U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB 12(g)
General Form For Registration of Securities of
Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
GLOBAL INNOVATIVE SYSTEMS INC.
(Name of Small Business Issuer in its Charter)
Nevada E.I.N. 98-0217653
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5975 Selkirk Crescent
Prince George, B.C., Canada V2N 2G9
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (250) 964-2692
Securities to be registered under Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
Voting Common Stock OTC Bulletin Board Service
Page No.: 1
Total No. of Pages: 74
Exhibit Index Appears on Page: 17
<PAGE>
PART I
Prospective readers of this Form 10-SB registration statement
should note that this document contains certain "forward looking statements,"
including without limitation, statements containing words "believes,"
"anticipates," "expects," "intends," "plans," "should," "seeks to," and
similar words. Prospective readers are cautioned that such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties. Actual results may differ materially from those in the forward
looking statements as a result of various factors, including but not limited
to, decisions of the Board of Directors not to pursue a specific course of
action based on its re-assessment of the facts or new facts, changes in
the Company's business or general economic conditions and those other
factors set forth in this Registration Statement. The Company relies
upon the protection afforded forward-looking statements provided by the
United States Securities Act of 1933 and the Securities Exchange Act of 1934.
Item 1. Description of Business
I. Business Development.
A. Global Innovative Systems Inc.:
Global Innovative Systems Inc. (the "Company") was incorporated on
September 14, 1995, under the laws of the State of Nevada. The Company
has been inactive until it entered into a share exchange agreement with
Niew Industries Inc. By agreement dated December 1, 1999, the Company
agreed to acquire 100% of the issued and outstanding shares from the
stockholders of Niew Industries Inc. along with amounts owing to these
stockholders totaling $414,302 in exchange for 12 million common shares
of the Company. The transaction to acquire Niew Industries Inc. closed on
January 31, 2000. The Company has agreed to make the necessary applications
to be listed as a publicly reporting company with a class of publicly traded
securities. This registration statement follows. The Company employs three
people on a full time basis.
The financial statements of the Company subsequent to the acquisition will
reflect the operations of Niew Industries Inc. pursuant to the accounting
requirements for reverse acquisitions. The reverse acquisition is achieved
resulting in a recapitalization of the Company as the former stockholders
of Niew Industries Inc. became the controlling stockholders of the Company
immediately upon conclusion of the acquisition.
B. Niew Industries Inc.: Niew Industries Inc. (referred to
hereafter as "Niew Industries" or "NII") was incorporated on January 15,
1997, under the British Columbia Company Act. Thereafter NII remained
inactive until March 23, 1998, when it began the development of a twin
rotating asphalt mixing system. To date this has been NII's only activity.
Niew Industries' business objective was to create a simplified asphalt
mixing system that would be compact, environmentally friendly and easy
to mobilize. The Company intends to market such a system to worldwide
manufacturers and users of asphalt plants. NII has taken a step towards
this goal with the design and development of the Twin Rotating Asphalt
Mixing System ("TRAMS"). The main frame houses a Genset for electrical
power, all electrical components, a four bin feed system (split bins,
two side by side) a burner with a blower and an exhaust fan to dry the
aggregate and drum.
The drum was designed as a double tapered mixer-dryer with one drum
inside the other. This caused the overall drum length to be cut in half
thus allowing for more frame area. The drum's double tapered design
allows asphalt oil to be sprayed in with no fire contact. The asphalt
spray system was designed to arrest the majority of dry particulate from
the air and introduced back in to the mixed product. The shape of the
drums allows the plant to be set up level rather than at an incline as
with conventional plants. The tapered drums also cause the air to slow
down on exit, thus any particles that may have escaped fall back into the
drum.
NII's goal is to create a mixing system that is easier and quicker to
mobilize than conventional systems and does not burn the asphalt,
increasing product life. No materials are taken out of the mix as do
plants with water settling ponds. Productivity is anticipated to be equal
to plants of the same capacity which take five loads to move, as compared
to the two loads of the TRAMS System. Management ascribes the objective
benefits of the TRAMS System to include: mobility, which lowers costs;
productivity; improved product quality; decreased environmental impact; and
reduced costs for the customer.
After developing its prototype, NII identified areas where improved
performance of the TRAM System was possible. These areas included
improvements to the asphalt-oil injection system, pollution control
system, ramps, and a conveyor system. The majority of these changes
have occurred and have been successfully tested. For example, NII is
adding a conventional baghouse system in order to comply with the
2001 British Columbia air pollution regulations. (See: Regulatory
Background, discussed below).
NII completed development of the TRAM System prototype, attaining its
Phase I goal. Efforts to achieve its Phase II goals are now underway.
These include the identification of target markets, development of a
marketing plan, further testing in specific applications with potential
customers and, ultimately, the commercial production of the equipment
for sale or lease.
To achieve this end, NII will build another trailer which will house a
self-erecting silo, asphalt, diesel and propane tanks. This project is
financed currently by the Company's principals. The plans for this
project have been created, but the construction funding is not in place.
See Item 2, Management's Discussion and Analysis, Liquidity and
Capital Resources. Management believes that the asphalt industry will
find the package attractive due to the compactness and perceived
neatness of a totally self-contained asphalt plant in two loads.
Management projects revenue to be derived ultimately from sales of the TRAM
System, but is also considering the possibility of leasing the TRAM System to
potential customers. Management believes in a broad based appeal of the TRAMS
based upon its operational performance in categories such as environmental
compliance, quality control, integration of electrical and computer
programming, increased user friendliness and cost effectiveness.
In order to complete Phase II and to commence manufacturing of the asphalt
plants, NII will seek traditional debt, equity or principal funding.
At this time, NII has no facilities or commitments regarding the
manufacturing of asphalt plants.
NII has also negotiated an exclusive licensing agreement with Ian Westwood,
the inventor of a self-erecting silo, but this is not the same silo design
that will be used in Phase II. Mr. Westwood's silo design is referred to
as the "Silovation." The Silovation system can be used with any
existing asphalt plant, including the TRAMS.
The Silovation prototype was completed in May of 1999 and is currently owned
by the Everall Construction Company of Edmonton, Alberta.
On November 8, 1999, Niew Industries Inc. and Mr. Westwood executed their
agreement pursuant to which Mr. Westwood licensed to NII patents and all
technical knowledge derived from the Portable Overhead Bin used on the
Silovationn and the applicable patents pending held by Mr. Westwood in
exchange for the sum of CAN. $75,000. This sum is payable in two equal
installments. The first payment occurred in the first quarter of 2000.
The second is to occur on August 31, 2000. Additional payments are
due based upon the sales of equipment employing the Portable Overhead Bin.
See Exhibit 10 (ii) attached hereto.
<PAGE>
C. Global Innovative Systems, Inc.'s Corporate History:
The Company was incorporated as Legacy Bodysentials Inc. by the
Nevada Secretary of State on Sept. 14, 1995, for the purpose of developing
and marketing of cosmetic products. The Company has been inactive
since incorporation.
On September 30, 1995, Legacy Bodysentials accepted from twelve
individuals subscription agreements to purchase a total of 10,000,000
shares from the Company pursuant to a Rule 504 offering under Regulation D.
The Board authorized Legacy to proceed with the sale of its shares pursuant
to the subscriptions received for the sale of 10,000,000 shares at a price of
$0.01 per common share. Pacific Stock Transfer Company was appointed
as the transfer agent of the common shares of Legacy.
The Company is aware of approximately 75 transactions involving these
shares. The Company currently has approximately 71 shareholders. These
transactions are summarized in Item 4 - Transfers Involving the Original
Twelve Certificates.
On September 25, 1996, Legacy Bodysentials changed its name to Legacy
Minerals Inc. after an affirmative vote by the Company's Board of Directors
to change the name. A new business plan was adopted focusing upon
mineral exploration, which was not implemented.
On August 27, 1997, by a vote of the Company's Board of Directors,
300,000 issued and outstanding shares were redeemed to treasury and
cancelled.
On May 18, 1998, Legacy Minerals Inc. changed its name to Global
Commonwealth Inc. after a vote by the Company's Board of Directors to
change the name. The Board contemplated and evaluated various business
plans, without adopting any.
On November 12, 1999, Global Commonwealth Inc. changed its name to
Global Innovative Systems Inc. (the "Company") after an affirmative vote
by the Company's Board of Directors to change the name. Other than the
above described acquisition by of the Company of NII, the Company does
not have any plans, proposals, arrangements or understandings with respect
to future acquisitions.
The Company has had no business operations prior to the acquisition of NII.
Business of Issuer.
The Company's objective to create a simplified asphalt mixing system
which would be compact, environmentally friendly and easy to mobilize
has been materially advanced with the design and development of the
TRAMS System. The main frame houses a Genset for electrical power,
all electrical components, a four bin feed system (split bins, two side by
side) a burner with a blower, an exhaust fan to dry the aggregate and a drum.
For a more in depth discussion of the TRAMS System, see the discussion of
Niew Industries Inc., above.
<PAGE>
III. Industry Overview and Competition.
There are at present, about eight major asphalt plant manufacturers
situated in the central and eastern United States. Together they sell
approximately 150 units per year all across North America. The Company
intends to complete Phase II, then to locate the asphalt plant at a
gravel pit, whose location has already been selected, and to record set
up time, conduct anti-pollution equipment testing, and record
promotional videos.
Research and Development.
When testing the mixing system (Phase I) the TRAMS was set up in
Columbia Bitulithic Ltd.'s Aldergrove, British Columbia pit and used
NII's asphalt mix. Columbia Bitulithic Ltd. is a British Columbia paving
company. Once Phase II testing has been completed, the Company will
sell or lease the prototype to an asphalt firm for a paving season to further
test the system's performance and dependability. Upon receipt of positive
results, management intends to commence manufacturing the TRAM System.
Research and development expenditures are charged to expense when incurred.
Research and development costs consist of the cost of materials and services
consumed, salaries and wages of personnel directly engaged in research and
development and the costs of patent applications. The cost of the research
and development is reduced by any grants or subsidies. Costs incurred to date
consist of the following:
Jan 15, 1997 (incorporation Year Ended 09/30:
to Sept. 30, 1999
(Cumulative)) 1999 1998
---------------------------- --------- --------
Materials and supplies $268,710 $44,627 $224,083
Salaries and benefits 135,354 85,782 49,572
Patent applications 14,173 9,443 4,730
Investment tax
credits recovered (95,486) (51,250) (44,236)
$322,751 $88,602 $234,149
Certain specific scientific or technological objectives were identified
at the outset of research and development activities in 1999. In fact,
these were a continuation of the activities commenced in 1998. NII
sought to prove that it could develop an asphalt manufacturing plant that:
(1) provides an integrated system that was able to improve dramatically
on pollution control which is virtually non-existent in conventional systems
without bag-houses or settling ponds; (2) improves the durability of the
finished product by the introduction of a different production process; and
(3) improves in the recovery of fine aggregate in the production process
with the result that the finished product has a higher grade and a longer
life.
<PAGE>
V. Regulatory Background:
The Province of British Columbia, the Ministry of Environment and
more specifically the Waste Management Act R.S.C.B. of 1996, specify
in strict detail the amount of emissions permitted from new asphalt plant
operations. The three most important parameters deal with airborne
particulates, organics and carbon monoxide. These are outlined in the
Act and all asphalt operators are expected to submit stack emission
tests to the Environment Ministry on an annual basis.
The prototype asphalt plant designed and manufactured by NII was
meant to meet and exceed these strict requirements. The new concept
and drum technology developed by the Company was tested during
operational trials in the Spring of 1999. The test results, which are
included below, were obtained without the use of either of the two
pollution control methods that are currently used by the asphalt industry -
the bag-house and the wet scrubber.
Parameters Specifications Test Result
- ----------- --------------- ---------------
Particulates 90mg / m3 105.41mg / m3
Organics 60mg / m3 24mg / m3
Carbon Monoxide 200mg / m3 196mg / m3
The British Columbia Provincial Waste Management Act Regulations
specify that all new asphalt plants meet these specifications immediately
while older or existing plants must be up-graded to comply by the year
2001.
The bag-house will be used on all future TRAMS, as the wet scrubber
application is becoming out dated and obsolete. The prototype results,
described above, were extremely gratifying to Management. The TRAMS
prototype passed all of the emissions standards, other than the particulate
standard, without the use or application of any form of conventional
pollution control device - no bag-house or wet scrubber was used. Management
predicts that the use of a bag-house will result in compliance with
particulate emission requirements under all existing emission standards.
However, testing of the TRAMS with a bag-house has not yet been undertaken.
Management is confident that after completing a retrofit that includes a
mini-baghouse installation the unit will meet the requirements set out in
the Provincial Waste Management Act and can meet current North American
anti-pollution requirements.
Item 2. Management Discussion and Analysis or Plan of Operation
The Company was incorporated on September 14, 1995 in Nevada while
NII was incorporated on January 15, 1997 in British Columbia. Prior to the
acquisition of NII, the Company was inactive. The discussion below relates
to a discussion of the financial results of NII and management's plan of
operations for the consolidated entity. The financial results below do not
include the financial condition and results of operation of the Company. The
financial results of NII will be consolidated with the financial statements
of the Company in the 2nd quarter of the Company's 2000 fiscal year.
<PAGE>
RESULTS OF OPERATIONS
Statement of Operations Data
Three months
ended December 31, Year ended September 30,
1999 1998 1999 1998
-------- --------- --------- ---------
Revenue $ - $ - $ - $ -
Expenses
General and administrative
3,986 8,431 45,078 20,381
Professional fees 6,451 689 11,539 5,844
Research and development 16,938 20,295 88,602 234,149
Loss on terminated proposed
business acquisition 33,417 - - -
-------- ---------- ---------- ---------
60,792 29,415 145,219 260,374
Net loss for the period
$ (60,792) $ (29,415) $ (145,219) $ (260,374)
<PAGE>
Balance Sheet Data
December 31, September 30,
1999 1998 1999 1998
-------- ---------- -------- ---------
Working capital $ 54,804 $ 97,585 $ 84,302 $ 72,090
Total assets 74,893 112,740 113,231 91,158
Long term debt 532,599 380,949 501,431 328,099
Accumulated deficit (466,385) (289,789) (405,593) (260,374)
Stockholders' deficit (469,286) (276,035) (408,079) (248,521)
NII is a development stage company and therefore has not had any
revenue generating activities.
Three months ended December 31, 1999 compared to three months
ended December 31, 1998
The research and development costs in the three month period ended
December 31, 1999 are low because the development is almost completed
and NII has turned its attention to finalizing the acquisition of the company
by Global, the registration of Global's stock and arranging for additional
financing. Further development of the TRAMS System has been deferred
until NII can obtain additional funding.
The professional fees increased from 1998 to 1999 as a result of additional
costs anticipated to be incurred in connection with NII's plans and
intentions to become a public company. Initially, the 1998 year end had
not been audited so the costs that year were lower.
Management of NII had investigated a proposed acquisition of a Canadian
business involved in the development of a secure locking system for
explosives magazines. In that regard, NII had advanced $33,417 in
anticipation of acquisition. NII performed its due diligence in
connection with the acquisition and has re-evaluated the proposal and
decided not to pursue the acquisition. As a result, the initial advances
have been written off. The company to which the funds were advanced and
Global have one common director.
Year ended September 30, 1999 compared to the year ended
September 30, 1998
During 1998, NII began the construction of its prototype TRAMS System.
Research and development costs were higher in 1998 because the majority
of the expenditures were for materials for the actual construction of the
prototype. With the completion of a substantial portion of construction
in 1998, costs in 1999 involved testing and refining of the prototype.
The general administrative costs are greater in 1999 because NII was active
for the entire year while in 1998, it was active only for approximately half
the year.
The professional fees are greater in 1999 for the same reasons as stated
above.
Liquidity and Capital Resources
As of December 31, 1999, NII has expended $339,689 on direct research
and development on the prototype. During this stage known as Phase I,
NII constructed the prototype but is still improving it to make it more
efficient and to ensure that it meets government standards for pollution
control. Management estimates that the completion of Phase I will
require approximately $15,000 for materials and $10,000 for labor and
subcontracts.
NII has begun Phase II in which it is building a second trailer which will
have a self-erecting silo, asphalt, diesel and propane tanks. NII
intends to sell the commercial version of the two machines as a package,
but would also be able to sell them individually. Management estimates
the cost of Phase II to be as follows:
Materials $ 84,000
Overhead 16,000
Salaries 50,000
$ 150,000
<PAGE>
To date, the operations of NII have been financed by private loans from
stockholders, directors and related parties totaling $ 532,599 at
December 31, 1999, as well as refundable Canadian government research
credits on eligible research expenditures. Upon conclusion of the share
exchange with NII resulting in NII no longer being Canadian owned, further
research credits will not be available.
Plan of Operations
In the next twelve months, the Company intends to complete Phase I and II
and then produce the machine for commercial sale.
NII has also acquired a license to manufacture a self-erecting silo which is
different from the silo that is going to be used in Phase II. Management
also intends to manufacture this silo for commercial sale.
These objectives are currently being financed by the Company's controlling
stockholders. The Company intends to seek traditional debt, equity or
principal funding to further finance the manufacturing process.
The Company anticipates it will be able to complete the stated plan of
operations if the additional financing can be achieved. The actual
expenditures and business plan of the Company may differ from the stated
plan of operations. The Board of Directors of the Company may decide
not to pursue the stated plan of operations. In addition, the Company may
modify the stated plan of operations based on the available amount of
financing in the event that the Company cannot achieve the required equity
financing to complete the stated plan of operations. The Company does not
have any arrangement in place for any debt or equity financing which would
enable the Company to meet the stated plan of operations.
