SECURITIES AND EXCHANGE COMMISSION
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Washington, D. C. 20549
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FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (G) OF THE SECURITIES ACT OF 1934
SILK ROAD ENTERTAINMENT INC.
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(Name of Small Business Issuer in its charter)
NEVADA 95-4678609
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(State or other jurisdiction of incorporation (IRS Employer Identification
of organization) No.)
555 S. Flower St. #4600
Los Angeles, California 90071
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(Address of principal executive offices (Zip Code)
Issuer's Telephone Number (213) 362-1024
Issuer's Fax Number (213) 362-1001
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
NONE NONE
SECURITIES TO BE REGISTERED PURSUANT OT SECTION 12(g) OF THE ACT:
COMMON STOCK no par value 50,000,000
(Title of Class)
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SILK ROAD ENTERTAINMENT INC.
TABLE OF CONTENTS
Part Item Description of Item Page
- ---- ---- ------------------- ----
Part I Item 1 Description of Business 3
Item 2 Management's Discussion and Analysis 3
and results of Operations
Liquidity 4
Marketing Plans 5
Regulations 5
Competition 6
Economic Risks 6
Employees
Reports to security holders 6
Impact of Y2K on Company 6
Item 3 Description of Property 7
Item 4 Security Ownership of Certain Beneficial Owners
and Management 7
Item 5 Directors, Executive Officers, Promoters and
Control Persons 7
Directors and Executive Officers 7
Item 6 Executive Compensation 8
Item 7 Certain Relationships and Related Transactions 8
Item 8 Description of Securities 8
Common Stock 8
Preferred Stock 8
Item 9 Transfer Agent 9
Part II Item 1 Market Price of and Dividends on Registrant's 9
Common Equity and Related Shareholder matters 9
Market Information
Holders
Dividends
Item 2 Legal Proceedings 10
Item 3 Changes in and Disagreements with Accountants 10
Item 4 Recent Sales of Unregistered Securities 10-12
Item 5 Indemnification of Directors and Officers 12
Part F/S Item 1 Financial Statements - Annual February 28, 1999 13-20
Item 2 Financial Statements - Interim Statement
December 31, 1999 21-25
Part III Item 1 Index to Exhibits 26
Exhibits 1 -
Articles of Incorporation 26-30
Amendment to Articles of Incorporation 30-31
By Laws 31-42
Specimen Share Certificate 42-43
Signature Page 43
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SILK ROAD ENTERTAINMENT INC.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
The Company was incorporated under the laws of the State of Nevada on the 25th
day of February 1998 as The Silk Road Restaurant Group, Inc. Through a filing in
the office of the Secretary of State of Nevada on May 7, 1998 the Company
amended its Articles of Incorporation to change its name to Silk Road
Entertainment Inc.
The Company is in the Internet entertainment business. The business began as the
sale and marketing of technology-based and location based entertainment program
themes for business, testing the market with two divisions, "Silk Road
Restaurant" catering to the United States, Canada, Mexico and the European
markets. This entertainment program is based on soft music played by oriental
musical instruments, live entertainment, cooking shows, Chinese art, and
cartoons based on Chinese stories and Chinese culture; and 2) "Hollywood 1-2-3
Restaurant" designed to cater to China and South-East Asia. This entertainment
program is based on American music, entertainment and culture.
Since formation, the Company has broadened its corporate approach to become an
entertainment medium for business-to-business applications while continuing to
market its original product to restaurants. The business has now become focused
on providing its services to retail store chains, supermarkets, and shopping
malls.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE NINE MONTHS ENDING DECEMBER 31, 1999.
Development Stage Activities.
The Company has been a development stage enterprise from its inception in
February 1998 to December 31, 1999. The Company has signed agreements with 24
restaurants for its entertainment program and all 24 installations have been
completed and are currently operating. Each of these restaurants pay a monthly
fee of $350 to the Company for maintenance in addition to a percentage on the
sale of any paintings, merchandise or products that are purchased for resale by
the restaurant.
During this developmental period, the Company has been financed in part through
services which were converted to shares of common stock, the sale of common
stock for cash and the exchange of common stock for merchandise and products, in
addition to the license for video, films and other business related items.
The Company has developed its first broadband set-top box, named E-Box1,
specializing in high quality entertainment (text, audio, video, 3-D games). The
entertainment will be provided to recipient locations using high tech
innovation, but also providing all-in-one features to support multiple needs at
the location. This will include conference presentation capability, restaurant
introduction, merchant promotion, party banquet management and image/picture
print-out at recipient's location. The e-Box1 supports most common audio and
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video interfaces that fit most customer locations existing audio and video
environment. The customer just plugs in the E-Box1. The equipment has additional
interfaces to hook up digital cameras, printers, game controllers, microphone
and the Internet.
The Company's products and services include two basic concepts: 1) broadband
set-top box development and 2) DVD programs license services. Subsequent
products and services include public video wall systems for supermarkets,
airports and shopping malls among others. The Company developed its first
broadband set-top box, which has been named "e-Box1," to present a new a new era
of entertainment and education for business. The Company's service not only
brings in high quality multimedia entertainment (text, audio, video and 3-D
games) to any location using high tech state-of the-art innovation, but also
provides all-in-one features to support multiple entertainment needs at any
location. With the e-Box1, the customer has the ability to manage media from all
over the world. Computers using the e-Box1 also have the ability to edit and
deliver special editions of worldwide media content to individual remote
locations through Internet. Through the Company's program, conference
presentations can also be downloaded with information as it is happening. In
addition. e-Box1 has multiple interfaces to hook up digital cameras, printers,
game controllers, microphone and Internet. e-Box1 is extremely easy to use. It
works with a TV or video monitor and audio system such as an amplifier with
speakers. It does not require an engineer to adapt it for use. Just plug in
e-Box1 with compatible location video systems (TV or video projector) and audio
systems (such as an amplifier with speakers) and the customer is ready to begin
clicking and playing. The simplicity in use provides an instantaneous source of
entertainment to businesses as well as the retail market. The retail
establishment can also use this entertainment source for merchant promotions.
Revenue in the form of a licensing fee is paid to the Company monthly by each
business or retail establishment subscribing to the program. The Company also
receives revenue from the sale of merchandise, pictures, statues and other
artifacts, which the Company sources from Asia and distributes through its
client base. In addition, Chinese art will be sold at each location as well as
through the Company's web site. This art will either be commissioned by the
Company or acquired by the Company for direct sale. In addition to the 40,000
Chinese restaurants in the United States, the Company's market extends to
business conference presentations, retail shopping malls, merchant promotions,
party banquets and image picture print out. Chain stores with both regional and
national scope are targeted as potential customers since the Company provides
them with a method of showing individual films at each location and even at
different locations within one facility. Supermarkets can utilize this type of
centralized control and local presentation to promote products on an hourly or
daily basis.
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The Company is also at the planning stage of offering several web services to
its customers. The services include a web site and related on line services via
a DVD program. One web site is designed to introduce and market films made in
Asia to the Internet audience. In addition to the film, the audience is able to
enjoy interviews with the Asian stars and enter a Chat Room with others who are
interested in a direct interaction. In addition, the audience can preview other
Asian films to determine their level of interest. Advertising would be the main
source of revenue for this service and would be sold for $3,000 to $50,000
depending upon the customer and its usage. On line shopping would be an
alternate source of revenue. As of this date, this is still at the concept stage
and not incorporated into any on going business of Silk Road.
Although the Company has no competition for its service at this time, as
broadband technology becomes more widespread, similar programs could be
developed in the future. To counter potential competition, the Company, which is
the first to supply this proprietary technology to its niche market, Chinese
restaurants, will target shopping malls, airports, and supermarkets, among
others, and will be well established in the industry and positioned to remain
the leader in the broadband internet entertainment business.
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Liquidity and Capital Resources.
Results of operations for the year ended February 28, 1999 and a ten-month
interim statement dated December 31, 1999 are included in this filing.
The Company's cash balance at February 28, 1999 and December 31, 1999 was
$28,968 and $50,731 respectively. For the year ended February 28, 1999 the
Company continued to be funded in part by the sale of shares of common stock
aggregating $921,259 which is broken down as follows: Common stock issued for
cash $245,798; common stock issued for services video and licensing right to
film and other property and equipment $675,461. For the ten months ended
December 31, 1999 the Company did not raise any funds through the sale of
shares.
Management believes it will be required to raise additional funds in the year
2000 and will do so in a private placement or a regulation A filing and
subsequent sale of shares. The Company's future liquidity requirements will be
dependent upon factors that include the cost of operations, volume of sales and
prices derived from sales of products, the expansion of marketing activities and
many unforeseen happenings that might have an impact on the retail market for
our products. There can be no assurance that financing, if required, will be
available on terms that are satisfactory to management.
MARKETING PLANS
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1. Retail stores for the entertainment package to be installed on a customized
basis.
2. Shopping malls
3. Supermarkets
4. Beauty Salons
5. Chain restaurants and for the entertainment package and the sale of special
merchandise supplied by the Company.
6. The export market for Hollywood 1-2-3 in mainland China and other Asian
countries.
REGULATIONS
The Company is subject to many laws and regulations both in the United States
and internationally as its market expands. The Company must also comply with
Federal, State and Local Laws including the Environmental Protection Act. The
Company does not produce or utilize any toxic, hazardous or harmful substance
that could injure the health of the individual or the environment. The Company
does not anticipate any difficulty in the future in complying with all
applicable Laws and Regulations in the performance of its operations. The
Company cannot predict the impact of possible changes in response to future
legislation, rules or governmental requirements including the Food and Drug
Administration regulations which may affect the ability of the Company, as well
as others in the industry, to develop and market products. However, the Company
does not presently believe that existing applicable legislative and
administrative rules and regulations will have a significant impact on
operations.
