SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-SB
General Form for Registration of Securities of
Small Business Issuers Under Section 12(b) or (g) of
The Securities Exchange Act of 1934
FOURTHCAI, INC.
-------------------------------
(Name of Small Business Issuer)
NEVADA 86-0979534
-------------- ---------------------
(State of (I.R.S. Employer
Incorporation) Identification Number)
4300 North Miller Rd. Suite 120 Scottsdale, Arizona 85251
-----------------------------------------------------------
(Address of Principal Executive Offices Including Zip Code)
(480) 421 2882
--------------------------
(Issuers Telephone Number)
Securities to be registered pursuant to Section 12(b) of the Act: NONE
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK
$.0001 par value
(Title of Class)
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PART I
ITEM 1. BUSINESS
Fourthcai, Inc., was incorporated in The State of Nevada on September 3,
1999. Its purpose is to engage in any lawful corporate activity, which includes
mergers and acquisitions. The issuer is in a development stage and has no
operations to date other than issuing of shares to the original shareholders. It
was formed to provide a method for a private domestic or foreign company to
become a public reporting company thereby causing their shares to be qualified
to trade in the domestic secondary markets.
There have been no bankruptcy, receivership or similar proceeding in the
Company's history.
There has been no material reclassification or merger in the Company's
short history.
The issuer will attempt to locate another business for the purpose of
merging that company into the issuer. It is possible that the company will
become a wholly owned subsidiary of the issuer or it may sell or transfer assets
into the issuer and not merge. The issuer is not able to know if it will be
successful in locating and merging with or acquiring another entity.
There are certain benefits to being a reporting company with a publicly
traded class of stock. They are perceived as follows:
* increased ability to raise capital
* enhanced visibility in the financial community particularly helpful to
raise debt if needed
* presence in the capital markets of the United States
* ability to use registered securities to acquire other companies and or
their assets
* improved competitive position
* increased corporate prestige
* key employees compensation through stock options
* shareholder liquidity and corporate valuation
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An entity may be interested in merging with the issuer if it is interested
in using public securities to make acquisitions of other companies or one that
is interested in becoming public without substantial dilution of its stock.
Other targeted companies may be those which have not been able to locate an
underwriter with acceptable terms; one that feels it can raise capital on more
favorable terms as a public entity or a foreign company seeking entry into the
United States stock markets.
The Company's business has numerous associated risks such as; competition,
no operating history, lack of any agreements with possible targeted companies,
management control, lack of market research, stock dilution, taxation, target
company's need for audited financial, conflicts of interest (this issue is
discussed in ITEM 5) and possible computer problems.
The business of seeking mergers with other companies or acquiring other
companies is highly competitive. There are many large corporations and venture
capital firms that seek other entities with which to merge or acquire. These
corporations and venture capital firms are better financed than the issuer and
have more expertise in the field of mergers and acquisitions. The issuer will
not be a significant competitor in this field.
The issuer is without operating history. It has no revenue and limited
assets. The Company will in all likelihood operate at a loss and will be unable
to reverse that situation until a merger or acquisition occurs. There is no
targeted company nor any assurance the company will be able to close a business
transaction needed to reverse its anticipated losses.
The issuer has no current agreement with respect to a merger or acquisition
with a targeted company. There is no assurance that the Company will be
successful in its plan to merge or acquire another entity. There has been no
industry identification by management nor has there been a business model
established consisting of the required operating history, assets and revenues of
a target company. Therefore, the issuer may enter into an agreement which may
result in a business combination with an entity without significant operating
history, revenues or assets precluding the potential for current earnings or
increased net worth.
The management of the issuer consists of its only officer. He will devote a
portion of his time to the business of the Company attempting to locate and
close with a potential targeted company. There is neither compensation paid nor
an agreement to enter into such a contract in the future. The loss of this
individual could adversely affect the Company's development and its continued
operations.
The Company has performed limited research in an attempt to determine
whether demand exists for these types of transactions. Even if further research
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determines that the demand does in fact exist, there is no assurance that the
issuer will be able to conclude a transaction.
The successful conclusion of an acquisition or merger by the issuer will
probably result in the issuance of securities to the shareholders of the
targeted company. This transaction will cause, in all probability, the
shareholders of the targeted company gaining control of the issuer and a change
in the existing management. It is the intention of the issuer to structure a
transaction with a targeted company to minimize the state and federal tax
consequences as they apply to both parties. There can be no assurance that all
the statutory requirements can be met in the proposed reorganization or that the
parties will receive tax benefits desired in a transfer of stock or assets.
The issuer will seek those companies, which have audited financial
statements or assure the issuer that said statements will be furnished within
sixty days of closing. If audited financial statements are not available at
closing, the issuer will require representations that the statements, when
audited, will not materially differ from the unaudited statements presented.
There are no assurances that a viable candidate for merger will agree with the
issuer's request, which would result in the failure of the transaction to close.
The issuer will require that the targeted company be computer compliant for
the year 2000. If the target is not compliant it will be necessary to disclose
what steps it intends to take in order to eliminate any business disruption
created by noncompliance. There can be no assurance that the company will not
close a transaction with a company that has not or is unable to correct the year
2000 computer problems. The impact of said transaction could be very difficult
to ascertain.
The issuer does not believe it could be subject to regulation under the
Investment Company Act, because it will not be engaged in the business of
investing or trading securities. However, if the Company engages in operations
which result in it holding passive investments in more than one other company,
in could be subject to the regulations found in the Investment Company Act of
1940 and it would have to register under said act which could result in
significant registration and compliance costs.
The issuer has no full time employees. The president of the Company will
devote a portion of his time to the activities of the issuer without
compensation.
The Company will send an annual report to its security holders, which shall
contain audited financial statements. The issuer is electronically filing this
Registration Statement with the Securities Exchange Commission, without an
obligation to do so under the Securities Act of 1934, to comply with the
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reporting requirements as promulgated by the commission. As such, the Company
will advise the shareholders that the SEC maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC at http://www.sec.gov.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
During the next twelve months the issuer intends to locate, analyze,
acquire or merge with a targeted company. At this time, the issuer has no
company in mind. There has been no negotiation with any company neither on
behalf of the issuer nor by any officer, director or agent of the issuer
regarding any type of acquisition or merger. The issuer will solicit targeted
companies through the utilization of contacts in business and professional
communities. The issuer intends to solicit directly or may engage consultants or
advisors to assist it in reaching its objective. Payment will be made to these
consultants and advisors if a successful acquisition or merger occurs because of
their efforts. The payment may consist of cash or some stock in the surviving
entity or a combination of both.
The satisfaction of the issuer's cash requirements for the next twelve
months will be met in that Corporate Architects, Inc., the issuer's principal
shareholder, has agreed to advance to the Company the additional funds needed
for operations and those amounts designated for costs associated with a search
for and completion of an acquisition. The principal shareholder has no
expectation of reimbursement of the funds advanced unless the new owners of the
Company decide to pay all or a portion thereof. A limit as to the minimum or
maximum amounts advanced by the principal shareholder has not been set. The
issuer will not borrow funds to pay management, agents, consultants, advisors or
promoters. The Company will not merge with, acquire or purchase assets of an
entity in which the Company's officers, directors or shareholders or any
affiliate or agent hold an equity position or is an officer or director.