In the event the Company is not successful in achieving any further sales of
its common stock, the Company anticipates that it could not sustain its
business operations without short-term financing from the Company's
controlling stockholders based on the Company's current cash position and
the absence of a current revenue stream. Due to the Company's lack of
operating history, there exists substantial doubt about the Company's
ability to continue as a going concern, as stated in Note 1 to NII's
financial statements.
The Company anticipates continuing operating losses in the foreseeable future.
The Company bases this expectation in part on the basis that the Company
will incur substantial operating expenses in completing its stated plan of
operations. The Company's future financial results are also uncertain due
to a number of factors, many of which are outside of the Company's control.
These factors include, but are not limited to general economic conditions,
government environmental regulations and increased industry competition.
<PAGE>
Impact of Inflation
The Company believes that inflation has not had a material effect on
its past business.
Year 2000 Computer Problems
All of the Company's mission critical and non-mission critical computer
systems are Year 2000 compliant. Management foresees no extraordinary
expenditures on its operating systems as a result of any computer problems
arising from the arrival of the Year 2000.
Item 3. Description of Property.
The Company maintains its principal executive offices in Prince George,
British Columbia at the address shown on the facing page. Because this
office is in the residence of Ken Bergestad, the Company pays no rent for
the use of this space. The Company rents on a month to month basis 1500
square feet of space formerly used by NII located at 402 Elm Street, Quesnel,
British Columbia, V2J 3W9. The Company pays the property owner
$350.00 per month for this space which is used primarily as a work shop.
Item 4. Security Ownership of Certain Beneficial Owners and Management
I. Security Ownership of Certain Beneficial Owners.
The date of the information presented in this table is as of March 31, 2000.
Title of Class Name & Address Amount and Nature of Percent of Class
of Beneficial Owner Beneficial Owner
- -------------- ---------------- ----------------------- ----------------
Common Lloyd Olson(1) 2,400,000 11.05%
_________________________________________
(1) Lloyd Olson is an employee of the Company, but is not an officer or a
director, nor is he related to any person in management. Mr. Olson's address of
record is RR 08 Box 13 Bjornson Site, Quesnel, British Columbia,
Canada V2J 5E6.
<PAGE>
II. Security Ownership of Management.
The date of the information presented on this table is March 31, 2000.
Title of Class Name and Address of Amount Percent of
Beneficial Owner (1) Class
- --------------- ---------------------- --------- --------------
Common Stock Walter Niemi 7,200,000 33.18%
" " Ken Bergestad 2,400,000 11.05%
9,600,000 44.23%
_____________________________
(1) The address of record for these shareholders is 5975 Selkirk Crescent,
Prince George, British Columbia, Canada V2N 2G9
III. Transfers Involving the Original Twelve Certificates.
The Company is aware of approximately 33 transactions involving the original
twelve common stock certificates. These transactions are summarized below:
VENDOR(1) PURCHASER DATE VOLUME
Brenna Baumgartner
900,000
Cert. No. 2512 38 Purchasers(2) March 16, 2000 900,000
Andrew Beers
500,000
Cert. No. 2510
(the shares represented by this certificate have never been transferred).
Jan Beers
500,000
Cert. No. 2511 Feb. 5, 1996
Andrew McNeilly 100,000
Andrew McNeilly 100,000
Andrew McNeilly 100,000
Josephine Page 100,000
Josephine Page 100,000
Kerry J. Garvin
900,000
Cert. No. 2507
(the shares represented by this certificate have never been transferred).
Arthur G. Lang
900,000
Cert. No. 2508 38 Purchasers(2) March 16, 2000 900,000
Mary L. Lang
900,000
Cert. No. 2509
(the shares represented by this certificate have never been transferred).
Barbara J. McMullin.
900,000
Cert. No. 2501
(the shares represented by this certificate have never been transferred).
Brent M. McMullin
900,000
Cert. No. 2502 Nov. 21, 1996
Donald Byers 300,000
Donald Byers 300,000
Donald Byers 300,000
Kevin McMullin
900,000
Cert. No. 2504 Oct. 26, 1995
Bevin McMullin 900,000
Melba R. McMullin
900,000
Cert. No. 2503 Dec. 9, 1999
Patricia Taverner 10,000
Joanne Gialleonardo 10,000
Maria T. Myatovic 10,000
John J. Paolucci 20,000
Ed & Marylin Harder JTTEN 50,000
Greg Rolufs 50,000
Murdoch M. Ross 50,000
Jesse Sabbarwal 10,000
Kewal Singh Bagri 10,000
Harmail Bagri 10,000
Robin Bagri 10,000
Leslie K. Fallowfield 10,000
Angelino & Lorena Spoletini JTTEN 10,000
Silvana Spoletini 20,000
Daniel A. &Joanne Gialleonardo JTTEN 10,000
Antonio & Ellena Gialleonardo JTTEN 10,000
Michael J. Romano 10,000
Maria L. Romano 10,000
John & Reno Romano JTTEN 10,000
James T. & James C. Gibb JTTEN 10,000
Luigi P. Brunello 10,000
Joagum M. & Lydia Santos JTTEN 50,000
Robert M. & Gayle Wannop JTTEN 100,000
Scotia McCleod in trust for Eric P. Wilson 75,000
James H. Walske 15,000
Robert J. Robinson 20,000
Northern Business Ltd. 290,000
Linda G. Swales
900,000
Cert. No. 2506 Sept. 9, 1998
Andrew J. Chamberlin in trust 700,000
FRL Syndicate 200,000
Murray L. Swales
900,000
Cert. No. 2505 March 13, 2000
FRL Syndicate 700,000
Donald Byers 200,000
_____________________________________________________
Each Vendor depicted paid $.01 (U.S.) to the Company for his or her shares.
These Certificates were cancelled on March 16, 2000, with the underlying
shares being distributed to 38 purchasers. However, there were other
transfers on this date, not involving any of the shareholders depicted
on this schedule and the Transfer Agent's records do not depict to whom
each seller's shares were distributed
<PAGE>
IV. Changes in Control.
There are no arrangements which may result in a change in control
of the issuer.
Item 5. Directors, Executive Officers, Promoters and Control
Persons
Directors and Executive Officers
Helge Freudentheil, President and Director (Age 50)
Mr. Helge Freudentheil is a Director at Global Innovative Systems, Inc,
and has been with the Company since the consummation of the transaction
among the Company and Niew on January 31, 2000. For 10 years prior
to joining the team at Global Innovative Systems, Inc., and continuing to
the present, Mr. Freudentheil has been the Owner-Manager of P.G. Machine
Works, a general machinery, welding, fabricating and manufacturing business
in Prince George, British Columbia. While at P.G. Machine Works,
Mr. Freudentheil: built specialty parts for Rolls Royce turbines; Nuvo
Pinione pumps for Westcoast Energy, Inc.; and built special and intricate
parts for BC Hydro transformer equipment. Mr. Freudentheil has spent his
career involved in the machinery industry. Mr. Freudentheil expends
approximately 90% of his work week efforts to P.G. Machine Works and the
remaining 10% to the Company. He has served as the Lecturer in Charge
for Harare Polytechic in Harare, Zimbabwe, lecturing in applied workshop
technology, production of machine tools and processes. He received a
Zimbabwe National Diploma in Mechanical Engineering. Mr. Freudentheil
holds a Provincial Trade Certificate; Machinist, and an Inter-provincial
Trade Certificate; Machinist.
Mr. Ken Bergestad, Vice-President and Director (Age 47)
Mr. Ken Bergestad is the Vice President of Global Innovative Systems, Inc.
and has held that since the consummation of the transaction among the Company
and Niew on January 31, 2000. From 1997 until 1999, Mr. Bergestad was
Secretary of Niew Industries, Inc. Mr. Bergestad was instrumental in raising
the start-up capital for Niew Industries, Inc. and took on the job as
bookkeeper as well as day-to-day administrative duties of the company.
Mr. Bergestad has also been involved in the paving industry for over
twenty years. He worked as a grade foreman for Pittman Asphalt.
Mr. Bergestad has been a member of the Operating Engineers Union since
1979, and is a classified Grade Foreman, and Equipment Operator.
Mr. Bergestad attained a Bachelor of Arts degree in Psychology from the
University of Victoria. Mr. Bergestad provides approximately
100% of his work week to his duties for the Company.
Walter R. Niemi, Secretary, Treasurer and Director (Age 55)
Mr. Walter R. Niemi is the Secretary Treasurer of Global Innovative
Systems, Inc. and has held that position since the consummation of the
transaction among the Company and Niew on January 31, 2000. Mr. Niemi
is also the President of Niew Industries, Inc. and has been there since
January 1997. Mr. Niemi has extensive experience in the paving industry
and applies virtually 100% of his time to the Company and Niew Industries
Inc. For the five year prior to joining Niew Industries, Mr. Niemi
worked as a mechanic and plant operator for Quesnel Paving. He joined the
Operating Engineers Union in 1970 and is classified as a heavy duty
mechanic, welder, and asphalt plant operator. At Quesnel Paving,
Mr. Niemi's duties consisted of operating, maintaining, repairing, moving
and overseeing the operation of Asphalt Equipment. As an inventor by
nature, Mr. Niemi began designing a different method of mixing asphalt
in the mid 1980's. The drawings of the double tapered mixing drum system
were completed by the beginning of 1997.
Mr. Robert W. Stark, Vice President and Director (Age 49)
Mr. Stark is currently a Director of Global Innovative Systems, Inc. Mr.
Stark came to Global Innovative Systems, Inc. upon the consummation of the
transaction among the Company and Niew on January 31, 2000. Before his
arrival at Global Innovative Systems, Inc. and since 1988, Mr. Stark has
been self-employed with Krats Drilling. He applies approximately 90% of his
work time to Krats Drilling and the remaining 10% to the Company. Mr. Stark
has been employed for over thirty years as a driller, blaster and driver in
British Columbia and the Yukon. Mr. Stark comes to Global Innovative
Systems, Inc. with many years of experience and a lengthy list of training and
certification in areas including but not limited to: BC Ministry of Energy
Mines and Petroleum Services blasting certification, Mine Rescue
Certification, Transportation of Dangerous Goods Certification, and WCB
Occupational First-Aid Level 1.
II. Family Relationships.
There are no family relationships among the directors, executive
officers or persons nominated or chosen by the Company to become
officers or executive officers.
III. Involvement in Certain Legal Proceedings.
The Company is not aware of any material legal proceedings involving
any director, director nominee, promoter or control person including
criminal convictions, pending criminal matters, pending or concluded
administrative or civil proceedings limiting one's participation in the
securities or banking industries or findings of securities or commodities
law violations.
Item 6. Executive Compensation
The following information is dated as of December 31, 1999,
the end of Global Innovative Systems, Inc. last fiscal year.
<PAGE>
I. SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
Name
and Other Restrict- Sec. LTIP All Other
Princi- Annual ed Underly- Payouts Compansa-
pal Salary Bonus Compen- Stock ing ($) tion
Position Year (US$)(*) ($) sation Award Options/ ($)
US($) SARs (#)
Helge 99 0 0 0 0 0 0 0
Freudentheil
president
Robert 99 0 0 0 0 0 0 0
Stark
(vice
president)
Ken 99 19,959 0 0 0 0 0 0
Bergestad
(vice
president)
Walter 99 39,918 0 0 0 0 0 0
Niemi
(secretary
/treasurer)
1 The Compensation depicted was paid by Niew Industries Inc. and is
depicted in U.S. Dollars. The actual compensation paid to Messrs. Bergestad
and Niemi was in Canadian Dollars. The Canadian equivalents are $30,000
and $60,000 respectively.
* The compensation depicted is in U.S. dollars. The compensation was paid
in Canadian dollars.
<PAGE>
II. OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
A. Rule 701 Stock Plan.
On July 1, 1996, Legacy Minerals Inc. adopted the Legacy Minerals Inc.
1996 Consultant and Employee Stock Compensation Plan pursuant to Rule
701 promulgated under the Securities Act of 1933 (the "Plan"). Shares
designated to the Plan: 1,000,000. Transfer Company: Pacific Stock Transfer
Company; 2690 S. Eastern Rd., Suite 218; Las Vegas, Nevada 89109.
The Company has no grants to report in the past fiscal year pursuant to its
Plan. The Plan authorizes the distribution of up to 1,000,000 shares to
be acquired at $.50 per share for an aggregate capital infusion to the
Company of $500,000. To date no options have been granted. The criteria
for distributing options is within management's discretion.
III. AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FY-END OPTION/SAR VALUES
The Company has no Options, Exercises or Values to report for its
last fiscal year pursuant to its Plan. The Plan authorizes the distribution
of up to 1,000,000 shares to be acquired at $.50 per share, but no options
have been granted. The criteria for distributing options is within
management's discretion.
IV. LONG-TERM INCENTIVE PLANS -
AWARDS IN LAST FISCAL YEAR
The Company has no plans or awards to report for last fiscal year
pursuant to its Plan. The Plan authorizes the distribution of up to
1,000,000 shares to be acquired at $.50 per share, but no options have
been granted. The criteria for distributing options is within management's
discretion.
V. COMPENSATION OF DIRECTORS
Standard Arrangements.
Each member of the Company's Board of Directors is to be paid $6,000
(U.S.) annually commencing in 2000 as compensation for their positions.
The members of the Company's Board of Directors also are reimbursed for
actual expenses incurred in attending Board meetings.
B. Other Arrangements.
There are no other arrangements for compensation to the Board of
Directors' members.
VI. EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT, AND CHANGE-IN-CONTROL ARRANGEMENTS
No member of management, nor any employee, is covered by any
employment contract, termination of employment agreement or change
in control arrangement.
<PAGE>
Item 7. Certain Relationships and Related Transactions
During the year ended September 30, 1999, the Niew Industries
borrowed $34,074 (U.S.) from Global Innovative Systems Inc.'s officer
and director Ken Bergestad's father and paid him interest of $1,331
during the year. The loan is unsecured and is without specific terms of
repayment. Interest is payable at the prime rate of the bank that
provided the funds to the related party. The lender has indicated that
he does not expect to request repayment during the next fiscal year. As
of December 31, 1999, the Company had repaid one half of the outstanding
principal balance.
Certain current stockholders of the Company previously advanced $467,357
to NII. Of this sum, $450,457 does not bear interest. The balance of
$16,900 was repaid during the three month period ending December 31, 1999.
These advances are unsecured and have no specific terms of repayment. In
connection with the share exchange agreement, the advances by Niew's
stockholders totaling $414,302 were acquired by the Company.
During 1998, NII advanced $27,827 to its directors. During 1999
arrangements were made by which these advances were repaid by the
directors.
Niew Industries Inc. advanced a sum of money to Remote Security
Ltd. a company in which Robert Stark, a director of the Company, also
serves as a director. Management of NII had investigated a proposed
acquisition of Remote Security Ltd. a Canadian business involved in the
development of a secure locking system for explosives magazines.
Primarily, the secure locking system is designed for use by the mining
industry to prevent theft of explosives while stored. NII advanced $33,417
in anticipation of acquisition. NII performed its due diligence in
connection with the acquisition. Thereafter, NII's management re-evaluated
the proposal and decided not to pursue the acquisition. As a result, the
initial advances were written off. At the time of the related party
transaction, Mr. Stark was a controlling shareholder of Remote Security
Ltd. While he is a member of Global's Board of Directors, Mr. Stark
has never been a director of Niew Industries Inc. Thus, he did not
participate in Niew Industries Inc.'s decision to advance the funds, to
abandon the acquisition, or to forgive the indebtedness.
Item 8. Legal Proceedings
The issuer is not a party to any pending legal action, suit, or proceeding
nor is its property the subject of any legal proceeding.
Item 9. Market for Registrant's Common Equity and Other Shareholder
Matters
The Company is authorized to issue 200,000,000 common shares with
par value of $.001 (USD). There is no public trading market for the common
equity shares of the Company. If the Company successfully obtains a
listing, as is presently intended by management, the common equity shares
will be listed upon the OTC Electronic Bulletin Board Service upon approval
by the NASD of the Company's application on Form 211. There are
approximately 75 equity holders of record of the Company's Common stock.
The number of shares eligible for trading will be all of the Common stock
except that which are owned by management. There have been no cash
dividends declared since inception of the Company. At this time the
Company does not anticipate paying dividends.
Item 10. Recent Sales of Unregistered Securities
During the period from incorporation to the present, the Company sold
securities which were not registered under the Securities Act of 1933 in
reliance presumptively upon exemptions from the securities registration
provisions in transactions as set forth below.
<PAGE>
A. Three individuals, comprising all of the shareholders of NII, a British
Columbia corporation, sold one hundred percent of the outstanding shares and
amounts owing to them by NII to Global Innovative Systems Inc. in exchange
for 12,000,000 Common voting shares of the Company. This transaction
closed on January 31, 2000.
NII Shares Shares issued on exchange
Walter Niemi. 1,290 60.0(% of NII) 7,200,000
Ken Bergestad; 430 20.0 2,400,000
Lloyd Olson 430 20.0 2,400,000
Totals 2,150 100.0% 12,000,000
September 3, 1995 Rule 504 Private Placement.