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COMPETITION
The restaurant industry in which the Company will engage is extremely
competitive. While there are thousands of Chinese restaurants located in every
state of the United States they are for the most part independently owned and
not a part of a chain. For this reason each restaurant owner must be
individually sold on the Company's entertainment package. There is no assurance
that the Company can develop superior or more cost-effective products than its
competitors, or that it can successfully market its product.
ECONOMIC RISKS
Local, national and international economic conditions may have a substantial
adverse effect on the efforts of the Company. A downturn in the United States
economy could reduce the amount of disposable cash that individuals are willing
to pay for dining out and this could cause the closure of some of the Company's
customers and/or prospective customers. Any adverse political issue as respect
to China could also have an adverse effect on the business of our customers and
therefore have an impact on the Company.
EMPLOYEES
At the present time the Company employs a total of 2 management personnel, and 5
consultants who sell the company program throughout the United States.
REPORTS TO SECURITY HOLDERS
Prior to filing this Form 10-SB, the Company has not been required to deliver
annual reports. However, once the Company becomes a reporting company, it will
deliver annual reports to securities holders as required by the Securities
Exchange Act of 1934 (the "Exchange Act"), as amended and as required by the
rules or regulations of any exchange upon which the Company shares may be
traded.
Prior to the filing of this Form 10-SB, the Company has not filed reports with
the Securities and Exchange Commission (the "Commission"). Once the Company
becomes a reporting company, management anticipates that Forms 3, 4, 5, 10-K-SB,
10-Q-SB, 8-Kand Schedules 13D along with appropriate proxy materials will have
to be filed as they come due. If the Company issues additional shares, then the
Company will file registration statements for those shares.
IMPACT OF Y2K ON COMPANY
The Year 2000 issue arising out of computer programs has not affected the
Company, or its plans for sales. The Company intends to timely update its
accounting and other systems which are determined to be affected by Year 2000 by
purchasing Year 2000 compliant software and hardware available from retail
vendors at reasonable cost. The Company has not yet contacted any of its vendors
to determine their status as to the Y2K compliance.
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ITEM 3. DESCRIPTION OF PROPERTY
The Company does not own any real property and currently rents a total of 800
square feet in an office complex located at 555 S. Flower Street #4600 Los
Angeles, CA 90071 on a month to month basis and a 1300 square foot office in
Alhambra, California located at 2225 W. Commonwealth Ave. #103 on a one year
lease at $1150 pre month.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Shares by (a) each person known to be the
beneficial owner of more than 5% of the Company's outstanding Common Shares, (b)
the Directors of the Company and (c) the Directors and Officers as a group.
NAME NUMBER OF SHARES OWNED PERCENTAGE OF
(COMMON STOCK) SHARES ISSUED
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Richard Lo (Wing Nin Lo) 100,000 3.6192%
D.Y. Wang 100,000 3.6192%
Meng Chiu Liu 25,000 0.9048%
Zi Ran Zhang 10,000 0.3619%
All Directors and Officers as a Group 235,000 8.5052%
Beneficial owners of more than 5% of the Company's outstanding shares are:
K. H. Lee & Company 294,000
L & L Investment Company 530,000
Burrows Capital & Investment 1,244,000
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Directors, Executive Officers, Promoters and Control Persons are listed
below:
Name Age Position
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Richard Lo 59 President & CEO, Director
D.Y. Yang 42 Director
Meng - Chiu Liu 39 Secretary/Treasurer
Zi Ran Zhang 49 Director
Dr. Jim Su 37 VP Engineering-Director
The biographies of the Directors and Officers are set forth below. All Directors
hold office until the next annual shareholder's meeting or until their death,
resignation, retirement or until their successors have been elected and
qualified. Vacancies in the existing Board are filled by a majority vote of the
remaining Directors.
Mr. Richard Lo. President and CEO. Mr. Lo has more than 17 years of executive
management experience in addition to an international marketing. He served as
Vice President of Operations for Worldwide Merchant Inc from 1985 to 1990 and is
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currently a promoter and Vice President for First American Financial Group and
Vice President of Marketing for American Merchant Group. Approximately 90% of
his time is devoted to Silk Road Entertainment, Inc.
Mr. D.Y. Yang. Director. Mr. Yang has over 11 years of experience in film
production, television and film marketing and book publications. He has served
as co-producer for various films at several film studios from 1987 to the
present. He also serves as the marketing Director of Television and Film Import
and Export Division Inc. He holds a B. A. in English language from Beijing
University in 1986 and an MFA in Film Production from UCLA.
Ms. Meng-Chin Liu. Secretary/Treasurer. Ms. Meng has more than 15 years of
experience in the operational management and financial services and has served a
a financial controller for American Merchant Group from 1990-1996. She was also
a registered representative in her position with W.M.A.
Mr. Zi Ran Zhang. Director. Mr.Zhang will be in charge of the business
development of the Company in China. Mr. Zhang was the chief engineer and
director of China Realty Co. Ltd. In Hebei Province for the period from 1984 to
1991. He then joined the Shi Jia Zhuang East Square as their General Manager and
Vice President until 1999. Mr. Zhang is experienced in Trading and in movie and
video distribution in China.
Dr. Jim Su. Vice President Engineering/Director. Dr. Su received his Ph.D. from
the University of Southern California in Computer Engineering. He presently
holds four patents and has written extensively in the field of hardware and
software applications including microprocessor design and prolog parallel
microprocessors. He will be in charge of all Internet engineering functions for
the Company.
ITEM 6. EXECUTIVE COMPENSATION
A. No officer or director has received a monetary salary.
B. There is no annuity, pension or retirements benefit proposed to be paid to
officers, directors or employees of the Company in the event of a
retirement. There is no existing plan provided for contributed to by the
Company or any of its employees.
C. As of the date of this filing no options have been granted for shares of
either common or preferred shares of the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No Director, Officer, Promoter or Control Person is, or has been in debt to the
Company.
ITEM 8. DESCRIPTION OF SECURITIES
The Company is authorized to issue 50,000,000 shares of Common Stock, each share
having a par value of $.001. On the 31st of December 1999 2,763,000 shares were
issued and outstanding. The Company does not have any Preferred Shares
authorized and no preferred shares are issued and outstanding.
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Shareholders of Common Stock are entitled to receive ratably such dividends as
may be declared by the Board of Directors without any preference. Holders of
Common Stock are entitled to one vote per share. Cumulative voting is not
allowed and thus holders of more than 50% of the shares voting for Directors can
elect all Directors. The holders of Common Stock have no preference rights to
purchase new issues of the securities of the Company.
Dividends may be paid if, and when, declared by the Board of Directors. All
shares are non-assessable and fully paid.
Upon liquidation or dissolution of the Company, holders of Common Stock are
entitled to receive pro rata, either in cash or in kind, all of the assets of
the Company after payment of the debts. There are no redemption, conversion or
pre-emptive rights attached to the Common Stock.
ITEM 9
Transfer Agent and Registrar
The Transfer and Registrar of the Company is:
Pacific Stock Transfer Attn: Shelly
5844 S. Pecos Rd. Suite "D"
Las Vegas, NV 89120
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS
As of the date of this filing the Company's Common Stock is not traded
over-the-counter on the Bulletin Board by the National Association of Securities
Dealers (NASD) nor in the Pink Sheets published by the National Quotation
Bureau. The NASD issued a four letter symbol to the Company, "SLKR" for use when
a listing is approved. The Company filed a 15-C-211 through the brokerage firm
of J. Alexander Securities in Los Angeles, California and has sought approval by
the NASD to begin trading shares which have been held by shareholders over two
years.
Prior to the Company becoming a "Reporting Company", as called for, there will
be 466,000 shares of free trading shares of the Company's Common Stock with an
additional 225,000 shares held by officers and directors and an additional
1,774,000 shares of common stock held for a period over two years by control
persons.
As of December 31, 1999 there were 38 shareholders of the Company's Common
Stock. The Company has not declared or paid any dividends on its stock, and does
not anticipate declaring any dividends in the foreseeable future.
The Company's common stock is covered by the Securities and Exchange Commission
rule that imposes additional sales practice requirements on broker-dealers who
sell these securities to persons other than established customers and accredited
investors, generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse. For transactions covered by this
rule, the broker-dealer must make a special suitability determination for the
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purchaser and transaction prior to the sale. Consequently, the rule may affect
the ability of broker-dealers to sell our securities and also may affect the
ability of purchasers of our stock to sell their shares in the secondary market.
It may also cause less broker-dealers to make a market and it may affect the
level of news coverage we receive.
ITEM 2. LEGAL PROCEEDINGS.
Neither the Company, nor its Directors, nor any Officer is a party to any
material legal proceeding or litigation, which would impact the operations of
the Company.
ITEM 3. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS
None
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
30,000 shares of common stock valued at $5.00 per share were issued on March 9,
1998 to Chien Hwa Chao for cash in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Securities Act of 1933, as amended (the
"Act").
27,500 shares of common stock valued at $5.00 per share were issued on March 9,
1998 to Candy Jeng and Amy Wong Jeng for the use of their personal financial
guarantees on equipment leased in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Act.
20,000 shares of common stock valued at $5.00 per share were issued on March
9,1998 to Bernice Ringler for services in a non-public offering in reliance on
Rule D Regulation 504 Section 4(2) of the Act.
33,000 shares of common stock valued at $1.00 per share were issued on March 9,
1998 to Timothy Lee for artwork used in film production for restaurant in a
non-public offering in reliance on Rule D Regulation 504 Section 4(2) of the
Act. Artwork was used in three programs and constituted about 12 minutes in the
film at 24 frames per second.