The Company's business plan is to locate certain companies that may wish to
merge with the issuer in some fashion. This targeted company would desire the
perceived advantages of a merger with a public, reporting company. The perceived
advantages may enhance the company's ability to attract investment, utilize
securities for acquisition, provide liquidity and numerous other benefits. No
particular industry has been identified nor is this search confined to a
specific geographical area. It is not anticipated by management that the Company
will be able to participate in any more than one merger because of its limited
assets and resources.
The issuer may merge or acquire a company in early stage development
needing additional capital to launch new products, increase marketing or improve
quality. The utilization of the public market may be beneficial in raising the
required capital.
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The issuer does not have nor will it acquire capital to supply targeted
companies. It is the position of management that it can present to the candidate
the opportunity to acquire controlling interest in a public company without the
substantial costs, both in time and money, of an initial public offering.
Management has performed only limited research in this area.
The officer and director of the issuer will undertake the responsibility of
finding and analyzing new business opportunities. He will perform this task
individually and possibly with the help of other consultants and agents. The
agents or consultants will not receive a cash fee from the issuer said fee will
have to be assumed by the target company. The officer is experienced in the
analysis of companies and will be able to determine the existence of the primary
requirements of a good business structure consisting of financial, management,
products, distribution, need for further research and development, growth
potential and other material requirements. The issuer will have total discretion
in determining the type of company best suited for a business combination.
The issuer will be subject to all the reporting requirements of the
Securities Exchange Act. Said Act requires, among other things, that a reporting
company file its audited financial statements. The issuer will not merge or
acquire a company that does not have or will not have audited financials within
a reasonable period of time, to meet the requirements of the Exchange Act. If
the merger candidate is unable to produce audited financial statements within
sixty days from the filing of the 8 K announcing the consummation of the merger
or said financial statements fail to comply with the Exchange Act, the closing
documents will provide for the dissolution of the transaction.
A target company may want to establish a public trading market for its
securities. It may desire to avoid what it perceives to be an adverse
consequence of undertaking its own public offering. It is possible to meet this
objective by entering into a transaction with the issuer. The adverse
consequences may be perceived to be, loss of control, substantial expense and
loss of time attempting to conclude an underwriting or the inability to retain
an underwriter with acceptable terms
A business candidate may have pre-existing agreements with outside
advisors, attorneys and accountants and the continuation of those agreements may
be required before the candidate will agree to close a transaction with the
issuer. These existing agreements may be a factor in the determination by the
issuer to go forward.
The conclusion of a business transaction will most likely result in the
present shareholders no longer being in control of the issuer. Management of the
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issuer probably will not have the expertise in the business of the new entity,
which will result in the resignation of the present management.
The acquisition or merger usually results in the issuance of restricted
securities as consideration. If the negotiations resulted in the requirement for
registered securities to be issued, the surviving company would have to bear the
burden of registering the shares. There can be no assurance that that these
newly registered shares would be sold into the market depressing the market
value.
A merger with another company will significantly dilute the percentage of
ownership the present shareholders now enjoy. The amount of dilution will depend
on the number of shares issued which in term could depend on the assets and
liabilities of the merging company. This is not to say that other factors may
not enter into this determination.
ITEM 3. DESCRIPTION OF PROPERTY
The issuer is currently housed in the offices of its principal shareholder,
Corporate Architects, Inc. at 4300 N. Miller Road Suite 120, Scottsdale, Arizona
85251-3620. No rent is being charged to the issuer and the issuer may remain at
this address until a merger is concluded. The Company owns no real property and
has no plans to acquire real property.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth each person known by the Company to be the
beneficial owner of more than 5% of the Common Shares (the only class of voting
securities) of the Company all directors individually and all directors and
officers of the Company as a group. Each person has sole voting and investment
power with respect to the shares as indicated.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
------------------- --------- --------
Corporate Architects, Inc.(1) 5,000,000 99.2%
4300 N. Miller Rd Suite 120
Scottsdale, AZ 85251-3620
All Executive Officers and 5,000,000 99.2%
Directors as a Group (1 person)
- ----------
(1) Mr. Edmond L. Lonergan owns 100% of the issued and outstanding shares of
Corporate Architects, Inc. and is its sole officer and director. As such,
Mr. Lonergan is the beneficial owner of the common stock of the issuer and
is the only control shareholder.
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ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The issuer has one officer and director.
Name Age Positions and Offices Held
---- --- --------------------------
Edmond L. Lonergan 54 President Secretary and Director
There are no agreements that a Director will resign at the request of
another person and the above named Director is not acting on behalf of nor will
act on behalf of another person.
The following is a brief summary of the Director, and Officer including his
business experiences for the past five years.
Edmond L. Lonergan from 1968 to 1996 has founded numerous high tech
corporations one of which became public. It was honored by Inc. Magazine for
becoming the 28th fastest growing company in 1992. Previously, he held the
positions of Board Chairman, President, CEO, Vice President of Sales and
Marketing, Vice President of Operations, Vice President of Finance, Director of
Research, Operating Manager, Manager of Software Development and Product
Development Consultant. Mr. Lonergan was also selected to be a member of the
White House Small Business Committee during the Carter Administration.
Mr. Lonergan founded Corporate Architects, Inc. in 1997. The company
specializes in consulting and advising businesses in the area of strategic
planning as well as mergers and acquisitions.
CURRENT BLANK CHECK COMPANY
Mr. Lonergan is the majority shareholder, through his ownership of
Corporate Architects, and sole officer and director of Firstcai, Inc. which has
filed a registration statement on Form 10-SB. That registration statement will
go effective automatically 60 days after the filing date of November 1, 1999.
The initial business purpose of Firstcai, Inc. is to engage in mergers and
acquisitions with an unidentified company. It is a blank check company and will
remain so until such time that it completes an acceptable business transaction.
He is also sole officer and director of Thirdcai as well as the majority
shareholder through his ownership of Corporate Architects. Thirdcai filed its
registration statement on Form 10-SB and it has been advised by the Securities
Exchange Commission that the registration will become effective 60 days after
its filing date of February 4, 2000.
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Mr. Lonergan expects to be involved with other blank check companies with
similar objectives. There are potential conflicts of interest which may occur if
the officer and director holds a similar position with other blank check
companies with the same objectives. The sole officer and director intends to
locate merger candidates for the companies in a chronological order based on the
date of final approval by the Securities and Exchange Commission. To date, there
have been no mergers with the "blank check" companies registered by Corporate
Architects.
ITEM 6. EXECUTIVE COMPENSATION
The issuer's officer and director does not and has not receive compensation
for services rendered to the issuer nor has any compensation been accrued. He
will not participate in any finders' fees however; he will receive some benefits
as a beneficial owner of the issuer upon a merger or acquisition taking place.
Furthermore, there are no stock option plans, pension plans, insurance coverage
or other benefit programs adopted by the issuer.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no parents of this small business issuer.
There are and have been no transactions with promoters.
There were no material underwriting discounts and commissions upon the sale
of securities by the issuer where any of the specified persons was or is to be a
principal underwriter or is a controlling person or member of a firm that was or
is to be a principal underwriter.
There were no transactions involving the purchase or sale of assets other
than in the ordinary course of business.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capital stock of the issuer consists of 100,000,000 shares
of Common Stock, par value $.0001 per share. There is no authorized Preferred
Stock. The material terms of the capital stock of the issuer are set forth in
the following statements. However, reference is made to the more detailed
statements as found in the Company's Articles of Incorporation with amendments
and the Company Bylaws all of which are attached to this registration statement
as exhibits.