On or about September 3, 1995, the Company accepted subscription agreements
from twelve prospective purchasers to purchase the Company's Class A
Voting Common Stock for $.01 (U.S.) per share. The Company executed and
filed on Form D that it relied upon Rule 504 in selling the 10 million shares
subscribed for. Subsequently, many of these shares have been sold or
otherwise distributed by these shareholders to other persons, many of whom
remain shareholders of the Company on this date. The original twelve
investors and the amounts of their initial investments appear below.
Name & Address(1) No./Shares Price Total (U.S.$) U.S. Resident
Brenna Baumgartner 900,000 $.01 $9,000.00 No.
Andrew Beers 500,000 5,000.00 No.
Jan Beers 500,000 5,000.00 No.
Kerry J. Garvin 900,000 9,000.00 No.
Arthur G. Lang 900,000 9,000.00 No.
Mary L. Lang 900,000 9,000.00 No.
Barbara J. McMullin 900,000 9,000.00 No.
Brent M. McMullin 900,000 9,000.00 No.
Kevin McMullin 900,000 9,000.00 No.
Melba R. McMullin 900,000 9,000.00 No.
Linda G. Swales 900,000 9,000.00 No.
Murray L. Swales 900,000 9,000.00 No.
(1) All Purchasers subscribed for the shares purchased under the
address P.O. Box 4287-1000; San Jose, Costa Rica.
The Company has not undertaken to distribute or offer any of its shares other
than in the two transactions described above.
<PAGE>
Item 11. Description of Securities
The securities to be registered pursuant to this Form 10-SB are all of the
authorized voting Common stock of Global Innovative Systems Inc. There
are no preemptive rights associated with the securities and no cumulative
voting is authorized by the By-laws. The amount of shares authorized is
200,000,000. There are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any shares of the Company's
common stock.
Item 12. Indemnification of Directors and Officers
Article 11 of the Company's By-laws provides that every person who was
or is a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil criminal, administrative or
investigative, by reason of the fact that he or a person for whom he is
the legal representative is or was a director or officer of the
corporation or is or was serving at the request of the corporation or for
its benefit as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise,
shall be indemnified and held harmless to the fullest extent legally
permissible under the General Corporation Law of the State of Nevada
against all expenses, liability and loss (including attorney's fee,
judgments, fines and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith. The expenses of
officers and directors incurred in defending a civil or criminal action,
suit or proceeding must be paid by the corporation as they are incurred
and in advance of the final disposition of the action, suit or proceeding
upon receipt of an undertaking by or on behalf of the director or officer
to repay the amount if it is ultimately determined by a court of competent
jurisdiction that he is not entitled to be indemnified by the corporation.
Such right of indemnification shall be a contract right which may be
enforced in any manner desired by such person. Such right of indemnification
shall not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective
rights of indemnification under any bylaw, agreement, vote of
stockholders, provisions of law or otherwise, as well as rights under
Article 11.
Nevada Revised Statutes Section 78.7502 provides for discretionary and
mandatory indemnification of officers, directors, employees and agents
as follows:
A 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 legal
proceeding, except by or in the right of the corporation, by reason of the
fact that the person is or was a director, officer, employee or agent of
the corporation, against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
the person in connection with the action, suit or proceeding if the person
acted in good faith and in a manner which was 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 not reasonable cause
to believe the conduct was unlawful.
A 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 its
favor by reason of the fact that the person is or was a director, officer,
employee or agent of the corporation, against expenses, including amounts
paid in settlement and attorneys' fees actually and reasonably incurred
by the person in connection with the defense or settlement of the action
or suit if the person acted in good faith and in a manner 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 judged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts 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, the person is fairly and reasonably entitled to
indemnify for such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in subsections 1 and 2, or in defense of any
claim, issue or matters therein, the corporation shall indemnify the person
against expenses, including attorneys' fees, actually and reasonably incurred
in connection with the defense.
Nevada Revised Statutes Section 78.751 requires authorization for
discretionary indemnification; advancement of expenses and limitation
on indemnification and advancement of expenses as follows:
Any discretionary indemnification under NRS 78.7502 unless ordered
by a court or advanced pursuant to subsection 2, may be made by
the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or
agent is proper in the circumstances. The determination must be made:
By the stockholders;
By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
If a quorum consisting of directors who were not parties to the action,
suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
<PAGE>
Item. 13. Financial Statements.
The Financial Statements filed as part of this Registration
Statement are:
Global Innovative Systems Inc.:
Unaudited Pro-forma Consolidated Financial Information.
Consolidated Balance Sheet as of December 31, 1999 and 1998;
Consolidated Statement of Operations for the three month
period ended December 31, 1999;
Consolidated Statement of Operations for the year ended
September 30, 1999;
Notes to Financial Statements.
Niew Industries Inc.:
Unaudited interim Financial Statements for the three months
ended December 31, 1999.
Balance Sheets
Statements of Operations
Statements of Changes in Stockholders' Equity
Statements of Cash Flows
Notes to the Financial Statements
Audited Financial Statements for the years ended
September 30, 1999 and 1998
Auditors' Report
Balance Sheets
Statements of Operations
Statement of Changes in Stockholders' Equity
Statements of Cash Flows
Notes to the Financial Statements.
Item 14. Changes in and Disagreements with Accountants
None.
Item 15. Index to Exhibits Page Range
3. (i) Corporate Charter..............................................44-49
(ii) Articles of Incorporation .....................................50-52
(iii) Bylaws.........................................................53-62
10. Material Contracts
(i) Share Purchase Agreement.......................................63-65
(ii) Ian Westwood Agreement.........................................66-72
21.
(i) Subsidiaries of the Registrant.................................73
99.
(i) Letter of Counsel..............................................74
Signatures.
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Company caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
Global Innovative Systems Inc.
By:
/s/ Helge Freudentheil
Helge Freudentheil, President (Chief Executive Officer) and Director
April 7, 2000
/s/ Ken Bergestad
Ken Bergestad, Vice President and Director
April 7, 2000
/s/ Walter Niemi
Walter Niemi, Secretary, Treasurer (Chief Financial Officer) and Director
April 7, 2000
/s/ Robert Stark
Robert Stark, Vice President and Director
April 7, 2000
<PAGE>
Unaudited Pro Forma Consolidated Financial Information
The Unaudited Pro-Forma Consolidated Financial Information reflects
financial information which gives effect to the acquisition of all the
outstanding common shares of Niew Industries Inc. and amounts due to
its stockholders totaling $414,302 in exchange for 12 million shares of
common stock of the Company.
The Pro-Forma Consolidated Statements included herein reflect the
anticipated use of the purchase method of accounting for the above
transaction. The acquisition of Niew Industries Inc. will be accounted
for as a reverse acquisition as the former stockholders of Niew Industries
Inc. will control approximately 55% of the voting common shares of the
Company immediately after the acquisition. Such financial information
has been prepared from, and should be read in conjunction with, the
historical financial statements and notes thereto included elsewhere in
this 10-SB registration statement.
The Pro-Forma Consolidated Balance Sheet gives effect to the above
transaction as if it occurred on December 31, 1999. The Pro-Forma
Consolidated Statement of Operations gives effect to the transaction as if
it had occurred at the beginning of the earliest period presented,
combining the results of the Company and Niew Industries Inc. for the year
ended September 30, 1999 and for the three-month period ended
December 31, 1999. The Company was inactive prior to the acquisition of
Niew Industries Inc.
The Pro-Forma Consolidated Financial Information is unaudited and is not
necessarily indicative of the consolidated results which actually would
have occurred if the above transaction had been consummated at the
beginning of the periods presented; nor does it purport to present the
results of operations for future periods.
The accompanying note forms an integral part of these pro-forma financial
statements.
<PAGE>
Global Innovative Systems, Inc.
(A Development Stage Company)
Pro-Forma Balance Sheet
(Unaudited)
December 31, 1997
Global Niew
Innovativ Industries Pro-Forma
Systems, Inc. Inc. Adjustments Balance
Assets
Current
Cash $ 35,000 $ 9,491 $ - $ 44,491
Receivables - 1,156 - 1,156
Investment tax credits
refundable - 52,290 - 52,290
Prepaid expenses - 3,452 - 3,452
________________________________________________________________________
35,000 66,389 - 101,389
Fixed assets - 8,504 - 8,504
Due from Niew Industries
Inc. 414,302 - (414,302) 1 -
$ 449,302 $ 74,893 $ (414,302) $ 109,893
_________________________________________________________________________
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Current
Accounts payable
$ - $ 6,155 $ - $ 6,155
Accrued liabilities
- 5,430 - 5,430
- 11,585 - 11,585
Loans payable
414,302 62,585 (414,302) 1 62,585
Loan payable to related party
- 16,970 - 16,970
Advances from stockholders and directors
- 38,737 - 38,737
Advances from Global Innovative Systems, Inc.
- 414,302 (414,302) 1 -
___________________________________________________________________________
414,302 544,179 (828,604) 129,877
____________________________________________________________________________
Stockholders' equity (deficit)
Share capital
Authorized
200,000,000 common shares, par value $0.001
Issued
21,700,000 common shares (pro-forma)
9,700 1,404 (9,700) 1 21,700
20,296 1
Additional paid-in capital
90,300 - (90,300) 1 429,006
14,704 1
414,302 1
Deficit accumulated in the development stage
(65,000) (466,385) 65,000 1 (466,385)
Accumulated other comprehensive loss -
foreign currency translation loss
- (4,305) - (4,305)
__________________________________________________________________________
35,000 (469,286) 414,302 (19,984)
__________________________________________________________________________
$ 449,302 $ 74,893 $ (414,302) $ 109,893
<PAGE>
Global Innovative Systems, Inc.
(A Development Stage Company)
Pro-Forma Statement of Operations
(Unaudited)
For the three-month period ended
December 31, 1999
Global Niew
Innovative Industries Pro-Forma
Systems, Inc. Inc. Adjustments Balance
_________________________________________________________________________
Expenses
Accounting, audit and legal
$ - $ 6,451 $ - $ 6,451
Automotive - 615 - 615
Bank charges and interest
- 1,726 - 1,726
Depreciation - 510 - 510
Insurance - 1,659 - 1,659
Office and supplies
- 727 - 727
Rent - 68 - 68
Research and development
- 16,938 - 16,938
Telephone - 1,136 - 1,136
Travel - 220 - 220
___________________________________________________________________________
- 30,050 - 30,050
Interest income - (2,675) - (2,675)
Loss on termination of proposed business acquisition
- 33,417 - 33,417
___________________________________________________________________________
Net loss for the period
$ - $ 60,792 $ - $ 60,792
___________________________________________________________________________
Basic and diluted loss per share
$ 0.00
=======================
Weighted average shares outstanding 12,000,000
=======================
<PAGE>
Global Innovative Systems, Inc.
(A Development Stage Company)
Pro-Forma Statement of Operations
(Unaudited)
For the year ended September 30, 1999
Global Niew
Innovative Industries Pro-Forma
Systems, Inc. Inc. Adjustments Balance
___________________________________________________________________________
Expenses
Accounting, audit and legal
$ - $ 11,539 $ - $ 11,539
Automotive - 11,113 - 11,113
Bank charges and interest
- 1,528 - 1,528
Depreciation - 2,203 - 2,203
Insurance - 5,018 - 5,018
Licenses, dues and subscriptions
- 97 - 97
Office and supplies
- 1,962 - 1,962
Rent - 3,027 - 3,027
Research and development
- 88,602 - 88,602
Telephone - 5,563 - 5,563
Travel - 14,643 - 14,643
__________________________________________________________________________
- 145,295 - 145,295
Interest income
- (76) - (76)
Net loss for the year
$ - $ 145,219 $ - $ 145,219
Basic and diluted loss per share
$ 0.01
============
Weighted average shares outstanding 12,000,000
============
<PAGE>
Global Innovative Systems, Inc.
(A Development Stage Company)
Note to the Pro-forma Financial Statements
(Unaudited)
For the year ended September 30, 1999 and
for the three-month period ended December 31, 1999
__________________________________________________________________________
To reflect the acquisition of 100% of the common stock of Niew Industries
Inc. along with amounts owing to its stockholders of $414,302 in exchange
for 12 million shares of the Company's common stock (At December 31, 1999,
the Company had acquired the loans from the stockholders of Niew Industries
Inc.). The transaction was accounted for as a recapitalization of the
Company using accounting principles applicable to reverse acquisitions.
Following reverse acquisition accounting, the financial statements subsequent
to closing will be presented as a continuation of Niew Industries Inc.
The value assigned to the common stock issued by the Company on the
transaction is $30,000 based on the fair value of net assets of the
Company at the date of acquisition.
The intercompany balance of $414,302 is eliminated upon consolidation.
The accompanying note forms an integral part of these pro-forma financial
statements.
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
BALANCE SHEETS (UNAUDITED)
(Expressed in US Dollars)
December 31,
1999 1998
_______________________
ASSETS
Current assets
Cash $ 9,491 $ 25,962
Receivables 1,156 35,341
Investment tax credits refundable 52,290 42,779
Prepaid expenses 3,452 1,329
___________ ______________
66,389 105,411
Fixed assets 8,504 7,329
___________ ______________
$ 74,893 $ 112,740
=========== ==============
LIABILITIES
Current liabilities
Accounts payable $ 6,155 $ 4,826
Accrued liabilities 5,430 3,000
__________ ______________
11,585 7,826
Loans payable (Note 4) 62,585 -
Loan payable to related party 16,970 -
Advances from stockholders and
directors (Note 5) 38,737 380,949
Advances from Global Innovative
Systems Inc. (Note 6) 414,302 -
__________ _______________
544,179 388,775
STOCKHOLDERS' DEFICIT
Common stock (Note 7) 1,404 3,265
Accumulated other comprehensive income Foreign
currency translation (loss) gain (4,305) 10,489
Deficit accumulated in the
development stage (466,385) (289,789)
__________ _______________
(469,286) (276,035)
__________ _______________
$ 74,893 $ 112,740
========== ===============
The accompanying notes are an integral part of these financial statements
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS (UNAUDITED)
(Expressed in US Dollars)
January 15, 1997
(incorporation) to
December 31, 1999 Three months ended December 31,
Cumulative 1999 1998
__________________________________________________________________________
EXPENSES
Accounting, audit and legal
$ 23,834 $ 6,451 $ 689
Automotive 15,725 615 1,996
Bank charges and interest
3,430 1,726 67
Depreciation 3,550 510 429
Insurance 11,531 1,659 1,135
Office and supplies 3,813 727 146
Rent 11,537 68 2,756
Research and development
costs (Note 8) 339,689 16,938 20,295
Telephone 7,969 1,136 1,437
Travel 15,370 220 490
__________ __________ ___________
LOSS BEFORE OTHER ITEMS
(436,448) (30,050) (29,440)
__________ __________ ___________
OTHER ITEMS
Interest income 3,480 2,675 25
Loss on terminated proposed
business acquisition (Note 9)
(33,417) (33,417) -
_________ __________ ____________
(29,937) (30,742) 25
_________ __________ ____________
NET LOSS FOR THE PERIOD
$ (466,385) $ (60,792) $ (29,415)
The accompanying notes are an integral part of these financial statements
<PAGE>
NIEW INDUSTRIES INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
(UNAUDITED)
(A DEVELOPMENT STAGE COMPANY)
(EXPRESSED IN US DOLLARS)
Deficit
Foreign Accumulated
Currency in the Total
Translation Development Stockholders'
Shares Amount Adjustments Stage Deficit
________ ________ ____________ ____________ ____________
Initial capitalization of
the company on January 15, 1997
100 $ 67 $ - $ - $ 67
Common stock issued at $1 Can.
April 15, 1998
4,900 3,198 - - 3,198
________ _________ ___________ ___________ ____________
5,000 3,265 - - 3,265
Net loss for the year
- (260,374) (260,374)
Foreign currency translation adjustments
8,588 - 8,588
_______ __________ __________ __________ ____________
Comprehensive loss 8,588 (260,374) (251,786)
_______ __________ __________ ___________ ___________
Balance September 30, 1998
5,000 3,265 8,588 (260,374) (248,521)
Net loss for the year
- (145,219) (145,219)
Foreign currency
translation adjustments (14,339) - (14,339)
Total comprehensive loss (14,339) (145,219) (159,558)
_______ __________ ___________ __________ ____________
Balance, September 30, 1999
5,000 3,265 (5,751) (405,593) (408,079)
_______ __________ ___________ ___________ ____________
Net loss for the period (60,792) (60,792)
Common stock redeemed at $1 Cdn. on October 31, 1999
(2,850) (1,861) - - (1,861)
Foreign currency translation
adjustments - - 1,446 - 1,446
Total comprehensive loss
- - 1,446 (60,792) (61,207)
Balance, December 31, 1999
2,150 $ 1,404 $ (4,305) $(466,385) $(469,286)
========== ========= ========= =========== =========
The accompanying notes are an integral part of these financial statements
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (UNAUDITED)
(Expressed in US Dollars)
January 15, 1997
(incorporation) to
December 31, 1999 Three months ended December 31,
Cumulative 1999 1998
____________________________________________________
CASH PROVIDED BY (USED IN)
Operating
Net loss for the period $ (466,385) $ (60,792) $ (29,415)
Non cash item
Depreciation 3,550 510 429
(Increase) decrease in assets
Receivables (1,156) (56) (1,886)
Investment tax credits refundable
(52,290) 44,846 -
Prepaid expenses (3,452) 1,682 1,279
Increase (decrease) in liabilities
Accounts payable 6,155 (8,294) (3,754)
Accrued liabilities 5,430 - -
____________ ____________ _________
(508,148) (22,104) (33,347)
Financing
Loan payable to related party
16,970 (17,068) -
Loans payable 62,585 62,585 -
Advances from (to) stockholders and directors
38,737 (14,318) 52,850
Issuance (redemption) of common stock
1,404 (1,861) -
Advances from Global Innovative Systems Inc.