10,000 shares of common stock valued at $5.00 per share were issued on March 9,
1998 to Stephen S. Loo for services in a non-public offering in reliance on Rule
D Regulation 504 Section 4(2) of the Act. His services introduced a critical
restaurant to the program and led others to join in the program.
5,000 shares of common stock valued at $5.00 per share were issued on March 15,
1998 to Yo Cho Tsang for cash in a non-public offering in reliance with Rule D
Regulation 504 Section 4(2) of the Act.
530,000 shares of common stock valued at $690,000 were issued on March15, 1998
to L&L Investment Company for the video licensing rights to the film library to
be used by Silk Road at the restaurants who participate in our program in a
non-public offering in reliance with Rule D Regulation 504 Section 4(2) of the
Act.
1,244,000 shares of common stock valued at $690,000 were issued on March 15,
1998 to Burrows Capital Investment Company for the video licensing rights to the
film library to be used by Silk Road at the restaurants who participate in our
program in a non-public offering in reliance with Rule D Regulation 504 Section
4(2) of the Act.
30,000 shares of common stock valued at $1.00 per share were issued on March 20,
1998 to Frank Chen for merchandise in a non-public offering in reliance on Rule
D Regulation 504 Section 4(2) of the Securities Act of 1933, as amended (the
"Act").
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1,000 shares of common stock valued at $1.00 per share were issued on March 20,
1998 to Yan Can Cook for cooking services in a non-public offering in reliance
on Rule D Regulation 504 Section 4(2) of the Act.
25,000 shares of common stock valued at $.10 per share were issued on March 20,
1998 to Meng Chiu-Liu for services as Controller of Silk Road in a non-public
offering in reliance on Rule D Regulation 504 Section 4(2) of the Securities Act
of 1933, as amended (the "Act").
100,000 shares of common stock valued at $.10 per share were issued on March 20,
1998 to Richard Lo (Wing Win Lo) for services as President of Silk Road in a
non-public offering in reliance on Rule D Regulation 504 Section 4(2) of the
Act.
15,000 shares of common stock valued at $1.00 per share were issued on March 20,
1998 to Jen Lin for merchandise in a non-public offering in reliance with Rule D
Regulation 504 Section 4(2) of the Act.
5,000 shares of common stock valued at $1.00 per share were issued on March 20,
1998 to Fay C. Meng for services in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Securities Act of 1933, as amended (the
"Act").
10,000 shares of common stock valued at $1.00 per share were issued on March 20,
1998 to Peter Shaw for services in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Act. Mr. Shaw sourced merchandise and
products to be sold through the restaurants from China.
100,000 shares of common stock valued at $.10 per share were issued on March 20,
1998 to D.Y. Wang for services as C.E.O. and Director of Silk Road in a
non-public offering in reliance on Rule D Regulation 504 Section 4(2) of the
Act.
1,000 shares of common stock valued at $5.00 per share were issued on July 30,
1998 to Tjan Chia-Ling for cash in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Act.
2,000 shares of common stock valued at $5.00 per share were issued on July 30,
1998 to Ta Peng-Wang for cash in a non-public offering in reliance with Rule D
Regulation 504 Section 4(2) of the Act.
6,000 shares of common stock valued at $3.00 per share were issued on September
12, 1998 to Zhiming Han for music composition services in a non-public offering
in reliance on Rule D Regulation 504 Section 4(2) of the Securities Act of 1933,
as amended (the "Act").
500 shares of common stock valued at $5.00 per share were issued on September
12, 1998 to Al Kwang Ho for cash in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Act.
5,000 shares of common stock valued at $5.00 per share were issued on September
12, 1998 to Su Huang & Yam He Huanh for cash in a non-public offering in
reliance on Rule D Regulation 504 Section 4(2) of the Act.
2,000 shares of common stock valued at $5.00 per share were issued on September
12, 1998 to Barbara Chen and Ziang Cheng Taxg for cash in a non-public offering
in reliance on Rule D Regulation 504 Section 4(2) of the Act.
10,000 shares of common stock valued at $.10 per share were issued on October 1,
1998 to Jimmie Liu and Meng Chiu Liu for artwork design services in a non-public
offering in reliance on Rule D Regulation 504 Section 4(2) of the Act.
10,000 shares of common stock valued at $5.00 per share were issued on October
26, 1998 to Chun Kao for cash in a non-public offering in reliance with Rule D
Regulation 504 Section 4(2) of the Act.
10,000 shares of common stock valued at $5.00 per share were issued on November
9, 1998 to Michael Chen for cash in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Securities Act of 1933, as amended (the
"Act").
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10,000 shares of common stock valued at $5.00 per share were issued on November
20, 1998 to Zi Ran Zhang for cash in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Act.
5,000 shares of common stock valued at $5.00 per share were issued on November
20, 1998 to Yun Zhang for cash in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Act.
5,000 shares of common stock valued at $5.00 per share were issued on November
20, 1998 to Li-Zhong for cash in a non-public offering in reliance on Rule D
Regulation 504 Section 4(2) of the Act.
5,000 shares of common stock valued at $5.00 per share were issued on November
20, 1998 to Ying Ying Zhu GE for cash in a non-public offering in reliance with
Rule D Regulation 504 Section 4(2) of the Act.
2,000 shares of common stock valued at $5.00 per share were issued on November
22, 1998 to Sum Chu Ma for cash in a non-public offering in reliance with Rule D
Regulation 504 Section 4(2) of the Act.
4,000 shares of common stock valued at $2.50 per share were issued on November
25, 1998 to Elaine Culver for services in a non-public offering in reliance on
Rule D Regulation 504 Section 4(2) of the Act.
10,000 shares of common stock valued at $1.25 per share were issued on December
20, 1998 to Alice Lee for artwork design services in a non-public offering in
reliance on Rule D Regulation 504 Section 4(2) of the Act.
10,000 shares of common stock valued at $1.25 per share were issued on December
20, 1998 to Cheuk Yen Wu for artwork design services in a non-public offering in
reliance on Rule D Regulation 504 Section 4(2) of the Act.
5,000 shares of common stock valued at $5.00 per share were issued on December
20, 1998 to Dong Sheng Yang for cash in a non-public offering in reliance on
Rule D Regulation 504 Section 4(2) of the Act.
20,000 shares of common stock valued at $1.00 per share were issued on January
7, 1999 to Cheuk Fung Wu for services in a non-public offering in reliance on
Rule D Regulation 504 Section 4(2) of the Act.
6,000 shares of common stock valued at $1.00 per share were issued on January
25, 1999 to John Chow for merchandise in a non-public offering in reliance on
Rule D Regulation 504 Section 4(2) of the Act.
294,000 shares of common stock valued at $.50 per share were issued on July 19,
1999 to K. H. Lee Co. for video and licensing rights to film in a non-public
offering in reliance with Rule D Regulation 504 Section 4(2) of the Act.
150,000 shares of common stock valued at $3.00 per share were issued on July 21,
1999 to Chang Shih-Chien for cash in a non-public offering in reliance with Rule
D Regulation 504 Section 4(2) of the Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has provided in its by-laws under Article Ten Section 3 that it "may
indemnify any Director, Officer, agent or employee as to liabilities. The
Directors as far as permissible under Nevada Statutes are without personal
liability for actions taken on behalf of the Corporation which are consistent
with the purposes of the Corporation and the laws of the State of Nevada and the
United States of America.
12
<PAGE>
The minutes provide further that the Corporation shall have the power to
purchase and maintain insurance on behalf of any person who is a director,
officer, employee or agent against any liability asserted against the person and
incurred by the person in any such capacity or arising out of the person's
status as such whether or not the corporation would have the power to indemnify
the person against such liability under provisions of the law. The Company has
not purchased such insurance as of this date.
PART F/S
The Independent Auditor's Report and the Financial Statements for the period
February 25, 1998 (date of inception) to February 28, 1999 are included.
Management's report from March 1, 1999 to December 31, 1999 is also included.
Independent Auditors Report F-1
Financial Statements
Balance Sheet - Assets - Liabilities and Stockholders Equity F-2
Statement of Operations F-3
Statement of Changes in Stockholders' Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6-8
13
<PAGE>
H. M. RICHARDS & ASSOCIATES
Accountancy Corporation * Certified Public Accountants
Member AICPA * Member CSCPA
5857 Uplander Way Culver City, CA
Phone (310) 348-4188 Fax: (310) 348-4189
August 18, 1999
Silk Road Entertainment, Inc.
Los Angeles, CA
To the Shareholders and the Board of Directors of Silk Road Entertainment, Inc.
We have audited the accompanying balance sheet of Sandy Creek Corporation (a
development stage Company) as of February 28, 1999 and the related statements of
operations, stockholders' equity and cash flows for the period February 25, 1998
(date of inception) to February 28, 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Silk Road Entertainment, Inc.
as of February 28, 1999 and the results of its operations, stockholders' equity
and cash flows for the period in accordance with generally accepted accounting
principles.
/s/ H. M. Richard and Associates
- --------------------------------
H. M. Richard and Associates
An Accountancy Corporation
F-1
<PAGE>
<TABLE>
<CAPTION>
SILK ROAD ENTERTAINMENT, INC.
