U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE HARBOR GROUP NET, CO.
(Name of Small Business Issuer in its charter)
Nevada 8700 88-0451550
(State or Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Classification Code Number) Identifcation No.)
Organization)
3360 W. Sahara, Suite 200, Las Vegas, Nevada, 89102; (702) 732-2253
Fax: (702) 940 4006
(Address and telephone number of Registrant's principal executive offices and
principal place of business)
Shawn F. Hackman, Esq., 3360 West Sahara Avenue, Suite 200, Las Vegas, Nevada
89102; (702) 732-2253. Fax: (702) 940-4006
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If the delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box.
ADD BOX -CONTINUING OFFER RULE
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of each Amount to be Proposed Proposed Amount of
class of registered maximum Maximum registration
securities to be offering price aggregate fee
registered per unit offering price
<S> <C> <C> <C> <C>
Common shares 2,000,000 $0.05 $100,000.00 26.40
</TABLE>
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
PART 1. INFORMATION REQUIRED IN PROSPECTUS
PROSPECTUS
THE HARBOR GROUP.NET CO.
2,000,000 Shares
Common Stock
Offering Price $0.05 per Share
The Harbor Group Com, Co., a Nevada corporation is offering up to
2,000,000 shares of its $.001 par value common stock shares at an offering
price of $0.05 per share on a direct participation offering basis pursuant
to the terms of this prospectus for the purpose of providing start-up
and working capital for Harbor Group.
The shares offered are highly speculative and involve a high degree of risk
to public investors and should be purchased only by persons who can afford to
lose their entire investment.
The Securities and Exchange Commission, or any State Securities Commission,
has not approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
<TABLE>
Price to Public Underwriting Discounts
and Commissions Proceeds to Issuer
<S> <C> <C> <C>
Per Share $. 05 0 $.05
Total Minimum $25,000 0 $25,000
Total Maximum $100,000.00 0 $100,000.00
</TABLE>
A maximum of 2,000,000 shares may be sold on a direct participation offering
basis. All of the proceeds from the sale of shares will be placed in an
interest-bearing escrow account by 12 o'clock noon of the fifth business day
after receipt thereof, until the sum of the minimum offering, is received.
If less than $20,000, is received from the sale of the shares within 240 days
of the date of this prospectus, all proceeds will be refunded promptly to
purchasers with interest and without deduction for commission or other
expenses. Subscribers will not be able to obtain return of their funds while
in escrow. No commissions are anticipated.
No sales commissions will be paid in connection with the sales of these shares.
The net proceeds to Harbor Group, in the column "Proceeds to Issuer", is
before the payment of certain expenses in connection with this offering.
Information contained herein is subject to completion or amendment. The
registration statement relating to the securities has been filed with the
Securities and Exchange Commission. The securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such State.
Subject to Completion, Dated______________,2000.
The shares being offered by The Harbor Group.Net Co. are subject to prior sale,
acceptance of the subscriptions by The Harbor Group.Net Co. and approval of
certain legal matters by counsel to The Harbor Group.Net Co.
This our initial public offering of common stock. The initial offering price
per share is .05. We will apply to list our common stock on the OTC:BB. No
public market currently exists for the shares of common stock.
The Harbor Group.Net.Co. has the right to accept or reject any subscriptions, in
whole or in part, for any reason. Until_____2000, all dealers effecting
transactions in registered securities may be required to deliver a prospectus.
This is true whether or not the dealer is participating in this distribution.
Dealers also have an obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
The Harbor Group.Net Co. is conducting a blank check offering as provided under
Rule 419 of Regulation C as promulgated by the U.S. Securities and
Exchange Commission (the "SEC") under the securities act of 1933 (the
"Securities Act"). Th net offering proceeds, after deduction for offering
expenses (estimated at $25,000) and sales commissions, and the securities to
be issued to investors must be deposited in an escrow account (the "deposited
funds" and "deposited securities," respectively). while held in the escrow
account, the deposited securities may not be traded or transferred. Except
for an amount up to 10% of the deposited funds otherwise releasable under
Rule 419, the deposited funds and the deposited securities may not be
released until an acquisition meeting certain specified criteria has been
consummated and a sufficient number of investors reconfirm their investment
in accordance with the procedures set forth in Rule 419. Pursuant to these
procedures, a new prospectus, which describes an acquisition candidate and its
business and includes audited financial statements, will be delivered to all
investors.
The Harbor Group.Net Co. must return the pro rata portion of the deposited
funds to any investor who does not elect to remain an investor. Unless a
sufficient number of investors elect to remain investors, all investors will
be entitled to the return of a pro rata portion of the deposited funds, plus
interest, and none of the deposited securities will be issued to investors.
In the event an acquisition is not consummated within 18 months of the
effective date of this prospectus, the deposited funds will be returned on
a pro rata basis to all investors.
Until 90 days after the date funds and securities are released from the
escrow or trust account pursuant to Rule 419, all dealers effecting
transactions in the registered securities, whether or not participating in
this distribution, may be required to deliver a prospectus.
This prospectus is not an offer to sell or a solicitation to buy the
securities offered. It is unlawful to make such an offer or solicitation.
The delivery of this prospectus, nor a sale of the mentioned securities shall
create an implication that there has been no change in the information in
this prospectus. If a material change does occur, however, this prospectus
will be amended or supplemented accordingly for all existing shareholders and
prospective investors.
This prospectus does not intentionally contain a false statement or material
fact, nor does it intentionally omit a material fact. No person or entity
has been authorized by The Harbor Group.Net Co.. to give any information or
make a representation, warranty, covenant, or agreement which is not
expressly provided for or continued in this prospectus. Any such information
that is given should not be relied upon as having been authorized.
The Harbor Group.Net Co. is not a reporting company. Upon written or oral
request, any person who receives a prospectus will have an opportunity to
meet with representatives of Harbor Group to verify any of the information
included in the prospectus and to obtain additional information. Such a
person shall also, upon written or oral request, receive a copy of any
information that is incorporated by reference in the prospectus and the
address ,including title or department, and telephone number. Such
information shall be provided without charge.
All offerees and subscribers will be asked to acknowledge in the subscription
agreement that they have read this prospectus carefully and thoroughly, they
were given the opportunity to obtain additional information; and they did so
to their satisfaction.
TABLE OF CONTENTS
Rights And Protections Under Rule 419
Escrow Of 90% Of The Proceeds Derived Hereby
After the earlier of either,
(1) written notification by Harbor Group of its need for all, or
substantially all, of such net proceeds for the purpose of facilitating a
business combination; or
(2) 18 months after the effective date of this registration statement,
90% of the net proceeds from the offering will be placed in an escrow account
with Southwest Escrow as escrow agent.
Escrowed Funds Not To Be Used For Salaries Or Reimbursable Expenses
No funds, including any interest earned, will be disbursed from the
escrow account for the payment of salaries or reimbursement of expenses incurred
on Harbor Group's behalf by Harbor Group's officers and directors. Other than
the foregoing, there is no limit on the amount of such reimbursable expenses,
and there will be no review of the reasonableness of such expenses by anyone
other than Harbor Group's board of directors, both of whom are officers. In
no event will the escrowed funds or any interest earned on the funds, be used
for any purpose other than implementation of a business combination.
PROSPECTUS SUMMARY
Each prospective investor is urged to read this prospectus, and the attached
exhibits, in their entirety.
Deposit of offering proceeds and securities.
Rule 419 requires that the net offering proceeds, after deduction for
underwriting compensation and offering costs, and all securities to be issued be
deposited into an escrow or trust account the deposited funds and deposited
securities, respectively governed by an agreement which contains certain terms
and provisions specified by the rule. Under Rule 419, the deposited funds and
deposited securities will be released to Harbor Group and to investors,
respectively, only after Harbor Group has met the following three conditions:
First, Harbor Group must execute an agreement for an acquisition(s) meeting
certain prescribed criteria;
Second, Harbor Group must successfully complete a reconfirmation offering
which includes certain prescribed terms and conditions;
and
Third, the acquisition(s) meeting the prescribed criteria must be
consummated. Accordingly, Harbor Group will enter into an escrow agreement
with Southwest Escrow, the escrow agent.