414,302 - -
___________ ___________ ________
533,998 29,338 52,850
Investing
Purchase of fixed assets
(12,090) - (324)
___________ __________ ________
INCREASE IN CASH 13,760 7,234 19,179
EFFECT OF FOREIGN EXCHANGE ON CASH
(4,269) 1,446 1,955
CASH AT BEGINNING OF PERIOD - 811 4,828
CASH AT END OF PERIOD $ 9,491 $ 9,491 $ 25,962
The accompanying notes are an integral part of these financial statements
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(Expressed in US Dollars)
December 31, 1999 and 1998
1. UNAUDITED FINANCIAL STATEMENTS
The interim financial statements for the three month periods ended
December 31, 1999 and 1998 included herein have been prepared by the
Company without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the
information presented not misleading.
These statements reflect all adjustments consisting of normal
recurring adjustments, which, in the opinion of management, are
necessary for fair presentation of the information, contained therein.
It is suggested that these interim financial statements be read in
conjunction with the financial statements of the Company for the years
ended September 30, 1999 and 1998 and the notes thereto included in the
company's registration on Form 10-SB. The Company follows the same
accounting policies in preparation of interim reports.
Results of operations for the interim periods are not indicative of
annual results.
2. NATURE OF BUSINESS AND CONTINUING OPERATIONS
Niew Industries Inc. was incorporated on January 15, 1997 under the
British Columbia Company Act. The Company was inactive until
March 23, 1998 when it began the development of a twin rotating
asphalt mixing system. To date, this has been the company's only
activity. These financial statements are expressed in US dollars and
have been prepared in accordance with accounting principles generally
accepted in the United States.
These accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course of
business. As at December 31, 1999, the Company has accumulated operating
losses of $466,385 since its inception. The continuation of the Company
is dependent upon the continuing financial support of creditors and
stockholders and obtaining long term financing as well as achieving a
profitable level of operations through the successful development of
the twin rotating asphalt mixing system. Subsequent to the period, the
Company was acquired by Global Innovative Systems Inc., a Nevada company in
the process of obtaining an over-the-counter listing in the United States.
It is the intention of the management of Global to raise a new equity
financing of approximately $1,500,00 within the upcoming year. Amounts
raised will be used to complete the development of the twin rotating asphalt
mixing system and then proceed into a stage of commercial production. While
the Company is expending its best efforts to achieve the above plans, there
is no assurance that any such activity will generate funds that will be
available for operations.
<PAGE>
NIEW INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - Continued
(Expressed in US Dollars)
December 31, 1999 and 1998
3. NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
requires companies to recognize all derivatives contracts as either assets
or liabilities on the balance sheet and to measure them at fair value. If
certain conditions are met, a derivative may be specifically designated as
a hedge, the objective of which is to match the timing of gain or loss
recognition on the hedging derivative with the recognition of (i) the changes
in the fair value of the hedged assets or liability that are attributable to
the hedged risk or (ii) the earnings effect of the hedged forecaster
transaction. For a derivative not designated as a hedging instrument,
the gain or loss is recognized in income in the period of change.
SFAS No. 133 is effective for all quarters of fiscal years beginning
after June 15, 2000. Historically, the Company has not entered into
derivative contracts either to hedge existing risks or for speculative
purposes. Accordingly the Company does not expect adoption of the new
standards on October 1, 2000, to affect its financial statements.
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities,"
("SOP 98-5") which provides guidance on the ifnancial reporting of start-up
activities and organization costs to be expensed as incurred. SOP 98-5 is
effective for fiscal years beginning after December 15, 1998 with initial
adoptoion reported as the cumulative effect of a change in accounting
principle. Adoption of this standard did not have a material effect on the
financial statements.
4.LOANS PAYABLE
During the period, the Company recieved advances totaling $62,585. These
advances do not bear interest and have no specific terms of repayment.
The lendershave indicated that they do not expect to request repayment
within the next fiscal year. Consequently, the amount has been classified
as a non-current liability.
5. ADVANCES FROM STOCKHOLDERS AND DIRECTORS
The advances are unsecured, do not bear interest and have no specific terms
of repayment. The stockholders and directors have indicated that they do not
expect to request repayment within the next fiscal year. Consequently, the
amount has been classified as a non-current liability.
<PAGE>
NIEW INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)-CONTINUED
(Expressed in U.S. Dollars)
December 31, 1999 and 1998
6. ADVANCES FROM GLOBAL INNOVATIVE SYSTEMS INC.
In connection with the share purchase agreement (Note 10), Global
acquired advances made to the Company by previous stockholders. The
advances do not bear interest and have no specific terms of repayment.
7. COMMON STOCK
Authorized:
10,100 common shares without par value
Issued:
1999 1998
__________ ________
2,150 common shares (1998 - 5,000) $ 1,404 $ 3,265
During the period, 2,850 shares were redeemed for cash
consideration of $1,861.
8. RESEARCH AND DEVELOPMENT COSTS
The company is in the process of developing a twin rotating asphalt
mixing system. Costs incurred to date consist of the following:
January 15, 1997
(incorporation) to Three months ended
December 31, 1999 December 31,
Cumulative 1999 1998
________________________________________________________
Materials and supplies
$ 274,528 $ 5,818 $ 13,061
Salaries and benefits
138,436 3,082 3,384
Patent applications 22,211 8,038 3,850
Investment tax credits recovered
(95,486) - -
_____________ _____________ ___________
$ 339,689 $ 16,938 $ 20,295
============== ============= ===========
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - Continued
(Expressed in US Dollars)
December 31, 1999 and 1998
9. LOSS ON TERMINATED PROPOSED BUSINESS ACQUISITION
During the period, the Company advanced funds in anticipation of the
acquisition of a business. The directors have reassessed the proposed
acquisition and have chosen to abandon it. As a result, the advances
have been written off.
The company to which the funds were advanced and Global Innovative
Systems Inc. have one common director.
10. SUBSEQUENT EVENT
By agreement dated December 1, 1999, Global Innovative Systems Inc.,
a Nevada corporation, agreed to acquire 100% of the issued and outstanding
shares of the company. The acquisition is to be effective on
January 31, 2000. Global is currently inactive with its only asset
being approximately $35,000 in cash at the date of acquisition.
Terms of the share exchange agreement have global acquiring the Company's
stock in exchange for 12 million shares of Global. Upon closing the
acquisition, the transaction will be accounted for using the purchase
method of accounting as a reverse acquisition. Following reverse
acquisition accounting, consolidated financial statements subsequent to
closing of the acquisition will be presented as a continuation of the
Company. The operations of Global will be consolidated with those of the
company from the date of acquisition.
Global Innovative Systems Inc. will be making an application to the
United States Securities and Exchange Commission to register its common stock.
11. COMMITMENT
By agreement dated November 8, 1999, the company agreed to purchase a
license entitling it to manufacture a component known as a "Portable
Overhead Bin". This component will be part of the twin rotating asphalt
mixing system that is currently being developed by the Company. To
acquire the license, the Company is required to pay a one time payment
of $75,000 in Canadian dollars, $30,000 to be paid by March 31, 2000 and
the balance to be paid by August 31, 2000. In addition, the company will
be required to pay a royalty based on the number of units manufactured in
a calendar year. The minimum royalty is $10,000 Canadian for 2000 and
$20,000 Canadian for 2001 and thereafter.
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
SEPTEMBER 30, 1999
Page
AUDITORS' REPORT 1
COMMENTS BY AUDITOR FOR U.S. READERS
ON CANADA-U.S. REPORTING DIFFERENCE 2
FINANCIAL STATEMENTS
Balance Sheet 3
Statements of Operations 4
Statements of Changes in Stockholders' Deficit 5
Statements of Cash Flows 6
Notes to Financial Statements 7 - 12
<PAGE>
AUDITORS' REPORT
To the Stockholders
Niew Industries Inc.
(A Development Stage Company)
We have audited the balance sheets of Niew Industries Inc., (A Development
Stage Company), as at September 30, 1999 and 1998, the statements of
changes in stockholders' deficit for the years then ended and the
statements of operations and cash flows for the years then ended and
for the cumulative period from January 15, 1997 (incorporation) to
September 30, 1999. These financial statements are the responsibility
of the company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted standards
for auditing in Canada. Those standards require that we plan and perform
an audit to obtain reasonable assurance 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.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the company as at
September 30, 1999 and 1998 and the results of operations and its
cash flows for the years then ended and for the cumulative period from
January 15, 1997 (incorporation) to September 30, 1999, in accordance
with generally accepted accounting principles in the United States.
Burnaby, B.C., Canada Chartered Accountants
December 7, 1999
<PAGE>
COMMENTS BY AUDITOR FOR U.S. READERS
ON CANADA - U.S. REPORTING DIFFERENCE
In the United States, reporting standards for auditors require the addition
of an explanatory paragraph (following the opinion paragraph) when the
financial statements are affected by conditions and events that cast
substantial doubt on the company's ability to continue as a going concern,
such as those described in Note 1 to the financial statements. Our report
to the stockholders dated December 17, 1999 is expressed in accordance
with Canadian reporting standards which do not permit a reference to such
events and conditions in the auditor's report when these are adequately
disclosed in the financial statements.
Burnaby, B.C., Canada Chartered Accountants
December 7, 1999
<PAGE>
NIEW INDUSTRIES INC
(A Development Stage Company)
BALANCE SHEETS (UNAUDITED)
(Expressed in US Dollars)
September 30,
1999 1998
__________ ____________
ASSETS
Current assets
Cash $ 811 $ 4,828
Receivables (Note 9) 1,100 33,455
Investment tax credits refundable (Note 2)
97,136 42,779
Prepaid expenses 5,134 2,608
__________ _____________
104,181 83,670
Fixed assets (Note 3) 9,050 7,488
$ 113,231 $ 91,158
LIABILITIES
Current liabilities
Accounts payable $ 14,449 $ 8,580
Accrued liabilities 5,430 3,000
________________ _______________
19,879 11,580
Loan payable to related party (Note 4)
34,074 -
Advances from stockholders (Note 5) 467,357 328,099
________________ _______________
521,310 339,679
STOCKHOLDERS' DEFICIT
Common stock (Note 6) 3,265 3,265
Accumulated other comprehensive income
Foreign currency translation (loss) gain
(5,751) 8,588
Deficit accumulated in the development stage
(405,593) (260,374)
_______________ ________________
(408,079) (248,521)
$ 113,231 $ 91,158
The accompanying notes are an integral part of these financial statements
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS (UNAUDITED)
(Expressed in US Dollars)
January 15, 1997
(incorporation) to
September 30, 1999 Year ended September 30,
Cumulative 1999 1998
_____________________________________________________
EXPENSES
Accounting, audit and legal
$ 17,383 $ 11,539 $ 5,844
Automotive 15,110 11,113 3,997
Bank charges and interest 1,704 1,528 176
Depreciation 3,040 2,203 837
Insurance 9,872 5,018 4,854
Licenses, dues and subscriptions
165 97 68
Office and supplies 2,921 1,962 959
Rent 11,469 3,027 8,442
Research and development (Note 7)
322,751 88,602 234,149
Telephone 6,833 5,563 1,270
Travel 15,150 14,643 507
LOSS BEFORE OTHER ITEM (406,398) (145,295) (261,103)
OTHER ITEM
Interest income 805 76 729
NET LOSS FOR THE PERIOD $ (405,593) $ (145,219) $ (260,374)
================ ================ ============
The accompanying notes are an integral part of these financial statements
<PAGE>
NIEW INDUSTRIES INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
(A DEVELOPMENT STAGE COMPANY
(EXPRESSED IN US DOLLARS)
Deficit
Foreign Accumulated
Currency in the Total
Translation Development Stockholders'
Shares Amount Adjustments Stage Deficit
________ _______ ____________ _____________ ______________
Initial capitalization of the company of January 15, 1997
100 $ 67 $ - $ - $ 67
Common stock issued at $1 Can. April 15, 1998
4,900 3,198 - - 3,198
________ ________ ____________ _____________ ______________
5,000 3,265 - - 3,265
Net loss for the year - (260,374) (260,374)
Foreign currency
translation adjustments 8,588 - 8,588
Comprehensive loss 8,588 (260,374) (251,786)
Balance September 30, 1998
5,000 3,265 8,588 (260,374) (248,521)
Net loss for the year - (145,219) (145,219)
Foreign currency
translation adjustments (14,339) - (14,339)
Total comprehensive loss (14,339) (145,219) (159,558)
Balance, September 30, 1999
5,000 3,265 (5,751) (405,593) (408,079)
========== ======== ========= ============= ==========
The accompanying notes are an integral part of these financial statements
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (UNAUDITED)
(Expressed in US Dollars)
January 15, 1997
(incorporation) to
September 30, 1999 Year ended September 30,
Cumulative 1999 1998
_________________________________________________________
CASH PROVIDED BY (USED IN)
Operating
Net loss for the period $ (405,593) $ (145,219) $ (260,374)
Non cash item
Depreciation 3,040 2,203 837
(Increase) decrease in assets
Receivables (1,100) 32,355 (33,455)
Investment tax credits refundable
(97,136) (54,357) (42,779)
Prepaid expenses (5,134) (2,526) (2,608)
Increase (decrease) in liabilities
Accounts payable 14,449 5,869 8,580
Accrued liabilities 5,430 2,430 3,000
_______________________________________________________
(486,044) (159,245) (326,799)
Financing
Loan payable to related party
34,074 34,074 -
Advances from stockholders 467,357 139,258 328,099
Issuance of common stock 3,265 - 3,198
______________________________________________________
504,696 173,332 331,297
Investing
Purchase of fixed assets (12,090) (3,765) (8,325)
INCREASE (DECREASE) IN CASH 6,562 10,322 (3,827)
EFFECT OF FOREIGN EXCHANGE ON CASH
(5,751) (14,339) 8,588
CASH AT BEGINNING OF PERIOD - 4,828 67
CASH AT END OF PERIOD 811 811 4,828
=============== =============== =============
The accompanying notes are an integral part of these financial statements
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(Expressed in US Dollars)
September 30, 1999 and 1998
1. NATURE OF BUSINESS AND CONTINUING OPERATIONS
Niew Industries Inc. was incorporated on January 15, 1997 under the
British Columbia Company Act. The company was inactive until March
23, 1998 when it began the development of a twin rotating asphalt mixing
system. To date this has been the Company's only activity. These
financial statements are expressed in US dollars and have been prepared
in accordance with accounting principles generally accepted in the United
States.
These accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. As at
September 30, 1999, the Company has accumulated operating losses of
$405,593 since its inception. The continuation of the Company is
dependent upon the continuing financial support of creditors and
stockholders and obtaining long term financing as well as achieving
a profitable level of operations through the successful development of the
twin rotating asphalt mixing system. As disclosed in Note 10, The Company
has been acquired by Golobal Innovative Systems, Inc., a Nevada company in
the process obtaining an over-the-counter listing in the United States.
It is the intention of the management of Global to raise new equity
financing of approximately $1,500,000 within the upcoming year. Amounts
raised will be used to complete the development of the twin rotating
asphalt mixing system and thene proceed into a stage of commerical
production. While the Company is expending its best efforts to
achieve the above plans, there is no assurance that any such activity will
generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Tax Credit: The Company has made application to the
Canada Customs and Revenue Agency to claim for refundable investment
tax credits related to their research and development activities. The
tax credits are earned by incurring expenditures that qualify for this
credit under the Income Tax Act of Canada. The Company's estimate of the
amount recoverable is shown in the financial statements as investment tax
credits refundable. The estimate is based on the Canada Customs and
Revenue Agency's current assessing practices and the accrual for 1999
has not yet been subject to audit by the Canada Customs and Revenue
Agency. Once the application is audited by the Canada Customs and Revenue
Agency, it is reasonably possible the estimate could change materially.
Depreciation: Fixed assets are recorded at cost and are depreciated
over their estimated useful lives as follows:
Rate per annum
Office equipment 20% declining balance basis
Machinery and equipment 20% declining balance basis
Automotive equipment 30% declining balance basis
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - Continued
(Expressed in US Dollars)
September 30, 1999 and 1998
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Foreign Currency Translation: As a Canadian company operating solely
in Canada, its functional currency is the Canadian dollar. These financial
statements have been translated into United States dollars for consistency
with other registrants of the Securities and Exchange Commission ("SEC")
in the United States. As a result, the assets and liabilities have been
translated at the exchange rate in effect at the balance sheet date, and
revenues and expenses have been translated at the average exchange rate for
the year. Gains or losses on translation are deferred as a separate
component of stockholders' deficit.
Research and Development Costs: Expenditures on research and
development are charged to expense when incurred. Research and development
costs consist of the cost of materials and services consumed, salaries
and wages of personnel directly engaged in research and development and
the costs of patent applications. The cost of the research and development
is reduced by any investment tax credits received.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the recognized amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Income Taxes: The Company follows the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes", which requires the Company to recognize deferred tax liabilities
and assets for the expected future tax consequences of events that have
been recognized in the Company's financial statements or tax returns using
the liability method. Under this method, deferred tax liabilities and
assets are determined based on the temporary differences between the
financial statement carrying amounts and tax bases of assets and liabilities
using enacted tax rates in effect in the years in whichthe differences
are expected to reverse.