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COMMON STOCK
Holders of common stock are entitled to one vote per each share standing in
his/her name on the books of the Company as to those matters properly before the
shareholders. There are no cumulative voting rights and simple majority
controls. The holders of common stock will share ratably in dividends, if any,
as declared by the Board of Directors in its discretion from funds or stock
legally available. Common stock holders are entitled to share pro-rata on all
net assets, in the event of dissolution. All of the shares of common stock are
fully paid and non-assessable.
The issuer is not offering preferred stock with this registration statement
nor is it offering debt securities.
There are no provisions in the Articles of Incorporation or the Bylaws that
would delay, defer or prevent a change of control. However, any future issuance
of preferred stock could have the effect of delaying or preventing a change in
control of the Company without further action by the shareholders and could
adversely affect the voting or other rights of the holders of common stock.
The business activity of the issuer is that of a blank check company as
defined in Section 7 (b) (3) of the Securities Act of 1933. A "blank check"
company is a company that: (i) is a development stage company without a specific
business plan or purpose or has indicated that its purpose is to engage in a
merger or acquisition with an unidentified company or companies or other entity
or person and (ii) is issuing "penny stock" as defined in Rule 3a51 - 1 under
the Securities Exchange Act of 1934. Penny Stock is an equity security other
than a security; (a) that is a reported security; (b) that is issued by an
investment company registered under the Investment Company Act of 1940; (c) that
is a put or call by the Option Clearing Corporation; (d) except for purposes of
section 7(d) of the Securities Act and Rule 419 that has a price of $5.00 or
more; (e) that is registered, or approved for registration upon notice of
issuance, on a national exchange; (f) that is authorized for, or approved for
authorization upon notice of issuance, for quotation on NASDAQ, except that a
security that satisfies the requirements of this paragraph, but that does not
otherwise satisfy the requirements of paragraphs (a), (b), (c) or (d) of this
section 3(a) 51-1, shall be a penny stock for purposes of section 15(b)(6) of
the Exchange Act; or (g) is issued by an issuer who has net tangible assets in
excess of $2,000,000 if it has been in continuos operation for at least three
years, $5,000,000 is in continuos operation for less than three years; or
average revenue of at least $6,000,000 for the last three years.
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PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON REGISTRANTS COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
MARKET INFORMATION
There is no public trading market for the common equity and there has been
no trading to date. Furthermore, there is no assurance that a public trading
market will ever be established.
The issuer's securities meet the definition of "penny stock" as found in
Rule 3a51-1 of the Securities Exchange Act of 1934. The Securities and Exchange
Commission has adopted Rule 15g-9 which established sales practice requirements
for certain low price securities ("penny stock"). Unless the transaction is
exempt, it shall be unlawful for a broker or dealer to sell a penny stock to, or
to effect the purchase of a penny stock by, any person unless prior to the
transaction: (i) The broker or dealer has approved the person's account for
transactions in penny stocks pursuant to this rule and (ii) the broker or dealer
has received from the person 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 stock the broker or dealer
must: (a) obtain from the person information concerning the person's financial
situation, investment experience, and investment objectives; (b) reasonably
determine that transactions in penny stocks are suitable for that person, and
that the person has sufficient knowledge and experience in financial matters
that the person reasonably may be expected to be capable of evaluating the risks
of transactions in penny stocks; (c) deliver to the person a written statement
setting forth the basis on which the broker or dealer made the determination (i)
stating in a highlighted format that it is unlawful for the broker or dealer to
affect a transaction in penny stock unless the broker or dealer has received,
prior to the transaction, a written agreement to the transaction from the
person; and (ii) stating in a highlighted format immediately preceding the
customer signature line that (iii) the broker or dealer is required to provide
the person with the written statement; and (iv) the person should not sign and
return the written statement to the broker or dealer if it does not accurately
reflect the person's financial situation, investment experience, and investment
objectives; and (d) receive from the person a manually signed and dated copy of
the written statement. It is also required that disclosure be made as to the
risks of investing in penny stocks and the commissions payable to the broker-
dealer, as well as current price quotations and the remedies and rights
available in cases of fraud in penny stock transactions. Statements, on a
monthly basis must be sent to the investor listing recent prices for the penny
stock and information on the limited market.
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It is the issuer's intention to merge or acquire a company, which would
qualify it to be listed on the NASDAQ SmallCap Market. The initial listing
requirements are as follows: (1) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income in latest fiscal year or two of the
last three fiscal years of $750,000, (2) public float 1,000,000 shares with a
market value of $5,000,000, (3) minimum bid price of $4.00, (4) three market
makers, (5) 300 round lot (100 or more shares) shareholders, (6) an operating
history of one year or $50,000,000 market cap, and (7) corporate governance
standards must be in place. Subsequent to qualifying for listing the company, in
order to remain on the SmallCap Market, the company must maintain the following;
(1) net tangible assets of $2,000,000 or market capitalization of $35,000,000 or
net income in latest fiscal year or two of the last three fiscal years of
$500,000, (2) public float 500,000 shares with a market value of $1,000,000, (3)
minimum bid price of $1.00, (4) two market makers, (5) 300 round lot (100 or
more shares) shareholders, and (6) corporate governance standards must be in
place.
The company may not qualify for the SmallCap market after a merger or
acquisition. In that case it's securities may be traded on the Over The Counter
Bulletin Board (OTCBB). This exchange differs from NASDAQ in that the
qualifications do not include minimum assets, revenues, number of shareholders,
market capitalization, number of shares in the public float and corporate
governance standards. To qualify for OTCBB the company must have a market maker
willing to list the securities on a bid and ask quotation and sponsor the
company for listing. All companies, including banks and insurance companies,
traded on the OTCBB must be fully reporting as of June 2000. The company may
also offer its securities on the National Quotation Bureau, Inc., commonly known
as the "pink sheets".
It is the company's objective to become qualified for NASDAQ SmallCap
however; there is no assurance it will reach or maintain that objective. The
issuer may, after a merger or acquisition, commence trading on the OTC BB.
(a) Holders. There are three (3) holders of the common equity of the
Company.
(b) Dividends. There have been no cash dividends declared to date and
there are no plans to do so. There are no restrictions that limit the
ability to pay dividends on common equity other than the dependency on
the Company's revenues, earnings and financial condition.
ITEM 2. LEGAL PROCEEDINGS
The issuer is not a party to any pending legal proceeding nor is its
property the subject of any legal proceeding.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company has had no disagreements with its accountants nor has the
Company changed accountants.
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ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The Company has sold the following securities, which were not registered
during the past three years.
Number
Date Name of Shares Consideration
- ---- ---- --------- -------------
September 3,1999 Corporate Architects, Inc (1) 5,000.000 $1,000.00
September 3, 1999 Carl P. Ranno (2) 10,000 Legal Services
September 23, 1999 Kenneth R. Lew (3) 30,000 $600.00
- ----------
(1) Mr. Edmond Lonergan is the president and sole director of the issuer and is
also the sole shareholder and director of Corporate Architects, Inc.
accordingly; Mr. Lonergan is the beneficial owner of the common securities
issued to Corporate Architects, Inc.
(2) Mr. Ranno elected to accept common securities as a portion of his fees for
legal services rendered to the issuer.
(3) Mr. Lew is not an officer, director or beneficial owner of Corporate
Architects, Inc. however, he is a consultant to the firm.
There have been no underwriting undertaken by the issuer.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to the Nevada Revised Statutes sec. 78.751, a Nevada Corporation
has the power to indemnify its Directors, Officers, Employees and Agents.