(A Development Stage Company)
BALANCE SHEET
FEBRUARY 28, 1999
ASSETS
------
Current assets:
<S> <C>
Cash $ 28,968
Accounts receivable 57,682
Inventories (Note 2) 8,735
Loan receivable 3,500
---------
Total current assets 98,885
Property and equipment, less $36,699 accumulated
depreciation (Note 3) 697,271
Other assets:
Organization Cost, less $2,778 accumulated amortization (Note 6) 11,111
Deposits 4,271
---------
Total assets $ 811,538
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 14,000
Current portion of long-term debt (Note 4) 42,000
---------
Total current liabilities 56,000
Long-term debt, less current portion (Note 4) 4,644
Deferred income (Note 5) 64,743
---------
Total liabilities 125,387
---------
Stockholders' equity:
Common stock $.001 par value; shares authorized 50,000,000
issued and outstanding 2,764,000 2,764
Preferred stock $.001 par value; authorized 5,000,000
shares; issued and outstanding, none --
Paid-in capital (Note 2) 918,495
Retained earnings (deficit) (235,108)
---------
Total stockholders' equity 686,151
---------
Total liabilities and stockholders' equity $ 811,538
=========
See accompanying notes to the financial statements.
F-2
</TABLE>
<PAGE>
SILK ROAD ENTERTAINMENT, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION FEBRUARY 25, 1998 TO FEBRUARY 28, 1999
Net sales $ 4,299
Cost of goods sold 2,976
-----------
Gross profit 1,323
Operating expenses (236,431)
-----------
Income (loss) before income taxes (235,108)
Income tax (benefit) --
-----------
Net income (loss) $ (235,108)
===========
Loss per share:
Basic and diluted $ (0.17)
Number of shares used in the per
share calculation:
Basic and diluted 1,382,000
See accompanying notes to the financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
SILK ROAD ENTERTAINMENT, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION FEBRUARY 25, 1998 TO FEBRUARY 28, 1999
Common Stock Preferred Stock
---------------------- -------------------
Number Number Paid-In Stockholders'
of Shares Amount of Shares Amount Capital Deficit Equity
--------- ------ --------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Stock issued:
To employees 417,500 418 -- -- -- -- 418
To investor/supplier/president 2,118,000 2,118 -- -- 687,882 -- 690,000
To public 227,500 228 -- -- 245,798 -- 246,026
Offering costs (15,185) (15,185)
Net loss for the year (235,108) (235,108)
----------- ----------- ------- ----------- ----------- ----------- -----------
2,763,000 $ 2,764 -- $ -- $ 918,495 $ (235,108) $ 686,151
=========== =========== ======= =========== =========== =========== ===========
See accompanying notes to the financial statements.
F-4
</TABLE>
<PAGE>
SILK ROAD ENTERTAINMENT, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION FEBRUARY 25, 1998 TO FEBRUARY 28, 1999
Cash flows from operating activities:
Net loss $(235,108)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 39,477
Changes in assets and liabilities:
Accounts receivable (57,682)
Inventories (8,735)
Deposits (4,271)
Deferred income 64,743
Accounts payable 14,000
---------
Net cash (used in) operating activities (187,576)
---------
Cash flows from investing activities:
Capital expenditures (57,303)
Loan receivable (3,500)
---------
Net cash provided by (used in) investing activities (60,803)
---------
Cash flows from financing activities:
Proceeds from issuing common stock 230,703
Issuance (repayment) of long-term debt 46,644
---------
Net cash provided by (used in) financing activities 277,347
---------
Net increase (decrease) in cash and cash equivalents 28,968
Cash and cash equivalents at beginning of year --
---------
Cash and cash equivalents at end of year $ 28,968
=========
Supplemental disclosure of cash flow information:
Noncash investing and financing activities $ 690,000
Interest paid $ --
Income taxes paid $ --
See accompanying notes to the financial statements.
F-5
<PAGE>
SILK ROAD ENTERTAINMENT, INC.
(A Development Stage Comapany)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BUSINESS:
- ------------------
Silk Road Entertainment, Inc. (the "Company") is a developer and provider of
technological entertainment packages with program themes for the restaurant
industry. The Company was formed in Nevada on February 25, 1998 and began doing
business on May 1, 1998.
NOTE 2 - SUMMARY OF SIGNIFIC ANT ACCOUNTING POLICIES:
- -----------------------------------------------------
Development Stage Company
- -------------------------
Since the inception, the Company has been primarily involved in raising
capital, commencing production schedules for various projects under progress,
and acquiring services in the field of legal, financial, and art and
entertainment to promote the company and develop it's future infrastructure.
The Company has devoted substantially all of its efforts toward
establishing the entity, by developing various projects and operating the day to
day activities. The Company has not generated any significant revenues since its
inception. Upon development, release and distribution of motion pictures, films,
and videos, a more steady revenue can be expected. Theses financial statements
comply with the reporting requirements under SFAS No. 7 for Development Stage
Companies
Inventories
- -----------
Inventories consist primarily finished goods merchandise held for resale and are
stated at the lower of cost (determined on a weighted average cost basis) or
market. Market value is based upon net realizable value. Appropriate
consideration is given to deterioration, obsolescence, and other factors in
evaluating net realizable value.
Revenues
- --------
Revenues are recognized upon shipment of product to customers. (Note 5)
Depreciation
- ------------
Depreciation is computed on a straight-line method. (Note 3)
F-6
<PAGE>
SILK ROAD ENTERTAINMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
NOTE 3 - PROPERTY AND EQUIPMENT:
- --------------------------------
Property and equipment consist of the following
Useful Life
In Years
--------
Videos and license rights acquired by issue of 2,273,000
common shares of Silk Road Entertainment, Inc 10 $690,000
Equipment 10 43,970
--------
Total property and equipment 733,970
Less accumulated depreciation 36,699
--------
Property and equipment, net $697,271
========
NOTE 4 - Long-term Debt:
- ------------------------
The long-term debt is a contract payable; capitalized lease note of $46,644
consists of 14 1/2 payments of $3,500 a month (including interest) less the
current portion of $42,000.
NOTE 5 - Deferred Income:
- -------------------------
The company has service agreements with restaurants for one and three year
terms. Deferred income consists of these three-year service agreements with 34
monthly payments due as of February 28, 1999. These payments total $145,766.
There are also 9 monthly payments due on the one-year agreements totaling
$13,250. The associated cost of sales of $78,430 has reduced the deferred income
to a net of $64,743. Deferred income is recognized as payments are received.
F-7
<PAGE>
SILK ROAD ENTERTAINMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 6 - Organization Costs:
- ----------------------------
Organization costs of $13,889 are amortized over 5 years.
NOTE 7: Lease Commitments
- -------------------------
The company has a lease for office space at two locations, which expires on
April 30, 1999. Month to month rent is $2,000.
Note 8: Year 2000 Computer Systems Compliance
- ---------------------------------------------
The company has reviewed the software systems and related applications used in
its business to assess its requirements regarding the "Year 2000 Issue." Based
on this review, the company does not require any upgrades of software or
hardware. The company therefore does not anticipate any business disruptions.
F-8
<PAGE>
Financial Statements
of
SILK ROAD ENTERTAINMENT, INC.
For the Period Ended December 31, 1999
F-9
<PAGE>
SILK ROAD ENTERTAINMENT, INC.
Balance Sheet
December 31, 1999
Assets
Current Assets
Petty Cash $ 600.00
CASH IN BANK SANWA BANK 10019 68,477.86
Cash in bank Sanwa Bank 10083 452.60
Total Current Assets $ 69,530.46
Fixed Assets
Office Equipment 719,926.03
Accumulated Depreciation (110,096.00)
Total Fixed Assets 609,830.03
Other Assets
Deposit - Utilities 4,271.00
Organization Cost 13,889.00
Accumulative Amortization (5,555.80)
Total Other Assets 12,604.20
Total Assets $ 691,964.69
==============
F-10
<PAGE>
SILK ROAD ENTERTAINMENT, INC.
Balance Sheet
December 31, 1999
Liabilities and Equity
Current Liabilities
Long Term Liabilities
Shell Credit Card Payable 1,500.00
-----------
Total Long Term Liabilities 1,500.00
Equity
Common Stock 2,764.00
Paid in Surplus 918,495.00
Retained Earnings (235,108.00)
Current Income (Loss) 4,313.69
-----------
Total Equity 690,464.69
-----------
Total Liabilities & Equity $691,964.69
===========
F-11
<PAGE>
<TABLE>
<CAPTION>
SILK ROAD ENTERTAINMENT, INC.
