officers and directors would abstain from negotiating and voting upon the
opportunity. However, all directors may still individually take advantage of
opportunities if the Company should decline to do so. Except as set forth above,
the Company has not adopted any other conflict of interest policy with respect
to such transactions.
<PAGE>17
Item 6. Executive Compensation
None of the Company's officers and/or directors receive any
compensation for their respective services rendered unto the Company, nor have
they received such compensation in the past. They all have agreed to act without
compensation until authorized by the Board of Directors, which is not expected
to occur until the Company has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this registration
statement, the Company has no funds available to pay directors. Further, none of
the directors are accruing any compensation pursuant to any agreement with the
Company.
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity may desire to
employ or retain one or a number of members of the Company's management for the
purposes of providing services to the surviving entity, or otherwise provide
other compensation to such persons. However, the Company has adopted a policy
whereby the offer of any post-transaction remuneration to members of management
will not be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.
Item 7. Certain Relationships and Related Transactions
There have been no related party transactions, or any other
transactions or relationships required to be disclosed pursuant to Item 404 of
Regulation S-B.
Najib E. Choufani, the Chairman of the Board, has agreed to provide
the necessary funds, without interest, for the Company to comply with the 1934
Act provided that he is an officer and director of the Company when the
obligation is incurred. All advances will be interest-free.
<PAGE>17
Item 8. Description of Securities
The Company's authorized capital stock consists of 100,000,000 shares
of Common Stock, par value $.001 per share. There are 11,350,000 Common Shares
and no Preferred Shares issued and outstanding as of the date of this filing.
Common Stock
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and non-assessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any. All shares of the Company's Common Stock issued and outstanding are
fully-paid and non-assessable. Holders of the Common Stock are entitled to share
pro rata in dividends and distributions with respect to the Common Stock, as may
be declared by the Board of Directors out of funds legally available therefor.
<PAGE>18
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters
There is no trading market for the Company's Common Stock at present
and there has been no trading market to date. There is no assurance that a
trading market will ever develop or, if such a market does develop, that it will
continue. The Company intends to request a broker-dealer to make application to
the NASD Regulation, Inc. to have the Company's securities traded on the OTC
Bulletin Board Systems or published, in print and electronic media, or either,
in the National Quotation Bureau LLC "Pink Sheets."
(a) Market Price. The Company's Common Stock is not quoted at the present time.
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
For the initial listing in the NASDAQ SmallCap market, a company must
have net tangible assets of $4 million or market capitalization of $50 million
or a net income (in the latest fiscal year or two of the last fiscal years) of
$750,000, a public float of 1,000,000 shares with a market value of $5 million.
The minimum bid price must be $4.00 and there must be three market makers. In
addition, there must be 300 shareholders holding 100 shares or more, and the
company must have an operating history of at least one year or a market
capitalization of $50 million.
For continued listing in the NASDAQ SmallCap market, a company must
have net tangible assets of $2 million or market capitalization of $35 million
or a net income (in the latest fiscal year or two of the last fiscal years) of
$500,000, a public float of 500,000 shares with a market value of $1 million.
The minimum bid price must be $1.00 and there must be two market makers. In
addition, there must be 300 shareholders holding 100 shares or more.
<PAGE>19
Management intends to strongly consider undertaking a transaction
with any merger or acquisition candidate which will allow the Company's
securities to be traded without the aforesaid limitations. However, there can be
no assurances that, upon a successful merger or acquisition, the Company will
qualify its securities for listing on NASDAQ or some other national exchange, or
be able to maintain the maintenance criteria necessary to insure continued
listing. The failure of the Company to qualify its securities or to meet the
relevant maintenance criteria after such qualification in the future may result
in the discontinuance of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's securities may then
continue in the non-NASDAQ over-the-counter market. As a result, a shareholder
may find it more difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Company's securities.
(b) Holders
There are thirty-seven (37) holders of the Company's Common Stock. In
1996, the Company issued 2,100,000, as adjusted for a 400 to 1 stock split, of
its Common Shares for cash and in 1999 the Company issued an additional
9,200,000 shares for cash and, in January 2000, 50,000 were issued for services
rendered. All of the issued and outstanding shares of the Company's Common Stock
were issued in accordance with the exemption from registration afforded by
Section 4(2) of the Securities Act of 1933, as amended.
As of the date of this registration statement, 1,900,000 shares of
the Company's Common Stock held by non-affiliates are eligible for sale under
Rule 144 promulgated under the Securities Act of 1933, as amended, subject to
certain limitations included in said Rule. In general, under Rule 144, a person
(or persons whose shares are aggregated), who has satisfied a one year holding
period, under certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent of the then
outstanding Common Stock or the average weekly trading volume during the four
calendar weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation by a person
who has satisfied a two-year holding period and who is not, and has not been for
the preceding three months, an affiliate of the Company.
(c) Dividends
The Company has not paid any dividends to date, and has no plans to
do so in the immediate future.
Item 2. Legal Proceedings
There is no litigation pending or threatened by or against the
Company.
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
The Company has not changed accountants since its formation and there
are no disagreements with the findings of said accountants.
<PAGE>20
Item 4. Recent Sales of Unregistered Securities
(a) Securities Sold
The Company has sold and issued its securities during the three year
period preceding the date of this registration statement. 2,100,000 shares and
9,200,000 shares of Common Stock of the Company were sold and issued on July 22,
1996 and November 1999, respectively. An additional 50,000 shares were sold in
January 2000 for services rendered. and have been issued for investment purposes
in "private transactions" and are "restricted" shares as defined in Rule 144
under the Securities Act of 1933, as amended. These shares may not be offered
for public sale except under Rule 144, or otherwise, pursuant to said Act.
In summary, Rule 144 applies to affiliates (that is, control persons)
and non-affiliates when they resell restricted securities (those purchased from
the issuer or an affiliate of the issuer in nonpublic transactions).
Non-affiliates reselling restricted securities, as well as affiliates selling
restricted or non-restricted securities, are not considered to be engaged in a
distribution and, therefore, are not deemed to be underwriters as defined in
Section 2(11) of the Securities Act of 1933, as amended, if six conditions are
met:
(1) Current public information must be available about the issuer
unless sales are limited to those made by non-affiliates after
two years.
(2) When restricted securities are sold, generally there must be a
one-year holding period.
(3) When either restricted or non-restricted securities are sold by
an affiliate after one year, there are limitations on the amount
of securities that may be sold; when restricted securities are
sold by non-affiliates between the first and second years, there
are identical limitations; after two years, there are no volume
limitations for re-sales by non-affiliates.
(4) Except for sales of restricted securities made by non-affiliates
after two years, all sales must be made in brokers' transactions
as defined in Section 4(4) of the Securities Act of 1933, as
amended, or a transaction directly with a "market maker" as that
term is defined in Section 3(a)(38) of the 1934 Act.
(5) Except for sales of restricted securities made by non-affiliates
after two years, a notice of proposed sale must be filed for all
sales in excess of 500 shares or with an aggregate sales price in
excess of $10,000.
(6) There must be a bona fide intention to sell within a reasonable
time after the filing of the notice referred to in (5) above.
(b) Underwriters and Other Purchasers
There were no underwriters in connection with the sale and issuance
of any securities.