Comprehensive Income: The company has adopted SFAS No. 130. "Reporting
Comprehensive Income", which establishes standards for reporting and
display of comprehensive income, its components and accumulated balances.
The Company is disclosing this information on its Statement of Changes in
Stockholders' Deficit. Comprehensive income is comprised of net income
(loss) and all changes to stockholders' deficit except those resulting
from investments by owners and distributions to owners.
New Accounting Pronouncements: In June 1998, the Financial Accounting
Standards Board issued SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities. SFAS No. 133 requires companies to recognize all
derivative contracts as either assets or liabilities on the balance sheet
and to measure them at fair value. If certain conditions are met, a
derivative may be specifically designated as a hedge, the objective of
which is to match the timing of gain or loss recognition on the hedging
derivative with the recognition of (i) the changes in the fair value of
the hedged assets or liability that are attributed to the hedged risk or
(ii) the earnings effect of the hedged forecasted transaction. For the
derivative not designated as a hedging instrument, the gain or loss
is recognized in income in the period of change. SFAS No. 133 is
effective for all quarters of fiscal years beginning after June 15, 2000.
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - Continued
(Expressed in US Dollars)
September 30, 1999 and 1998
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Historically, the Company has not entered into derivative contracts either
to hedge existing risks or for speculative purposes. Accordingly, the
Company does not expect adoption of the new standards on October 1, 2000
to affect its financial statements.
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities", (SOP 98-5") which provides guidance on the financial reporting
of start-up activities and organization costs. It requires costs of
start-up activities and organization costs to be expensed as incurred.
SOP 989-5 is effective for fiscal years beginning after December 15, 1998
with initial adoption reported as the cumulative effect of a change in
accounting principle. Adoption of this standard would not have a
material effect on the financial statements.
3. FIXED ASSETS
Accumulated Net Book Value
Cost Depreciation 1999 1998
-------------- ----------------- -------- ---------
Office equipment
$ 270 $ 76 $ 194 $ 233
Machinery and equipment
8,406 1,983 6,423 5,590
Automotive equipment
3,476 1,043 2,433 1,665
$ 12,152 $ 3,102 $ 9,050 $ 7,488
============== ============ ============= =============
4. LOAN PAYABLE TO RELATED PARTY
During the year ended September 30, 1999, the Company borrowed $34,074
from a person related to one of the directors and paid him interest of
$1,331 during the year. The loan is unsecured and is without specific
terms of repayment. Interest is payable at the prime rate of the bank
that provided the funds to the related party. The lender has indicated
that he does not expect to request repayment during the next fiscal year,
therefore the amount has been classified as other than a current liability.
5. ADVANCES FROM STOCKHOLDERS
Of the advances, $450,457 does not bear interest, the balance of $16,900,
will receive a 10% bonus when repaid. The advances are unsecured and
have no specific terms of repayment. The stockholders have indicated that
they do not expect to request repayment within the next fiscal year.
Consequently, the amount has been classified as a non current liability.
Subsequent to the year end the advances of $16,900 were repaid in full.
In addition, $413,998 of the remaining advances were acquired by Global
Innovative Systems, Inc., in connection with the share exchange agreement
(Note 10).
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - Continued
(Expressed in US Dollars)
September 30, 1999 and 1998
6. COMMON STOCK
Authorized:
10,100 common shares without par value
Issued:
1999 1998
---------------------------------
5,000 common shares $ 3,265 $ 3,265
============== ===============
During 1998, 4,900 shares were issued for cash consideration of $3,198.
Subsequent to September 30, 1999, 2,850 shares were redeemed for cash
consideration of $1,861.
7. RESEARCH AND DEVELOPMENT COSTS
The company is in the process of developing a twin rotating asphalt
mixing system. Costs incurred to date consist of the following:
January 15, 1997
(incorporation) to
September 30, 1999 Year ended September 30,
Cumulative 1999 1998
-----------------------------------------------------------
Materials and supplies
$ 268,710 $ 44,627 $ 224,083
Salaries and benefits
135,354 85,782 49,572
Patent and applications
14,173 9,443 4,730
Investment tax credits recovered
(95,486) (51,250) (44,236)
------------------ --------------- ---------------
$ 322,751 $ 88,602 $ 234,149
================== =============== ===============
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - Continued
(Expressed in US Dollars)
September 30, 1999 and 1998
8. INCOME TAX INFORMATION
The Company has operating losses of $77,684 available to be carried
forward to reduce taxable income of future years expiring as follows:
2004 $ 22,578
2005 55,105
The Company has undeducted expenditures for tax purposes of $359,843
available to be carried forward indefinitely to reduce taxable income
of future years.
The tax effect of temporary differences that give rise to the Company's
deferred tax assets (liabilities) are as follows:
1999 1998
Tax loss carryforwards $ 34,842 $ 10,300
Undeducted expenses 164,160 125,331
Fixed assets 1,387 382
Patents 6,466 2,158
Investment tax credits (23,380) (20,181)
Valuation allowance (183,475) (117,990)
$ - $ -
============ ===============
The provision for income taxes differs from the amount computed using
the federal statutory income tax rate as follows:
Year ended September 30,
1999 1998
-------------------------------
Benefit at Federal Canadian statutory rate $ (41,800) $ (75,315)
Benefit at Provincial statutory rate (23,685) (42,675)
Increase in valuation allowance 65,485 117,990
$ - $ -
============== ===============
<PAGE>
NIEW INDUSTRIES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(Expressed in US Dollars)
September 30, 1999 and 1998
8. INCOME TAX INFORMATION - Continued
The company evaluates its valuation allowance requirements based on
projected future operations. When circumstances change and this causes
a change in management's judgment about the recoverability of deferred
tax assets, the impact of the change on the valuation allowance is
reflected in current income.
9. RELATED PARTY TRANSACTIONS
As of the year ended September 30, 1998, the company had advanced
$27,827 to directors of the Company. During the current year, these
advances were repaid by the Directors.
10. SUBSEQUENT EVENT
By agreement dated December 1, 1999, Global Innovative Systems Inc., a
Nevada corporation, agreed to acquire 100% of the issued and outstanding
shares of the Company. The acquisition is to be effective on January 31,
2000. Global Innovative Systems Inc. is currently inactive with its only
asset being approximately $35,000 in cash at the date of acquisition.
Terms of the share exchange agreement have Global acquiring the company's
stock in exchange for 12 million shares of Global. Upon closing the
acquisition, the transaction will be accounted for using the purchase
method of accounting as a reverse acquisition. Following reverse
acquisition accounting, consolidated financial statements subsequent to
closing of the acquisition will be presented as a continuation of the
Company. The operations of Global will be consolidated with those of the
company from the date of acquisition.
Global Innovative Systems Inc. will be making an application to the United
States Securities and Exchange Commission to register its common stock.
11. FAIR VALUE OF FINANCIAL STATEMENTS
The carrying value of the Company's financial instruments, including
cash, receivables, accounts payable and accrued liabilities at
September 30, 1999 approximate their fair values due to the short
term nature of these financial assets and liabilities.
The fair value of loans payable to shareholders and related parties is
not practicable to determine.
In accordance with Section 12 of the Securities and Exchange Act of 1934,
the Company caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
Global Innovative Systems, Inc.
By:
/s/ Helge Freudentheil
Helge Freudentheil, President (Chief Executive Officer) and Director
April 7, 2000
/s/ Ken Bergestad
Ken Bergestad, Vice President and Director
April 7, 2000
/s/ Walter Niemi
Walter Niemi, Secretary, Treasurer (Chief Fiancial Officer) and Director
April 7, 2000
/s/ Robert Stark
Robert Stark, Vice President and Director
April 7, 2000
<PAGE>
SECRETARY OF STATE
The Great Seal of the State of Nevada
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada
Secretary of State, do hereby certify that LEGACY BODYSENTIALS,
INC. did on the FOURTEENTH day of SEPTEMBER, 1995 file in
this office the original Articles of Incorporation; that said Articles
are now on file and of record in the office of the Nevada Secretary of
State, and further, that said Articles contain all the provisions required
by the law of the said State of Nevada.
IN WITNESS WHEREOF, I have hereunto
set my hand and affixed the Great Seal of State,
at my office, in Carson City, Nevada, this FOURTEENTH day of SEPTEMBER, 1995.
/s/ Dean Heller
Secretary of State
(Seal of State Appears Here) By /s/ Delania Margueio
Certification Clerk
<PAGE>
State of Nevada Telephone: 702.687.5203
Office of the Secretary of State Fax. 702.687.3471
101 N. Carson St, #3
Carson City, NV 89701 Filing Fee:
#C15939-95
Certificate of Amendment to Articles of Incorporation
For Profit Nevada Corporation
(Pursuant to NRS 78.385 and 78.390-After Issuance of Stock)
Remit in Duplicate
(Date Stamp appears here, November 12, 1999 office of the
Secretary of State)
1. Name of Corporation: Global Commonwealth, Inc.
2. The articles have been amended as follows (provide article
numbers, if available):
Article I is hereby amended to read as follows:
"The name of the corporation is: Global Innovative Systems, Inc."
3. The vote by which the stockholders holding shares in
the corporation entitling them to exercise at least a majority
of the voting power, or such greater proportion of the voting
power as may be required in the case of a vote by classes or
series, or as may be required by the provisions of the articles
of incorporation have voted in favor of the amendment is: 9,700,000.
4. Signatures:
/s/ President or Vice President /s/Walter Neimi
President or Vice President Secretary or Asst. Sec.
Providence of British Columbia
Canada
This instrument was acknowledged before me on
8th day of November, 1999, by Helge Freudgtheil
as: President
as designated to sign this certificate
of Global Commonwealth Inc.
(name on behalf of whom instrument was executed)
/s/ Notary Public /s/
Notary Public Signature
* If any proposed amendment would alter or change any
preference or any relative or other right given to any class or
series of outstanding shares, then the amendment must be approved
by the vote, in addition to the affirmative vote otherwise required,
of the holders of shares representing a majority of the voting power
of each class or series affected by the amendment regardless of
limitations or restrictions on the voting power thereof.
IMPORTANT: Failure to include any of the above information and
remit the proper fees may cause this filing to be rejected.
<PAGE>
FILED IN THE STATE OF NEVADA
MAY 18 1998
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(after Issuance of stock)
No. C15939-98
/s/ Dean Heller
Dean Heller, Secretary of State
LEGACY MINERALS, INC.
Name of Corporation
We the undersigned ROMERO PRESCOTT and
President or Vice President
DONALD BYERS OF LEGACY MINERALS INC.
Secretary or Assistant Secretary Name of Corporation
Do hereby certify:
That the Board of Directors of said corporation at a meeting
duly convened, held on the 30th day of April, 1998, adopted a
resolution to amend the original articles as follows:
Article One is hereby amended to read as follows:
The name of the Corporation is: GLOBAL COMMONWEALTH, INC.
The number of shares of the corporation outstanding and
entitled to vote on an amendment to the Articles of Incorporation
is 10,000,000 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 vote of the stockholders holding at
least a majority of each class of stock outstanding and entitled to
vote thereon.
/s/ Romero Prescott /s/
President or Vice President
/s/ Don Byers /s/
Secretary or Assistant Secretary
Providence of Alberta )
City of Edmonton )
On May 4, 1998, personally appeared before me, a Notary Public,
Romero Prescott and Donald Byers,
(name of persons appearing and signing document)
who acknowledged that they executed the above instrument.
/s/ Notary Public /s/
Signature of Notary
(Notary Stamp or seal)
<PAGE>
THIS FORM SHOULD ACCOMPANY AMENDED AND
RESTATED ARTICLES OF INCORPORATION FOR A NEVADA
CORPORATION
1. Name of Corporation: LEGACY MINERALS, INC.
2. Date of adoption of Amended and Restated Articles:
3. If the articles were amended, please indicate what changes
have been made:
(a) Was there a name change? Yes X No __. If yes, what
is the new name Legacy Minerals, Inc.
(b) Did you change the resident agent? Yes__ No X.
If yes, please indicate the new resident agent and address. Please attach
the resident agent acceptance certificate.
(c) Did you change the purposes? Yes__ No X.
Did you add Banking?__ Gaming?___, Insurance?_____, None of these?_____
(d) Did you change the capital stock? Yes___No X.
If yes, what is the new capital stock?
(e) Did you change the directors Yes X No___.
If yes, indicate the change: Romero Prescott was appointed
President & a Director; Donald Byers remains a Director & Sec/Treasurer.
(f) Did you add the directors liability provisions? Yes___ No X.
(g) Did you change the period of existence? Yes___ No X.
If yes, what is the new existence?
(h) If none of the above apply, and you have amended
or modified the articles, how did you change your articles?
/s/ Don Byers /s/
Name and Title of Officer
Secretary Treasurer
Date: May 4, 1998
Providence of Alberta )
City of Edmonton )
On May 4, 1998, personally appeared before me, a Notary Public,
Donald Byers, who acknowledged that he/she executed the above document.
(name of persons appearing and signing document)
who acknowledged that they executed the above instrument.
/s/ Notary Public /s/
Signature of Notary
(Notary Stamp or seal)
<PAGE>
FILED IN THE STATE OF NEVADA
September 25 1996
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(after Issuance of stock)
No. C15939-95
/s/ Dean Heller
Dean Heller, Secretary of State
LEGACY BODYSENTIALS, INC.
Name of Corporation
We the undersigned DONALD BYERS and
President or Vice President
GLEN MACDONALD OF LEGACY BODYSENTIALS INC.
Secretary or Assistant Secretary Name of Corporation
Do hereby certify:
That the Board of Directors of said corporation at a meeting
duly convened, held on the 8th day of July, 1996, adopted a
resolution to amend the original articles as follows:
Article One is hereby amended to read as follows:
The name of the Corporation is: LEGACY MINERALS, INC.
The number of shares of the corporation outstanding and
entitled to vote on an amendment to the Articles of Incorporation
is "twelve" 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 vote of the stockholders holding at
least a majority of each class of stock outstanding and entitled to
vote thereon.
/s/ Don Byers /s/
President or Vice President
/s/ Glen Mac Donald /s/
Secretary or Assistant Secretary
Providence of British Columbia )
Country of Canada )
On September 17, 1996, personally appeared before me, a Notary Public,
Donald Byers and Glen MacDonald,
(name of persons appearing and signing document)
who acknowledged that they executed the above instrument.
/s/ Notary Public /s/
Signature of Notary
(Notary Stamp or seal)
<PAGE>
THIS FORM SHOULD ACCOMPANY AMENDED AND
RESTATED ARTICLES OF INCORPORATION FOR A NEVADA
CORPORATION
1. Name of Corporation: LEGACY BODYSENTIALS, INC.
2. Date of adoption of Amended and Restated Articles: July 8th 1996
3. If the articles were amended, please indicate what changes
have been made:
(a) Was there a name change? Yes X No __. If yes, what
is the new name Legacy Minerals, Inc.
(b) Did you change the resident agent? Yes__ No X.
If yes, please indicate the new resident agent and address. Please attach
the resident agent acceptance certificate.
(c) Did you change the purposes? Yes__ No X.
Did you add Banking?__ Gaming?___, Insurance?_____, None of these?_____
(d) Did you change the capital stock? Yes___No X.
If yes, what is the new capital stock?
(e) Did you change the directors Yes____ No X.
If yes, indicate the change:
(f) Did you add the directors liability provisions? Yes___ No X.
(g) Did you change the period of existence? Yes___ No X.
If yes, what is the new existence?
(h) If none of the above apply, and you have amended
or modified the articles, how did you change your articles?
/s/ Don Byers /s/
Name and Title of Officer
Secretary Treasurer
Date: July 8th 1996
Providence of British Columbia )
Country of Canada )
On September 17, 1996, personally appeared before me, a Notary Public,
Donald Byers, who acknowledged that he/she executed the above document.
(name of persons appearing and signing document)
who acknowledged that they executed the above instrument.
/s/ Notary Public /s/
Signature of Notary
(Notary Stamp or seal)
<PAGE>
ARTICLES OF INCORPORATION
Of Legacy Bodysentials Inc.
KNOW ALL MEN BY THESE PRESENTS:
That we the undersigned, have this day voluntarily associated ourselves
together for the purpose of forming a corporation under the laws of
the State of Nevada and do hereby certify:
1.
The name of this corporation is:
Legacy Bodysentials Inc.
2-
The resident agent of said corporation shall be Pacific Corporate
Services Company, 7631 Bermuda Road, Las Vegas, NV 89123 and such other
offices as may be determined by the By-Laws in and outside the State
of Nevada.
3.
The objects to be transacted, business and pursuit and nature of the
business, promoted or carried on by this corporation are and shall
continue to be engaged in any lawful activity.
4.
The members of the governing board shall be styled Directors and the first
Board of Directors shall consist of one (1). The number of stockholders
of said corporation shall consist of one (1). The number of directors
and shareholders of this corporation may, from time to time, be increased
or decreased by an amendment to the By-Laws of this corporation in that
regard, and without the necessity of amending these Articles of
Incorporation. The name and address of the first Board of Directors and of
the Incorporation as follows:
Douglas McClean Suite 307-19533 Fraser Hwy.