Prescribed Acquisition Criteria.
Rule 419 requires that before the deposited funds and the deposited securities
can be released, Harbor Group must first execute an agreement(s) to acquire an
acquisition candidate(s) meeting certain specified criteria. The agreement must
provide for the acquisition of a business(es) or assets valued at not less than
80% of the maximum offering proceeds, but excluding underwriting commissions,
underwriting expenses and dealer allowances payable to non-affiliates. Once the
acquisition agreements meeting the above criteria have been executed, Harbor
Group must successfully complete the mandated reconfirmation offering and
consummate the acquisitions(s).
Post-effective amendment.
Once the agreement(s) governing the acquisition(s) of a business(es) meeting the
above criteria has (have) been executed, Rule 419 requires Harbor Group to
update the registration statement of which this prospectus is a part with a
post-effective amendment. The post-effective amendment must contain information
about: the proposed acquisition candidate(s) and its business(es), including
audited financial statements; the results of this offering; and the use of the
funds disbursed from the escrow account. The post-effective amendment must also
include the terms of the reconfirmation offer mandated by Rule 419. The offer
must include certain prescribed conditions which must be satisfied before the
deposited funds and deposited securities can be released from escrow.
Reconfirmation offering.
The reconfirmation offer must commence within five business days after the
effective date of the post-effective amendment. Pursuant to Rule 419, the terms
of the reconfirmation offer must include the following conditions:
(1) The prospectus contained in the post-effective amendment will be sent
to each investor whose securities are held in the escrow account within five
business days after the effective date of the post-effective amendment;
(2) Each investor will have no fewer than 20, and no more than 45, business
days from the effective date of the post-effective amendment to notify Harbor
Group in writing that the investor elects to remain an investor;
(3) If Harbor Group does not receive written notification from any investor
within 45 business days following the effective date, the pro rata portion of
the deposited funds and any related interest or dividends held in the escrow
account on such investor's behalf, will be returned to the investor within five
business days by first class mail or other equally prompt means;
(4) The acquisition(s) will be consummated only if investors having
contributed 80% of the maximum offering proceeds elect to reconfirm their
investments; and
(5) If a consummated acquisition(s) has not occurred within 18
months from the date of this prospectus, the deposited funds held in the escrow
account shall be returned to all investors on a pro rata basis within five
business days by first class mail or other equally prompt means.
Release of deposited securities and deposited funds.
The deposited funds and deposited securities may be released by Harbor Group and
the investors, respectively, after:
(1) the escrow agent has received written certification from Harbor Group
and any other evidence acceptable by the escrow agent that Harbor Group has
executed an agreement for the acquisition(s) of a business(es) the value of
which represents at least 80% of the maximum offering proceeds and has filed
the required post-effective amendment, the post-effective amendment has been
declared effective, the mandated reconfirmation offer having the conditions
prescribed by Rule 419 has been completed, and Harbor Group has satisfied all of
the prescribed conditions of the reconfirmation offer; and
(2) the acquisition(s) of the business(es) the value of which represents
at least 80% of the maximum offering proceeds is (are) consummated.
The Company
The Harbor Group.Net Co., was incorporated on February 15th, 2000 under the
laws of the State of Nevada, to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions. Harbor
Group has been in the developmental stage since inception and has no
operations to date. Other than issuing shares to its original shareholders,
Harbor Group has never commenced any operational activities.
Harbor Group was formed for the purpose of creating a corporation which could
be used to consummate a merger or acquisition. Ken Heim serves as President,
Treasurer and Director and Rose Heim serves as Secretary and Director The
directors determined next to proceed with filing a Form SB-2.
The directors elected to commence implementation of Harbor Group's principal
business purpose. As such, Harbor Group can be defined as a shell company,
whose sole purpose at this time is to locate and consummate a merger or
acquisition with a private entity.
The proposed business activities described herein classify Harbor Group as a
blank check company. Many states have enacted statutes, rules and
regulations limiting the sale securities of blank check companies in their
prospective jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in Harbor Group's securities until such
time as Harbor Group has successfully implemented this business plan.
Accordingly, each shareholder of Harbor Group will execute and deliver a
lock-up letter agreement, affirming that his/her respective shares of Harbor
Group's common stock until such time that Harbor Group has successfully
consummated a merger or acquisition and Harbor Group is no longer classified
as a blank check company.
In order to provide further assurances that no trading will occur in Harbor
Group's securities until a merger or acquisition has been consummated, each
shareholder has agreed to place his/her respective certificates until such
time as legal counsel has confirmed that a merger or acquisition has been
successfully consummated. However, while management believes that the
procedures established to preclude any sale of Harbor Group's securities
prior to closing of a merger or acquisition will be sufficient, there
can be no assurances that the procedures established will unequivocally limit
any shareholder's ability to sell their respective securities before such
closing.
The Offering
Shares of Harbor Group will be offered at $.05 per share. The minimum
purchase required of an investor is $300.00. If all the shares offered are
sold, the net proceeds to Harbor Group will be $100,000.00 less certain costs
associated with this offering. This balance will be used as working capital
for Harbor Group.
Liquidity of Investment
Although the shares will be free trading, there is no established market for
the shares and there may not be in the future. Therefore, an investor should
consider his investment to be long-term.
RISK FACTORS
The securities offered are highly speculative in nature and involve a high
degree of risk. They should be purchased only by persons who can afford to
lose their entire investment. Therefore, each prospective investor should,
prior to purchase, consider very carefully the following risk factors among
other things, as well as all other information set forth in this prospectus.
RULE 419 GENERALLY.
Rule 419 generally requires that the securities to be issued
and the funds received in a blank check offering be deposited and held in an
escrow account until an acquisition meeting specified criteria is completed.
Before the acquisition can be completed and before the funds and securities can
be released, the issuer in a blank check offering is required to update its
registration statement with a post-effective amendment.
After the effective date of any such post-effective amendment, Harbor Group
is required to furnish investors with the prospectus produced thereby
containing information, including audited financial statements, regarding the
proposed acquisition candidate and its business. Investors must be given no
fewer than 20 and no more than 45 business days from the effective date of
the post-effective amendment to decide to remain investors or require the
return of their investment funds. Any investor not making a decision within
said period is automatically to receive a return of his investment funds.
Although investors may request the return of their investment funds in
connection with the reconfirmation offering required by Rule 419, Harbor Group's
shareholders will not be afforded an opportunity specifically to approve or
disapprove any particular transaction involving the purchase of shares from
management.
Investors are prohibited from selling or offering to sell shares held in escrow.
According to Rule15g-8 as promulgated by the S.E.C. under the amended
Securities Exchange Act of 1934, it shall be unlawful for any person to sell or
offer to sell shares or any interest in or related to the shares held in the
Rule 419 escrow account other than pursuant to a qualified domestic relations
order or by will or the laws of descent and distribution. As a result, contracts
for sale to be satisfied by delivery of the deposited securities are
prohibited, for example contracts for sale on a when, as, and if issued basis.
Because this is a blank check offering, investors will not be able to evaluate
the specific merits or risks of business combinations
As a result of management's broad discretion with respect to the specific
application of the net proceeds of this offering, this offering can be
characterized as a blank check offering. Although substantially all of the
net proceeds of this offering are intended generally to be applied toward
effecting a business combination, such proceeds are not otherwise being
designated for any more specific purposes. Accordingly, prospective investors
will invest in Harbor Group without an opportunity to evaluate the specific
merits or risks of any one or more business combinations. Determinations
ultimately made by Harbor Group relating to the specific allocation of the
net proceeds of this offering do not guarantee Harbor Group will achieve its
business objectives.