All of the shareholders have had a pre-existing personal or business
relationship with the Company or its officers and directors. By reason of their
business experience, each have been involved financially and by virtue of a time
commitment in business projects with the officers of the Company. Further, each
<PAGE>21
of the shareholders have established a pre-existing personal relationship with
the officers and directors of the Company. The following are the names of the 37
issuees and the number of shares purchased by each of them.
Name Shares
----------------------------- -----------
Uni Financial Group 9,200,000
Hillcrest Capital Group, Inc. 500,000
Schorr Corporations 325,000
Michael Savage 200,000
G. Savage Mem. Found. 300,000
Marc Sterling 200,000
Gene Stewart 325,000
William B. Barnett 50,000
Aloha Associates 50,000
Hemisphere Holdings 50,000
John Jones 25,000
Nancy Jones 25,000
Steve Albaugh 4,000
Bruce Briney 4,000
Herman Chitra 4,000
Tim Graves 4,000
John Aldridge 4,000
Steve Brohm 4,000
Jonah Dietz 4,000
Steve Hesse 4,000
David Hack 4,000
Eileen Buckley 4,000
Chad Holtz 4,000
Mark Price 4,000
Tim Rice 4,000
Bruce Staggs 4,000
Debbie Johnson 4,000
Tom Lambert 4,000
Maureen Reading 4,000
Francesca Lanham 4,000
Bryon Rhodes 4,000
Howard Smith 4,000
Raymond Willey 4,000
Jennifer Worden 4,000
Brett Verde 4,000
Cliff Freeman 4,000
Melany Wade 4,000
(c) Consideration
Except for 50,000 shares issued in January 2000 for services
rendered, each of the shares of stock were sold for cash. Prior to the forward
stock split, each shareholder paid $1.00 per share for the shares, the Company
sold and issued 5,000 shares, and the aggregate consideration received by the
Company was $5,000.00. On November 9, 1999, the Company issued 9,200,000 shares
to Uni Financial Group, Inc. (of which the President is Najib E. Choufani the
Company's Chairman of the Board) for $0.001 per share or an aggregate of
$9200.00.
<PAGE>22
(d) Exemption from Registration Relied Upon
The sale and issuance of the shares of stock was exempt from
registration under the Securities Act of 1933, as amended, by virtue of section
4(2) as a transaction not involving a public offering. Each of the shareholders
had acquired the shares for investment and not with a view to distribution to
the public.
Item 5. Indemnification of Directors and Officers
Except for acts or omissions which involve intentional misconduct,
fraud or known violation of law or for the payment of dividends in violation of
Nevada Revised Statutes, there shall be no personal liability of a director or
officer to the Company, or its stockholders for damages for breach of fiduciary
duty as a director or officer. The Company may indemnify any person for expenses
incurred, including attorneys fees, in connection with their good faith acts if
they reasonably believe such acts are in and not opposed to the best interests
of the Company and for acts for which the person had no reason to believe his or
her conduct was unlawful. The Company may indemnify the officers and directors
for expenses incurred in defending a civil or criminal action, suit or
proceeding as they are incurred in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount of such expenses if it is ultimately
determined by a court of competent jurisdiction in which the action or suit is
brought determined that such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to officers, directors or
persons controlling the Company pursuant to the foregoing, the Company has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is therefore unenforceable.
<PAGE>23
TRANSAMERICA HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
December 31, 1999
December 31, 1997
TABLE OF CONTENTS
PAGE #
F-
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 3
STATEMENT OF OPERATIONS 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-11
<PAGE>F-1
INDEPENDENT AUDITORS' REPORT
Board of Directors February 28, 2000
TRANSAMERICAN HOLDINGS, INC.
Beverly Hills, California
I have audited the accompanying Balance Sheets TRANSAMERICAN HOLDINGS,
INC., (Formerly Health Research, LTD.), (A Development Stage Company), as of
December 31, 1999, December 31, 1998, and December 31, 1997, and the related
statements of operations, stockholders' equity and cash flows for the three
years ended December 31, 1999, December 31, 1998, and December 31, 1997. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of TRANSAMERICAN
HOLDINGS, INC., (Formerly Health Research, LTD.), (A Development Stage Company),
as of December 31, 1999, December 31, 1998, and December 31, 1997, and the
results of its operations and cash flows for the three years ended December 31,
1999, December 31, 1998, and December 31, 1997, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #6 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #6. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Barry L. Friedman
- ---------------------------
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702) 361-8414
<PAGE>F-2
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
<TABLE>
<S> <C> <C> <C>
BALANCE SHEET
ASSETS
December 31, December 31, December 31,
1999 1998 1997
---------------- --------------- ----------------
CURRENT ASSETS
CASH $ 9,200 $ 0 $ 0
---------------- --------------- ----------------
TOTAL CURRENT ASSETS $ 9,200 $ 0 $ 0
---------------- --------------- ----------------
OTHER ASSETS $ 0 $ 0 $ 0
---------------- --------------- ----------------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
---------------- --------------- ----------------
TOTAL ASSETS $ 9,200 $ 0 $ 0
================ =============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>F-3
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C>
December 31, December 31, December 31,
1999 1998 1997
CURRENT LIABILITIES
Advances Payable (Note #5) $ 3,600 $ 3,025 $ 1,750
---------------- --------------- ----------------
TOTAL CURRENT LIABILITIES $ 3,600 $ 3,025 $ 1,750
---------------- --------------- ----------------
STOCKHOLDERS' EQUITY (Note #4)
Common stock, $1.00 par value
Authorized 25,000 shares
Issued and outstanding at
December 31, 1997 -5,000 shs $ 5,000
December 31, 1998 -5,000 shs $ 5,000
Common stock, $.001 par value
Authorized 100,000,000 shares
Issued and outstanding at
December 31, 1998 -11,300,000 $ 11,300
Additional Paid-In Capital 3,000 0 0
Deficit accumulated during
The development stage -5,100 -5,000 -5,000
TOTAL STOCKHOLDERS' EQUITY $ -9,200 $ -3,025 $ 0
---------------- --------------- ----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 9,200 $ 0 $ 0
================ =============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>F-4
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<S> <C> <C> <C> <C>
Year Year Year July 22,1996
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1999 1998 1997 1999
--------------- ---------------- --------------- ----------------
INCOME
Revenue $ 0 $ 0 $ 0 $ 0
--------------- ---------------- --------------- ----------------
EXPENSES
General, Selling and
Administrative $ 100 $ 0 $ 0 $ 5,100
--------------- ---------------- --------------- ----------------
TOTAL EXPENSES $ 100 $ 0 $ 0 $ 5,100
--------------- ---------------- --------------- ----------------
NET PROFIT/LOSS (-) $ -100 $ 0 $ 0 $ -5,100
=============== ================ =============== ================
Net Profit/Loss(-)
per weighted share
(Note #1) $ NIL $ NIL $ NIL $ -.0015
--------------- ---------------- --------------- ----------------
Weighted average
Number of common
shares outstanding 2,392,448 2,000,000 2,000,000 3,352,603
--------------- ---------------- --------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>F-5
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------------- ---------------- --------------- ----------------
Balance,
December 31, 1996 5,000 $ 5,000 $ 0 $ -5,000
Net loss year ended
December 31, 1997 0
--------------- ---------------- --------------- ----------------
Balance,
December 31, 1997 5,000 $ 5,000 $ 0 $ -5,000
Net loss year ended
December 31, 1998 0
--------------- ---------------- --------------- ----------------
Balance,
December 31, 1998 5,000 $ 5,000 $ 0 $ -5,000
January 25, 1999
Changed par value
From $1.00 to $.001 -4,995 +4,995
October 30, 1999
Forward stock split
400:1 1,995,000 +1,995 -1,995
November 1, 1999
Issued common stock
For services 100,000 +100
November 9, 1999
Issued common stock
for cash 9,200,000 +9,200
Net loss year ended
December 31, 1999 -100
--------------- --------------- -------------- ---------------
Balance,
December 31, 1999 11,300,000 $ 11,300 $ 3,000 $ -5,100
--------------- --------------- -------------- ---------------
The accompanying notes are an integral part of these financial statements.