Pursuant to Article 12 of the issuers Articles of Incorporation, the Company
shall indemnify its Officers, Directors, Employees and Agents. Article V of the
issuer's Bylaws specifically sets forth the Indemnification of those above
stated. Pursuant to the above the Directors and Officers liability is affected.
A copy of the Articles and Bylaws are attached as exhibits and more fully sets
forth the subject of this Item.
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PART F/S
Attached are the audited financial statements of the issuer since its
inception.
Table of Contents
Issuer Financial Statements and Independent Auditors' Reports
a) Balance Sheets
b) Notes to Financial Statements
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Report of Independent Accountants
To the Board of Directors
FourthCAI, Inc.
Scottsdale, Arizona
We have audited the accompanying balance sheet of FourthCAI, Inc. as of February
29, 2000. This balance sheet is the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our 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.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of FourthCAI, Inc. as of February 29,
2000 in conformity with generally accepted accounting principles.
/s/ James C. Marshall, CPA, PC
Scottsdale, Arizona
February 29, 2000
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FOURTHCAI, INC.
BALANCE SHEET
FEBRUARY 29, 2000
ASSETS
February 29, 2000
Current Assets
Cash and cash equivalents $ 1,000
-------
Current Assets 1,000
-------
Total Assets $ 1,000
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Stockholders' Equity
Common Stock - $0.0001 par value, authorized 100,000,000
shares, issued and outstanding 5,040,000 $ 504
Additional paid in capital 496
-------
Total Stockholders' Equity 1,000
-------
Total Liabilities and Stockholders' Equity $ 1,000
=======
The accompanying notes are an integral part of these financial statements.
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FOURTHCAI, INC.
NOTES TO FINANCIAL STATEMENT
FEBRUARY 29, 2000
NOTE 1 - ORGANIZATION
FourthCAI, Inc. (the "Company") was incorporated in the state of Nevada on
September 3, 1999. The Company has had no operations since incorporation.
NOTE 2 - STOCKHOLDERS' EQUITY
The Company has 100,000,000 shares of $0.0001 par value stock authorized and
5,040,000 shares outstanding at February 29, 2000.
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PART III
ITEM 1. INDEX TO EXHIBITS
Exhibit Number Description
-------------- -----------
(3)
(i) Articles of Incorporation
(ii) By-Laws
(4) Instruments Defining the Rights of Holders
(i) Lock-Up Agreement with Corporate Architects
(ii) Lock-Up Agreement with Carl P. Ranno
(iii) Lock-Up Agreement with Kenneth R. Lew
(23) Consent of Accountant
(27) Financial Data Schedule
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned thereunto duly authorized.
FOURTHCAI, INC.
March 14, 2000 By: /s/ Edmund L. Lonergan
------------------------------------
Director and President
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ARTICLES OF INCORPORATION
OF
FOURTHCAI, INC.
* * * * *
The undersigned, acting as incorporator, pursuant to the provisions of the
laws of the State of Nevada relating to private corporations, hereby adopts the
following Articles of Incorporation:
ARTICLE ONE. [NAME]. The name of the corporation is: FOURTHCAI, INC.
ARTICLE TWO. [RESIDENT AGENT].The initial agent for service of process is
Nevada Agency and Trust Company, 50 West Liberty Street, Suite 880, City of
Reno, County of Washoe, State of Nevada 89501.
ARTICLE THREE. [PURPOSES]. The purposes for which the corporation is
organized are to engage in any activity or business not in conflict with the
laws of the State of Nevada or of the United States of America, and without
limiting the generality of the foregoing, specifically:
I. [OMNIBUS]. To have to exercise all the powers now or hereafter conferred
by the laws of the State of Nevada upon corporations organized pursuant to
the laws under which the corporation is organized and any and all acts
amendatory thereof and supplemental thereto.
II. [CARRYING ON BUSINESS OUTSIDE STATE]. To conduct and carry on its
business or any branch thereof in any state or territory of the United
States or in any foreign country in conformity with the laws of such state,
territory, or foreign country, and to have and maintain in any state,
territory, or foreign country a business office, plant, store or other
facility.
III. [PURPOSES TO BE CONSTRUED AS POWERS]. The purposes specified herein
shall be construed both as purposes and powers and shall be in no wise
limited or restricted by reference to, or inference from, the terms of any
other clause in this or any other article, but the purposes and powers
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specified in each of the clauses herein shall be regarded as independent
purposes and powers, and the enumeration of specific purposes and powers
shall not be construed to limit or restrict in any manner the meaning of
general terms or of the general powers of the corporation; nor shall the
expression of one thing be deemed to exclude another, although it be of
like nature not expressed.
ARTICLE FOUR. [CAPITAL STOCK]. The corporation shall have authority to
issue an aggregate of ONE HUNDRED MILLION (100,000,000) COMMON CAPITAL SHARES,
$0.0001 PAR VALUE per share.
The holders of shares of capital stock of the corporation shall not be
entitled to pre-emptive or preferential rights to subscribe to any unissued
stock or any other securities, which the corporation may now or hereafter be
authorized to issue.
The corporation's capital stock may be issued and sold from time to time
for such consideration as may be fixed by the Board of Directors, provided that
the consideration so fixed is not less than par value.
The stockholders shall not possess cumulative voting rights at all
shareholders meetings called for the purpose of electing a Board of Directors.
ARTICLE FIVE. [DIRECTORS].The affairs of the corporation shall be governed
by a Board of Directors of no more than seven (7) nor less than one (1) person.
The name and address of the first Board of Directors is:
NAME ADDRESS
---- -------
Edmond L. Lonergan 4300 North Miller Road
Scottsdale, AZ 85251
ARTICLE SIX. [ASSESSMENT OF STOCK]. The capital stock of the corporation,
after the amount of the subscription price or par value has been paid in, shall
not be subject to pay debts of the corporation, and no paid up stock and no
stock issued as fully paid up shall ever be assessable or assessed.
ARTICLE SEVEN. [INCORPORATOR]. The name and address of the incorporator of
the corporation is as follows:
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NAME ADDRESS
---- -------
Amanda Cardinalli 50 West Liberty Street, Suite 880
Reno, Nevada 89501
ARTICLE EIGHT. [PERIOD OF EXISTENCE]. The period of existence of the
corporation shall be perpetual.
ARTICLE NINE. [BY-LAWS]. The initial By-laws of the corporation shall be
adopted by its Board of Directors. The power to alter, amend, or repeal the
By-laws, or to adopt new By-laws, shall be vested in the Board of Directors,
except as otherwise may be specifically provided in the By-laws.
ARTICLE TEN. [STOCKHOLDERS' MEETINGS]. Meetings of stockholders shall be
held at such place within or without the State of Nevada as may be provided by
the By-laws of the corporation. Special meetings of the stockholders may be
called by the President or any other executive officer of the corporation, the
Board of Directors, or any member thereof, or by the record holder or holders of
at least ten percent (10%) of all shares entitled to vote at the meeting. Any
action otherwise required to be taken at a meeting of the stockholders, except
election of directors, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by stockholders having at
least a majority of the voting power.