REGULATIONS CONCERNING "BLANK CHECK" ISSUERS.
The ability to register or qualify for sale the shares for both initial sale
and secondary trading is limited because a number of states have enacted
regulations pursuant to their securities or "blue sky" laws restricting or,
in some instances, prohibiting, the sale of securities of blank check
issuers, such as Harbor Group, within that state. In addition, many states,
while not specifically prohibiting or restricting blank check companies, may
not register the shares for sale in their states. Because of such regulations
and other restrictions, Harbor Group's selling efforts, and any secondary
market which may develop, may only be conducted in those jurisdictions where
an applicable exemption is available or a blue sky application has been filed
and accepted or where the shares have been registered.
Harbor Group has had no operating revenue to date and may not become profitable.
Harbor Group has had no operating history nor any revenues or earnings from
operations. Harbor Group has no significant assets or financial resources.
Harbor Group will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in Harbor Group incurring a net operating loss
which will increase continuously until Harbor Group can consummate a business
combination with a profitable business opportunity. Harbor Group may not be
able to identify such a business opportunity and consummate such a business
combination. Additionally, because
Success of Harbor Group's business operations may depend on management
outside of Harbor Group's control.
The success of Harbor Group's proposed plan of operation will depend to a
great extent on the operations, financial condition and management of the
identified business opportunity. While management intends to seek business
combinations with entities having established operating histories, there can
be no assurance that Harbor Group will be successful in locating candidates
meeting such criteria. In the event Harbor Group completes a business
combination, the success of Harbor Group's operations may be dependent upon
management of the successor firm or venture partner firm and numerous other
factors beyond Harbor Group's control.
Harbor Group is at a competitive disadvantage and in a highly competitive
market searching for business combinations and opportunities.
Harbor Group is and will continue to be an insignificant participant in the
business of seeking mergers with, joint ventures with and acquisitions of
small private entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of companies which may be desirable target candidates for Harbor
Group. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than Harbor Group
and Harbor Group will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a business
combination. Moreover, Harbor Group will compete in seeking merger or
acquisition candidates with numerous other small public companies.
Harbor Group has no agreement for a merger nor any standards set for
acceptable candidates for merger.
Harbor Group has no arrangement, agreement or understanding with respect to
engaging in a merger with, joint venture with or acquisition of, a private
entity. Harbor Group may not be successful in identifying and evaluating
suitable business opportunities or in concluding a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluations. Harbor Group has been in the
developmental stage since inception and has no operations to date. Other than
issuing shares to its original shareholders, Harbor Group never commenced any
operational activities. Harbor Group may not be able to negotiate a business
combination on terms favorable to Harbor Group. Harbor Group has not
established a specific length of operating history or a specified level of
earnings, assets, net worth or other criteria which it will require a target
business opportunity to have achieved, and without which Harbor Group would
not consider a business combination in any form with such business
opportunity. Accordingly, Harbor Group may enter into a business combination
with a business opportunity having no significant operating history, losses,
limited or no potential for earnings, limited assets, negative net worth or
other negative characteristics.
Harbor Group's management lack certain business skills and will be devoting
only part-time work hours.
While seeking a business combination, management anticipates devoting up to
twenty hours per month to the business of Harbor Group. Harbor Group's two
officers have not entered into written employment agreements with Harbor
Group and are not expected to do so in the foreseeable future. Harbor Group
has not obtained key man life insurance on either of its officers or
directors. Notwithstanding the combined limited experience and time
commitment of management, loss of the services of any of these individuals
would aversely affect development of Harbor Group's business and its
likelihood of continuing operations.
Furthermore, Harbor Group's officers and directors are not professional
business analysts. Lack of experience will be a detriment to Harbor Group's
efforts.
Potential merger or acquisition candidates must meet SEC requirements that
may delay or preclude Harbor Group's business plan.
Section 13 of the Securities Exchange Act of 1934, requires companies
falling under Section 13 of the Securities Exchange Act of 1934 to provide
certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one or two years,
depending on the relative size of the acquisition. The time and additional
costs that may be incurred by some target entities to prepare such statements
may significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by Harbor Group. Acquisition prospects that do not have
or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the 1934
Act are applicable.
Harbor Group is at a competitive disadvantage because it lacks any market
research or marketing organization.
Harbor Group has neither conducted, nor have others made available to it,
results of market research indicating that market demand exists for the
transactions contemplated by Harbor Group. Moreover, Harbor Group does not
have, and does not plan to establish, a marketing organization. Even in the
event demand is identified for a merger or acquisition contemplated by Harbor
Group, there is no assurance Harbor Group will be successful in completing
any such business combination.
Harbor Group will limited to the business opportunities of any company
Harbor Group's proposed operations, even if successful, will in all
likelihood result in Harbor Group engaging in a business combination with
only one business opportunity. Consequently, Harbor Group's activities will
be limited to those engaged in by the business opportunity which Harbor Group
merges with or acquires. Harbor Group's inability to diversify its
activities into a number of areas may subject Harbor Group to economic
fluctuations within a particular business or industry and therefore increase
the risks associated with Harbor Group's operations.
Potential determination by the SEC that Harbor Group is an investment company
could cause material adverse consequences.
Although Harbor Group will be regulated under the Securities Exchange Act of
1933, management believes Harbor Group will not be regulated under the
Investment Company Act of 1940, insofar as Harbor Group will not be engaged
in the business of investing or trading in securities. In the event Harbor
Group engages in business combinations which result in Harbor Group holding
passive investment interests in a number of entities, the Harbor Group could
be under regulation of the Investment Company Act of 1940. In such event,
Harbor Group could be required to register as an investment company and could
be expected to incur significant registration and compliance costs Harbor
Group has obtained no formal determination from the Securities and Exchange
Commission as to the status of Harbor Group under the Investment Company Act
of 1940 and, consequently, any violation of such Act would subject Harbor
Group to material adverse consequences.
Any business combination will probably result loss of management and control
by Harbor Group shareholders.
A business combination involving the issuance of Harbor Group's common stock
will, in all likelihood, result in shareholders of a private company
obtaining a controlling interest in Harbor Group. Any such business
combination may require management of Harbor Group to sell or transfer all or
a portion of Harbor Group's common stock held by them, or resign as members
of the board of directors of Harbor Group. The resulting change in control
Harbor Group could result in removal of one or more present officers
and directors or Harbor Group and a corresponding reduction in or elimination
of their participation in the future affairs of Harbor Group.
Should Harbor Group meet its business plan of merging, shareholders in Harbor
Group will most likely suffer a reduction in percentage share ownership of
the newly formed company.
Harbor Group's primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in Harbor Group
issuing securities to shareholders of such private company. The issuance of
previously authorized and unissued common stock of Harbor Group would result
in reduction in percentage of shares owned by present and prospective
shareholders of Harbor Group and would most likely result in a change in
control or management of Harbor Group.
Harbor Group may enter into a business combination with an entity that
desires to establish a public trading market for its shares. A business
opportunity may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with
Harbor Group. Such consequences may include, but are not limited to, time
delays of the registration process, significant expenses to be incurred in
such an offering, loss of voting control to public shareholders and the
inability or unwillingness to comply with various federal and state
securities laws enacted for the protection of investors. These securities
laws primarily relate to provisions regarding the registration of securities
which require full disclosure of Harbor Group's business, management and
financial statements.
Many business decisions made by Harbor Group can have major tax consequences
and many associated risks.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination Harbor Group may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. Harbor Group intends to structure any business combination so as
to minimize the federal and state tax consequences to both Harbor Group and
the target entity; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax-free reorganization
or that the parties will obtain the intended tax-free treatment upon a
transfer of stock or assets. A non-qualifying reorganization could result in
the imposition of both federal and state taxes which may have an adverse
effect on both parties to the transaction.