<PAGE>F-6
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Year Year Year July 22,1996
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1999 1998 1997 1999
--------------- ---------------- --------------- ----------------
Cash Flows from
Operating Activities
Net Loss $ -100 $ 0 $ 0 $ -5,100
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue common stock
For services +100 0 0 +5,100
Changes in assets and
Liabilities 0 0 0 0
Increase in current
Liabilities 0 0 0 0
--------------- ---------------- --------------- ----------------
Net cash used in
Operating activities $ 0 $ 0 $ 0 $ 0
Cash Flows from
Investing Activities 0 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock for Cash +9,200 0 0 +9,200
--------------- ---------------- --------------- ----------------
Net Increase (decrease) $ 9,200 $ 0 $ 0 $ 9,200
Cash,
Beginning of period 0 0 0 0
--------------- ---------------- --------------- ----------------
Cash, End of Period $ 9,200 $ 0 $ 0 $ 9,200
--------------- ---------------- --------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>F-7
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999, December 31, 1998, and December 31, 1997
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized July 22, 1996 under the laws of the State of
Nevada as Health Research, LTD. The Company currently has no operations
and in accordance with SFAS #7, is considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits.
For the purpose of the statements of cash flows, all highly
liquid investments with the maturity of three months or less
are considered to be cash equivalents. There are no cash
equivalents as of December 31, 1999.
<PAGE>F-8
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998, and December 31, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS #109) "Accounting for
Income Taxes". A deferred tax asset or liability is recorded
for all temporary difference between financial and tax
reporting. Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings
Per Share". Basic loss per share is computed by dividing
losses available to common stockholders by the weighted
average number of common shares outstanding during the period.
Diluted loss per share reflects per share amounts that would
have resulted if dilative common stock equivalents had been
converted to common stock. As of December 31, 1999, the
Company had no dilative common stock equivalents such as stock
options.
Year End
The Company has selected December 31st as its year-end.
<PAGE>F-9
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998, and December 31, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
Computer programs that have time sensitive software may
recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or
miscalculations causing disruption of normal business
activities.
The company's potential software suppliers have verified that
they will provide only certified "Year 2000" compatible
software for all of the company's computing requirements.
Because the company's products and services are sold to the
general public with no major customers, the company believes
that the "Year 2000" issue will not pose significant
operational problems and will not materially affect future
financial results.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended December
31, 1999, due to the net loss and no state income tax in Nevada, the
state of the Company's domicile and operations. The Company's total
deferred tax asset as of December 31, 1999 is as follows:
Net operation loss carry forward $ 5,100
Valuation allowance $ 5,100
Net deferred tax asset $ 0
The federal net operation loss carry forward will expire in various
amounts from 2008 to 2019.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
<PAGE>F-10
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1999, and December 31, 1997
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 100,000,000
shares with Par Value of $.001.
Preferred Stock
The corporation has no preferred stock.
On July 30, 1996, the company issued 5,000 shares of its No Par Value
Common Stock in consideration of $5,000 in cash.
On January 25, 1999, the State of Nevada approved the Company's
restated Articles of Incorporation, which increased its capitalization
from 25,000 common shares with No Par Value stock to 100,000,000 common
shares with $0.001 Par Value stock.
On October 30, 1999, the company had a forward stock split of 400:1
thus increasing the outstanding common stock of the corporation from
5,000 common shares to 2,000,000 common shares.
On November 1, 1999, the Company issued 100,000 of its $.001 par value
common stock for $100 in services.
On November 9, 1999, the Company issued 9,200,000 of its $.001 par
value common stock for $9,200 in cash.
On November 15, 1999, the Company changed its name from Health
Research, LTD., to Transamerican Holdings, Inc.
On December 29, 1999, the State of Nevada approved the company's
restated Articles of Incorporation that increased the capitalization
from 25,000,000 common shares with a par value of $0.0001 to
100,000,000 common shares with a par value of $0.0001.
<PAGE>F-11
TRANSAMERICAN HOLDINGS, INC.
(Formerly Health Research, LTD.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1999, December 31, 1998, and December 31, 1997
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
share of common or preferred stock.
NOTE 6 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of the
Company to seek a merger with an existing, operating company. Until
that time, the stockholders/officers and or directors have committed to
advancing the operating costs of the Company interest free.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge.
Such costs are immaterial to the financial statements and accordingly,
have not been reflected therein. The officers and directors of the
Company are involved in other business activities and may, in the
future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business
interests. The Company has not formulated a policy for the resolution
of such conflicts.
<PAGE>F-12
To Whom It May Concern: February 28, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of February 28, 2000, on the Financial
Statements of TRANSAMERICAN HOLDINGS, INC., (Formerly Health Research, LTD.), as
of December 31, 1999, in any filings that are necessary now or in the near
future with the U.S. Securities and Exchange Commission.
Very truly yours,
/s/BARRY L. FRIEDMAN
---------------------------
Barry L. Friedman
Certified Public Accountant
<PAGE>24
PART III
<TABLE>
<S> <C> <C>
Item 1. Exhibit Index
No.
(3) Articles of Incorporation and Bylaws
3.1.1 Articles of Incorporation .......................................
3.1.2 Certificate of Amendment of Articles of Incorporation ...........
3.1.3 Certificate of Amendment of Articles of Incorporation ...........
3.1.4 Certificate of Amendment of Articles of Incorporation ...........
3.2 Bylaws ..........................................................
(12) Lock-Up Agreement
12.1 Najib E. Choufani ...............................................
12.2 Michael Savage...................................................
(23) 23.1 Consent of Certified Public Accountant...........................
(27) Financial Data Schedule
27.1 Financial Data Schedule .........................................
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 10, 2000 TRANSAMERICAN HOLDINGS, INC.
/s/ MICHAEL SAVAGE
----------------------------
By: Michael Savage
Its: President
FILED Articles of Incorporation
in the office of the (Pursuant to NRS 78) C39766
Secretary of State of $125 DM
the State of Nevada State of Nevada
JUL 22 1996 Secretary of State
(IMPORTANT: Read instructions carefully on reverse side before completing this
form. TYPE OR PRINT (BLACK INK ONLY)
1. NAME OF CORPORATION: HEALTH RESEARCH LTD.
-----------------------------------------------------
2. RESIDENT AGENT:
Name of Resident Agent: NEVADA FIRST BANCORP.