ARTICLE ELEVEN. ( CONTRACTS OF CORPORATION) No contract or other
transaction between the corporation and any other corporation, whether or not a
majority of the shares of the capital stock of such other corporation is owned
by this corporation, and no act of this corporation shall in any way be affected
or invalidated by the fact that any of the directors of this corporation are
pecuniarily or otherwise interested in, or are directors or officers of such
other corporation. Any director of this corporation, individually, or any firm
of which such director may be a member, may be a party to, or may be pecuniarily
or otherwise interested in any contract or 3transaction of the corporation;
provided, however, that the fact that he or such firm is so interested shall be
disclosed or shall have been known to the Board of Directors of this
corporation, or a majority thereof; and any director of this corporation who is
also a director or officer of such other corporation, or who is so interested,
may be counted in determining the existence of a quorum at any meeting of the
Board of Directors of this corporation that shall authorize such contract or
transaction, and may vote thereat to authorize such contract or transaction,
with like force and effect as if he were not such director or officer of such
other corporation or not so interested.
ARTICLE TWELVE. [LIABILITY OF DIRECTORS AND OFFICERS]. No director or
officer shall have any personal liability to the corporation or its stockholders
for damages for breach of fiduciary duty as a director or officer, except that
this Article Twelve shall not eliminate or limit the liability of a director or
officer for (I) acts or omissions which involve intentional misconduct, fraud or
a knowing violation of law, or (ii) the payment of dividends in violation of the
Nevada Revised Statutes.
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IN WITNESS WHEREOF, the undersigned incorporator has hereunto affixed her
signature AT Reno, Nevada this 2nd day of September, 1999.
/s/ Amanda Cardinalli
----------------------------------------
AMANDA CARDINALLI
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BY-LAWS FOR THE REGULATION
EXCEPT AS OTHERWISE PROVIDED BY STATUTE
OR ITS ARTICLES OF INCORPORATION OF
FOURTHCAI,INC.
A NEVADA CORPORATION
* * * * *
ARTICLE I.
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office for the transaction of
the business of the corporation is hereby fixed and located at Suite 880, Bank
of America Plaza, 50 West Liberty Street, Reno, Nevada 89501, being the offices
of THE NEVADA AGENCY AND TRUST COMPANY. The board of directors is hereby granted
full power and authority to change said principal office from one location to
another in the State of Nevada.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any time be
established by the board of directors at any place or places where the
corporation is qualified to do business.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. MEETING PLACE. All annual meetings of shareholders and all other
meetings of shareholders shall be held either at the principal office or at any
other place within or without the State of Nevada which may be designated either
by the board of directors, pursuant to authority hereinafter granted to said
board, or by the written consent of all shareholders entitled to vote thereat,
given either before or after the meeting and filed with the Secretary of the
corporation.
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Section 2. ANNUAL MEETINGS. The annual meetings of shareholders shall be
held on the 1st day of July each year, at the hour of 10:00 o'clock a.m. of said
day commencing with the year 1999, provided, however, that should said day fall
upon a legal holiday then any such annual meeting of shareholders shall be held
at the same time and place on the next day thereafter ensuing which is not a
legal holiday. The board of directors of the corporation shall have the power to
change the date of the annual meeting as it deems appropriate.
Written notice of each annual meeting signed by the president or a vice
president, or the secretary, or an assistant secretary, or by such other person
or persons as the directors shall designate, shall be given to each shareholder
entitled to vote thereat, either personally or by mail or other means of written
communication, charges prepaid, addressed to such shareholder at his address
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appearing on the books of the corporation or given by him to the corporation for
the purpose of notice. If a shareholder gives no address, notice shall be deemed
to have been given to him, if sent by mail or other means of written
communication addressed to the place where the principal office of the
corporation is situated, or if published at least once in some newspaper of
general circulation in the county in which said office is located. All such
notices shall be sent to each shareholder entitled thereto not less than ten
(10) nor more than sixty (60) days before each annual meeting, and shall specify
the place, the day and the hour of such meeting, and shall also state the
purpose or purposes for which the meeting is called.
Section 3. SPECIAL MEETINGS. Special meetings of the shareholders, for any
purpose or purposes whatsoever, may be called at any time by the president or by
the board of directors, or by one or more shareholders holding not less than 10%
of the voting power of the corporation. Except in special cases where other
express provision is made by statute, notice of such special meetings shall be
given in the same manner as for annual meetings of shareholders. Notices of any
special meeting shall specify in addition to the place, day and hour of such
meeting, the purpose or purposes for which the meeting is called.
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Section 4. ADJOURNED MEETINGS AND NOTICE THEREOF. Any shareholders'
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by the vote of a majority of the shares, the holders of which
are either present in person or represented by proxy thereat, but in the absence
of a quorum, no other business may be transacted at any such meeting.
When any shareholders' meeting, either annual or special, is adjourned for
thirty (30) days or more, notice of the adjourned meeting shall be given as in
the case of an original meeting. Save as aforesaid, it shall not be necessary to
give any notice of an adjournment or of the business to be transacted at an
adjourned meeting, other than by announcement at the meeting at which such
adjournment is taken.
Section 5. ENTRY OF NOTICE. Whenever any shareholder entitled to vote has
been absent from any meeting of shareholders, whether annual or special, an
entry in the minutes to the effect that notice has been duly given shall be
conclusive and incontrovertible evidence that due notice of such meeting was
given to such shareholders, as required by law and the By-Laws of the
corporation.
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Section 6. VOTING. At all annual and special meetings of stockholders
entitled to vote thereat, every holder of stock issued to a bona fide purchaser
of the same, represented by the holders thereof, either in person or by proxy in
writing, shall have one vote for each share of stock so held and represented at
such meetings, unless the Articles of Incorporation of the company shall
otherwise provide, in which event the voting rights, powers and privileges
prescribed in the said Articles of Incorporation shall prevail. Voting for
directors and, upon demand of any stockholder, upon any question at any meeting
shall be by ballot. Any director may be removed from office by the vote of
stockholders representing not less than two-thirds of the voting power of the
issued and outstanding stock entitled to voting power.
Section 7. QUORUM. The presence in person or by proxy of the holders of a
majority of the shares entitled to vote at any meeting shall constitute a quorum
for the transaction of business. The shareholders present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.
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Section 8. CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, either annual or special, however called and noticed, shall be as
valid as though at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if either before or after
the meeting, each of the shareholders entitled to vote, not present in person or
by proxy, sign a written Waiver of Notice, or a consent to the holding of such
meeting, or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of this meeting.
Section 9. PROXIES. Every person entitled to vote or execute consents shall
have the right to do so either in person or by an agent or agents authorized by
a written proxy executed by such person or his duly authorized agent and filed
with the secretary of the corporation; provided that no such proxy shall be
valid after the expiration of eleven (11) months from the date of its execution,
unless the shareholder executing it specifies therein the length of time for
which such proxy is to continue in force, which in no case shall exceed seven
(7) years from the date of its execution.
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ARTICLE III
Section 1. POWERS. Subject to the limitations of the Articles of
Incorporation or the By-Laws, and the provisions of the Nevada Revised Statutes
as to action to be authorized or approved by the shareholders, and subject to
the duties of directors as prescribed by the By-Laws, all corporate powers shall
be exercised by or under the authority of, and the business and affairs of the
corporation shall be controlled by the board of directors. Without prejudice to
such general powers, but subject to the same limitations, it is hereby expressly
declared that the directors shall have the following powers, to wit:
FIRST - To select and remove all the other officers, agents and employees
of the corporation, prescribe such powers and duties for them as may not be
inconsistent with law, with the Articles of Incorporation or the By-Laws, fix
their compensation, and require from them security for faithful service.
SECOND - To conduct, manage and control the affairs and business of the
corporation, and to make such rules and regulations therefor not inconsistent
with law, with the Articles of incorporation or the By-Laws, as they may deem
best.