Income Statement
For the Period Ended December 31, 1999
12 Months Ended 12 Months Ended
Dec. 31, 1999 Pct Dec. 31, 1999 Pct
------------- --- ------------- ---
Revenue
<S> <C> <C> <C> <C>
Sales $ 453,339.48 105.52 $ 453,339.48 105.52
Returns and Allowance (23,716.83) (5.52) (23,716.83) (5.52)
------ ------
Total Revenue 429,622.65 100.00 429,622.65 100.00
Cost of Sales
Purchase 81,268.56 18.92 81,268.56 18.92
Commission 91,438.39 21.28 91,438.39 21.28
Advertising 5,754.00 1.34 5,754.00 1.34
Production Fee 37,892.16 8.82 37,892.16 8.82
------ ------
Total Cost of Sales 216,353.11 50.36 216,353.11 50.36
------ ------
Gross Profit 213,269.54 49.64 213,269.54 49.64
Operating Expenses
Accounting 1,500.00 0.35 1,500.00 0.35
Advertising 4,980.00 1.16 4,980.00 1.16
Amortization expense 42,066.80 9.79 42,066.80 9.79
Auto and Truck Expense 1,451.79 0.34 1,451.79 0.34
Bank Charges 423.78 0.10 423.78 0.10
Depreciation 32,488.00 7.56 32,488.00 7.56
Dues and Subscriptions 699.00 0.16 699.00 0.16
Entertainment 5,807.47 1.35 5,807.47 1.35
Equipment Rental 30,355.50 7.07 30,355.50 7.07
Freight 2,741.68 0.64 2,741.68 0.64
Insurance 1,787.00 0.42 1,787.00 0.42
Leasing - auto 1,430.34 0.33 1.430.34 0.33
Legal 7,596.00 1.77 7.596.00 1.77
Office Expense 11,342.77 2.64 11,342.77 2.64
Outside services 31,619.64 7.36 31,619.64 7.36
Postage 2,929.66 0.68 2,929.66 0.68
Professional fee 200.00 0.05 200.00 0.05
Promotion fee 300.00 0.07 300.00 0.07
Rent 14,708.00 3.42 14,708.00 3.42
Repairs and Maintenance 385.52 0.09 385.52 0.09
Sample 69.50 0.02 69.50 0.02
Security & Alarm Expense 183.43 0.04 183.43 0.04
Supplies 2,481.09 0.58 2,481.09 0.58
Taxes - Other 113.45 0.03 113.45 0.03
Telephone 5,632.52 1.31 5,632.52 1.31
Travel 4,862.91 1.13 4,862.91 1.13
------ ------
Total Expenses 208,155.85 48.45 208,155.85 48.45
------ ------
Operating Income 5,113.69 1.19 5,113.69 1.19
State Income Tax Expense 800.00 0.19 800.00 0.19
------ ------
F-12
</TABLE>
<PAGE>
12 Months Ended 12 Months Ended
Dec. 31, 1999 Pct Dec. 31, 1999 Pct
------------- --- ------------- ---
Total Other Income (800.00) (0.19) (800.00) (0.19)
----------------------------------------------
Net Income (Loss) $ 4,313.69 1.00 $ 4313.69 1.00
==============================================
F-13
<PAGE>
<TABLE>
<CAPTION>
SILK ROAD ENTERTAINMENT, INC.
(A development stage company)
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD FROM INCEPTION FEBRUARY 25, 1998 TO DECEMBER 31, 1999
Common Stock Preferred Stock
------------ ---------------
Number Number Paid-in Stockholder's
of shares of shares Capital Deficit Equity
--------- --------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Feb 1998-Feb 1999
Stock Issued:
To employees 417,500 -- -- -- 418
To investor/supplier 2,118,000 -- 687,882 -- 690,000
/president
To public 227,500 -- 245,798 -- 246,026
Offering Costs (15,185) -- (15,185)
Net Loss for the year (235,108) (235,108)
---------- ---------- ---------- ---------- ----------
2,763,000 -- $ 918,495 $ (235,108) $ 686,151
Mar 1999-Sep 1999
Net Income for seven months 6,381 6,381
---------- ---------- ---------- ---------- ----------
2,763,000 -- $ 918,495 $ (228,727) $ 692,532
Mar 1999-Dec 1999
Net Income for ten months 4,314 4,314
---------- ---------- ---------- ---------- ----------
2,763,000 -- $ 918,495 $ (224,413) $ 696,846
F-14
</TABLE>
<PAGE>
PART III
ITEM 1 INDEX TO EXHIBITS
Exhibit 1 State of Nevada Articles of Incorporation
Exhibit 2 Amendment to Articles of Incorporation May 7, 1998
Exhibit 3 By-laws of Silk Road Entertainment, Inc.
Exhibit 4 Specimen Share Certificate
Signature Page
14
<PAGE>
SIGNATURE
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned thereunto duly authorized.
SILK ROAD ENTERTAINMENT, INC.
Registrant
By Richard Lo
--------------
Signature
Date: March 16, 2000
15
Exhibit 1 Articles of Incorporation
ARTICLES OF INCORPORATION OF
THE SILK ROAD RESTAURANT GROUP lNC.
FIRST. The name of the corporation is:
THE SILK ROAD RESTAURANT GROUP INC.
SECOND. Its registered office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706 that this Corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada.
THIRD. The objects for which this Corporation is formed are: To engage in
any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred
upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers, when
not inconsistent with the purposes and objects for which this corporation is
organized.
(C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and when no
period is limited, perpetually, or until dissolved and its affairs wound up
according to law.
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal
estate and to mortgage or lease any such real and personal estate with its
franchises. The power to hold real and personal estate shall include the power
to take the same by devise or bequest in the State of Nevada, or in any other
state, territory or country.
(G) Shall have power to appoint such officers and agents as the
affairs of the corporation shall require, and to allow them suitable
compensation.
(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the transfer
of its stock, the transaction of its business, and the calling and holding of
meetings of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and
alter the same at pleasure. The use of a seal or stamp by the corporation on any
corporate documents is not necessary. The corporation may use a seal or stamp,
if it desires, but such use or nonuse shall not in any way affect the legality
of the document.
(K) Shall have power to borrow money and contract debts when necessary
for the transaction of its business, or for the exercise of its corporate
rights, privileges or franchises, or for any other lawful purpose of its
incorporation; to issue bonds, promissory notes, bills of exchange, debentures,
and other obligations and evidences of indebtedness, payable at a specified time
or times, or payable upon the happening of a specified event or events, whether
secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or
in payment for property purchased, or acquired, or for any other lawful object.
<PAGE>
(L) Shall have power to guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the capital
stock of, or any bonds, securities or evidences of the indebtedness created by,
any other corporation or corporations of the State of Nevada, or any other state
or government, and, while owners of such stock, bonds, securities or evidences
of indebtedness, to exercise all the rights, powers and privileges of ownership,
including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of
its own capital stock, and use therefor its capital, capital surplus, surplus,
or other property or fund.
(N) Shall have power to conduct business, have one or more offices,
and hold, purchase, mortgage and convey real and personal property in the State
of Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any foreign
countries.
(0) Shall have power to do all and everything necessary and proper for
the accomplishment of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the corporation, and, in general, to carry on any
lawful business necessary or incidental to the attainment of the objects of the
corporation, whether or not such business is similar in nature to the objects
set forth in the certificate or articles of incorporation of the corporation, or
any amendment thereof.
(P) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited,
or joint ventures, in connection with any lawful activities, as may be allowed
by law.
FOURTH.
That the total number of common stock authorized that may be issued by the
Corporation is FIFTY MILLION (50,000,000) shares of stock with a par value of
$.001 (ONE TENTH OF ONE CENT) and the total number of preferred non-voting stock
authorized that may be issued by the Corporation is FIVE MILLION (5,000,000)
shares of stock with a par value of $.00l (ONE TENTH OF ONE CENT) and no other
class of stock shall be authorized. Said shares may be issued by the corporation
from time to time for such considerations as may be fixed by the Board of
Directors.
FIFTH.
The governing board of this corporation shall be known as directors, and
the number of directors may from time to time be increased or decreased in such
manner as shall be provided by the By-Laws of this Corporation, providing that
the number of directors shall not be reduced to fewer than one (1).
The name and post office address of the first board of Directors shall be
one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
---- -------------------
Brent Buscay 2533 North Carson Street
Carson City, Nevada 89706
<PAGE>
SIXTH.
The capital stock, after the amount of the subscription price, or par
value, has been paid in, shall not be subject to assessment to pay the debts of
the corporation.
SEVENTH.
The name and post office address of the Incorporator signing the Articles
of Incorporation is as follows:
NAME POST OFFICE ADDRESS
---- -------------------
Brent Buscay 2533 North Carson Street
Carson City, Nevada 89706
EIGHTH.
The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this
corporation in the state of Nevada, shall be: 2533 North Carson Street Carson
City, Nevada 89706
NINTH.
The corporation is to have perpetual existence.
TENTH.
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make, alter
or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one (1)
or more committees, each committee to consist of one or more of the Directors of
the Corporation, which, to the extent provided in the resolution, or in the
By-Laws of the Corporation, shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the Corporation.
Such committee, or committees, shall have such name, or names, as may be stated
in the By-Laws of the Corporation, or as may be determined from time to time by
resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the Stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a Stockholders meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority, of the voting stock
issued and outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its board of Directors deems expedient and for the best
interests of the Corporation.
<PAGE>
ELEVENTH.
No shareholder shall be entitled as a matter of right to subscribe for or
receive additional shares of any class of stock of the Corporation, whether now
or hereafter authorized, or any bonds, debentures or securities convertible into
stock, but such additional shares of stock or other securities convertible into
stock may be issued or disposed of by the Board of Directors to such persons and
on such terms as in its discretion it shall deem advisable.
TWELFTH.
No director or officer of the Corporation shall be personally liable to the
Corporation or any of its stockholders for damages for breach of fiduciary duty
as a director or officer involving any act or omission of any such director or
officer; provided, however, that the foregoing provision shall not eliminate or
limit the liability of a director or officer (i) for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law, or (ii) the
payment of dividends in violation of Section 78.300 of the Nevada Revised
Statutes. Any repeal or modification of this Article by the stockholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of the Corporation
for acts or omissions prior to such repeal or modification.
THIRTEENTH.
This Corporation reserves the right to amend, alter, change or repeal any
provision contained in the Articles of Incorporation, in the manner now or
hereafter prescribed by statute, or by the Articles of Incorporation, and all
rights conferred upon Stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 25th day of February 1998.
---------------------------------
Brent Buscay
STATE OF NEVADA )
) ss:
CARSON CITY )
On this 25th day of February 1998 in Carson City, Nevada, before me, the
undersigned, a Notary Public in and for Carson City, State of Nevada, personally
appeared:
Brent Buscay
Known to me to be the person whose name is subscribed to the foregoing document
and acknowledged to me that he executed the same.
--------------------------
Notary Public
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the previously
named Corporation.
February 25, 1998
--------------------------
Vice President
Secretary of State Nevada
Filed: February 25, 1998
No. C3856-98
Exhibit 2 - Amendment to Articles of Incorporation
CERTIFICATE AMENDING ARTICLES OF INCORPORATION
OF
SILK ROAD RESTAURANT GROUP INC.