-------------------------------------------------
Street Address: 1800 EAST SAHARA AVENUE, SUITE 104, LAS VEGAS 89104
-----------------------------------------------------------
Street No. Street Name City Zip
3. SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value: 25,000 Par Value: $1.00
------ ------
Number of shares without par value: 0
--------
4. GOVERNING BOARD: shall be styled as (check one): Directors X Trustees
--- ---
CHAD HOLTZ 1800 E. SAHARA, STE. 104, LAS VEGAS, NV
- ----------------------------------- -----------------------------------------
Name Address City/State/Zip
- ----------------------------------- -----------------------------------------
Name Address City/State/Zip
5. PURPOSE: (optional-see reverse side): The purpose of this corporation shall
be:
------------------------------------------------------------------
6. OTHER MATTERS: This form includes the minimal statutory requirements to
incorporate under NRS 78. You may attach additional information pursuant to
NRS 78.037 or any other information you deem appropriate. If any of the
additional information is contradictory to this form it cannot be filed and will
be returned to you for correction. Number of pages attached: 0
---------
7. SIGNATURES OF INCORPORATORS: (the names and addresses of each of the
incorporators signing the articles: (signatures must be notarized) (Attach
additional pages if necessary)
CHAD HOLTZ
- ---------------------------------- -----------------------------------------
Name (print) Name (print)
1800 E. SAHARA, STE. 104,
LAS VEGAS, NV 89104
- ---------------------------------- -----------------------------------------
Address City/State/Zip Address City/State/Zip
/s/ CHAD HOLTZ
- ---------------------------------- -----------------------------------------
Signature Signature
NEVADA CLARK
- --------------- ----------------- ------------------- ----------------------
State of County of State of County of
This instrument was acknowledged This instrument was acknowledged
before me on: before me on:
JULY 22, 1996 -----------------------------------, 199
- --------------------------------- -----------------------------------------
Name of Person Name of Person
as incorporator of: as incorporator of:
HEALTH RESEARCH LTD.
- ---------------------------------- -----------------------------------------
(name of party on behalf of whom (name of party on behalf of whom
instrument was executed) instrument was executed)
/s/ MIKE KUSHINSK NOTARY PUBLIC SIGNATURE
NOTARY PUBLIC, STATE OF NEVADA, RECEIVED
COUNTY OF CLARK (AFFIX NOTARY STAMP OR SEAL)
- ----------------------------------
NOTARY PUBLIC SIGNATURE
(AFFIX NOTARY STAMP OR SEAL)
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I, NEVADA FIRST BANCORP, hereby accept appointment as Resident Agent for the
above named corporation.
/s/ CHAD HOLTZ SECRETARY OF STATE
- ------------------------------- JULY 22, 1996
Signature of Resident Agent
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
HEALTH RESEARCH, LTD.
Name of Corporation
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
JAN 25 1999
NO. C15830-96
DEAN HELLER
SECRETARY OF STATE
I, the undersigned, James E. Pitochelli, President and Secretary of Health
Research, Ltd., does hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
held on the 12th day of January, 1999, adopted a Resolution to amend the
original Articles of Incorporation as follows;
RESOLVED: That the number of shares of the corporation outstanding and entitled
to vote on an amendment to the Articles of Incorporation is
100,000,000;
RESOLVED: That the authorized stock of the company be and is hereby amended as
follows:
100,000,000 shares of Common Stock with a par value of .001 per share
RESOLVED: That the said change(s) and amendment have been consented to and
approved by a majority vote of the stockholders holding at least a
majority of each class of stock outstanding and entitled to vote
thereon.
/s/ JAMES E. PITOCHELLI
--------------------
James E. Pitochelli
President
/s/JAMES E. PITOCHELLI
-------------------
James E. Pitochelli
Secretary
STATE OF NEVADA
COUNTY OF CLARK
On 12th day of January, 1999, personally appeared before me, a Notary
Public, the following named individual, James E. Pitochelli, President and
Secretary of Health Research Ltd., who acknowledged that he executed the above
instrument.
/s/ COLETTE THORNE
---------------
Colette Thorne
Notary Public
(Notary Seal)
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
HEALTH RESEARCH, LTD.
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
NOV 02 1999
NO. C15830-96
DEAN HELLER
SECRETARY OF STATE
The undersigned, being the President and the Secretary of Health Research, Ltd.,
a Nevada Corporation, hereby certify that by majority vote of the Board of
Directors and Shareholders at a meeting held on October 25, 1999, it was voted
and adopted a resolution to amend the original Articles of Incorporation as
follows:
The undersigned further certify that ARTICLE FOUR of the original Articles of
Incorporation filed on the 26th day of July 1996 herein is amended to include as
follows:
"The Corporation declare a 400 new shares for 1 existing share forward stock
split to be effective October 31, 1999."
The undersigned hereby certify that they have on this day October 25, 1999
executed this Certificate Amending that original Articles of Incorporation
heretofore filed with the Secretary of State of Nevada.
/s/ SHIRLEY BETHURUM
---------------------------
Shirley Bethurum, President
/s/ SHIRLEY BETHURUM
---------------------------
Shirley Bethurum, Secretary
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
HEALTH RESEARCH, LTD.
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
NOV 15 1999
NO. C15830-96
DEAN HELLER
SECRETARY OF STATE
The undersigned, being the President and the Secretary, respectively,
of Health Research, Ltd., a Nevada Corporation, hereby certify that, by majority
vote of the Board of Directors and Shareholders at a meeting held on November 8,
1999, a resolution was voted and adopted to amend the original Articles of
Incorporation as follows:
The undersigned further certify that ARTICLE ONE of the original
Articles of Incorporation filed on the 26th day of July 1996, herein is amended
to include as follows:
1. NAME OF CORPORATION: TRANSAMERICAN HOLDINGS, INC.
The undersigned hereby certify that they have, on this 8th day of
November 1999, executed this Certificate amending the original Articles of
Incorporation heretofore filed with the Secretary of State of Nevada.
/s/ FRED TANNOUS
-----------------------
Fred Tannous, President
/s/ ERIC T. MANLUNAS
------------------------
Eric T. Manlunas, Secretary
BYLAWS
OF
TRANSAMERICAN HOLDINGS, INC.
ARTICLE I
Offices
SECTION 1. Principal Offices
The location of the principal executive office of the Corporation shall be fixed
by the Board of Directors. It may be located at any place within or outside the
State of Nevada. The Secretary of this Corporation shall keep the original or a
certified copy of these Bylaws, as amended to date, at the principal executive
office of the Corporation if this office is located in Nevada. If this office is
located outside Nevada, the Bylaws shall be kept at the principal business
office of the Corporation within Nevada. The Officers of this Corporation shall
cause the Corporation to file an annual statement with the Secretary of State of
Nevada as required by the Nevada Corporations Code specifying the street address
of the Corporation's principal executive office.
SECTION 2. Other Offices
The Corporation may also have offices at such other places as the Board of
Directors may from time to time designate, or as the business of the Corporation
may require.
ARTICLE II
Shareholders' Meetings
SECTION 1. Place of Meetings
All meetings of the shareholders shall be held at the principal executive office
of the Corporation or at such other place as may be determined by the Board of
Directors.
SECTION 2. Annual Meetings
The annual meeting of the shareholders shall be held each year on the second
Tuesday of June at the hour of 10:00 a.m., at which time the shareholders shall
elect by plurality vote a Board of Directors and transact any other proper
business. If this date falls on a legal holiday, then the meeting shall be held
on the following business day at the same hour.