The requirement of audited financial statements of potential merging entities
may cause some potential merger candidates to forego merging with Harbor Group.
Management of Harbor Group believes that any potential business opportunity
must provide audited financial statements for review, and for the protection
of all parties to the business combination. One or more attractive business
opportunities may choose to forego the possibility of a business combination
with Harbor Group, rather than incur the expenses associated with preparing
audited financial statements.
Harbor Group securities may be limited to only a few markets because of blue
sky laws.
Because the securities registered hereunder have not been registered for
resale under the blue sky laws of any state, and Harbor Group has no current
plans to register or qualify its shares in any state, the holders of such
shares and persons who desire to purchase them in any trading market that
might develop in the future, should be aware that there may be significant
state blue sky restrictions upon the ability of new investors to purchase the
securities which could reduce the size of the potential market. As a result in
changes in federal law, non-issuer trading or resale of Harbor Group's
securities is exempt from state registration or qualification requirements in
most states. However, some states may continue to attempt to restrict the
trading or resale of blind-pool or blank-check securities. Accordingly,
investors should consider any potential secondary market for Harbor Group's
securities to be a limited one.
Certain officers, directors, principal shareholders and affiliates may
purchase, for investment purposes, a portion of the shares offered hereby,
which could, upon conversion, increase the percentage of the shares owned by
such persons. The purchases by these control persons may make it possible for
the offering to meet the escrow amount.
Harbor Group may not be able to sale enough shares to follow through with the
business plan.
The 2,000,000 common shares are to be offered directly by Harbor Group, and
no individual, firm, or corporation has agreed to purchase or take down any
of the shares. It is not know whether Harbor Group will be able to sell any
shares.
Harbor Group's offering price is arbitrary and the value of Harbor Group
securities may never actually reach the offering price.
The offering price of the shares bears no relation to book value, assets,
earnings, or any other objective criteria of value. They have been
arbitrarily determined by Harbor Group. There can be no assurance that, even
if a public trading market develops for Harbor Group's securities, the shares
will attain market values commensurate with the offering price.
Harbor Group shares are to be offered based on a direct participation
offering basis.
The shares are offered by Harbor Group on a direct participation offering
basis, and no individual, firm or corporation has agreed to purchase or take
down any of the offered shares. Harbor Group cannot and does not make any
statement guaranteeing that shares will be sold. Provisions have been made
to deposit in escrow the funds received from the purchase of shares sold by
Harbor Group.
Harbor Group's shares may never actually be traded and therefore purchasers
may never be able to resale.
Prior to the offering, there has been no public market for the shares being
offered. An active trading market may not develop. Consequently, purchasers
of the shares may not be able to resell their securities at prices equal to
or greater than the respective initial public offering prices. The market
price of the shares may be affected significantly by factors such as
announcements by Harbor Group or its competitors, variations in Harbor
Group's results of operations, and market conditions in the retail,
electron commerce, and internet industries in general.
Movements in prices of stock may also affect the market price in general.
As a result of these factors, purchasers of the shares offered hereby may not
be able to liquidate an investment in the shares readily or at all.
Shares sold in the future may have to comply with Rule 144.
All of the 3,000,000 shares, which are held by management, have been issued
in reliance on the private placement exemption under the amended Securities
Act of 1933. Such shares will not be available for sale in the open market
without separate registration except in reliance upon Rule 144 under the Act.
In general, under Rule 144 a person (or persons whose shares are aggregated)
who has beneficially owned shares acquired in a non-public transaction for at
least one year, including persons who may be deemed affiliates of Harbor
Group (as that term is defined under the Act) would be entitled to sell within
any three-months period a number of shares that does not exceed the greater
of 1% of the then outstanding shares of common stock, or the average weekly
reported trading volume on all national securities exchanges and through
NASDAQ during the four calendar weeks preceding such sale, provided that
certain current public information is then available. If a substantial
number of the shares owned by management were sold pursuant to Rule 144 or a
registered offering, the market price of the common stock could be adversely
affected.
Harbor Group faces uncertainty with regard to the Y2K issue.
The Year 2000 isssue arises because many computerized systems use two digits
rather than four to identify a year. Date sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using the year 2000 date is processed. The effects of the Year
2000 issue may be experienced before, on, or after January 1, 2000, and if
not addressed, the impact on operations and financial reporting may range
from minor errors to significant system failure which could affect Harbor
Group's ability to conduct normal business operations. This creates potential
risk for all companies, even if their own computer systems are Year 2000
compliant. It is not possible to be certain that all aspects of the Year
2000 issue affecting Harbor Group, including those related to the efforts of
customers, suppliers, or other third parties, will be fully resolved.
Harbor Group's Year 2000 plans are based on management's best estimates.
Based on currently available information, management does not believe that
the Year 2000 issues will have a material adverse impact on Harbor Group's
financial condition or results of operations; however, because of the
uncertainties in this area, assurance cannot be given in this regard.
USE OF PROCEEDS
Following the sale of the 2,000,000 shares offered by the company there will
be gross proceeds of $100,000, less certain expenses of this offering. These
proceeds will be used to provide start-up and working capital for Harbor Group.
The following table sets forth the use of proceeds from this offering -
based on the minimum and maximum offering amounts:
<TABLE>
Use of Proceeds Minimum Offering Maximum Offering
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
Transfer Agent Fee $ 250.00 1.0% $1,000.00 1.0%
Legal Fees $10,0000.00 40.0% $25,000.00 25.0%
Printing Costs $ 100.00 0.4% $ 500.00 0.5%
Accounting Fees $ 1,000.00 4.0% $ 2,500.00 2.5%
Working Capital $ 21,150.00 54.6% $71,000.00 71.0%
Total $25,000.00 100.0% $100,000.00 100.0%
</TABLE>
Management anticipates expending these funds for the purposes indicated
above. To the extent that expenditures are less than projected, the resulting
balances will be retained and used for general working capital purposes or
allocated according to the discretion of the board of directors. Conversely,
to the extent that such expenditures require the utilization of funds in
excess of the amounts anticipated, supplemental amounts may be drawn from
other sources, including, but not limited to, general working capital and/or
external financing. The net proceeds of this offering that are not expended
immediately may be deposited in interest or non-interest bearing accounts, or
invested in government obligations, certificates of deposit, commercial paper,
money market mutual funds, or similar investments.
DETERMINATION OF OFFERING PRICE
The offering price is not based upon Harbor Group's net worth, total asset
value, or any other objective measure of value based upon accounting
measurements. The offering price is determined by the board of directors of
Harbor Group and was determined arbitrarily based upon the amount of funds
needed by Harbor Group to start-up the business, and the number of shares
that the initial shareholders were willing to allow to be sold.
DILUTION
Net tangible book value is the amount that results from subtracting the total
liabilities and intangible assets of an entity from its total assets.
Dilution is the difference between the public offering price of a security
and its net tangible book value per share immediately after the offering,
giving effect to the receipt of net proceeds in the offering. As of February
15th, 2000, the net tangible book value of Harbor Group was $3000 or $.001
per share. Giving effect to the sale by Harbor Group of all offered shares at
the public offering price, the pro forma net tangible book value of Harbor
Group would be $100,000 or $.02 per share, which would represent an immediate
increase of $.02 in net tangible book value per share and $.03 per share
dilution per share to new investors. Dilution of the book value of the
shares may result from future share offerings by Harbor Group.
The following table illustrates the pro forma per share dilution:
<TABLE>
Assuming Maximum
Shares Sold
<S> <C>
Offering Price $.05
Net tangible book value per share before Offering $.001
Increase Attributable to purchase of stock by new investor $.02
Net tangible book value per Share after offering $.02
Dilution to new investors $.03
Percent Dilution to new investors 60%
Offering price before deduction of offering expenses, calculated on a
common share equivalent basis.