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THIRD - To change the principal office for the transaction of the business
of the corporation from one location to another within the same county as
provided in Article I, Section 1, hereof; to fix and locate from time to time
one or more subsidiary offices of the corporation within or without the State of
Nevada, as provided in Article I, Section 2, hereof; to designate any place
within or without the State of Nevada for the holding of any shareholders'
meeting or meetings; and to adopt, make and use a corporate seal, and to
prescribe the forms of certificates of stock, and to alter the form of such seal
and of such certificates from time to time, as in their judgment they may deem
best, provided such seal and such certificates shall at all times comply with
the provisions of law.
FOURTH - To authorize the issue of shares of stock of the corporation from
time to time, upon such terms as may be lawful, in consideration of money paid,
labor done or services actually rendered, debts or securities canceled, or
tangible or intangible property actually received, or in the case of shares
issued as a dividend, against amounts transferred from surplus to stated
capital.
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FIFTH - To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefore.
SIXTH - To appoint an executive committee and other committees and to
delegate to the executive committee any of the powers and authority of the board
in management of the business and affairs of the corporation, except the power
to declare dividends and to adopt, amend or repeal By-Laws. The executive
committee shall be composed of one or more directors.
Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number of
directors of the corporation shall be not less than one (1) and no more than
seven (7).
Section 3. ELECTION AND TERM OF OFFICE. The directors shall be elected at
each annual meeting of shareholders, but if any such annual meeting is not held,
or the directors are not elected thereat, the directors may be elected at any
special meeting of shareholders. All directors shall hold office until their
respective successors are elected.
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Section 4. VACANCIES. Vacancies in the board of directors may be filled by
a majority of the remaining directors, though less than a quorum, or by a sole
remaining director, and each director so elected shall hold office until his
successor is elected at an annual or a special meeting of the shareholders.
A vacancy or vacancies in the board of directors shall be deemed to exist
in case of the death, resignation or removal of any director, or if the
authorized number of directors be increased, or if the shareholders fail at any
annual or special meeting of shareholders at which any director or directors are
elected to elect the full authorized number of directors to be voted for at that
meeting.
The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors. If the board of directors
accept the resignation of a director tendered to take effect at a future time,
the board or the shareholders shall have the power to elect a successor to take
office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of his term of office.
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Section 5. PLACE OF MEETING. Regular meetings of the board of directors
shall be held at any place within or without the State which has been designated
from time to time by resolution of the board or by written consent of all
members of the board. In the absence of such designation, a regular meeting
shall be held at the principal office of the corporation. Special meetings of
the board may be held either at a place so designated, or at the principal
office.
Section 6. ORGANIZATION MEETING. Immediately following each annual meeting
of shareholders, the board of directors shall hold a regular meeting for the
purpose of organization, election of officers, and the transaction of other
business. Notice of such meeting is hereby dispensed with.
Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the board of
directors shall be held without call and the day of each month and at an hour
deemed appropriate and set by the board of directors; provided, however, should
such set day fall upon a legal holiday, then said meeting shall be held at the
same time on the next day thereafter ensuing which is not a legal holiday.
Notice of all such regular meetings of the board of directors is hereby
dispensed with.
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Section 8. SPECIAL MEETINGS. Special meetings of the board of directors for
any purpose or purposes shall be called at any time by the president, or, if he
is absent or unable or refuses to act, by any vice president or by any two (2)
directors.
Written notice of the time and place of special meetings shall be delivered
personally to the directors or sent to each director by mail or other form of
written communication, charges prepaid, addressed to him at his address as it is
shown upon the records of the corporation, or if it is not shown on such records
or is not readily ascertainable, at the place in which the meetings of the
directors are regularly held. In case such notice is mailed or telegraphed, it
shall be deposited in the United States mail or delivered to the telegraph
company in the place in which the principal office of the corporation is located
at least forty-eight (48) hours prior to the time of the holding of the meeting.
In case such notice is delivered as above provided, it shall be so delivered at
least twenty-four (24) hours prior to the time of the holding of the meeting.
Such mailing, telegraphing or delivery as above provided shall be due, legal and
personal notice to such director.
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Section 9. NOTICE OF ADJOURNMENT. Notice of the time and place of holding
an adjourned meeting need not be given to absent directors, if the time and
place be fixed at the meeting adjourned.
Section 10. ENTRY OF NOTICE. Whenever any director has been absent from any
special meeting of the board of directors, an entry in the minutes to the effect
that notice has been duly given shall be conclusive and incontrovertible
evidence that due notice of such special meeting was give to such director, as
required by law and the By-Laws of the corporation.
Section 11. WAIVER OF NOTICE. The transactions of any meeting of the board
of directors, however called and noticed or wherever held, shall be as valid as
though had a meeting duly held after regular call and notice, if a quorum be
present, and if, either before or after the meeting, each of the directors not
present sign a written waiver of notice or a consent to the holding of such
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
Section 12. QUORUM. A majority of the authorized number of directors shall
be necessary to constitute a quorum for the transaction of business, except to
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adjourn as hereinafter provided. Every act or decision done or made by a
majority of the directors present at a meeting duly held at which a quorum is
present, shall be regarded as the act of the board of directors, unless a
greater number be required by law or by the Articles of Incorporation.
Section 13. ADJOURNMENT. A quorum of the directors may adjourn any
directors' meeting to meet again at a stated day and hour; provided, however,
that in the absence of a quorum, a majority of the directors present at any
directors' meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the board.
Section 14. FEES AND COMPENSATION. Directors shall not receive any stated
salary for their services as directors, but by resolution of the board, a fixed
fee, with or without expenses of attendance may be allowed for attendance at
each meeting. Nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation therefor.
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ARTICLE IV.
OFFICERS
Section 1. OFFICERS. The officers of the corporation shall be a president,
a vice president and a secretary/treasurer. The corporation may also have, at
the discretion of the board of directors, a chairman of the board, one or more
vice presidents, one or more assistant secretaries, one or more assistant
treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 of this Article. Officers other than president and
chairman of the board need not be directors. Any person may hold two or more
offices.
Section 2. ELECTION. The officers of the corporation, except such officers
as may be appointed in accordance with the provisions of Section 3 or Section 5
of this Article, shall be chosen annually by the board of directors, and each
shall hold his office until he shall resign or shall be removed or otherwise
disqualified to serve, or his successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The board of directors may appoint
such other officers as the business of the corporation may require, each of whom
shall hold office for such period, have such authority and perform such duties
as are provided in the By-Laws or as the board of directors may from time to
time determine.
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Section 4. REMOVAL AND RESIGNATION. Any officer may be removed, either with
or without cause, by a majority of the directors at the time in office, at any
regular or special meeting of the board. Any officer may resign at any time by
giving written notice to the board of directors or to the president, or to the
secretary of the corporation. Any such resignation shall take effect at the date
of the receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the By- Laws for regular appointments to such office.
Section 6. CHAIRMAN OF THE BOARD. The chairman of the board, if there shall
be such an officer, shall, if present, preside at all meetings of the board of
directors, and exercise and perform such other powers and duties as may be from
time to time assigned to him by the board of directors or prescribed by the
By-Laws.
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Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may be
given by the board of directors to the chairman of the board, if there be such
an officer, the president shall be the chief executive officer of the
corporation and shall, subject to the control of the board of directors, have
general supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the shareholders and in the
absence of the chairman of the board, or if there be none, at all meetings of
the board of directors. He shall be ex-officio a 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
be prescribed by the board of directors or the By-Laws.