SECTION 3. Special Meetings
Special meetings of the shareholders, for any purpose or purposes, whatsoever,
may be called by the Board of Directors, the Chairperson of the Board of
Directors, the President, or by the Secretary at the written request of one or
more shareholders holding at least ten percent (10%), collectively, of the
voting power or the Corporation, or as otherwise required by law.
<PAGE>
SECTION 4. Notices of Meetings
Except as otherwise provided by statute, notices of meetings, annual or special,
shall be given in writing, to shareholders entitled to vote at the meeting, by
the Secretary or an Assistant Secretary or, if there be no such Officer, or in
the case of his or her neglect or refusal, by any Director or shareholder.
Such notices shall be given either personally or by first-class mail or other
means of written communication, addressed to the shareholder at the address of
such shareholder appearing on the stock transfer books of the Corporation or as
given by the shareholder to the Corporation for the purpose of notices. Notice
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting.
Such notice shall state the place, date and time of the meeting and (1) in the
case of a special meeting, the general nature of the business to be transacted,
and that no other business may be transacted; or (2) in the case of an annual
meeting, those matters which the Board at the time of the mailing of the notice,
intends to present for action by the shareholders; but, subject to the
provisions of Section 6 of this article, any proper matter may be presented at
the annual meeting for such action. The notice of any meeting at which Directors
are to be elected shall include the names of the nominees which, at the time of
the notice, the Board of Directors intends to present for election. Notice of
any adjourned meeting need not be given unless a meeting is adjourned for
forty-five (45) days or more from the date set for the original meeting.
SECTION 5: Waiver of Notice
The transactions of any meeting of shareholders, however called and noticed, and
wherever held, are as valid as though transacted at a meeting duly held after
regular call and notice, if a quorum is present, whether in person or by proxy,
and if, either before or after the meeting, each of the persons entitled to
vote, not present in person or by proxy, signs a written waiver of notice or a
consent to the holding of the meeting or an approval of the minutes thereof. All
such waivers or consents shall be filed with the Corporate records or made part
of the minutes of the meeting. Neither the business to be transacted at the
meeting, nor the purpose of any special meeting of shareholders need be
specified in any written waiver of notice, except as provided in Section 6 of
this Article.
SECTION 6: Special Notice and Waiver of Notice Requirements
Except as provided below, any shareholder approval at a meeting, with respect to
the following proposals, shall be valid only if the general nature of the
proposal so approved was stated in the notice of meeting, or in any written
waiver of notice.
a. Approval of a contract or other transaction between the Corporation
and one or more of its Directors or between the Corporation and any
corporation, firm, or association in which one or more of the
Directors has a material financial interest,
b. Amendment of the Articles of Incorporation after any shares have been
issued;
c. Approval of the principal terms of a reorganization;
d. Election to voluntarily wind up and dissolve the Corporation;
e. Approval of a plan of distribution of shares as part of the winding up
of the Corporation.
<PAGE>
Approval of the above proposals at a meeting shall be valid with or without such
notice, if it is by the unanimous approval of those entitled to vote at the
meeting.
SECTION 7: Action Without Meeting
Any action that may be taken at any annual or special meeting of shareholders
may be taken without a meeting and without prior notice if a consent, in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding shares 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.
Unless the consent of all shareholders entitled to vote have been solicited in
writing, notice of any shareholders' approval, with respect to any one of the
following proposals, without a meeting, by less than unanimous written consent
shall be given at least ten (10) days before the consummation of the action
authorized by such approval:
a. Approval of a contract or other transaction between the Corporation
and one or more of its Directors or another corporation, firm or
association in which one or more of its Directors has a material
financial interest;
b. To indemnify an agent of the Corporation;
c. To approve the principal terms of a reorganization, or
d. Approval of a plan of distribution as part of the winding up of the
corporation.
Prompt notice shall be given of the taking of any other Corporate action
approved by shareholders without a meeting by less than a unanimous written
consent to those shareholders entitled to vote who have not consented in
writing.
Notwithstanding any of the foregoing provisions of this section, and except as
provided in Article III, Section 4 of these Bylaws, Directors may not be elected
by written consent except by the unanimous written consent of all shares
entitled to vote for the election of Directors.
A written consent may be revoked by a writing received by the Corporation prior
to the time that written consents of the number of shares required to authorize
the proposed action have been filed with the Secretary of the Corporation, but
may not be revoked thereafter. Such revocation is effective upon its receipt by
the Secretary of the Corporation.
SECTION 8: Quorum and Shareholder Action
A majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders. If a quorum is present,
the affirmative vote of the majority of shareholders represented at the meeting
and entitled to vote on any matter shall be the act of the shareholders, unless
the vote of a greater number is required by law and except as provided in the
following paragraphs of this section.
The shareholders present at a duty called or held meeting, at which a quorum is
present may continue to transact business until adjournment notwithstanding the
<PAGE>
withdrawal of enough shareholders to leave less than a if any action is approved
by at least a majority of the shares required quorum, to constitute a quorum.
In the absence of a quorum, any meeting of shareholders may be adjourned from
time to time by the vote of a majority of the shares represented either in
person or by proxy, but no other business may be transacted except as provided
in the foregoing provisions of this section.
SECTION 9: Voting
Only shareholders of record on the record date fixed for voting purposes by the
Board of Directors pursuant to Article VIII, Section 3 of these Bylaws, or, if
there be no such date fixed, on the record dates given below, shall be entitled
to vote at a meeting.
If no record date is fixed:
a. The record date for determining shareholders entitled to notice of, or
to vote, at a meeting of shareholders, shall be at the close of
business on the business day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the business
day next preceding the day on which the meeting is held.
b. The record date for determining the shareholders entitled to give
consent to corporate actions in writing without a meeting, when no
prior action by the Board is necessary, shall be the day on which the
first written consent is given.
c. The record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the Board adopts
the resolution relating, thereto, or the 60th day prior to the date of
such other action, whichever is later.
Every shareholder entitled to vote shall be entitled to one vote for each share
held, except as otherwise provided by law, by the Articles of Incorporation or
by other provisions of these Bylaws. Except with respect to elections of
Directors, any shareholder entitled to vote may vote part of his or her shares
in favor of a proposal and refrain from voting the remaining shares or vote them
against the proposal. If a shareholder falls to specify the number of shares he
or she is affirmatively voting, it will be conclusively presumed that the
shareholder's approving vote is with respect to all shares the shareholder is
entitled to vote.
At each election of Directors, shareholders shall not be entitled to cumulate
votes unless the candidates' names have been placed in nomination before the
commencement of the voting and a shareholder has given notice at the meeting,
and before the voting has begun, of his or her intention to cumulate votes. If
any shareholder has given such notice then all shareholders entitled to vote may
cumulate their votes by giving one candidate a number of votes equal to the
number of Directors to be elected multiplied by the number of his or her shares
or by distributing such votes on the same principle among any number of
candidates as he or she thinks fit. The candidates receiving the highest number
of votes, up to the number of Directors to be elected, shall be elected. Votes
cast against a candidate or which are withheld shall have no effect. Upon the
demand of any shareholder made before the voting begins, the election of
Directors shall be by ballot rather than by voice vote.