The undersigned, being the President and Secretary of THE SILK ROAD RESTAURANT
GROUP INC., a Nevada corporation, hereby certify that by majority vote of the
Board of Directors and majority vote of the stockholders at a meeting held on 1
May 1998 it was agreed by unanimous vote that this CERTIFICATE AMENDING ARTICLES
OF INCORPORATION be filed.
The undersigned further certify that the original Articles of Incorporation of
THE SILK ROAD RESTAURANT GROUP INC. were filed with the Secretary of State of
Nevada on the 25th day of February 1998. The undersigned further certify that
ARTICLES FIRST of the original Articles of Incorporation filed on the 25th day
of February 1998 herein is amended to read as follows:
ARTICLE FIRST
FIRST: The name shall be
SILK ROAD ENTERTAINMENT, INC.
The undersigned hereby certify that they have this 6th day of May 1998
executed this Certificate Amending the original Articles of Incorporation
heretofore filed with the Secretary of State of Nevada.
Signed: President
Signed: Secretary
Notary Form Completed
State of Nevada
Filed: May 7, 1998
No. C3856-98
Exhibit 3
BY LAWS
OF
SILK ROAD ENTERTAINMENT INC.
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office for the transaction of
business of the corporation shall be fixed or may be changed by approval of a
majority of the authorized Directors, and additional offices may be established
and maintained at such other place or places as the Board of Directors may from
time to time designate.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any time be
established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
DIRECTORS - MANAGEMENT
Section 1. RESPONSIBILITY OF BOARD OF DIRECTORS. Subject to the provisions
of applicable law and to any limitations in the Articles of Incorporation of the
corporation relating to action required to be approved by the Shareholders, or
by the outstanding shares, the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised by or under the direction of
the Board of Directors. The Board may delegate the management of the day-to-day
operation of the business of the corporation to an executive committee or
others, provided that the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised under the ultimate direction
of the Board.
Section 2. STANDARD OF CARE. Each Director shall perform the duties of a
Director, including the duties as a member of any committee of the Board upon
which the Director may serve, in good faith, in a manner such Director believes
to be in the best interests of the corporation, and with such care, including
reasonable inquiry, as an ordinary prudent person in a like position would use
under similar circumstances.
Section 3. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number of
Directors shall be three (3) until changed by a duly adopted amendment to the
Articles of Incorporation or by an amendment to this by-law adopted by the vote
or written consent of holders of a majority of the outstanding shares entitled
to vote.
Section 4. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall. be
elected at each annual meeting of the Shareholders to hold office until the next
annual meeting. Each Director, including a Director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
Section 5. VACANCIES. Vacancies in the Board of Directors may be filled by
a majority of the remaining Directors, though less than a quorum, or by a sole
remaining Director, except that a vacancy created by the removal of a Director
by the vote or written consent of the Shareholders or by court order may be
filled only by the vote of a majority of the shares entitled to vote represented
at a duly held meeting at which a quorum is present, or by the written consent
of holders of a majority of the outstanding shares entitled to vote. Each
Director so elected shall hold office until the next annual meeting of the
Shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to exist
in the event of the death, resignation, or removal of any Director, or if the
Board of Directors by resolution declares vacant the office of a Director who
has been declared of unsound mind by an order of court or convicted of a felony,
or if the authorized number of Directors is increased, or if the Shareholders
fail, at any meeting of Shareholders at which any Director or Directors are
elected, to elect the number of Directors to be voted for at that meeting.
<PAGE>
The Shareholders may elect a Director or Directors at any time to fill any
vacancy or vacancies not filled by the Directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
Any Director may resign effective on giving written notice to the Chairman
of the Board, the President, the Secretary, or the Board of Directors, unless
the notice specifies a later time for that resignation to become effective. If
the resignation of a Director is effective at a future time, the Board of
Directors may elect a successor to take office when the resignation becomes
effective.
No reduction of the authorized number of Directors shall have the effect of
removing any Director before that Directors' term of office expires.
Section 6. REMOVAL OF DIRECTORS. Subject to applicable law, the entire
Board of Directors or any individual Director may be removed from office. In
such case, the remaining Board members may elect a successor Director to fill
such vacancy for the remaining unexpired term of the Director so removed.
Section 7. NOTICE. PLACE AND MANNER OF MEETINGS. Meetings of the Board of
Directors may be called by the Chairman of the Board, or the President, or any
Vice President, or the Secretary, or any two (2) Directors and shall be held at
the principal executive office of the corporation, unless some other place is
designated in the notice of the meeting. Members of the Board may participate in
a meeting through use of a conference telephone or similar communications
equipment so long as all members participating in such a meeting can hear one
another. Accurate minutes of any meeting of the Board or any committee thereof,
shall be maintained by the Secretary or other Officer designated for that
purpose.
Section 8. ORGANIZATIONAL MEETINGS. The organizational meetings of the
Board of Directors shall be held immediately following the adjournment of the
Annual Meetings of the Shareholders.
Section 9. OTHER REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at the corporate offices, or such other place as may be
designated by the Board of Directors, as follows:
Time of Regular Meeting: 9:00 A.M.
Date of Regular Meeting: Last Friday of every month
If said day shall fall upon a holiday, such meetings shall be held on the
next succeeding business day thereafter. No notice need be given of such regular
meetings.
Section 10. SPECIAL MEETINGS -- NOTICES -- WAIVERS. Special meetings of the
Board may be called at any time by the President or, if he or she is absent or
unable or refuses to act, by any Vice President or the Secretary or by any two
(2) Directors, or by one (1) Director if only one is provided.
At least forty-eight (48) hours notice of the time and place of special
meetings shall be delivered personally to the Directors or personally
communicated to them by a corporate Officer by telephone or telegraph. If the
notice is sent to a Director by letter, it shall be addressed to him or her at
his or her address as it is shown upon the records of the corporation, or if it
is not so shown on such 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, it shall be deposited in the United States mail, postage prepaid, in the
place in which the principal executive officer of the corporation is located at
least four (4) days prior to the time of the holding of the meeting. Such
mailing, telegraphing, telephoning or delivery as above provided shall be due,
legal and personal notice to such Director.
<PAGE>
When all of the Directors are present at any Directors' meeting, however,
called or noticed, and either (i) sign a written consent thereto on the records
of such meeting, or, (ii) if a majority of the Directors is present and if those
not present sign a waiver of notice of such meeting or a consent to holding the
meeting or an approval of the minute thereof, whether prior to or after the
holding of such meeting, which said waiver, consent or approval shall be filed
with the Secretary of the corporation, or, (iii) if a Director attends a meeting
without notice but without protesting, prior thereto or at its commencement, the
lack of notice, then the transactions thereof are as valid as if had at a
meeting regularly called and noticed.
Section 11. DIRECTORS' ACTION BY UNANIMOUS WRITTEN CONSENT. Any action
required or permitted to be taken by the Board of Directors may be taken without
a meeting and with the same force and effect as if taken by a unanimous vote of
Directors, if authorized by a writing signed individually or collectively by all
members of the board. Such consent shall be filed with the regular minutes of
the Board.
Section 12. QUORUM. A majority of the number of Directors as fixed by the
Articles of Incorporation or By--Laws shall be necessary to constitute a quorum
for the transaction of business, and the action of a majority of the Directors
present at any meeting at which there is a quorum, when duly assembled, is valid
as a corporate act; provided that a minority of the Directors, in the absence of
a quorum, may adjourn from time to time, but may not transact any business. A
meeting at which a quorum is initially present may continue to transact
business, notwithstanding the withdrawal of Directors, if any action taken is
approved by a majority of the required quorum for such meeting.
Section 13. NOTICE OF ADJOURNMENT. Notice of the time and place of holding
an adjourned meeting need not be given to absent Directors if the time and place
be fixed at the meeting adjourned and held within twenty-four (24) hours, but if
adjourned more than 24 hours, notice shall be given to all Directors not present
at the time of the adjournment.
Section 14. COMPENSATION OF DIRECTORS. Directors, as such, shall not
receive any stated salary for their services, but by resolution of the Board a
fixed sum and expense of attendance, if any, may be allowed for attendance at
each regular and special meeting of the Board; provided that nothing herein
contained shall be construed to preclude any Director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 15. COMMITTEES. Committees of the Board may be appointed by
resolution passed by a majority of the whole Board. Committees shall be composed
of two (2) or more members of the Board and shall have such powers of the Board
as may be expressly delegated to it by resolution of the Board of Directors,
except those powers expressly made non-delegable by applicable law.
Section 16. ADVISORY DIRECTORS. The Board of Directors from time to time
may elect one or more persons to be Advisory Directors who shall not by such
appointment be members of the Board of Directors. Advisory Directors shall be
available from time to time to perform special assignments specified by the
President, to attend meetings of the Board of Directors upon invitation and to
furnish consultation to the Board. The period during which the title shall be
held may be prescribed by the Board of Directors. If no period is prescribed,
the title shall be held at the pleasure of the Board.
<PAGE>
Section 17. RESIGNATIONS. Any Director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board of Directors of the Corporation, unless the notice specifies a later time
for the effectiveness of such resignation. If the resignation is effective at a
future time, a successor may be elected to take office when the resignation
becomes effective.
ARTICLE III
OFFICERS
Section 1. OFFICERS. The Officers of the corporation shall b~ a President,
a Secretary, and a Chief Financial Officer. The corporation may also have, at
the discretion of the Board of Directors, a Chairman of the Board, one or more
Vice Presidents, one or more Assistant Secretaries, or one or more Assistant
Treasurers, and such other Officers as may be appointed in accordance with the
provisions of Section 3 of this Article. Any number of offices may be held by
the same person.