Section 8. 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 of directors, 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. The vice
presidents shall have such other powers and perform such other duties as from
time to time may be prescribed for them respectively by the board of directors
or the By-Laws.
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Section 9. SECRETARY. The secretary shall keep, or cause to be kept, a book
of minutes at the principal office or such other place as the board of directors
may order, of all meetings of directors and shareholders, with the time and
place of holding, whether regular or special, and if special, how authorized,
the notice thereof given, the names of those present at directors' meetings, the
number of shares present or represented at shareholders' meetings and the
proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal office, a
share register, or a duplicate 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 the same, and the number and date
of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all the meetings
of the shareholders and of the board of directors required by the By-Laws or by
law to be given, and he shall keep the seal of the corporation in safe custody,
and shall have such other powers and perform such other duties as may be
prescribed by the board of directors or the By-Laws.
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Section 10. TREASURER. The treasurer shall keep and maintain, or cause to
be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursement, gains, losses, capital, surplus and shares.
Any surplus, including earned surplus, paid-in surplus and surplus arising from
a reduction of stated capital, shall be classified according to source and shown
in a separate account. The books of account shall at all times be open to
inspection by any director.
The treasurer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the board of directors. He shall disburse the funds of the corporation as may be
ordered by the board of directors, shall render to the president and directors,
whenever they request it, an account of all of his transactions as treasurer and
of the financial condition of the corporation, and shall have such other powers
and perform such other duties as may be prescribed by the board of directors or
the By-Laws.
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ARTICLE V.
INDEMNIFICATION OF OFFICERS, DIRECTORS
AND KEY PERSONNEL
Section 1. The corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation, by reason
of the fact that such person is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses including attorneys fees,
judgments, fines and amounts paid in settlement actually and reasonable incurred
by such person in connection with the action, suit or proceeding if such person
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the corporation, and that, with respect to any
criminal action or proceeding, such person had reasonable cause to believe that
his conduct was unlawful.
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Section 2. The corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
the corporations favor by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses including amount paid in settlement and attorneys fees actually
and reasonable incurred by such person in connection with the defense or
settlement of the action or suit if such person acted in good faith and in a
manner which such person reasonably believed to be in or not opposed to the best
interests of the corporation. Indemnification may not be made for any claim,
issue or matter as to which such a person has been adjudged by a court of
competent jurisdiction determining, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amount paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
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Section 3. To the extent that a director, officer, employee or agent of a
corporation had been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 1 and 2 of this Article V, or
in defense of any claim, issue or matter therein, the corporation shall
indemnify him against expenses, including attorneys fees, actually and
reasonably incurred by such person in connection with the defense.
Section 4. The procedure for authorizing the indemnifications listed in
Section 1, 2 and 3 of this Article V, and the limitations on such
indemnification and advancement of expenses, shall be that set forth in Section
78.751 of the Nevada Revised Statutes, and shall be amended from time to time as
such statute is amended.
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<PAGE>
ARTICLE VI.
MISCELLANEOUS
Section 1. RECORD DATE AND CLOSING STOCK BOOKS. The board of directors may
fix a time, in the future, not exceeding fifteen (15) days preceding the date of
any meeting of shareholders, and not exceeding thirty (30) days preceding the
date fixed for the payment of any dividend or distribution, or for the allotment
of rights, or when any change or conversion or exchange of shares shall go into
effect, as a record date for the determination of the shareholders entitled to
notice of and to vote at any such meeting, or entitled to receive any such
dividend or distribution, or any such allotment of rights, or to exercise the
rights in respect to any such change, conversion or exchange of shares, and in
such case only shareholders of record on the date so fixed shall be entitled to
notice of and to vote at such meetings, or to receive such dividend,
distribution or allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after any record date fixed as aforesaid. The board of directors may close the
books of the corporation against transfers of shares during the whole, or any
part of any such period.
Section 2. INSPECTION OF CORPORATE RECORDS. The share register or duplicate
share register, the books of account, and minutes of proceedings of the
shareholders and directors shall be open to inspection upon the written demand
of a shareholder or the holder of a voting trust certificate, as limited herein,
23
<PAGE>
at any reasonable time, and for a purpose reasonably related to his interests as
a shareholder, or as the holder of a voting trust certificate. Such inspection
rights shall be governed by the applicable provisions of the Nevada Revised
Statutes shall be no more permissive that such statutes as to percentage of
ownership required for inspection and scope of the permitted inspection. Demand
of inspection other than at a shareholders' meeting shall be made in writing
upon the president, secretary or assistant secretary of the corporation.
Section 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the board of directors.
Section 4. ANNUAL REPORT. The board of directors of the corporation shall
cause to be sent to the shareholders not later than one hundred twenty (120)
days after the close of the fiscal or calendar year an annual report.
24
<PAGE>
Section 5. CONTRACT, ETC., HOW EXECUTED. The board of directors, except as
in the By-Laws otherwise provided, may authorize any officer or officers, agent
or agents, to enter into any contract, deed or lease or execute any instrument
in the name of and on behalf of the corporation, and such authority may be
general or confined to specific instances; and 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 engagement or to pledge its credit to
render it liable for any purpose or to any amount.
Section 6. CERTIFICATES OF STOCK. A certificate or certificates for shares
of the capital stock of the corporation shall be issued to each shareholder when
any such shares are fully paid up. All such certificates shall be signed by the
president or a vice president and the secretary or an assistant secretary, or be
authenticated by facsimiles of the signature of the president and secretary or
by a facsimile of the signature of the president and the written signature of
the secretary or an assistant secretary. Every certificate authenticated by a
facsimile of a signature must be countersigned by a transfer agent or transfer
clerk.
25
<PAGE>
Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the board of directors or the By-Laws may
provide; provided, however, that any such certificate so issued prior to full
payment shall state the amount remaining unpaid and the terms of payment
thereof.
Section 7. REPRESENTATIONS OF SHARES OF OTHER CORPORATIONS. The president
or any vice president and the secretary or assistant secretary of this
corporation are authorized to vote, represent and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority herein
granted to said officers to vote or represent on behalf of this corporation or
corporations may be exercised either by such officers in person or by any person
authorized so to do by proxy or power of attorney duly executed by said
officers.
Section 8. INSPECTION OF BY-LAWS. The corporation shall keep in its
principal office for the transaction of business the original or a copy of the
By-Laws as amended, or otherwise altered to date, certified by the secretary,
which shall be open to inspection by the shareholders at all reasonable times
during office hours.
26
<PAGE>
ARTICLE VI.
AMENDMENT
Section 1. POWER OF SHAREHOLDERS. New By-Laws may be adopted or these
By-Laws may be amended or repealed by the vote of shareholders entitled to
exercise a majority of the voting power of the corporation or by the written
assent of such shareholders.
Section 2. POWER OF DIRECTORS. Subject to the right of shareholders as
provided in Section 1 of this Article VI to adopt, amend or repeal By-Laws,
By-Laws other than a By- Law or amendment thereof changing the authorized number
of directors may be adopted, amended or repealed by the board of directors.
Section 3. ACTION BY DIRECTORS THROUGH CONSENT IN LIEU OF MEETING. Any
action required or permitted to be taken at any meeting of the board of
directors or of any committee thereof, may be taken without a meeting, if a
written consent thereto is signed by all the members of the board or of such
committee. Such written consent shall be filed with the minutes of proceedings
of the board or committee.