<PAGE>
SECTION 10: Proxies
Every person entitled to vote shares may authorize another person or persons to
act by proxy with respect to such shares by filing a written proxy with the
Secretary of the Corporation, executed by such person or his or her duly
authorized agent.
A proxy shall not be valid after the expiration of eleven (11) months from the
date thereof unless otherwise provided in the proxy. Every proxy shall continue
in full force and effect until revoked by the person executing it prior to the
vote pursuant thereto.
ARTICLE III
DIRECTORS
SECTION 1: Powers
Subject to any limitations in the Articles of Incorporation and to the
provisions of the Nevada Corporations Code, the business and affairs of the
Corporation shall be managed and all Corporate powers shall be exercised by, or
under the direction of, the Board of Directors.
SECTION 2: Number
The authorized number of Directors shall be at least one (1) and no more than
fifteen (15). After issuance of shares, this Bylaw may only be amended by
approval of a majority of the outstanding shares entitled to vote; provided,
moreover, that a Bylaw reducing the fixed number of Directors to a number less
than one (1) cannot be adopted unless in accordance with the additional
requirements of Article IX of these Bylaws.
SECTION 3: Election and Tenure of Office
The Directors shall be elected at the annual meeting of the shareholders and
hold office until the next annual meeting and until their successors have been
elected and qualified.
SECTION 4: Vacancies
A vacancy on the Board of Directors shall exist in the case of death,
resignation, or removal of any Director or in case the authorized number of
Directors is increased, or in case the shareholders fall to elect the fully
authorized number of Directors at any annual or special meeting of the
shareholders at which any Director is elected. The Board of Directors may
declare vacant the office of a Director who has been declared of unsound mind by
an order of court or who has been convicted of a felony.
Except for a vacancy created by the removal of a Director, vacancies on the
Board of Directors may be filled by approval of the Board or, if the number of
Directors then in office is less than a quorum, by (1) the unanimous written
consent of the Directors then in office; (2) the affirmative vote of a majority
of the Directors then in office at a meeting held pursuant to notice or waivers
of notice complying with this Article of these Bylaws; or (3) a sole remaining
Director. Vacancies occurring, on the Board by reason of the removal of
Directors may be filled only by approval of the shareholders. Each Director so
elected shall hold office until the next annual meeting of the shareholders and
until his or her successor has been elected and qualified.
<PAGE>
The shareholders may elect a Director at any time to fill a vacancy not filled
by the Directors. Any such election by written consent other than to fill a
vacancy created by the removal of a Director requires the consent of a majority
of the outstanding shares entitled to vote.
Any Director may resign effective upon submitting written notice to the
Chairperson of the Board of Directors, the President, the Secretary or to the
Board of Directors unless the notice specifies a later time for the
effectiveness of the resignation. If the resignation is effective at a later
time, a successor may be elected to take office when the resignation becomes
effective. Any reduction of the authorized number of Directors does not remove
any Director prior to the expiration of such Director's term in office.
SECTION 5: Removal
Any or all of the Directors may be removed without cause if such removal is
approved by a majority of the outstanding shares entitled to vote.
The Superior Court of the proper county may, on the suit of shareholders holding
at least 25 percent of the number of outstanding shares of any class, remove
from office any Director in case of fraudulent or dishonest acts or gross abuse
of authority or discretion with reference to the Corporation and may bar from
reelection any Director so removed for a period prescribed by the court. The
Corporation shall be made a party to such action.
SECTION 6: Place of Minutes
Meetings of the Board of Directors shall be held at any place, within or without
the State of Nevada, which has been designated in the notice of the meeting or,
if not stated in the notice or if there is no notice, at the principal executive
office of the Corporation or as may be designated from time to time by
resolution of the Board of Directors. Meetings of the Board may be held through
use of conference telephone or similar communications equipment, as long as all
Directors participating in the meeting can hear one another.
SECTION 7: Annual, Regular and Special Directors' Meetings
An annual meeting of the Board of Directors shall be held without notice
immediately after and at the same place as the annual meeting of the
shareholders.
Other regular meetings of the Board of Directors shall be held at such times and
places as may be fixed from time to time by the Board of Directors. Call and
notice of these regular meetings shall not be required.
Special meetings of the Board of Directors may be called by the Chairperson of
the Board, the President, Vice President, Secretary, or any two Directors.
Special meetings of the Board of Directors shall be held upon four (4) days'
notice by mail, or forty-eight (48) hours' notice delivered personally or by
telephone or telegraph. A notice or waiver of notice need not specify the
purpose of any special meeting of the Board of Directors.
If any meeting is adjourned for more than 24 hours, notice of the adjournment to
another time or place shall be given before the time of the resumed meeting to
all Directors who were not present at the time of adjournment of the original
meeting.
<PAGE>
SECTION 8: Quorum and Board Action
A quorum for all meetings of the Board of Directors shall consist of two (2) of
the authorized number of Directors until changed by amendment to this Article of
these Bylaws.
Every act or decision done or made by a majority of the Directors present at a
meeting duly held at which a quorum is present is the act of the Board. A
meeting at which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of Directors, if any action taken is approved by
at least a majority of the required quorum for such meeting.
A majority of the Directors present at a meeting may adjourn any meeting to
another time and place, whether or not a quorum is present at the meeting.
SECTION 9: Waiver of Notice
The transactions of any meeting of the Board, however called and noticed or
wherever held, are as valid as though undertaken at a meeting duly held after
regular call and notice if a quorum is present and if, either before or after
the meeting, each of the Directors not present signs a written waiver of notice,
a consent to holding the meeting, or an approval of the minutes thereof All such
waivers, consents, and approvals shall be filed with the Corporate records or
made a part of the minutes of the meeting. Waivers of notice or consents need
not specify the purpose of the meeting.
SECTION 10. Action Without Meeting
Any action required or permitted to be taken by the Board may be taken without a
meeting, if all members of the Board shall individually or collectively consent
in writing to such action. Such written consent or consents shall be filed with
the minutes of the proceedings of the Board. Such action by written consent
shall have the same force and effect as a unanimous vote of the Directors.
SECTION 11: Compensation
No salary shall be paid Directors, as such, for their services but, by
resolution, the Board of Directors may allow a reasonable fixed sum and expenses
to be paid for attendance at regular or special meetings. Nothing contained
herein shall prevent a Director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attendance at meetings.
ARTICLE IV
OFFICERS
SECTION 1: Officers
The Officers of the Corporation shall be a President, a Vice President, a
Secretary, and a Treasurer who shall be the Chief financial Officer of the
Corporation. The Corporation also may have such other Officers with such titles
and duties as shall be determined by the Board of Directors. Any number of
offices may be held by the same person.
<PAGE>
SECTION 2: Election
All officers of the Corporation shall be chosen by, and serve at the pleasure
of, the Board of Directors.
SECTION 3: Resignation and Removal
An officer may be removed at any time, either with or without cause, by the
Board. An officer may resign at any time upon written notice to the Corporation
given to the Board, the President, or the Secretary of the Corporation. Any such
resignation shall take effect at the date of receipt of such notice or at any
other time specified therein. The removal or resignation of an officer shall be
without prejudice to the rights, if any, of the officer or the Corporation under
any contract of employment to which the officer is a party.