Section 2. ELECTION. The Officers of the corporation, except such Officers
as may be appointed in accordance with the provisions of Section 3 or Section 5
of this Article, shall be chosen annually by the Board of Directors, and each
shall hold office until he or she shall resign or shall be removed or otherwise
disqualified to serve or a successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors may appoint
such other Officers as the business of the corporation may require, each of whom
shall hold office for such period, have such authority and perform such duties
as are provided by the By-Laws or as the Board of Directors may from time to
time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if
any, of any Officer under any contract of employment, any Officer may be
removed, either with or without cause, by the Board of Directors, at any regular
or special meeting of the Board, or except in case of an Officer chosen by the
Board of Directors by any Officer upon whom such power of removal may be
conferred by the Board of Directors.
Any Officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the Officer is a
party.
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filed in the
manner prescribed in the By-Laws for regular appointment to that office.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
officer be elected, shall, if present, preside at meetings of the Board of
Directors and exercise and perform such other powers and duties as may be from
time to time assigned by the Board of Directors or prescribed by the By--Laws.
If there is no President, the Chairman of the Board shall in addition be the
Chief Executive Officer of the corporation and shall have the powers and duties
prescribed in Section 7 of this Article.
<PAGE>
Section 7. PRESIDENT/CHIEF EXECUTIVE OFFICER. Subject to such supervisory
powers, if any, as may be given by the Board of Directors to the Chairman of the
Board, if there be such an Officer, the President shall be the Chief Executive
Officer of the corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction and control of the business and
Officers of the corporation. He or she shall preside at all meetings of the
Shareholders and in the absence of the Chairman of the Board, or if there be
none, at all meetings of the Board of Directors. The President shall be ex
officio a member of all the standing committees, including the Executive
Committee, if any, and shall have the general powers and duties of management
usually vested in the office of President of a corporation, and shall have such
other powers and duties as may be prescribed by the Board of Directors or the
By-Laws.
Section 8. VICE PRESIDENT. In the absence or disability of the President,
the Vice Presidents, if any, in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the Board of
Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to, all the restrictions upon, the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Directors or the By-Laws.
Section 9. SECRETARY. The Secretary shall keep, or cause to be kept, a book
of minutes at the principal office or such other place as the Board of Directors
may order, of all meetings of Directors and Shareholders, with the time and
place of holding, whether regular or special, and if special, how authorized,
the notice thereof given, the names of those present at Directors' meetings, the
number of shares present or represented at Shareholders' meetings and the
proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office or
at the office of the corporation's transfer agent, a share register, or
duplicate share register showing the names of the Shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the meetings
of the Shareholders and of the Board of Directors required by the By-Laws or by
law to be given. He or she shall keep the seal of the corporation in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by the Board of Directors or by the By--Laws.
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep
and maintain, or cause to be kept and maintained in accordance with generally
accepted accounting principles, adequate and correct accounts of the properties
and business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, earnings (or
surplus) and shares. The books of accounts shall at all reasonable times be open
to inspection by any Director.
This Officer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the Board of Directors. He or she shall disburse the funds of the corporation as
may be ordered by the Board of Directors, shall render to the President and
Directors, whenever they request it, an account of all of his or her
transactions and of the financial condition of the corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or the By-Laws.
<PAGE>
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETINGS. All meetings of the Shareholders shall be
held at the principal executive office of the corporation unless some other
appropriate and convenient location be designated for that purpose from time to
time by the Board of Directors.
Section 2. ANNUAL MEETINGS. The annual meetings of the Shareholders shall
be held, each year, at the time and on the day following:
Time of Meeting: 10:00 A.M.
Date of Meeting: April 20th
If this day shall be a legal holiday, then the meeting shall be held on the
next succeeding business day, at the same hour. At the annual meeting, the
Shareholders shall elect a Board of Directors, consider reports of the affairs
of the corporation and transact such other business as may be properly brought
before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the Shareholders may be
called at any time by the Board of Directors, the Chairman of the Board, the
President, a Vice President, the Secretary, or by one or more Shareholders
holding not less than one-tenth (1/10) of the voting power of the corporation.
Except as next provided, notice shall be given as for the annual meeting.
Upon receipt of a written request addressed to the Chairman, President,
Vice President, or Secretary, mailed or delivered personally to such Officer by
any person (other than the Board) entitled to call a special meeting of
Shareholders, such Officer shall cause notice to be given, to the Shareholders
entitled to vote, that a meeting will be held at a time requested by the person
or persons calling the meeting, not less than thirty--five (35) nor more than
sixty (60) days after the receipt of such request. If such notice is not given
within twenty (20) days after receipt of such request, the persons calling the
meeting may give notice thereof in the same manner provided by these By-Laws.
Section 4. NOTICE OF MEETINGS -- REPORTS. Notice of meetings, annual or
special, shall be given in writing not less than ten (10) nor more than sixty
(60) days before the date of the meeting to Shareholders entitled to vote
thereat. Such notice shall be given by the Secretary or the Assistant Secretary,
or if there be no such Officer, or in the case of his or her neglect or refusal,
by any Director or Shareholder.
Such notices or any reports shall be given personally or by mail and shall
be sent to the Shareholder's address appearing on the books of the corporation,
or supplied by him or her to the corporation for the purpose of the notice.
Notice of any meeting of Shareholders shall specify the place, the day and
the hour of meeting, and (1) in case of a special meeting, the general nature of
the business to be transacted and no other business may be transacted, or (2) in
the case of an annual meeting, those matters which Board at date of mailing,
intends to present for action by the Shareholders. At any meetings where
Directors are to be elected notice shall include the names of the nominees, if
any, intended at date of notice to be presented by management for election.
If a Shareholder supplies no address, notice shall be deemed to have been
given if mailed to the place where the principal executive office of the
corporation is situated, or published at least once in some newspaper of general
circulation in the County of said principal office.
Notice shall be deemed given at the time it is delivered personally or
deposited in the mail or sent by other means of written communication. The
Officer giving such notice or report shall prepare and file an affidavit or
declaration thereof.
When a meeting is adjourned for forty--five (45) days or more, notice of
the adjourned meeting shall be given as in case of an original meeting. Save, as
aforesaid, it shall not be necessary to give any notice of adjournment or of the
business to be transacted at an adjourned meeting other than by announcement at
the meeting at which said adjournment is taken.
<PAGE>
Section 5. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of Shareholders, however called and notice, shall be
valid as through had at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the Shareholders entitled to vote, not present in person or
by proxy, sign a written waiver of notice, or a consent to the holding of such
meeting or an approval shall be filed with the corporate records or made a part
of the minutes of the meeting. Attendance shall constitute a waiver of notice,
unless objection shall be made as provided in applicable law.
Section 6. SHAREHOLDERS ACTING WITHOUT A MEETING - DIRECTORS. Any action
which may be taken at a meeting of the Shareholders, may be taken without a
meeting or notice of meeting if authorized by a writing signed by all of the
Shareholders entitled to vote at a meeting for such purpose, and filed with the
Secretary of the corporation, provided, further, that while ordinarily Directors
can be elected by unanimous written consent, if the Directors fail to fill a
vacancy, then a Director to fill that vacancy may be elected by the written
consent of persons holding a majority of shares entitled to vote for the
election of Directors.
Section 7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided for
under applicable law or the Articles of Incorporation, any action which may be
taken at any annual or special meeting of Shareholders may be taken without a
meeting and without prior notice, if a consent in writing, setting forth the
action so taken, signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize to take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
Unless the consents of all Shareholders entitled to vote have been
solicited in writing,
(1) Notice of any Shareholder approval without a meeting by less than
unanimous written consent shall be given at least ten (10) days before the
consummation of the action authorized by such approval, and
(2) Prompt notice shall be given of the taking of any other corporate
action approved by Shareholders without a meeting be less than unanimous
written consent, to each of those Shareholders entitled to vote who have
not consented in writing.
Any Shareholder giving a written consent, or the Shareholder's
proxyholders, or a transferee of the shares of a personal representative of the
Shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
Section 8. QUORUM. The holder of a majority of the shares entitled to vote
thereat, present in person, or represented by proxy, shall constitute a quorum
at all meetings of the Shareholders for the transaction of business except as
otherwise provided by law, by the Articles of Incorporation, or by these
By-Laws. If, however, such majority shall not be present or represented at any
meeting of the Shareholders, the shareholders entitled to vote thereat, present
in person, or by proxy, shall have the power to adjourn the meeting from time to
time, until the requisite amount of voting shares shall be present. At such
adjourned meeting at which the requisite amount of voting shares shall be
represented, any business may be transacted which might have been transacted at
a meeting as originally notified.
<PAGE>
If a quorum be initially present, the Shareholders may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum, if any action taken is approved by a
majority of the Shareholders required to initially constitute a quorum.
Section 9. VOTING. Only persons in whose names shares entitled to vote
stand on the stock records of the corporation on the day of any meeting of
Shareholders, unless some other day be fixed by the Board of Directors for the
determination of Shareholders of record, and then on such other day, shall be
entitled to vote at such meeting.
Provided the candidate's name has been placed in nomination prior to the
voting and one or more Shareholders has given notice at the meeting prior to the
voting of the Shareholder's intent to cumulate the Shareholder's votes, every
Shareholder entitled to vote at any election for Directors of any corporation
for profit may cumulate their votes and give one candidate a number of votes
equal to the number of Directors to be elected multiplied by the number of votes
to which his or her shares are entitled to, or distribute his or her votes on
the same principle among as many candidates as he or she thinks fit.
The candidates receiving the highest number of votes up to the number of
Directors to be elected are elected.