/s/ Amanda Cardinalli
----------------------------------------
Amanda Cardinalli
Incorporator
27
FOURTHCAI INC
4300 N. MILLER RD. SUITE 120
SCOTTSDALE, ARIZONA 85251-3620
February 1, 2000
Corporate Architects, Inc
4300 N. Miller Rd. Suite 120
Scottsdale, Arizona 85251-3620
Re: Lock-Up Agreement with Fourthcai, Inc.
Gentlemen,
In consideration of the sale to the holder by Fourthcai, Inc., (Company) of
its Common Stock ($.0001 par value), the undersigned holder warrants, covenants
and agrees for the benefit of the Company not to sell, offer to sell, solicit an
offer to buy, contract to sell, make any short sale, pledge, grant, grant any
option to purchase, or otherwise transfer or dispose of, any shares of Common
stock, or any securities convertible into or exercisable or exchangeable for
Common Stock, owned directly or beneficially by the undersigned or with respect
to which the undersigned has the power of disposition, except in connection with
or following a completed merger or acquisition by the Company and the Company is
no longer classified as a blank check company pursuant to Section 7 (b) (3) of
the Securities Act of 1933, as amended.
An attempt to sell, transfer or any type of disposition of the shares shall
be a violation of this letter agreement and shall be ineffective and null and
void.
In furtherance of the foregoing, the holder agrees to; (1) delivery its
shares to the Company for safe keeping; (2) allow the Company to advise its
Transfer Agent not to transfer said securities and (3) authorize the company to
deliver a copy of this Agreement to the transfer agent with instructions to
decline to make any transfer of securities if such transfer would constitute a
violation or breach of this Agreement.
This Agreement shall be binding upon the holder, its agents, heirs,
successors, assignees and beneficiaries.
A waiver of the terms and conditions of this agreement must be in writing
and executed by the proper officer of the Company and the holder.
If there is a breach or threatened breach of this Agreement, the holder
agrees that there is no adequate remedy at law and said breach will cause
irreparable damage. Accordingly, the holder agrees that the Company is entitled
to the issuance of an immediate injunction without notice to restrain the breach
or threatened breach. This remedy is not exclusive and the holder agrees that
the Company and third party beneficiaries shall be entitled to seek other
remedies including a claim for other remedies, including money damages.
THE HOLDER
By /s/ Edmond Lonergan
--------------------------
Corporate Architects, Inc. Constituting 5,000,000 shares certificate(s)
#__________________
FOURTHCAI INC
4300 N. MILLER RD. SUITE 120
SCOTTSDALE, ARIZONA 85251-3620
February 1, 2000
Carl P. Ranno Esq.
2816 East Windrose Drive
Phoenix, Arizona 85032
Re: Lock-Up Agreement with Fourthcai, Inc.
Gentlemen,
In consideration of the sale to the holder by Fourthcai, Inc., (Company) of
its Common Stock ($.0001 par value), the undersigned holder warrants, covenants
and agrees for the benefit of the Company not to sell, offer to sell, solicit an
offer to buy, contract to sell, make any short sale, pledge, grant, grant any
option to purchase, or otherwise transfer or dispose of, any shares of Common
stock, or any securities convertible into or exercisable or exchangeable for
Common Stock, owned directly or beneficially by the undersigned or with respect
to which the undersigned has the power of disposition, except in connection with
or following a completed merger or acquisition by the Company and the Company is
no longer classified as a blank check company pursuant to Section 7 (b) (3) of
the Securities Act of 1933, as amended.
An attempt to sell, transfer or any type of disposition of the shares shall
be a violation of this letter agreement and shall be ineffective and null and
void.
In furtherance of the foregoing, the holder agrees to; (1) delivery his
shares to the Company for safe keeping; (2) allow the Company to advise its
Transfer Agent not to transfer said securities and (3) authorize the company to
deliver a copy of this Agreement to the transfer agent with instructions to
decline to make any transfer of securities if such transfer would constitute a
violation or breach of this Agreement.
This Agreement shall be binding upon the holder, its agents, heirs,
successors, assignees and beneficiaries.
A waiver of the terms and conditions of this agreement must be in writing
and executed by the proper officer of the Company and the holder.
If there is a breach or threatened breach of this Agreement, the holder
agrees that there is no adequate remedy at law and said breach will cause
irreparable damage. Accordingly, the holder agrees that the Company is entitled
to the issuance of an immediate injunction without notice to restrain the breach
or threatened breach. This remedy is not exclusive and the holder agrees that
the Company and third party beneficiaries shall be entitled to seek other
remedies including a claim for other remedies, including money damages.
THE HOLDER
/s/ Carl P. Ranno
- --------------------
Carl P. Ranno Constituting 10,000 shares certificate(s)
#__________________
FOURTHCAI INC
4300 N. MILLER RD. SUITE 120
SCOTTSDALE, ARIZONA 85251-3620
February 1, 2000
Kenneth R. Lew
4300 North Miller Rd. Suite 120
Scottsdale, Arizona 85251
Re: Lock-Up Agreement with Fourthcai, Inc.
Gentlemen,
In consideration of the sale to the holder by Fourthcai, Inc., (Company) of
its Common Stock ($.0001 par value), the undersigned holder warrants, covenants
and agrees for the benefit of the Company not to sell, offer to sell, solicit an
offer to buy, contract to sell, make any short sale, pledge, grant, grant any
option to purchase, or otherwise transfer or dispose of, any shares of Common
stock, or any securities convertible into or exercisable or exchangeable for
Common Stock, owned directly or beneficially by the undersigned or with respect
to which the undersigned has the power of disposition, except in connection with
or following a completed merger or acquisition by the Company and the Company is
no longer classified as a blank check company pursuant to Section 7 (b) (3) of
the Securities Act of 1933, as amended.
An attempt to sell, transfer or any type of disposition of the shares shall
be a violation of this letter agreement and shall be ineffective and null and
void.
In furtherance of the foregoing, the holder agrees to; (1) delivery his
shares to the Company for safe keeping; (2) allow the Company to advise its
Transfer Agent not to transfer said securities and (3) authorize the company to
deliver a copy of this Agreement to the transfer agent with instructions to
decline to make any transfer of securities if such transfer would constitute a
violation or breach of this Agreement.
This Agreement shall be binding upon the holder, its agents, heirs,
successors, assignees and beneficiaries.
A waiver of the terms and conditions of this agreement must be in writing
and executed by the proper officer of the Company and the holder.
If there is a breach or threatened breach of this Agreement, the holder
agrees that there is no adequate remedy at law and said breach will cause
irreparable damage. Accordingly, the holder agrees that the Company is entitled
to the issuance of an immediate injunction without notice to restrain the breach
or threatened breach. This remedy is not exclusive and the holder agrees that
the Company and third party beneficiaries shall be entitled to seek other
remedies including a claim for other remedies, including money damages.
THE HOLDER
/s/ Kenneth R. Lew
- ----------------------
Kenneth R. Lew Constituting 30,000 shares certificate(s)
#__________________
[JAMES C. MARSHALL, CPA, PC LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion of our audit of the balance sheet of FourthCAI, Inc.
as of February 29, 2000 as part of this Form 10-SB.
/s/ James C. Marshall, CPA, PC
Scottsdale, Arizona
February 29, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> FEB-29-2000
<CASH> 1000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 504
<OTHER-SE> 496
<TOTAL-LIABILITY-AND-EQUITY> 1000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