SECTION 4: President
The President shall be the Chief Executive Officer and General Manager of the
Corporation and shall, subject to the direction and control the Board of
Directors, have general supervision, direction, and control of the business and
affairs of the Corporation. He or she shall preside at all meetings of the
shareholders and Directors and be an ex-officio member of all the standing
committees, including the Executive Committee, if any, and shall have the
general powers and duties of management usually vested in the office of
President of a corporation and shall have such other powers and duties as may
from time to time be prescribed by the Board of Directors or these Bylaws.
SECTION 5: Vice President
In the absence or disability of the President, the Vice Presidents, in order of
their rank as fixed by the Board of Directors (or if not ranked, the Vice
President designated by the Board) shall perform all 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. Each Vice President shall have such other
powers and perform such other duties as may from time to time be prescribed by
the Board of Directors or these Bylaws.
SECTION 6: Secretary
The Secretary shall keep, or cause to be kept, at the principal executive office
of the Corporation, a book of minutes of all meetings of Directors and
shareholders. The minutes shall state the time and place of holding of all
meetings; whether regular or special, and if special, how called or authorized,
the notice thereof given or the waivers of notice received; the names of those
present at Directors' meetings; the number of shares present or represented at
shareholders' meetings; and an account of the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal executive office
of the Corporation, or at the office of the Corporation's transfer agent, a
share register, showing the names of the shareholders and their addresses, the
number and classes of shares held by each, the number and date of certificates
issued for shares, and the number and date of cancellation of every certificate
surrendered for cancellation.
The Secretary shall keep, or cause to be kept, at the principal executive office
of the Corporation, the original or a copy of the Bylaws of the Corporation, as
amended or otherwise altered to date, certified by him or her.
<PAGE>
The Secretary shall give, or cause to be given, notice of all meetings of
shareholders and Directors required to be given by law or by the provisions of
these Bylaws.
The Secretary shall have charge of the seal of the Corporation and have such
other powers and perform such other duties as may from time to time be
prescribed by the Board of these Bylaws.
In the absence or disability of the Secretary, the Assistant Secretaries if any,
in order of their rank as fixed by the Board of Directors (or if not ranked, the
Assistant Secretary designated by the Board of Directors), shall have all the
powers of, and be subject to all the restrictions upon, the Secretary. The
Assistant Secretaries, if any, shall have such other powers and perform such
other duties as may from time to time be prescribed by the Board of Directors or
these Bylaws.
SECTION 7: Treasurer
The Treasurer shall be the Chief Financial Officer of the Corporation and shall
keep and maintain, or cause to be kept and maintained, adequate and correct
books and records of accounts of the properties and business transactions of the
Corporation.
The Treasurer shall deposit monies and other valuables in the name and to the
credit of the Corporation with which depositories as may be designated by the
Board of Directors. He or she shall disburse the funds of the Corporation in
payment of the just demands against the Corporation as authorized by the Board
of Directors; shall render to the President and Directors, whenever they request
it, an account of all his or her transactions as Treasurer and of the financial
condition of the corporation; and shall have such other powers and perform such
other duties as may from time to time be prescribed by the Board of Directors or
the Bylaws.
In the absence or disability of the Treasurer, the Assistant Treasurers, if any,
in order of their rank as fixed by the Board of Directors (or if not ranked, the
Assistant Treasurer designated by the Board of Directors), shall perform all the
duties of the Treasurer and, when so acting, shall have all the powers of and be
subject to all the restrictions upon the Treasurer. The Assistant Treasurers, if
any, shall have such other powers and perform such other duties as may from time
to time be prescribed by the Board of Directors or these Bylaws.
SECTION 8: Compensation
The Officers of this Corporation shall receive such compensation for their
services as may be fixed by resolution of the Board of Directors.
ARTICLE V
EXECUTIVE COMMITTEES
SECTION 1: At Option of Board of Directors
The Board may, by resolution adopted by a majority of the authorized number of
Directors, designate one or more committees, each consisting of two or more
Directors, to serve at the pleasure of the Board. Any such committee, to the
extent provided in the resolution of the Board, shall have all the authority of
the Board, except with respect to:
<PAGE>
a. The approval of any action for which the approval of the shareholders
or approval of the outstanding shares is also required.
b. The filling of vacancies on the Board or in any committee.
c. The fixing of compensation of the Directors for serving on the Board
or on any committee.
d. The amendment or repeal of Bylaws or the adoption of new Bylaws.
e. The amendment or repeal of any resolution of the Board which by its
express terms is not so amendable or repealable.
f. A distribution to the shareholders of the Corporation, except at a
rate or in a periodic amount or within a price range determined by the
Board.
g. The appointment of other committees of the Board or the members
thereof
ARTICLE VI
CORPORATE RECORDS AND REPORTS
SECTION 1: Inspection by Shareholders
The share register shall be open to inspection and copying by any shareholder or
holder of a voting trust certificate at any time during usual business hours
upon written demand on the Corporation, for a purpose reasonably related to such
holder's interest as a shareholder or holder of a voting trust certificate. Such
inspection and copying under this section may be made in person or by agent or
attorney.
The accounting books and records of the Corporation and the minutes of
proceedings of the shareholders and the Board and committees of the Board shall
be open to inspection upon written demand of the Corporation by any shareholder
or holder of a voting trust certificate at any reasonable time during usual
business hours, for any proper purpose reasonably related to such holder's
interests as a shareholder or as the holder of such voting trust certificate.
Such inspection by a shareholder or holder of voting trust certificate may be
made in person or by agent or attorney, and the right of inspection includes the
right to copy and made extracts.
Shareholders shall also have the right to inspect the original or copy of these
Bylaws, as amended to date and kept at the Corporation's principal executive
office, at all reasonable times during business hours.
SECTION 2: Inspection by Directors
Every Director shall have the absolute right at any reasonable time to inspect
and copy all books, records and documents of every kind and to inspect the
physical properties of the Corporation, domestic or foreign. Such inspection by
a Director may be made in person or by agent or attorney. The right of
inspection includes the right to copy and make extracts.
<PAGE>
SECTION 3: Right to Inspect Written Records
If any record subject to inspection pursuant to this chapter is not maintained
in written form, a request for inspection is not complied with unless and until
the Corporation at its expense makes such record available in written form.
SECTION 4: Waiver of Annual Report
The annual report to shareholders is hereby expressly waived, as long as this
Corporation has less than 100 holders of record of its shares. This waiver shall
be subject to any provision of law allowing, shareholders to request the
Corporation to furnish financial statements.
SECTION 5: Contracts, etc.
The Board of Directors, except as otherwise provided in the Bylaws, may
authorize any officer or officers, agent or agents, to enter into any contract
or execute any instrument in the name and on behalf of the Corporation. Such
authority may be general or confined to specific instances. Unless so authorized
by the Board of Directors, no officer, agent, or employee shall have any power
or authority to bind the Corporation by any contract, or to pledge its credit,
or to render it liable for any purpose or amount.
ARTICLE VII
INDEMNIFICATION AND INSURANCE OF CORPORATE AGENTS
SECTION 1: Indemnification
The Directors and Officers of the Corporation shall be indemnified by the
Corporation to the fullest extent not prohibited by the Nevada Corporations
Code.
SECTION 2: Insurance
The Corporation shall have the power to purchase and maintain insurance on
behalf of any agent against any liability asserted against or incurred by the
agent in such capacity or arising, out of the agent's status as such, whether or
not the Corporation would have the power to indemnify the agent against such
liability.