Surrey B.C. Canada
5.
The Corporation is to have perpetual existence.
<PAGE>
6.
The total authorized capitalization of this Corporation shall be and is
the sum of 200,000,000 shares Common Stock at $0.00l par value, said
stock to carry full voting power and the said shares shall be issued
fully paid at such time as the Board of Directors may designate in
exchange for cash, property, or services, the stock of other
corporations or other values, rights, or things, and the judgement of the
Board of Directors as to the value thereof shall be conclusive.
7.
The capital stock shall be and remain non-assessable. The private property
of the stockholders shall not be liable for the debts or liabilities of
the Corporation.
<PAGE>
IN WITNESS WHEREOF, I have set my hand this 30th day of day of
August, 1995.
PROVINCE OF BRITISH COLUMBIA )
COUNTY OF WESTMINSTER )
On this day of, 1995, before me, a
notary public in and for said County and Province, personally
appeared Douglac McClean, known to me to be the person whose name
is subscribed to the foregoing instrument, and he duly acknowledged
to me that he executed the same for the purpose therein mentioned.
IN WITNESS WHEREOF, I have set my hand and offered by official seal
in said County and Province the day and year in this Certificate first
above written.
____________/s/_______________
Notary Public
GORDON A. NEATE
Barrister & Solicitor
106-19665 Willowbrook Dr.
Langlcy, B.C. V2Y 1A5
<PAGE>
Exhibit 3 (iii)
BYLAWS
OF
LEGACY BODYSENTIALS INC.
A Nevada Corporation
ARTICLE 1
Offices
Section 1.
The registered office of this corporation shall
be in the County of Clark, State of
Nevada.
Section 2. The corporation may also have
offices at such other places both within and without
the State of Nevada as the Board of Directors may
from time to time determine or the business of the
corporation may require.
ARTICLE 2
Meetings of Stockholders
Section 1. All annual meetings of the stockholders
shall be held at the registered office of the corporation
or at such other place within or without the State of
Nevada as the Directors shall determine. Special meetings
of the stockholders may be held at such time and place
within or without the State of Nevada as shall be stated in
the notice of the meeting, or in a duly executed waiver of
notice thereof.
Section 2. Annual meetings of the stockholders,
commencing with the year 1996 shall be held on the
3Oth day of September, each year if not a legal holiday
and, if a legal holiday, then on the next secular day following,
or at such other time as maybe set by the Board of Directors
from time to time, at which the stockholders shall elect by
vote a Board of Directors and transact such other business as
may properly be brought before the meeting.
Section 3. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise
prescribed by statute or by the Articles of Incorporation,
may be called by the President or the Secretary by resolution
of the Board of Directors or at the request in writing of stockholders
owning a majority in amount of the entire capital stock of the corporation
issued and outstanding and entitled to vote. Such request shall state the
purpose of the proposed meeting.
Section 4. Notices of meetings shall be in writing and signed by the
President or Vice President or the secretary or an Assistant secretary or
by such other person or persons as the Directors shall designate. Such
notice shall 5tae the purpose or purposes for which the meeting is called
and the time and the place, which may be within or without this State,
where it is to be held. A copy of such notice shall be either delivered
personally to or shall be mailed, postage prepaid, to each stockholder of
record entitled to vote at such meeting not less than ten nor more than
sixty days before such meeting, If mailed, it shall be directed to a
stockholder at his address as it apps upon the records of the corporation
and upon such mailing of my such notice, the service then shall be complete
and the time of the notice shall begin to run from the date 'upon which such
notice is deposited in the nail for transmission to such stockholder. Personal
delivery of any such notice to any officer of a corporation or association,
or to any member of a partnership shall constitute delivery of such
notice to such corporation, association or partnership. In the event of
the transfer of stock after delivery of such notice of' and prior to the
holding of the meeting it shall not be necessary to deliver or mail
notice of the meeting to the transferee.
<PAGE>
Section 5. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 6. The holders of a 100/c of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy,
shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by
the Articles of Incorporation. If; however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote there at, present in person or represented by proxy,
shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall
be present or represented. At such a4journed meeting at which a quorum
shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. The
Company may have more than one shareholder.
Section 7. When a quorum is present or represented at any meeting,
the vote of the holders of a 100% of the stock having voting power
present in person or represented by proxy shall be sufficient to elect
directors or to decide any question brought before such meeting,
unless the question is one upon which by express provision of the
statutes or of the Articles of Incorporation, a different vote shall
govern and control the decision of such question.
Section 8. Each stockholder of record of the corporation
shall be entitled at each meeting of stockholders to one vote for
each tare of stock standing in his name of the books of the
corporation. Upon the demand of any stockholder, the vote for
Directors and the vote upon any question before the meeting
shall be by ballot.
Section 9. At any meeting of the stockholders any stockholder
may be represented and vote by a proxy or proxies appointed by
an instrument in writing. In the event that any such instrument
in writing shall designate two or more persons to act as proxies,
a majority of such persons present at the meeting, or, if only one
shall be present, then that one shall have and may exercise all
of the powers conferred by such written instrument upon all of
the persons so designated unless the instrument shall otherwise
provide. No proxy or power of attorney to vote shall be used
to vote at a meeting of the stockholders unless it shall have been
filed with the secretary of the meeting when required by the inspectors
of election. All questions regarding the qualifications of voters, the
validity of proxies and the acceptance of or rejection of votes shall be
decided by the inspectors of election who shall be appointed by the
Board of Directors, or if not so appointed, then by the presiding officer
of the meeting.
Section 10. Any action which maybe taken by the vote of the
stockholders at a meeting may be taken without a meeting if authorized
by the written consent of stockholders holding at least a majority
of the voting power, unless the provisions of the statutes or of the
Articles of Incorporation require a greater proportion of voting
power to authorize such action in which case such greater proportion
of written consents shall be required.
<PAGE>
ARTICLE 3
Directors
Section 1. The business of the corporation shall be managed
by ifs Board of Directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not
by statute or by the Articles of Incorporation or by these Bylaws
directed or required to be exercised or done by the stockholders.
Section 2. The number of Directors which shall constitute the
whole board shall be One.
The number of Directors may from time to time be increased or
decreased to not less than one nor more than fifteen by action
of the Board of Directors. The Directors shall be elected at the
annual meeting of the stockholders and except as provided in
section 2 of this Article, each Director elected shall hold office
until his successor is elected and qualified. Directors need not be
stockholders.
Section 3. Vacancies in the Board of Directors including those
caused by an increase in the number of directors, may be filled by a
majority of the remaining Directors, though less than a quorum,
or by a sole remaining Director, and each Director so elected shall
hold office until his successor is elected at an annual or a special
meeting of the stockholders. The holders of a two-thirds of the
outstanding shares of stock entitled to vote may at any time peremptorily
terminate the term of office of all or any of the Directors by vote at
a meeting called for such purpose or by a written statement filed
with the secretary or, in his absence, with any other officer. Such
removal shall be effective immediately, even if successors are not
elected simultaneously and the vacancies on the Board of Directors
resulting therefrom shall only be filled from the stockholders.
A vacancy or vacancies m the Board of Directors shall be deemed
to exist in case of the death, resignation or removal of any Directors,
or if the authorized number of Directors be increased, or if the
stockholders fail at any annual or special meeting of stockholders
at which my Director or Directors are elected to elect the full
authorized number of Directors to be voted for at that meeting.
The stockholders 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 accepts the resignation of a Director tendered to
take effect at a future time, the Board or -the stockholders shall have
power to elect a successor to take office when the resignation is to
become effective.
No reduction of the authorized number of Directors shall have the
effect of removing any Director prior to the expiration of his term
of office.
<PAGE>
ARTICLE 4
Meetings of the Board of Directors
Section 1. Regular meetings of the Board of Directors shall
be held at any place within or without the State which has been
designated from time to time by resolution of the Board or by
written consent of all members of the Board. In the absence of
such designation regular meeting shall be held at the registered
office of the corporation. Special meetings of the Board may
be held either at a place so designated or at the registered office.
Section 2. The first meeting of each newly elected Board of
Directors shall be held immediately following the adjournment
of the meeting of stockholders and at the place thereof no notice of
such meeting shall be necessary to the directors in order legally to
constitute the meeting, provided a quorum be present. In the event
such meeting is not so held, the meeting may he held at such time
and place as shall be specified in a notice given hereinafter provided
for special meetings of the Board of Directors.
Section 3. Regular meetings of the Board of Directors may be
held without call or notice at such time and at such place as shall
from time to time be fixed and determined by the Board Directors.
Section 4. Special meetings of the Board of Directors may be
called by the Chairman or the Pits [dent or by the Vice-President
or by any two directors.
Written notice of the time and place of special meetings shall be
delivered personally to each director, or sent to each director by
nail or by other form of written communication, charges prepaid,
addressed to him at his address as it is shown upon the records or
if not readily ascertainable, at the place in which the meetings
of the directors are regularly held. In case such notice is mailed
or telegraphed, it shall be deposited in the United States mail or
delivered to the telegraph company at least forty-eight (48) hours
prior to the time of the holding of the meeting. In case such notice
is delivered as above provided, ft shall be so delivered at least
twenty-four (24) hours prior to the time of the holding of the meeting.
Such mailing, telegraphing or delivery as above provided shall be due,
legal and personal notice to such director.
Section 5. Notice of the time and place of holding an adjourned
meeting need not be given to the absent directors if the dine and place
be fixed at the meeting adjourned.
Section 6. The transaction of my meeting of the Board of
Directors, however called and noticed or wherever held, shall
be as valid as though had at a meeting duly held after regular
call and notice, if a quorum be present, and if; either before or
after the meeting, each of the directors not present signs a written
waiver of notice, or a consent to holding such meeting, or
approvals 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 7. A majority of the authorized number of directors
shall be necessary to constitute a quorum for the transaction of
business, except to adjourn as hereinafter provided. Every act
or decision done or made by a majority of the directors present
at a meeting duly held at which a quorum is present shall be
regarded as the act of the Board of Directors, unless a greater
number be required by law or by the Articles of Incorporation.
Any action of a majority, although not at a regularly called
meeting, and the record thereof, if assented to in writing by all of
the other members of the Board shall be as valid and effective in all
respects as if passed by the Board in regular meeting.
Section 8. A quorum of the directors may adjourn any directors
meeting to meet again at 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.
<PAGE>
ARTICLE S
Committees of Directors
Section 1. The Board of Directors may, by resolution adopted
by a majority of the whole Board, designate one or more committees
of the Board of Directors, each committee to consist of two or more
of the directors of the corporation which, to the extent provided in
the resolution, shall and may exercise the power of the Board of
Directors in the management of the business and affairs of the corporation
and may have power to authorize the seal of the corporation to be
affixed to all papers which may require it. Such committee or committees;
shall have such name or names as may be determined from time to time
by the Board of Directors. The members of any such committee present
at any meeting and not disqualified from voting may, whether or not they
constitute a quorum, unanimously appoint mother member of the Board of
Directors to act at the meeting in the place of any absent or disqualified
member. At meetings of such committees, a majority of the members or
alternate members at any meeting at which there is a quorum shall be the
act of the committee.
Section 2. The committee shall keep regular minutes of their
proceedings and report the same to the Board of Directors.
Section 3. Any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members
of the Board of Directors or of such committee, as the case may be, and
such written consent is filed with the minutes of proceedings of the
Board or committee.
ARTICLE 6
Compensation of Directors
Section 1. The directors may be paid their expenses of attendance
at each meeting of the Board of Directors and may be paid a fixed
sum for attendance at each meeting of the Board of Directors or a
stated salary as director. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees
may be allowed like reimbursement arid compensation for attending
committee meetings.
ARTICLE 7
Notices
Section 1. Notices to directors and stockholders shall be in
writing and delivered personally or mailed tote directors or stockholders
at their addresses appearing on the books of the corporation. Notice by
mail shall be deemed to be given at the tine when the same shall be
mailed. Notice to directors may also be given by telegram.
Section 2. Whenever all parties entitled to vote at any meeting,
whether of directors or stockholders, consent, either by a writing on
the records of the meeting or filed with the secretary, or by presence
at such meeting and oral consent entered on the minutes, or by taking
part in the deliberations at such meeting without objection, the doings
of such meeting shall be as valid as if had at a meeting regularly called
and noticed, and at such meeting any business may be transacted which
is not excepted from the written consent to the consideration of which
no object for want of notice is made at the time, and if any meeting be
irregular for want of notice or of such consent, provided a quorum was
present at such meeting, the proceedings of said meeting may be ratified
and approved and rendered likewise valid and the irregularity or defect
therein waived by a writing signed by all patties having the right to vote
at such meeting; and such consent or approval of stockholders may be by
proxy or attorney, but all such proxies and powers of attorney must be in
writing.
Section 3. Whenever any notice whatever is required to be given
under the provisions of the statutes, of the Articles of Incorporation or of
these Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
<PAGE>
ARTICLE 8
Officers
Section 1. The officers of the corporation shall be chosen by the
Board of Directors and shall be a President, a Secretary and a Treasurer.
Any person may hold two or more officers.
Section 2. The Board of Directors at ifs first meeting after each
annual meeting of stockholders shall choose a Chairman of the Board
who shall be a director, and shall choose a President, a Secretary and
a Treasurer, none of whom need be directors.
Section 3. The Board of Directors may appoint a Vice-Chairman of
the Board, Vice-Presidents and one or more Assistant Secretaries and
Assistant Treasurers and such other officers and agents as it shall deem
necessary who shall hold their offices for such terms and shall exercise
such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
Section 4. The salaries and compensation of all officers of the
corporation shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold office at the
pleasure of the Board of Directors A~ officer elected or appointed by the
Board of Directors may be removed any time by the Board of Directors.
Any vacancy occurring in any office of the corporation by death, resignation,
removal or otherwise shall be fined by the Board of Directors.
Section 6. The Chairman of the Board shall, preside at meetings
of the stockholders and the Board of Directors, and shall see that all
orders and resolutions of the Board of Directors are carried into effect.
Section 7. The Vice-Chairman shall, in the absence or disability of
the Chairman of the Board, perform the duties and exercise the powers
of the Chairman of the Board and shall perform other such duties as the
Board of Directors may from time to time prescribe.
Section 8. The President shall be the chief executive officer of the
corporation and shall have active management of the business of the
corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution
thereof shall be expressly designated by the Board of Directors to some
other officer or agent of the corporation.
Section 9. The Vice-President shall act under the direction of the
President and in the absence or disability of the President shall perform
the duties and exercise the powers of the President. They shall perform
such other duties and have such other powers as the President or the
Board of Directors may from time to time prescribe. The Board of
Directors may designate one or more Executive Vice-Presidents or
may otherwise specify the order of seniority of the Vice-Presidents.
The duties and powers of the President shall descend to the Vice-Presidents
in such specified order of seniority.
Section 10. The Secretary shall act under the direction of the
President. Subject to the direction of the President he shall attend
all meetings of the Board of Directors and all meetings of the
stockholders and record the proceedings. He shall perform like
duties for the standing committees when required. He shall give,
or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and will perform other
such duties as may be prescribed by the President or the Board of
Directors.
Section 11. The Assistant Secretaries shall act under the direction
of the President. In order of their seniority, unless otherwise determined
by the President or the Board of Directors, they shall, in the absence
or disability of the Secretary, perform the duties and exercise the powers
of the Secretary. They shall perform other such duties and have such
other powers as the President or the Board of Directors may from time
to time prescribe.
Section 12. The Treasurer shall act under the direction of the President.
Subject to the direction of the President be shall have custody of the
corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation and
shall deposit all monies and other valuable effects' in the name and to
the credit of the corporation in such depositories as may be designated by
the Board of Directors. He shall disburse the funds of the corporation as
may be ordered by the President or the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the President and
the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his transactions as Treasurer and
of the financial condition of the corporation.
Section 13. If required by the Board of Directors, he shall give the
corporation a bond in such sum and with such surety as shall be s
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of
his death, resignation, retirement or removal from office, of all books,
papers, vouchers. money and other property of whatever land m his
possession or under his control belonging to the corporation.
Section 14. The Assistant Treasurer in the order of their seniority,
unless other wise determined by the president or the Board of Directors,
shall, in the absence or disability of the Treasurer, perform the duties
and exercise the powers of the Treasurer They shall perform such other
duties and have such other powers as the President or the Board of
Directors may from time to time prescribe.
<PAGE>
ARTICLE 9
Certificates of Stock
Section 1. Every stockholder shall be entitled to have a certificate
signed by the President or a Vice-President and the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the corporation,
certifying the number of shares owned by him in the corporation. If the
corporation shall be authorized to issue more than one class of stock or
more than one series of any class, the designations, preferences and relative,
participating, optional or other special rights of the various classes of
stock or series thereof and the qualifications, limitations or restrictions of
such rights, shall be set forth in full or summarized on the face or back of
the certificate which the corporation shall issue to represent such stock.
Section 2. If a certificate is signed (a) by a transfer agent other than
the corporation or its employees or (b) by a registrar other than the
corporation or ifs employees, the signatures of the officers of the
corporation may be facsimiles. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall cease to be
such officer before such certificate is issued, such certificate may be
issued with the same effect as though the person had not ceased to be
such officer. The seal of the corporation, or a facsimile thereof, may,
but need not be, affixed to certificates of stock.