The net tangible book value per share before the offering ($0.001) is
determined by dividing the number of shares outstanding prior to this
offering into the net tangible book value of Harbor Group.
The net tangible book value after the offering is determined by adding
the net tangible book value before the offering to the estimated proceeds to
Harbor Group from the current offering, assuming all the shares are
subscribed, and dividing by the number of common shares outstanding.
The net tangible book value per share after the offering ($103,000) is
determined by dividing the number of shares that will be outstanding,
assuming sale of all the shares offered, after the offering into the net
tangible book value after the offering as determined in note 3 above.
The increase attributable to purchase of stock by new investors is derived
by taking the net tangible book value per share after the offering ($.02)
and subtracting from it the net tangible book value per share before the
offering ($.001) for an increase of $.02.
The dilution to new investors is determined by subtracting the net
tangible book value per share after the offering ($.02) from the offering
price of the shares in this offering ($.05), giving a dilution value of
($.03).
The percent dilution to new investors is determined by dividing the
dilution to new investors ($.03) by the offering price per share ($.05)
giving a dilution to new investors of 60%.
PLAN OF DISTRIBUTION
Harbor Group will sell a maximum of 2,000,000 shares of its common stock, par
value $.001 per share to the public on a direct participation basis.
The minimum purchase required of an investor is $300.00. The gross proceeds
to Harbor Group will be $100,000.00 if all the shares offered are sold.
No commissions or other fees will be paid, directly or indirectly, by Harbor
Group, or any of its principals, to any person or firm in connection with
solicitation of sales of the shares, certain costs are to be paid in connection
with the offering. The public offering price of the shares will be modified,
from time to time, by amendment to this prospectus, in accordance with
changes in the market price of Harbor Group's common stock. These securities
are offered by Harbor Group subject to prior sale and to approval of certain
legal matters by counsel.
All of the proceeds from the sale of shares will be placed in an
interest-bearing escrow account by 12 o'clock noon of the fifth business day
after receipt thereof, until the sum of the minimum offering, is received.
If less than $20,000, is received from the sale of the shares within 240 days
of the date of this prospectus, all proceeds will be refunded promptly to
purchasers with interest and without deduction for commission or other
expenses. Subscribers will not be able to obtain return of their funds
while in escrow. No commissions are anticipated.
President Ken Heim and Secretary Rose Heim will be selling the securities.
Directors, Executive Officers, Promoters and Control Persons.
Ken Heim, President and Treasurer.
Ken Heim has been a professional musician and musical instructor for over
30 years. He graduated from Southern Illinois University in 1972 with a
bachelor of science degree in music education. He then began teaching
instrumental music in the Hazelwood school district in St. Louis Missouri
for several years before deciding to continue his education at Southwest
Theological Seminary where he earned two Master's degrees. One in Music
Ministry and the other in Trumpet performance. Over the past decade, Ken
has been involved in the church Music ministry as well as giving private
music lessons. Since 1993 he has been the instrumental Music director
at the Village Baptist Church in Oklahoma City, OK
Rose Heim, Vice President and Secretary.
Rosemary Heim earned her Bachelor of Science in Music education from Eastern
Tennesse State College in 1977. She continued her education at Southwestern
Baptist Theological Seminary where she earned a Masters in Vocal Performance.
For the past twenty plus years she has been involved in the music industry.
During that time she has been the featured soloist with the Fort Worth
Symphony as well as be a published composer with Broadman Publishing. At the
present time she is employed with the Village Baptist Church in Oklahoma
City, OK as the church Pianist and performs on a regular basis at the Oklahoma
City Country Club.
Terms of the Board of Directors.
According to the eighth article the term of board of directors, is as follows:
Except as otherwise required by applicable law, each director shall serve for
a term ending on the date of the third Annual Meeting of Stockholders of the
Corporation (the "Annual Meeting") following the Annual Meeting at which such
director was elected. All directors, shall have equal standing.
Not withstanding the foregoing provisions of this Article Eighth each
director shall serve until his successor is elected and qualified or until
his death, resignation or removal; no decrease in the authorized number of
directors shall shorten the term of any incumbent director; and additional
directors, elected pursuant to Section 4 or Article Forth hereof in
connection with rights to elect such additional directors under specified
circumstances, which may be granted to the holders of any class or series
of Preferred Stock, shall not be included in any class, but shall serve for
such term or terms and pursuant to such other provisions as are specified in
the resolution of the Board or Directors establishing such class or series
Opportunity to Make Inquiries.
Harbor Group will make available to each offeree, prior to any sale of the
shares, the opportunity to ask questions and receive answers from Harbor
Group concerning any aspect of the investment and to obtain any additional
information contained in this memorandum, to the extent that Harbor Group
possesses such information or can acquire it without unreasonable effort or
expense.
Execution of Documents.
Each person desiring to subscribe to the shares must complete, execute,
acknowledge, and delivered to Harbor Group a subscription agreement, which
will contain, among other provisions, representations as to the investor's
qualifications to purchase the common stock and his ability to evaluate and
bear the risk of an investment in Harbor Group. By executing the
subscription agreement, the subscriber is agreeing that if the subscription
agreement it is excepted by Harbor Group, such a subscriber will be, a
shareholder in Harbor Group and will be otherwise bound by the articles of
incorporation and the bylaws of Harbor Group in the form attached to this
prospectus.
Promptly upon receipt of subscription documents by Harbor Group, it will make
a determination as to whether a prospective investor will be accepted as a
shareholder in Harbor Group. Harbor Group may reject a subscriber's
subscription agreement for any reason. Subscriptions will be rejected for
failure to conform to the requirements of this prospectus, such as failure to
follow the proper subscription procedure, insufficient documentation, over
subscription to Harbor Group, or such other reasons other as Harbor Group
determines to be in the best interest of Harbor Group.
If a subscription is rejected, in whole or in part, the subscription funds,
or portion thereof, will be promptly returned to the prospective investor
without interest by depositing a check payable to said investor in the amount
of said funds in the United States mail, certified returned-receipt
requested. Subscriptions may not be revoked, cancelled, or terminated by the
subscriber, except as provided herein.
LEGAL PROCEEDINGS
Harbor Group is not a party to any material pending legal proceedings and, to
the best of its knowledge, no such action by or against Harbor Group has been
threatened.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The names, ages, and respective positions of the directors, officers, and
significant employees of Harbor Group are set forth below. All these persons
have held their positions since February 15th, 2000. There are no other
persons which can be classified as a promoter or controlling person of Harbor
Group.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this prospectus, the
outstanding shares of common stock of Harbor Group owned of record or
beneficially by each person who owned of record, or was known by Harbor Group
to own beneficially, more than 5% of Harbor Group's common stock, and the
name and share holdings of each officer and director and all officers and
directors as a group.
</TABLE>
<TABLE>
Title of Class Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Owner Class
<S> <C> <C> <C>
Common Stock Ken Heim,
President,
Treasurer
and Director 1,500,000 50.0%
Common Stock Rose Heim,
Vice President,
Secretary,
and Director 1,500,000 50.0%
</TABLE>
None of the Officers, Directors or existing shareholders do not have the
right to acquire any amount of the Shares within sixty days from options,
warrants, rights, conversion privilege, or similar obligations.
DESCRIPTION OF SECURITIES
General Description
The securities being offered are shares of common stock. The articles of
incorporation authorize the issuance of 25,000,000 shares of common stock,
with a par value of $.001. The holders of the shares:
have equal ratable rights to dividends from funds legally available
therefore, when, as, and if declared by the board of directors of Harbor
Group;
are entitled to share ratably in all of the assets of Harbor Group available
for distribution upon winding up of the affairs of Harbor Group;
do not have preemptive subscription or conversion rights and there are no
redemption or sinking fund applicable thereto;
are entitled to one non-cumulative vote per share on all matters on which
shareholders may vote at all meetings of shareholders.