ARTICLE VIII
SHARES
SECTION 1: Certificates
The Corporation shall issue certificates for its shares when fully paid.
Certificates of stock shall be issued in numerical order, and shall state the
name of the record holder of the shares represented thereby; the number,
designation, if any, and the class or series of shares represented thereby; and
contain any statement or summary required by any applicable provision of the
Nevada Corporations Code.
Every certificate for shares shall be signed in the name of the Corporation by
(1) the Chairperson or Vice Chairperson of the Board or the President or a Vice
President and (2) by the Treasurer or the Secretary or an Assistant Secretary.
<PAGE>
SECTION 2: Transfer of Shares
Upon surrender to the Secretary or transfer agent of the Corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment, or authority to transfer, shall be the duty of the
Secretary of the Corporation to issue a new certificate to the person entitled
thereto, to cancel the old certificate, and to record the transaction upon the
share register of the Corporation.
SECTION 3: Record Date
The Board of Directors may fix a time in the future as record date for the
determination of the shareholders entitled to notice of and to vote at any
meeting of shareholders or entitled to receive payment of any dividend or
distribution, or any allotment of rights, or to exercise rights in respect to
any other lawful action. The record date so fixed shall not be more than sixty
(60) days nor less than ten (10) days prior to the date of the meeting nor more
than sixty (60) days prior to any other action.
When a record date is so fixed, only shareholders of record on that date are
entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise the rights as the case may
be notwithstanding any transfer of any shares on the books of the Corporation
after the record date.
ARTICLE IX
AMENDMENT OF BYLAWS
SECTION 1: By Shareholders
Bylaws may be adopted, amended or repealed by the affirmative vote or by the
written consent of holders of a majority of the outstanding shares of the
Corporation entitled to vote. However, a Bylaw amendment which reduces the fixed
number of Directors to a number less than three (3) shall not be effective if
the votes cast against the amendment or the shares not consenting to its
adoption are equal to more than 15 percent of the outstanding shares entitled to
vote.
SECTION 2: By Directors
Subject to the night of shareholders to adopt, amend or repeal Bylaws, the
Directors may adopt, amend or repeal any Bylaw, except that a Bylaw amendment
changing the authorized number of Directors may be adopted by the Board of
Directors only if prior to the issuance of shares.
ARTICLE X
REPAYMENT OBLIGATIONS
Any payments made to an officer of the Corporation such as a salary, commission,
bonus, interest, or rent, or entertainment expense incurred by him or her which
shall be disallowed in whole or in part as a deductible expense by the Internal
revenue Service, shall be reimbursed by such officer to the Corporation to the
full extent of such disallowance. It be the duty of the Directors of this
Corporation as a Board to enforce payment of each amount disallowed. In lieu of
payment by the officer, subject to the determination of the Directors,
proportionate amounts may be withheld from said officer's future compensation
payments until the amount owed to the Corporation has been recovered.
APPROVED AND ADOPTED this 8th day of NOVEMBER, 1999.
/s/ Michael Savage
--------------
Michael Savage
President
CERTIFICATE OF SECRETARY
I hereby certify that I am the President of TransAmerican Holdings,
Inc., that the foregoing Bylaws, consisting of 13 pages, constitute the
code of Bylaws of TransAmerican Holdings, Inc., as duly adopted at a
regular meeting of Directors of the corporation held November 8, 1999.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 8th day of
November, 1999.
/s/ MICHAEL SAVAGE
-------------
Michael Savage
Secretary
March 2, 2000
TransAmerican Holdings, Inc.
468 N. Camden Drive, Suite 200
Beverly Hills, CA 90210
Re: Lock-Up of Securities
Gentlemen:
The undersigned is the record owner of 9,200,000 shares of the common stock of
TransAmerican Holdings, Inc, par value $.001 per share (the "Shares"). Such
Shares, in time, will be eligible for sale under Rule 144 promulgated under the
Secur8ities Act of 1933, as amended, subject to certain limitations included in
said Rule.
The undersigned, together with Michael Savage, Fred E. Tannous and Frederick
Manlunas, and each of them, agree as follows:
1. The undersigned will not sell, contract to sell, or make any other
disposition of , or grant any purchase option for the sale of, any of
the shares of the common stock owned by the undersigned, directly or
indirectly, until such time as the Company has entered into a merger or
acquisition or the Company is no longer classified as a "blank check"
company, as that term is defined in the Form 10-SB 12G on file with the
Securities and Exchange Commission, whichever first occurs.
2. The undersigned acknowledges that Manhattan Transfer Registrar Co., 58
Dorchester Road, Lake Ronkonkoma, NY 11779, the transfer agent for the
Company, has been advised of the restrictions described herein and that
any attempts by the undersigned to violate said restriction may result
in legal action(s) by the Company. The undersigned further agrees, upon
the request of the Company, that in addition to any other restrictions
reflecting that the Shares have not been registered under the
Securities Act of 1933, as amended, may be placed on individual
certificates issued.
Very truly yours,
Najib E. Choufani
March 2, 2000
TransAmerican Holdings, Inc.
468 N. Camden Drive, Suite 200
Beverly Hills, CA 90210
Re: Lock-Up of Securities
Gentlemen:
The undersigned is the record owner of 500,000 shares of the common stock of
TransAmerican Holdings, Inc, par value $.001 per share (the "Shares"). Such
Shares, in time, will be eligible for sale under Rule 144 promulgated under the
Secur8ities Act of 1933, as amended, subject to certain limitations included in
said Rule.
The undersigned, together with Najib Choufani, Fred E. Tannous and Frederick
Manlunas, and each of them, agree as follows:
1. The undersigned will not sell, contract to sell, or make any other
disposition of , or grant any purchase option for the sale of, any of
the shares of the common stock owned by the undersigned, directly or
indirectly, until such time as the Company has entered into a merger or
acquisition or the Company is no longer classified as a "blank check"
company, as that term is defined in the Form 10-SB 12G on file with the
Securities and Exchange Commission, whichever first occurs.
2. The undersigned acknowledges that Manhattan Transfer Registrar Co., 58
Dorchester Road, Lake Ronkonkoma, NY 11779, the transfer agent for the
Company, has been advised of the restrictions described herein and that
any attempts by the undersigned to violate said restriction may result
in legal action(s) by the Company. The undersigned further agrees, upon
the request of the Company, that in addition to any other restrictions
reflecting that the Shares have not been registered under the
Securities Act of 1933, as amended, may be placed on individual
certificates issued.
Very truly yours,
Michael Savage
[BARRY L. FRIEDMAN, P.C. LETTERHEAD]
To Whom It May Concern: February 28, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant
consents to the inclusion of their report of February 28, 2000, on the Financial
Statements of TRANSAMERICAN HOLDINGS, Inc. (Formerly Health Research, Inc.), as
of December 31, 1999, in any filings that are necessary now or in the near
future with the U.S. Securities and Exchange Commission.
Very truly yours,
/s/ BARRY L. FRIEDMAN
- -------------------------------
Barry L. Friedman
Certified Public Accountant
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 9,200
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,200
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,200
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 11,300
<OTHER-SE> 3,000
<TOTAL-LIABILITY-AND-EQUITY> 9,200
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,100)
<EPS-BASIC> (.002)
<EPS-DILUTED> (.002)
</TABLE>