Section 3 The Board of Directors may direct anew certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or
destroyed upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When
authorizing' such issue of a new certificate or certificates, the Board
of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate
or certificates, or hi'; legal representative, to advertise the same in
such manner as it shall require and/or give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made
- -list the corporation with respect to the certificate
alleged to have been lost or destroyed.
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or
authority to transfer, ft shall be the duty of the corporation, if it is
satisfied that all provisions of the laws and regulations applicable to
the corporation regarding transfer and ownership of shares have
been complied with, to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon
its books.
Section 5. The Board of Directors may fix in advance a date not
exceeding sixty (60) days nor less than ten (10) days preceding the
date of any meeting of stockholders, or the date for the payment of
any dividend, or the date for the allotment of rights, or the date when
any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining the consent of stockholders
for my purpose, as a record date for fire termination of the stockholders
entitled to notice of and to vote at any such meeting, and any adjournment
thereof; or entitled to receive payment of any such dividend, or to give
such consent, and in such case, such stockholders, and only such stockholders
as shall be stockholders of record on the date so fixed, shrill be entitled
to notice of and to vote at such meeting, or any adjournment thereof; or
to receive such payment of dividend, or to receive such allotment of
rights, or to exercise such rights, or to give such consent, as the case
may be, notwithstanding any transfer of any stock on the books of the
corporation after any such record date fixed as aforesaid.
The corporation shall be entitled to recognize the person registered
on its books as the owner of shares to be the exclusive owner for all
purposes including voting and dividends, and the corporation shall
not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise
provided by the laws of Nevada.
<PAGE>
ARTICLE 10
General Provisions
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the Articles of Incorporation, :4 any,
may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property
or in shares of the capital stock, subject to the provisions of the Articles
of Incorporation.
Section 2. Before payment of any dividend, there may be set aside
out of any fluids of the corporation available for dividends such
sum or sums as the directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends or for repairing or maintaining any property of the
corporation or for such other purpose as the directors shall think
conducive to the interest of the corporation, and the directors may
modify or abolish any such reserve in the manner in which it was
created
Section 3 All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons
as the Board of Directors may from time to time designate.
Section 4. The fiscal year of the corporation shall be fixed by resolution
of the Board of Directors.
Section 5. The corporation may or may not have a corporate seal,
as may be from time to time be determined by resolution of the Board
of Directors. If a corporate seal is adopted, it shall have inscribed thereon
the name of the corporation and the words "Corporate Seal of Nevada".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or in any manner reproduced.
<PAGE>
ARTICLE 11
Indemnification
Every person who was or is a party or is a threatened to be
made a party to or is involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he or a person of whom he is the legal representative
is or was a director or officer of the corporation or is or was serving
at the request of the corporation or for its benefit as a director or
officer of another corporation, or as its representative in a partnership,
joint venture, trust or other enterprise, shall be indemnified and held
harmless to the fullest extent legally permissible under General
Corporation Law of the State of Nevada time to time -St all expenses,
liability and loss (including attorney's fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or
suffered by him in connection therewith. The expenses of officers
and directors incurred in defending a civil or criminal action, suit
or proceeding must be paid by the corporation as they are incurred
and in advance of the final disposition of the action, suit or proceeding
upon
Receipt of an undertaking by or on behalf of the director or officer
to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall be a contract right
which may be enforced in any manner desired by such person. Such
right of indemnification shall not be exclusive of any other right which
such directors, officers or representatives may have or hereafter acquire
and, without limiting the generality of such statement, they shall be
entitled to their respective rights of indemnification under any bylaw,
agreement, vote of stockholders, provision of law or otherwise, as well
as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a director
or officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, or as ifs
representative in a partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred in any
such capacity or arising out of such status, whether or not the corporation
would have the power to indemnify such person.
The Board of Directors may from time to time adopt further Bylaws
with respect to indemnification and amend these and such Bylaws to
provide at all times the fullest indemnification permitted by the
General Corporation Law of the State or Nevada.
ARTICLE 12
Amendments
Section 1. The Bylaws may be amended by a majority vote of
all the stock issued and outstanding and entitled to vote at any annual
or special meeting of the stockholders, provided notice of intention to
amend shall have been contained in the notice of the meeting.
Section 2. The Board of Directors by a majority vote of the whole
Board at any meeting may amend these Bylaws, including Bylaws
adopted by the stockholders, but the stockholders may from time to time
specify particular provided of the Bylaws which shall not be amended
by the Board of Directors.
<PAGE>
APPROVED AND ADOPTED this 30th DAY OF SEPTEMBER, 1997.
CERTIFICATE OF SECRETARY
I, Brent N. McMullin hereby certify that I am the Secretary of Legacy
Bodysential Inc. , and the foregoing Bylaws, consisting of 9 pages, constitute
the code of Bylaws of Legacy Bodysentials Inc., as duly adopted at a regular
meeting of the Board of Directors of the corporation held Sept. 30th, 1995.
IN WITNESS WHEREOF, I have hereunto subscribed my name this
30th day of September, 1995.
/s/ Brent McMullin /s/
Brent McMullin
Secretary
<PAGE>
EXHIBIT 10i
SHARE PURCHASE AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 1st day of December, 1999.
BETWEEN:
Walter Niemi, Ken Bergestad, and Lloyd Olsen
5975 Selkirk Crescent
Prince George, B.C.
V2N2G9
(hereinafter referred to as the "Vendors")
OF THE FIRST PART
AND.
Global Innovative Systems Inc., a corporation incorporated pursuant
to the laws of the State of Nevada with its records office at 7631
Bermuda Road, Las Vegas, Nevada, U.S.A., 89123
(hereinafter referred to as the "Purchaser")
OF THE SECOND PART
AND:
Niew Industries Inc., a corporation incorporated pursuant to the laws
of the Province of B.C. with its principal office at 5975 Selkirk Crescent,
Prince George, B.C. V2N 2G9
(hereinafter referred to as "Niew")
OF THE THIRD PART
WHEREAS:
A. The Vendors are the owners of all of the outstanding shares in Niew.
B. The Purchaser has agreed with the Vendors to purchase all
2,150 common shares in Niew in exchange for shares in the Purchaser.
THIS AGREEMENT WITNESSETH that in consideration of the
covenants, agreement, warranties and payments herein set out and
provided for, the parties hereby respectively covenant and agree as
follows:
1. Purchased Shares
Subject to the terms and conditions hereof the Vendors covenant and
agree to sell, assign, and transfer to the Purchaser, and the Purchaser
covenants and agrees to purchase from the Vendors all (and not less
than all) of the issued and outstanding shares in the capital stock in
Niew (the "Purchased Shares") for the purchase price (the "Purchase:
Price") payable as set out in Article 2 hereof.
2. Purchase Price
(1) The Purchase Price shall be 12,000,000 Class A Common
voting shares of the Purchaser at $.0l U.S. per share.
(2) The Purchase Price shall be transferred to the Vendors
at the Closing.
(3) The Closing of this transaction shall take place on
January 31, 2000 (the "Closing Date").
<PAGE>
3. Representations and Warranties of the Vendors
The Vendors covenant, represent and warrant as follows:
(1) As of the date hereof, and as the Closing Date, and the
Vendors acknowledge that the Purchaser is relying upon such
covenants, representations and warranties in connection with the
purchase by the Purchaser of the Purchased Shares.
(2) The number of shares in Niew that has been duly issued
for valuable consideration are 2,150.
(3) (a) The shareholders of record areas follows:
Walter Niemi 1,290
Ken Bergestad 430
Lloyd Olson 430
(b) The shareholders of the Purchaser after the exchange
of the 2,150 common shares are as follows:
Walter Niemi 7,200,000
Ken Bergestad 2,400,000
Lloyd Olson 2,400,000
(4) No person, firm or corporation has any agreement or
option or any right (whether by law, pre-emptive or contractual
and including convertible securities, warrants or convertible
obligations of any nature) for the purchase or the issue of either
the Purchased Shares or any unissued percentage interest of Niew.
(5) The entering into of this agreement and the transactions
contemplated hereby will not result in the violations of any of the
terms and provisions of the constating documents or by-laws of the
Vendors or of any indenture or other agreement, written or oral,
to which the Vendors may be a party.
(6) This agreement has been duly executed and delivered by the
Vendors and is a valid and binding obligations of the Vendors
enforceable in accordance with its terms.
(7) The Vendors are non-resident within the meaning of the
International Revenue Code of the United States.
(8) To the Vendor's knowledge, there are no existing or threatened
legal actions or claims against Niew.
(9) The audited financial statements of Niew dated
September 30, 1999, a copy of which is attached hereto as
"Schedule A", fairly represent the financial position of Niew as at
the dates indicated.
<PAGE>
4. Covenants of the Vendors
The Vendors covenant and agree that on or before the Closing
Date, it will do, or will cause to be done, all necessary steps and
proceedings to permit all of the Purchased Shares to be duly and
regularly transferred to the Purchaser.
5. Covenants of the Purchaser
The Purchaser covenants and agrees that on or before the Closing
Date, it will do, or will cause to be done, all necessary steps and
proceedings to permit all of the shares of the Purchaser, being given
to the Vendors to be duly and regularly transferred to the Vendors.
6. Survival of Representations and Warranties
The representations and warranties of the Vendors and Purchaser
contained in this agreement, and contained in any document or
certificate given pursuant hereto, shall survive the closing of the
purchase and sale of the Purchased Shares herein provided for, for
a period of two years from the Closing Date.
7. Entire Agreement
This agreement constitutes the entire agreement between the
parties hereto. There are not, and shall not be, any verbal statements,
representations, warranties, undertakings or agreements between
the parties hereto, and this agreement may not be amended or
modified in any respect except by written instrument signed by
the parties hereto.
8. Proper Law of Contact
This agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws
of the State of Nevada.
9. Benefit and Binding Nature of the Agreement
This agreement shall ensure to the benefit of, and be binding upon,
the parties hereto and their respective successors and assigns.
Global Innovative Systems, Inc. Niew Industries, Inc.
/s/ Walter Niemi /s/ Walter Niemi
/s/ Ken Bergestad /s/ Ken Bergestad
/s/ Bob Stark /s/ Lloyd Olson
/s/ Helge Freudentheil
<PAGE>
EXHIBIT 10ii
AGREEMENT
AGREEMENT MADE THIS 8TH DAY OF
NOVEMBER 1999, AD
IAN WESTOOD, of the City of Calgary in the Province of
Alberta (hereinafter referred to as "the Licensor")
- -and-
NIEW INDUSTRIES INC., a body corporate incorporated
under the laws of the Province of British Columbia with an
office in Prince George in the Province of British Columbia with
an office in Prince George in the Province of British Columbia
(hereinafter referred to as the "Licensee")
WHEREAS the Licensor has developed and owns various methods
and technical know-how relating to manufacturers and use "A
PORTABLE OVERHEAD BIN"
AND WHEREAS the Licensor is the registered proprietor of or
has the exclusive or non-exclusive right to various letters patent
and patent applications for the "PORTABLE OVERHEAD BIN"
AND WHEREAS the licensee is desirous of obtaining from the
Licensor the technical know-how and right to manufacture and
distribute such "PORTABLE OVERHEAD BIN" in the Territory,
as hereinafter defined, under the said patents.
NOW THEREFORE, IN CONSIDERATION of the premises and
the mutual covenants and agreements hereinafter contained and for
other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged the parties hereto covenant and
agree to as follows.
<PAGE>
I. DEFINITIONS
For the purposes of this Agreement, the following definitions
shall apply:
(a) "Territory" shall mean the geographical area described as
Continental America
(b) "Products" shall mean the PORTABLE OVERHEAD BIN
invented by the Licensor and to which the Patents, as hereinafter
defined, apply;
(c) "Patents" shall mean any patents, including reissues, renewals;
extensions, divisions, continuations, and continuation-in-part issuing
from United States Patent Application Serial Number 09/333182 filed
June l4, 1999 and Canadian Patent Application Number 2,254,702
filed December 1, 1998 (Hereinafter call "THE PATENT APPLICATIONS");
(d) "Methods and Technical Know-how" shall mean all information,
knowledge and experience of a technical and commercial nature, Including
trade secrets, the Licensor's conceptual drawing information and data
relating to the PORTABLE OVERHEAD BIN;
(e) "Commencement Date" shall be the date hereof.
2. TECHNICAL KNOW-HOW
Upon and subject to the terms and conditions set out in this Agreement
the Licensor covenants and agrees to provide the Licensee with the
conceptual drawing above mentioned and any other documents and materials
produced by the Licensor in preparing design and application for patents,
necessary to enable the Licensee to produce the PORTABLE OVERHEAD
BIN.
3. GRANT OF LICENSE
Upon and subject to the terms and conditions set out in this Agreement,
the Licensor hereby grants to the Licensee, effective from the date
hereof, the exclusive license to make, use and sell the PORTABLE
OVERHEAD BIN protected by the PATENTS in the TERRITORY.
(a) The Licensee agrees to pay to the Licensor for the grant of the
License herein the sum of $75,000.00 payable as follows:
(i) The sum of $37,00O.00 on or before January 1, 2000 and
the balance on or before the 31st day of August 2000;
(ii) All payments stipulated to made pursuant to this paragraph
on account of the Grant of License herein shall be made in
Canadian Dollars.
04. TECHNICAL ASSISTANCE
The Licensors obligation to assist the Licensee in the manufacture
and production of the PORTABLE OVERHEAD BIN shall be restricted
to the production by the Licensor to the Licensee of the Conceptual
Plans and drawing and the provision of such technical and mechanical
knowledge as is the property of the Licensor.
ROYALTY
In consideration of the rights and licenses granted to the Licensee by
the Licensor pursuant to the Agreement, the Licensor shall pay to the
Licensor royalty as follows:
(a) the sum of $6,OO0.0O for each of the first (1st') and second
(2nd PORTABLE OVERHEAD BINS sold in any calendar year;
(b) the sum of $8,000.00 for each of the third (3rd) and fourth
(4th) PORTABLE OVERHEAD BINS sold in any calendar year;
(c) the sum of $l0,000.00 for each of the fifth (5th and any
subsequent PORTABLE OVERHEAD BIN sold in any calendar year;
(d) the required royalty payment shall be made within 60 days
of the sale of each PORTABLE OVERHEAD BIN and failure
to make such payment shall be a DEFAULT, under this agreement.
Provided however, notwithstcndin8 the foregoing, the Licensee shall
in any event pay a minimum royalty of $20,000.00 In any calendar
year, beginning with the year 2001 in which fewer that 3 PORTABLE
OVERHEAD BINS are sold. For the year 2000, the minimum royalty
shall be $l0,000.00. The minimum royalty shall be paid on or before
the 31st day of January first following the said calendar year. Failure
to make payments as herein stipulated shall be a DEFAULT under
this agreement.
<PAGE>
6. EFFECT ON ROYALTY OF PATENT NOT ISSUING
The Licensee shall pay the royalty agreed until December 31, 2001
or until one of the patent applications is no longer in prosecution or
appeal before its respective patent office, which ever is later. If at that
time no patent has issued on the patent application, the Licensee agrees
to pay to the Licensor one-half (1/2) of the royalty rate prescribed in this
Agreement for a further period of two (2) years. The Licensor agrees to
keep the Licensee fully informed regarding the prosecution of the patent
applications, and to furnish copies of' correspondence with any patent
office regarding the licensed patents to the Licensor.
7. WARRANTY
The Licensor warrants to the Licensee that it is the owner of the invention
and it has the sole right to grant the license granted free from all
encumbrances. The Licensor expressly makes no further warranties
respecting the invention and licensed patents, and in particular does
not warrant that the invention does not infringe the rights of any third
party. The Licensee agrees that the Licensor will not be liable for
any damages incurred by the Licensee as the result of the Licensor's
products infringing the intellectual property rights of any third party.
8. VALIDITY OF PATENT
The Licensee covenants with the Licensor that it will not at any time
raise or cause to be raised any question or objecting to the validity of
the licensed patents on any grounds whatsoever.
9. SUBLICENSES
The Licensee shall have the right to give and grant sublicenses of its
rights, provided that all articles sold under sublicense shall be subject to
the royalty payments reserved to the Licensor3 and the Licensee
covenants with the Licensor to make the royalty payments to the Licensor
by reason of sales by sublicenses and for the observance and performance
by all sublicenses of all the provisions of this agreement. The Licensee
shall promptly notify the Licensor of all such sublicenses granted.
<PAGE>
10. SALES PROMOTION
The Licensee covenants with the Licensor that it will with all
reasonable dispatch manufacture and sell PORTABLE OVERHEAD
BINS embodying the invention and will use its best efforts to
promote, continue and increase the sale of same throughout the
United States and Canada.
11. INFRINGEMENT
In the event that either the Licensor or the Licensee considers that
there exist a situation of infringement of the licensed patents for which
a suit for infringement could or should be brought, that party shall
give to the other party all the available details regarding the situation
and the parties will jointly decide on the steps to be taken.
In connection with matters pertaining to litigation or threatened litigation
arising under this Agreement, it is understood and agreed between the
parties hereto that they will at all times consult with one another. In
the event that the parties agree to commence litigation against an
infringer, the costs involved shall be shared 25% to the Licensor and
75% to the Licensee, and all money recovered shall, after expenses
have been deducted, be divided 25% to the Licensor and 75% to the
Licensee.