These securities do not have any of the following rights:
cumulative or special voting rights;
preemptive rights to purchase in new issues of shares;
preference as to dividends or interest;
preference upon liquidation;
any other special rights or preferences.
In addition, the shares are not convertible into any other security. There
are no restrictions on dividends under any loan other financing arrangements
or otherwise. See a copy of the articles of incorporation and the amendments
to the articles, and Bylaws of Harbor Group, attached as Exhibit 3.1 and
Exhibit 3.2, respectively, to this Form SB-2. As of the date of this Form
SB-2, Harbor Group has 3,000,000 shares of common stock outstanding.
Non-Cumulative Voting
The holders of shares of common stock of Harbor Group do not have cumulative
voting rights, which means that the holders of more than 50% of such
outstanding shares, voting for the election of directors, can elect all of
the directors to be elected, if they so choose. In such event, the holders of
the remaining shares will not be able to elect any of the Harbor Group's
directors.
Dividends
Harbor Group does not currently intend to pay cash dividends. Because Harbor
Group does not intend to make cash distributions, potential shareholders
would need to sell their shares to realize a return on their investment.
There can be no assurances of the projected values of the shares, nor can
there be any guarantees of the success of Harbor Group.
The number of holders of record is 4.
Possible Anti-Takeover Effects of Authorized but Unissued Stock
Upon the completion of this offering, Harbor Group's authorized but unissued
capital stock will consist of 20,000,000 shares of common stock, assuming the
entire offering is sold. One effect of the existence of authorized but
unissued capital stock may be to enable the board of directors to render more
difficult or to discourage an attempt to obtain control of Harbor Group by
means of a merger, tender offer, proxy contest, or otherwise, and thereby to
protect the continuity of Harbor Group's management.
If, in the due exercise of its fiduciary obligations, for example, the board
of directors were to determine that a takeover proposal was not in Harbor
Group's best interests, such shares could be issued by the board of directors
without stockholder approval in one or more private placements or other
transactions that might prevent, or render more difficult or costly,
completion of the takeover transaction by diluting the voting or other rights
of the proposed acquirer or insurgent stockholder or stockholder group. This
may be done by creating a substantial voting block in institutional or other
hands that might undertake to support the position of the incumbent board of
directors, by effecting an acquisition that might complicate or preclude the
takeover, or otherwise.
Transfer Agent
Harbor Group intends to engage the services of Pacific Stock Transfer
Company, P.O. Box 93385 Las Vegas, Nevada 89193 (702) 361-3033
Fax (702) 732-7890.
INTEREST OF NAMED EXPERTS AND COUNSEL
No named expert or counsel was hired on a contingent basis, will receive a
direct or indirect interest in the small business issuer, or was a promoter,
underwriter, voting trustee, director, officer, or employee of the small
business issuer.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
No director of Harbor Group will have personal liability to Harbor Group or
any of its stockholders for monetary damages for breach of fiduciary duty as
a director involving any act or omission of any such director since
provisions have been made in the articles of incorporation limiting such
liability. The foregoing provisions shall not eliminate or limit the
liability of a director.
for any breach of the director's duty of loyalty to Harbor Group or its
stockholders,
for acts or omissions not in good faith or, which involve intentional
misconduct or a knowing violation of law,
under applicable Sections of the Nevada Revised Statutes,
the payment of dividends in violation of Section 78.300 of the Nevada
Revised Statutes or,
for any transaction from which the director derived an improper personal
benefit.
The by-laws provide for indemnification of the directors, officers, and
employees of Harbor Group in most cases for any liability suffered by them or
arising out of their activities as directors, officers, and employees of
Harbor Group if they were not engaged in willful misfeasance or malfeasance
in the performance of his or her duties; provided that in the event of a
settlement the indemnification will apply only when the board of directors
approves such settlement and reimbursement as being for the best interests
of Harbor Group. The bylaws, therefore, limit the liability of directors to
the maximum extent permitted by Nevada law (Section 78.751).
The officers and directors of Harbor Group are accountable to Harbor Group as
fiduciaries, which means they are required to exercise good faith and
fairness in all dealings affecting Harbor Group. In the event that a
shareholder believes the officers and/or directors have violated their
fiduciary duties to Harbor Group, the shareholder may, subject to applicable
rules of civil procedure, be able to bring a class action or derivative suit
to enforce the shareholder's rights, including rights under certain federal
and state securities laws and regulations to recover damages from and require
an accounting by management. Shareholders who have suffered losses in
connection with the purchase or sale of their interest in Harbor Group in
connection with such sale or purchase, including the misapplication by any
such officer or director of the proceeds from the sale of these securities,
may be able to recover such losses from Harbor Group.
Disclosure of the Commission Position on Indemnification for Securities Act
Liabilities
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
ORGANIZATION WITHIN LAST FIVE YEARS
The names of the promoters of the registrant are the officers and directors
as disclosed elsewhere in this Form SB-2. None of the promoters have
received anything of value from the registrant.
DESCRIPTION OF BUSINESS
1. Company /Business Summary
The Harbor Group.Net Co., was incorporated on February 15, 2000, under the
laws of the State of Nevada, to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisition. Harbor Group
has been in the development state since inception and has no operations date.
Other than issuing shares to its original shareholders, Harbor Group never
commenced any operational activities.
Harbor Group was formed for the purpose of creating a corporation which could
be used to consummate a merger or acquisition. Ken Heim serves as President,
Treasurer and Director and Rose Heim serves as Secretary and Director,
collectively referred to as the directors. The directors determined next to
proceed with filling a Form SB-2.
The directors, elected to commence implementation of Harbor Group's
principal business purpose, described below under Item 2, Plan of Operation.
As such, Harbor Group can be defined as a "shell" company, whose sole purpose
at this time is to locate and consummate a merger or acquisition with a private
entity.
The proposed business activities described herein classify Harbor Group as a
blank check company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of blank check companies in their
respective jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in the Harbor Group's securities until
such time as Harbor Group has successfully implemented its business plan
described. Accordingly, each shareholder of Harbor Group will execute and
delivered a lock-up letter agreement, affirming that he/she will not sell
his/her respective shares of Harbor Group's common stock until such time as
Harbor Group has successfully consummated a merger or acquisition and Harbor
Group is no longer classified as a blank check company. In order to provide
further assurances that no trading will occur in Harbor Group's securities
until a merger or acquisition has been consummated, each shareholder has
agreed to place his/her respective stock certificate with Harbor Group's
legal counsel, who will not release these respective certificates until such
time as legal counsel has confirmed that a merger or acquisition has been
successfully consummated.
However, while management believes that the proceedures established to preclude
any sale of the Harbor Group's securities prior to closing of a merger
acquisition will be sufficient, there can be no assurance that the procedures
established herein will unequivocally limit any shareholder's ability to
sell their respective securities before such closing.
The public may read and copy any materials that Harbor Group files with the SEC
at the SEC's Public Reference Room at 450 Fifth Street, N.W. Washington, D.C.
20549. Information about the operation of the Public Reference Room is
available by calling 1-800-SEC-0330. Additionally, the SEC maintains an
Internet site containing reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC at:
http://www.sec.gov.
ITEM 2. PLAN OF OPERATION
The registrant intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for
its securities. The registrant has no particular acquisitions in mind and
has not entered into any negotiations regarding such an acquisition. None
of Harbor Group's officers, directors, promoters or affiliates have engaged
in any preliminary contact or discussions with any representative of any other
company regarding the possibility of an acquisition or merger between Harbor
Group and such other company as of the date of this registration statement.