The Board of Directors may fix a time in the future not exceeding thirty
(30) days preceding the date of any meeting of Shareholders or the date fixed
for the payment of any dividend or distribution, or for the allotment of rights,
or when any change or conversion or exchange of shares shall go into effect, as
a record date for the determination of the Shareholders entitled to notice of
and to vote at any such meeting, or entitled to receive any such dividend or
distribution, or any allotment of rights or to exercise the rights in respect to
any such change, conversion or exchange of shares. In such case only
Shareholders of record on the date so fixed shall be entitled to notice of and
to vote at such meeting, to receive such dividends, distribution or allotment of
rights, or to exercise such rights, as the case may be notwithstanding any
transfer of any share on the books of the corporation after an y record date
fixed as aforesaid. The Board of Directors may close the books of the
corporation against transfers of shares during the whole or any part of such
period.
Section 10. PROXIES. Every Shareholder entitled to vote, or to execute
consents, may do so, either in person or by written proxy, executed in
accordance with the provisions of applicable law filed with the Secretary of the
corporation.
Section 11. ORGANIZATION. The President, or in the absence of the
President, any Vice President, shall call the meeting of the Shareholders to
order, and shall act as Chairman of the meeting. In the absence of the President
and all of the Vice Presidents, Shareholders shall appoint a Chairman for such
meeting. The Secretary of the corporation shall act as Secretary of all meetings
of the Shareholders, but in the absence of the Secretary at any meeting of the
Shareholders, the presiding Officer may appoint any person to act as Secretary
of the meeting.
Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders, the Board of Directors may, if they so elect, appoint inspectors
of election to act at such meeting or any adjournment thereof. If inspectors of
election be not so appointed, or if any persons so appointed fail to appear or
refuse to act, the chairman of any such meeting may, and on the request of any
Shareholder or his or her proxy shall, make such appointment at the meeting in
which case the number of inspectors shall be either one (1) or three (3) as
determined by a majority of the Shareholders represented at the meeting.
<PAGE>
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
Section 1. CERTIFICATES FOR SHARES. Certificates for shares shall be of
such form and device as the Board of Directors may designate and shall state the
name of the record holder of the shares represented thereby; its number; date of
issuance; the number of shares for which it is issued; a statement of the
rights, privileges preferences and restriction, if any; a statement as to the
redemption or conversion, if any; a statement of liens or restrictions upon
transfer or voting, if any; if the shares be assessable or, if assessments are
collectible by personal action, a plain statement of such facts.
All certificates shall be signed in the name of the corporation by the
Chairman of the Board or Vice Chairman of the Board or the President or Vice
President and by the Chief Financial Officer or an Assistant Treasurer or the
Secretary or any Assistant Secretary, certifying the number of shares and the
class or series of sharps owned by the Shareholder.
Any or all of the signatures on the certificate may be facsimile. In case
any Officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to be that Officer,
transfer agent, or registrar before that certificate is issued, it may be issued
by the corporation with the same effect as if that person were an Officer,
transfer agent, or registrar at the date of issuance.
Section 2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost or destroyed shall make an affidavit or
affirmation of that fact and shall, if the Directors so require, give the
corporation a band of indemnity, in form and with one or more sureties
satisfactory to the Board, in at least double the value of the stock represented
by said certificate, whereupon a new certificate may be issued in the same
tender and for the same number of shares as the one alleged to be lost or
destroyed.
Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
appoint one or more transfer agents or transfer clerks, and one or more
registrars which shall be an incorporated bank or trust company, either domestic
or foreign, who shall be appointed at such times and places as the requirements
of the corporation may necessitate and the Board of Directors may designate.
Section 5. CLOSING STOCK TRANSFER BOOKS -- RECORD DATE. In order that the
corporation may determine the Shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution or
allotment of any rights or entitled to exercise any rights in respect to any
other lawful action, the Board may fix, in advance, a record date, which shall
not be more than sixty (60) days nor less than ten (10) days prior to the date
of such meeting nor more than sixty (60) days prior to any other action.
If no record date is fixed; the record date for determining Shareholders
entitled to notice of or to vote at a meeting of Shareholders shall be at the
close of business on the business day next preceding the day on which notice is
given or if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held. The record date for determining
Shareholders entitled to give consent to corporate action in writing without a
meeting, when no prior action by the Board is necessary, shall be the day on
which the first written consent is given.
The record date for determining Shareholders for any other purpose shall be
at the close of business on the day on which the Board adopts the resolution
relating thereto, or the sixtieth (60th) day prior to the date of such other
action, whichever is later.
<PAGE>
ARTICLE VI
RECORDS - REPORTS - INSPECTION
Section 1. RECORDS. The corporation shall maintain, in accordance with
generally accepted accounting principles, adequate and correct accounts, books
and records of its business and properties. All of such books, records and
accounts shall be kept at its principal executive office as fixed by the Board
of Directors from time to time.
Section 2. INSPECTION OF BOOKS AND RECORDS. All books and records shall be
open to inspection of the Directors and Shareholders from time to time and in
the manner provided under applicable law.
Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a copy
of these By--taws, as amended or otherwise altered to date, certified by the
Secretary, shall be kept at the corporation's principal executive office and
shall be open to inspection by the Shareholders at all reasonable times during
office hours.
Section 4. CHECK. DRAFTS. ETC. All checks, drafts, or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as shall be determined from time to time by the Board
of Directors.
Section 5. CONTRACT. ETC. -- HOW EXECUTED. The Board of Directors, except
as in the By--Laws otherwise provided, may authorize any Officer or Officers,
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the corporation. Such authority may be general or
confined to specific instances. Unless so authorized by the Board of Directors,
no Officer, agent or employee shall have any power or authority to bind the
corporation by any contract or agreement, or to pledge its credit, or to render
it liable for any purpose or to any amount except as may be provided under
applicable law.
ARTICLE VII
ANNUAL REPORTS
Section 1. REPORT TO SHAREHOLDERS. DUE DATE. The Board of Directors shall
cause an annual report to be sent to the Shareholders not later than one hundred
twenty (120) days after the close of the fiscal or calendar year adopted by the
corporation. This report shall be sent at least fifteen (15) days before the
annual meeting of Shareholders to be held during the next fiscal year and in the
manner specified in Section 4 of the Article IV of these By-Laws for giving
notice to Shareholders of the corporation. The annual report shall contain a
balance sheet as of the end of the fiscal year and an income statement and
statement of changes in financial position for the fiscal year, accompanied by
any report of independent accountants or, if there is no such report, the
certificate of an authorized officer of the corporation that the statements were
prepared without audit from the books and records of the corporation.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
Section 1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or these
By-Laws may be amended or repealed by the vote or written consent of holders of
a majority of the outstanding shares entitled to vote; provided, however, that
if the Articles of Incorporation of the corporation set forth the number of
authorized Directors of the corporation, the authorized number of Directors may
be changed only by an amendment of the Article of Incorporation.
Section 2. POWERS OF DIRECTORS. Subject to the right of the Shareholders to
adopt, amend or repeal By-Laws, as provided in Section 1 of this Article VIII,
and the limitations, if any, under law, the Board of Directors may adopt, amend
or repeal any of these By-Laws other than a By-Law or amendment thereof changing
the authorized number of Directors.
Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law is
adopted, it shall be copied in the book of By-Laws with the original By-Laws, in
the appropriate place. If any By-Law is repealed, the fact of repeal with the
date of the meeting at which the repeal was enacted or written assent was filed
shall be stated in said book.
ARTICLE IX
CORPORATE SEAL
Section 1. Seal. The corporate seal shall be circular in form, and shall
have inscribed thereon the name of the corporation, the date and State of
incorporation.
ARTICLE X
MISCELLANEOUS
Section 1. REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of other
corporations standing in the name of this corporation may be voted or
represented and all incidents thereto may be exercised on behalf of the
corporation by the Chairman of the Board, the President or any Vice President
and the Secretary or an Assistant Secretary.
Section 2. SUBSIDIARY CORPORATIONS. Shares of this corporation owned by a
subsidiary shall not be entitled to vote on any matter. A subsidiary for these
purposes is defined as a corporation, the shares of which possessing more than
25% of the total combined voting power of all classes of shares entitled to
vote, are owned directly or indirectly through one (1) or more subsidiaries.
Section 3. INDEMNITY. Subject to applicable law, the corporation may
indemnify any Director, Officer, agent or employee as to those liabilities and
on those terms and conditions as appropriate. In any event, the corporation
shall have the right to purchase and maintain insurance on behalf of any such
persons whether or not the corporation would have the power to indemnify such
person against the liability insured against.
Section 4. ACCOUNTING YEAR. The accounting year of the corporation shall be
fixed by resolution of the Board of Directors.
Exhibit 4 -- Specimen Share Certificate
SPECIMEN SHARE CERTIFICATE
----------------------------
SILK ROAD ENTERTAINMENT, INC.
NUMBER SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
AUTHORIZED 50,000,000 COMMON SHARES
See Reverse Side for Certain Definitions
CUSIP
This Certifies That_____________________________________________________________
is the owner of ________________________________________________________________
fully paid and non-assessable Common Shares of
SILK ROAD ENTERTAINMENT, INC.
Transferable only on the books of the Company by the holder hereof in person or
by duly authorized attorney upon the surrender of the Certificate properly
endorsed. This Certificate and the shares represented hereby are issued and
shall be subject to all the provisions of the Articles of Incorporation, to all
of which the holder by acceptance hereby assents.
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed in
facsimile by its duly authorized officers and the facsimile seal of the Company
to be duly affixed hereto.
This Certificate is not valid unless duly countersigned by the Transfer Agent
and Registrar.
Dated:__________________________ (seal) ____________________________
Secretary President