It is agreed that neither party shall bind or commit such other party
to any course of lea1 or other action which makes or may make such
other part liable for any 1egal costs, expenses, or damages but should
the parties fail to agree to as to the course action jointly to be taken
either party shall then by at liberty to take or defend proceedings alone
at its own expense, or indemnifying the other party, and shall be entitled
to retain any monies received in such action. The party declining to be
involved in the litigation will however provide any assistance necessary
for the other party to pursue the litigation to its best advantage, provided
that the other party pays all expenses incurred in providing such
assistance, royalty payments shall continue during the course of any
action, however in the event that the licensed patents or one of them,
is held to be invalid, royalty payments shall immediately cease, effective
the date of such judgment. A judgment of non-infringement shall not
affect the payment of royalties.
Further to the matter of patent validity where it is the opinion of an
independent patent lawyer agreed upon by the parties that the licensed
patent in question is likely to be found invalid should an infringement
action be instituted, the royalty payable by this Agreement for machines
sold after that date shall immediately cease. Licensor may institute and
prosecute the infringement action, and if such lawsuit is successful, the
royalty rate shall revert back to the full royalty rate herein prescribed,
effective the date of judgment, and all royalty payments not paid during
the action shall be payable within 30 days. Failure to make such payment
shall be deemed to be a DEFAULT by the Licensee under this Agreement.
12. OTHER LEGAL ACTION
The Licensor shall be entitled but shall not be bound to defend at his
own cost every action instituted for the impeachment or a declaration
of non-infringement of the licensed patents; provided that, if the
Licensor shall decide not to defend any action it shall so advise tile
Licensee who shall be entitled but shall not be bound to defend at its
own cost the actions. Should the patent be declared invalid, the royalty
payable by this Agreement for PORTABLE OVERHEAD BINS sold after
the date of such declaration shall immediately cease. A judgment of
non-infringement shall not affect the payment of roya1ties.
13. COMPLIANCE WITH LAWS AND REGULATIONS
The Licensee shall comply with all municipal, provincial and federal
laws and regulation and shall obtain and at all times maintain any and
all permits, certificates or licenses necessary for the manufacture and
sale of the PORTABLE OVERHEAD BIN in the Territory in accordance
with the terms of this Agreement.
<PAGE>
14. ACCOUNTING, RECORDS, REPORTS, AUDITS REPORTS
(a) All payments of royalties hereunder shall be accompanied by a
statement of the Licensee showing details of all sales of the PORTABLE
OVERHEAD BIN during the period to which the royalty payments apply,
in such format and containing such information as prescribed by the
Licensor from time to time. By January 31st, each year the Licensee shall
deliver to the Licensor the certificate of an independent auditor certifying
as to the amount of actual total sales of the PORTABLE OVERHEAD
BIN made by the Licensee, in the Territory during the previous calendar
year.
RECORDS
(b) During the term of this Agreement and for a period of two (2) years
thereafter, the Licensee agrees to keep sufficiently detailed records of the
PORTABLE OVERHEAD BIN manufactured and sold by the Licensee
to permit verification of the reports and payments made or to be made to
the Licensor by the Licensee under this agreement.
AUDITS AND INSPECTION
(c) The Licensor shall have the right, through his authorized
representative, during normal business hours and with the full cooperation
of the Licensee, to have free access to the Licensee's offices, files, books
of account and other records for the purposed of identifying and auditing
the reports and royalties due to the Licensor by the Licensee under this
Agreement. The cost of such inspection, examination or audit shall be
borne by the Licensor, unless such inspection, examination or audit reflects
a discrepancy of five percent (5%) or more in the royalty payments
reportedly due by the Licensee and the actual royalty payments due under
this Agreement. In any event of such discrepancy, the Licensee shall
immediately pay the unremitted royalty payments due to the Licensor and
reimburse the Licensor for all of its costs, including the time spent by the
Licensor's employees at market rates, incurred in connection with such
inspections, examinations and audits.
15. PATENTS AND KNOW-HOW
ACKNOWLEDGEMENT OF OWNERSHIP
(a) For the. purposes of this section, the Patents, Methods and
Technical Know-how are referred to as "Intellectual Property."
Neither this Agreement, nor the use by the Licensee of the Intellectual
Property shall in any way give or be deemed to give to the Licensee
any Interest in the Intellectual Property, except for the right to use the
Intellectual Property solely in connection with the exploitation of the
Licensee's rights under this Agreement in the territory and strictly in
accordance with the terms and conditions of this Agreement. The Licensee
shall not use the intellectual Property in any manner calculated to represent
that it is the owner of the Intellectual Property. Neither during the term
of this Agreement, nor at any time after termination hereof, shall the
Licensee, whether directly or indirectly, dispute or contest the validity or
enforceability of the Intellectual Property or attempt any registration
thereof.
TERMINATION OF USE
(b) Forthwith upon the termination for any reason whatsoever
of this Agreement, the Licensee shall cease all use of the Intellectual
Property for any purpose whatsoever.
16. NON DISCLOSURE
The Licensor and Licensee hereby covenant and agree that,
during and after the term of this Agreement, they will hold secret
and confidential and will not in any manner disclose to any person,
(except, during the term of this Agreement to such of its employees
consultants, subcontractors, as are required to use such information
or material in connection with the Licensee pursuing its rights under
this Agreement any information received respecting tile operations of
the other party.
INSURANCE
TYPES OF INSURANCE
The Licensee shall, at its sole cost and expense, take out and keep
in full force and effect, throughout the term of this Agreement and
any renewal thereof, such insurance coverage and in such amounts as
may be required from time to time by the Licensor acting reasonably
(including, without limitations product liability insurance, fire and
extended coverage insurance, business interruption insurance,
workmen's compensation insurance and public liability and indemnity
insurance), fully protecting, as named insureds, the Licensor and the
Licensee against loss or damage occurring in connection with the
manufacturing and marketing of the PORTABLE OVERHEAD BIN.
<PAGE>
POLICIES OF INSURANCE
(a) All policies of insurance obtained pursuant to this section
12 shall:
(i) be in such form and amounts as is reasonably acceptable to the
Licensor;
(ii) contain a clause that the insurer will not cancel or change or refuse
to renew the insurance without first giving to the Licensor, thirty (30) days
prior written notice; and
(iii) name the Licenser as an additional named insured, this interest appears.
PLACEMENT OF INSURANCE BY THE LICENSOR
(c) If the Licensee fails to take out or keep in force any insurance
referred to in this section, or should any such insurance not be as provided
to subsection (b) above, and should the Licensee not rectify such failure
within forty-eight (48) hours after written notice is given to the Licensee by
the Licensor, the Licensor has the right, without assuming any obligation in
connection therewith, to effect such insurance at the sole cost of the Licensee
and all outlays by the Licensor shall be immediately paid by the Licensee to
the Licensor on the first day of the next month following such payment by the
Licensor without prejudice to any other rights and remedies of the Licenser
under this Agreement.
INDEPENDENT STATUS OF LICENSEE AND INDEMNITY
STATUS OF LICENSEE
(a) The parties hereto acknowledge that the Licensee is an independent
contractor and nothing in this Agreement is intended to constitute the
Licensee as an agent or a partner of the Licensor. The Licensee has no
authority to assume or to create any obligation of liability, expressed or
implied on behalf of or in the name of the Licensor. Subject to the controls
which are necessary for the Licenser to have over the operation of the
Licensee's business in performance of this Agreement as provided herein the
licensee shall conduct its business in its own discretion.
INDEMNIFICATION BY LICENSEE
(b) The Licensee hereby agrees, during and after the term of
this Agreement, to indemnify and save the Licensor harmless from any and
all liabilities, losses, suits, claims, demands, costs, fines, and actions
of any kind or nature whatsoever to which the Licensor shall or may become
liable for, or suffer by reason of any breach, violation or non-performance
on the part of the Licensee, or any of its agents, servants or employees of
any damages suits, cost or actions of any persons, firms or corporations
arising from the Licensee manufacturing and/or marketing the PORTABLE
OVERHEAD BIN.
19. ASSIGNMENT
ASSIGNMENT BY THE LICENSOR
(a) In the event of a sale transfer or assignment by the Licensor of this
Agreement, to the event that the purchaser or assignee shall assume the
covenants and obligations or the Licensor under this Agreement, the Licensor
shall thereupon and without further agreement, be freed and relieved of
all liability with respect to such covenants and obligations.
ASSIGNMENT BY LICENSEE
(b) The Licensee acknowledges that the Licensor, in granting this
license and the rights and interests under this Agreement, has relied on,
among other things, the character, background, qualifications arid financial
ability of the Licensee and, where applicable, its partners, officers,
directors, shareholders, and managers. Accordingly1 his Agreement, and
the Licensee's rights and interest hereunder, shall not be sold, assigned,
transferred, shared or encumbered in whole or in part in any manner
whatsoever without thc prior written consent of the Licensor, which
shall not be unreasonably withheld. Any actual or proposed assignment
occurring by operations of law or otherwise without the Licensor's prior
written consent shall be a material default of this Agreement.
20, TERMINATION
EVENTS OF DEFAULT
(a) The Licensor shall have the right to terminate this
Agreement and the rights granted hereunder without prejudice to
enforcement of any other legal right or
remedy, immediately upon giving written notice of such termination
upon the happening of any breach of the contract in any of the following
events:
(i) if default shall be made in the due and punctual payment of any
amount payable under this Agreement, when and as same shall become
due and payable, and such default shall continue for a period of thirty
(30) days after written notice thereof has been given to the Licensee;
(ii) if the Licensee shall breach arty other of the terms or conditions
of this Agreement or any other agreement or undertaking entered into
between the Licensor and the Licensee and such breach shall continue for
a period often (10) days after written notice thereof has been given to the
Licensee;
(iii) if the Licensee ceases or threatens to cease to carry on business,
or takes or threatens to take any action to liquidate its assets, or stops
making payments in the usual course of business;
(iv) if the Licensee makes or purports to make a general assignment
for the benefit of creditors;
(v) if the Licensee shall institute any proceeding under any statue or
otherwise relating to insolvency or bankruptcy, or should any proceeding
under any such statue or otherwise be instituted against the Licensee;
(vi) if a custodian, receiver, manager or any other person with like powers
be appointed to take charge of all or any parts of the Licensee's
undertaking, business, property or assets;
(vii) if any lessor or encumbrances or any other person, corporation or entity
lawfully entitled, shall take possession of any of the undertaking business,
property or assets of the Licensee;
(viii) in the event the Licensee is a corporation,
(1) if an order shall be made or a resolution passed for the winding up
or liquidation of the Licensee;
if the Licensee passes or purports to pass or takes or purports to take any
corporate proceeding to enable it to take proceeding for its dissolution,
liquidation or amalgamation;
if the Licensee shall lose its charter by expiration, forfeiture or
otherwise; or
if any proceedings with respect to the Licensee are commenced under The
Companies Creditors Arrangement Act (Canada).
(ix) if a distress or execution against any of the undertaking business,
property or assets of the Licensee shall not be discharged or stayed within
twenty (20) days after the entry thereof or within such time period as action
must be taken in order to discharge, or stay the distress or execution,
whichever shall be the earlier;
(x) If final judgment for the payment of money in any amount in
excess of $2,500.00 shall be rendered by any court of competent
jurisdiction against the Licensee and such judgment shall not be discharged
or execution thereof stayed within twenty (20) days after entry thereof or
within such time period as action must be taken in order to discharge of
stay execution of the judgment, whichever shall be the earlier;
(xi) if the Licensee or any agent or representative of the Licensee fails
to submit any report required to be finished to the Licensor pursuant hereto
within ten (10) days of the date such report is due.
<PAGE>
SURVIVAL OF COVENANTS
(b) Notwithstanding the expiration or termination of this Agreement
for any reason whatsoever, all covenants and agreements to be performed
and/or observed by the Licensee under this Agreement or which by their
nature survive the expiration or termination of this Agreement, shall survive
any such expiration.
RESTRICTIVE COVENANTS
SEVERABILITY
(a) If for any reason whatsoever, any term or condition of this
Agreement or the application thereof to any party or circumstances
shall, to any extent be invalid or unenforceable, all other terms and
conditions of this Agreement and/or the application of such terms and
conditions to parties or circumstances, other than those as to which it
is held invalid or unenforceable, shall not be affected thereby and each
term and condition of this Agreement shall be separately valid and
enforceable to the fullest extent permitted by law.
THE LICENSEE MAY NOT WITHHOLD PAYMENTS DUE THE
LICENSOR
(b) The Licensee agrees that it will not, on grounds of the
alleged non-performance by the Licensor of any of its obligations
hereunder, withhold payment of any royalty or other amounts due to
the Licensor or its affiliates, whether on account of good purchased by
the Licensee or otherwise.
NOTICE
(c) All notices, consents, approvals, staternents1 authorizations,
documents, or other communications (collectively "Notice") required
or permitted to be given hereunder shall be in writing, and shall be
delivered personally or mailed by registered mail, postage prepaid, to
the said parties at their respective addresses set forth hereunder, namely:
To the Licensor at:
C/o Tharp Sinclair Watson Quigley Taylor
Attention: David H. Sinclair
800 933 17th Avenue SW.
Calgary, AB T2T 5R6
To the Licensee at:
Niew Industries Ltd.
5975 Selkirk Cresceni
Prince George BC V2N 2G9
22. ENTIRE AGREEMENT
(a) This Agreement constitute the entire agreement between
the parties and supersedes all previous agreements and understandings
between the parties in any way relating to the subject matter hereof. It
is expressly understood and agreed that the Licensor has made no
representations, inducements, warranties or promises; whether direct,
indirect or collateral, express or implied, oral or otherwise, concerning
this Agreement, the matters herein, or concerning any other matter,
which are not embodied herein. The Licensee acknowledges that it
has entered into this Agreement as a result of its own representations
of the Licensor, its, agents, officers or employees. The Licensee
specifically acknowledges that no representation, promise,
guarantee or warranty concerning the result or profits to be derived
from the manufacture and/or marketing of the PORTABLE
OVERHEAD BIN has been made to induce the Licensee to execute
this Agreement.
BINDING AGREEMENT
(b) Subject to the restrictions on assignment herein contained,
this Agreement shall ensure to the benefit of and be binding upon the
parties hereto and their respective heirs1 executors1 administrator;
successors and permitted assigns.
ARBITRATION
(c) If, at any time during the continuance of this Agreement or
after the termination thereof, any dispute1 difference or question shall
arise between or among any of the parties hereto or their heirs, executor,
administrators, successors or permitted assigns concerning the
construction, meaning or effect of this Agreement or any agreement or
covenant entered into pursuant to this Agreement or the termination of
this Agreement or the termination of any such agreement or covenants
(other than a matter dealt within this Agreement or any agreement or
covenant entered into pursuant thereto whereby such agreement or
covenant entered into pursuant thereto whereby such agreement or
covenant specifically stated that a certain determination shall be final
and binding, or the rights or obligations of the parties hereto or their
heirs, executors, administrators, successors or assigns, then, subject to
the exceptions referred to hereinafter, every such dispute, difference or
question shall be submitted to and settled by arbitration and the decision
of the arbitrator, appointed as hereinafter provided, to deal with such
matter shall be accepted by all the parties to such dispute, difference or
question and their heirs, executors, administrators, successors and assigns.
The arbitration shall be conducted by a single arbitrator agreed upon by
the parties to the matter. If, within five (5) days after notice of the matter
has been given by one of such parties to the other or others, such parties
cannot agree upon a single arbitrator, then in such event, the arbitration
shall be conducted by a single arbitrator appointed by a Judge of the
Queen's Bench on the application of any such party with notice to the
other or others. The arbitration shall be conducted in accordance with the
provisions of The Arbitration Act of Alberta and of any amendment thereto,
or of any successor statue thereof, in force at the time of such dispute,
difference or question. The decision of the arbitrator shall be final and
binding upon all the parties to such dispute, difference or question, and
they shall be no appeal therefrom. The prevailing party shall be entitled
to an award of arbitration costs.
23. LAW OF ALBERTA
This agreement shall be interpreted in accordance with the laws of the
Province of Alberta and shall be treated in all respect' as an Alberta
contract.
IN WITNESS WHEREOF, the parties hereto have hereunto affixed
their hands at Prince George, in the Province of British Columbia
/s/ C.R. Misch /s/ Nov. 8, 1999 /s/ Ian Westwood /s/
Witness IAN WESTWOOD
NIEW INDUSTRIES, INC.
/s/ C.R. Misch /s/ Nov. 8, 1999 Per: /s/
/s/ Ken Bergstad /s/ Secretary
printed name and title of representative of Niew Industries, Inc.
<PAGE>
EXHIBIT 21 i
SUBSIDIARIES OF THE REGISTRANT:
Niew Industries, Inc.
99(i)
DWORKIN, CHAMBERS & WILLIAMS, P.C.
3900 E. Mexico Ave, #1300
Denver, CO 80210
(303) 584.0990 phone
(303) 584.0995 fax
April 11, 2000
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Global Innovative Systems Inc.
Form 10 SB Registration Statement
Ladies and Gentlemen:
We are counsel to Global Innovative Systems Inc.
(the "Company") with regard to the Company's Form 10 SB registration
statement. This correspondence is attached as an exhibit. We hereby
consent to the inclusion of our name and expression of opinion on various
matters therein.
Please notify me as necessary regarding the Company's registration
statement.
Sincerely,
/s/ Bradford J. Lam
------------------------
Bradford J. Lam
Cc: Mr. Ken Bergestad
Michael Madsen, CPA
Brian Tipper, CPA
Mr. Donald Byers
<PAGE>