While Harbor Group will attempt to obtain audited financial statements of a
target entity, there is no assurance that such audited financial statements
will be available. The board of directors does intend to obtain certain
assurances of value of the target entity's assets prior to consummating such
a transaction, such as evaluating the competency of the officers and directors
of the merging company as well as the merging company's financial condition.
Additionally, Harbor Group's board of directors does intend to gain further
assurances that an audited statement will be provided within seventy-five
days after closing of such a transaction. Relative closing documents will
include representations that the value of the assets conveyed to or otherwise
so transferred will not materially differ from the representations included
in such closing documents.
The registrant has no full time employees. The registrant's two officers
have agreed to allocate a portion of their time to the activities of the
registrant, without compensation. Management anticipates that the business
plan of Harbor Group can be implemented by each officer devoting
approximately 10 hours per month to the business affairs of Harbor Group and,
consequently, conflicts of interest may arise with respect to the limited time
commitment by such officers.
Harbor Group is a blank check company and therefore has no operating
expenses. Any reporting costs will be will financed by the principles. It
is possible that reasonable finders' fees may be incurred upon a successful
merger or acquisition of Harbor Group. It is possible that an officer or
affiliate may earn the finders' fees. Should outside consulting be required
following a business combination, the directors and officers of Harbor Group
will make certain that the acquiring company has the ability to pay the
outside consultant(s) in either cash or stock.
Harbor Group is filing this registration statement on a voluntary basis
because the primary attraction of the registrant as a merger partner or
acquisition vehicle will be its status as an SEC reporting company. Any
business combination or transaction will likely result in a significant
issuance of shares and substantial dilution to present stockholders of the
registrant.
The articles of incorporation of Harbor Group provides that Harbor Group may
indemnify officers and/or directors of Harbor Group for liabilities, which
can include liabilities arising under the securities laws. Therefore, assets
of Harbor Group could be used or attached to satisfy any liabilities subject
to such indemnification.
GENERAL BUSINESS PLAN
Harbor Group's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. Harbor Group will not restrict its
search to any specific business, industry, or geographical location and
Harbor Group may participate in a business venture of virtually any kind or
nature. This discussion of the proposed business is purposefully general and
is not meant to be restrictive of Harbor Group's virtually unlimited
discretion to search for and enter into potential business opportunities.
Management anticipates that it will be able to participate in only one
potential business venture because Harbor Group has nominal assets and
limited financial resources. This lack of diversification should be
considered a substantial risk to shareholders of Harbor Group because it will
not permit Harbor Group to offset potential losses from one venture against
gains from another.
Harbor Group may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public
marketplace in order to raise additional capital in order to expand into new
products or markets, to develop a new product or service, or for other
corporate purposes. Harbor Group may acquire assets and establish
wholly-owned subsidiaries in various businesses or acquire existing
businesses as subsidiaries.
The primary method Harbor Group will use to find potential merger or
acquisition candidates will be to run classified ads in the Wall Street
Journal periodically seeking companies which are looking to merge with a
public shell.
Harbor Group anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some
industries and shortages of available capital, management believes that there
are numerous firms seeking the perceived benefits of a publicly registered
corporation. Such perceived benefits may include facilitating or improving
the terms on which additional equity financing may be sought, providing
liquidity for incentive stock options or similar benefits to key employees,
providing liquidity, subject to restrictions of applicable statutes, for all
shareholders and other factors. Business opportunities may be available in
many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex.
Harbor Group has, and will continue to have, no capital with which to provide
the owners of business opportunities with any significant cash or other
assets. However, management believes Harbor Group will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the
cost and time required to conduct an initial public offering. The owners of
the business opportunities will, however, incur significant legal and
accounting costs in connection with the acquisition of a business
opportunity, including the costs of preparing Form 8-K's, 10-K's or 10-KSB's,
agreements and related reports and documents. The Securities Exchange Act of
1934, specifically requires that any merger or acquisition candidate comply
with all applicable reporting requirements, which include providing audited
financial statements to be included within the numerous filings relevant to
complying with the Securities Exchange Act of 1934. Nevertheless, the
officers and directors of Harbor Group have not conducted market research and
are not aware of statistical data which would support the perceived benefits
of a merger or acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of Harbor Group, none of whom
is a professional business analyst. Management intends to concentrate on
identifying preliminary prospective business opportunities which may be
brought to its attention through present associations of Harbor Group's two
officers, or by Harbor Group's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the available
technical, financial and managerial resources; working capital and other
financial requirements; history of operations, if any; prospects for the future
nature of present and expected competition; the quality and experience of
management services which may be available and the depth of management; the
potential for further research, development, or exploration, specific risk
factors not now foreseeable but which then may be anticipated to impact the
proposed activities of Harbor Group; the potential for growth or expansion;
the potential for profit; the perceived public recognition or acceptance
of products, services, or trades; name identification; and other relevant
factors. Management will meet personally with management and key personnel of
the business opportunity as part of their investigation. To the extent
possible, Harbor Group intends to utilize written reports and personal
investigation to evaluate the above factors. Harbor Group will not
acquire or merge with any company for which audited financial statements
cannot be obtained within a reasonable period of time after closing of the
proposed transaction.
Management of Harbor Group, while not especially experienced in matters
relating to the new business of Harbor Group, will rely upon their own
efforts and, to a much lesser extent, the efforts of Harbor Group's
shareholders, in accomplishing the business purposes of the Harbor Group. It
is not anticipated that any outside consultants or advisors, other than the
Harbor Group's legal counsel and accountants, will be utilized by Harbor
Group to effectuate its business purposes as here described. However, if
Harbor Group does retain such an outside consultant or advisor, any cash fee
earned by such party will need to be paid by the prospective merger/
acquisition candidate, as Harbor Group has no cash assets with which to pay
such obligation. There have been no discussions, understandings, contracts
or agreements with any outside consultants and none are anticipated in the
future. In the past, Harbor Group's management has never used outside
consultants or advisors in connection with a merger or acquisition.
Harbor Group will not restrict its search for any specific kind of firms, but
may acquire a venture which is in its preliminary or development stage, which
is already in operation, or in essentially any stage of corporate life. It
is impossible to predict at this time the status of any business in which
Harbor Group may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which Harbor Group may offer. However, Harbor Group
does not intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as Harbor
Group has successfully consummated such a merger or acquisition. Harbor
Group also has no plans to conduct any offerings under Regulation S.
ACQUISTION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, Harbor
Group may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may
also acquire stock or assets of an existing business. On the consummation
of a transaction, it is probable that the present management and shareholders
of Harbor Group will no longer be in control of Harbor Group. In addition,
Harbor Group's directors may, as part of the terms of the acquisition
transaction, resign and be replaced by new directors without a vote of
Harbor Group's shareholders. All shareholders will be a part of
negotiations in person and all shareholders will sign the merger or
acquisition.
It is anticipated that Harbor Group's principle shareholders may actively
negotiate or otherwise consent to the purchase of a portion of their common
stock as a condition to, or in connection with, a proposed merger or
acquisition transaction. Any terms of sale of the shares presently held by
officers and/or directors of Harbor Group will be also afforded to all other
shareholders of Harbor Group on similar terms and conditions. The policy set
forth in the preceding sentence is based on an understanding between the two
members of management, and these two persons are not aware of any
circumstances under which this policy would change while they are still
officers and directors of Harbor Group. Any and all such sales will only be
made in compliance with the securities laws of the United States and any
applicable state.
It is anticipated that any securities issued in any such reorganization would
be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, Harbor Group may agree to register all
or a part of such securities immediately after the transaction is consummated
or at specified times thereafter. If such registration occurs, of which
there can be no assurance, it will be undertaken by the surviving entity
after Harbor Group has successfully consummated a merger or acquisition and
Harbor Group is no longer considered a shell company. Until such time as
this occurs, Harbor Group will not attempt to register any additional
securities. The issuance of substantial additional securities and their
potential sale into any trading market which may develop in Harbor Group's
securities may have a depressive effect on the value of Harbor Group's
securities in the future, if such a market develops, of which there is no
assurance.
While the actual terms of a transaction to which Harbor Group may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event
and thereby structure the acquisition in a so-called tax-free reorganization
under Sections 368a or 351 of the Internal Revenue Code.
With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of Harbor Group which
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, Harbor Group's shareholders will in
all likelihood hold a substantially lesser percentage ownership interest in
Harbor Group following any merger or acquisition. The percentage ownership may
be subject to significant reduction in the event Harbor Group acquires a
target company with substantial assets. Any merger or acquisition effected
by Harbor Group can be expected to have a significant dilutive effect on the
percentage of shares held by Harbor Group's then-shareholders.
Harbor Group will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the
terms of such agreements cannot be predicted, generally such agreements will
require some specific representations and warranties by all of the parties
thereto, will specify certain events of default, will detail the terms of
closing and the conditions which must be satisfied by each of the parties
prior to and after such closing, will outline the manner of bearing costs,
including costs associated with Harbor Group's attorneys and accountants,
will set forth remedies on default and will include miscellaneous other terms.
As stated above, Harbor Group will not acquire or merge with any entity which
cannot provide independent audited financial statements within a reasonable
period of time after closing of the proposed transaction. Harbor Group
is subject to all of the reporting requirements included in the Securities
Exchange Act of 1934. Included in these requirements is the affirmative duty
of Harbor Group to file independent audited financial statements as part of
its Form 8-K to be filed with the Securities and Exchange Commission upon
consummation of a merger of acquisition, as well as harbor Group's audited
financial statements included in its annual report on Form 10-K (or 10-KSB,
as applicable). If such audited financial statements are not available at
closing, or within the time parameters necessary to insure Harbor Group's
compliance with the requirements of the Securities and Exchange Act of 1934,
or if the audited financial statements provided do not conform to the
representations made by the candidate to be acquired in the closing documents,
the closing documents may provide that the proposed transaction will be
voidable, at the discretion of the present management of Harbor Group.
The board of directors will pass a resolution which prohibits Harbor Group
from completing an acquisition or merger with any entity in which any of
Harbor Group's officers, directors, principal shareholders or their
affiliates or associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under which this
policy, through their own initiative may be changed.
There are no arrangements, agreements or understandings between non-management
Shareholders and management under which non-management management of the Harbor
Group's affairs. There is no agreement that non-management shareholders will
Exercise their voting rights to continue to re-elect the current directors,
However, it is expected that they will do so based on the existing
Friendship among such person.
Harbor Group's officers and shareholders have verbally agreed that they will
advance Harbor Group any additional funds which Harbor Group needs for
operating capital and for costs in connection with searching for or
completing an acquisition or merger. These persons have further agreed that
such advances will be made in proportion to each person's percentage
ownership of Harbor Group. These persons have also agreed that such advances
will be made interest free without expectation of repayment unless the owners
of the business which Harbor Group acquires or merges with agree to repay all
or a portion of such advances. There is no dollar cap on the amount of money
which such persons will advance to Harbor Group. Harbor Group will not
borrow any funds from anyone other than its current shareholders for the
purpose of repaying advances made by the shareholders, and Harbor Group will
not borrow any funds to make any payments to Harbor Group's promoters,
management or their affiliates or associates.
COMPETITION
Harbor Group will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than
Harbor Group. In view of Harbor Group's combined extremely limited financial
resources and limited management availability, Harbor Group will continue
to be at a significant competitive disadvantage compared to Harbor Group's
competitors.
YEAR 2000 COMPLIANCE
Harbor Group is aware of the issues associated with the programming code in
existing computer systems during the year 2000. Harbor Group has assessed
these issues as they relate to Harbor Group, and since Harbor Group currently
has no operating business and does not use any computers, and since it has
no customers, suppliers or other constituents, it does not believe that there
are any material year 2000 issues to disclose in the Form SB-2.
DISCRIPTION OF PROPERTY
Harbor Group has retained Shawn F. Hackman, a P.C., as a resident agent.
The address is 3360 W. Sahara, Suite 200, Las Vegas, Nevada 89102. A
Copy of the resident agent agreement is attached. Harbor Group, currently,
owns no property.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no relationships, transactions, or proposed transactions to which
the registrant was or is to be a party, in which any of the named persons set
forth in Item 404 of Regulation SB had or is to have a direct or indirect
material interest.
MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
The shares have not previously been traded on any securities exchange. At
the present time, there are no assets available for the payment of dividends
on the Shares.
EXECUTIVE COMPENSATION
(a) No officer or director of the company is receiving any remuneration at
this time.
(b) There are no annuity, pension or retirement benefits proposed to be paid
to officers, directors, or employees of the corporation in the event of
retirement at normal retirement date pursuant to any presently existing
plan provided or contributed to by the corporation or any of its
subsidiaries.
(c) No remuneration is proposed to be in the future directly or indirectly
by the corporation to any officer or director under any plan which is
presently existing.
FINANCIAL STATEMENTS
The Financial Statements required by Item 310 of Regulation S-B are attached
as Exhibit 99.1 to this Form SB-2.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Information on this item is set forth in propsectus under the heading
Disclosure of Commission Position on Indemnification for Securities Act
Liabilities.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
Use of Proceeds Minimum Offering Maximum Offering
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
Transfer Agent Fee $250.00 1.0% $1,000.00 1.0%
Legal Fees $10,0000.00 40.0% $25,000.00 25.0%
Printing Costs $100.00 0.4% $500.00 0.5%
Accounting Fees $1,000.00 4.0% $2,500.00 2.5%
Working Capital $21,150.00 54.6% $71,000.00 71.0%
Total $25,000.00 100.0% $100,000.00 100.0%
</TABLE>
RECENT SALES OF UNREGISTERED SECURITIES
Each officer and director received shares for services rendered.
The breakdown is as follows:
<TABLE>
Title of Class Name of Beneficial Owner Amount and Nature of Percent of
Beneficial Owner Class
<S> <C> <C> <C>
Common Stock Ken Heim, President,
Treasurer, and Director 1,500,000 50.0%
Common Stock Rose Heim, Vice President,
Secretary, and Director 1,500,000 50.0%
</TABLE>
EXHIBITS
The Exhibits required by Item 601 of Regulation S-B, and an index thereto,
are attached.
UNDERTAKINGS
The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement; and Notwithstanding the forgoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation From the low or high end of the estimated maximum offering range
may be reflected in the form of prospects filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) Include any additional or changed material information on the plan of
distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(b) Provide to the underwriter at the closing specified in the underwriting
agreement certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised "Act") may be permitted to directors,
officers and controlling persons of the small business issuer that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the small business issuer of
expenses incurred or paid by a director, officer or controlling person of the
small business issuer in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the small business issuer
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<TABLE>
Exhibits
<CAPTION>
<S> <C>
3.1 Articles
3.2 Bylaws
99.1 Financials
99.2 Power of Attorney
99.3 Signatures
</TABLE>
Articles Of Incorporation
Of
The Harbor Group.Net Co.
Know all men by these present that the undersigned have this day voluntarily
associated ourselves together for the purpose of forming a corporation under
and pursuant to the provisions of Nevada Revised Statutes 78.010 to Nevada
Revised Statues 78.090 inclusive as amended and state and certify that the
articles of incorporation are as follows:
First: Name
The name of the corporation is The Harbor Group.Net Co., (The
"Corporation").
Second: Registered Office and Agent
The address of the registered office of the corporation in the State Of
Nevada is 3360 W. Sahara, Suite 200, in the city of Las Vegas, County of
Nevada 89102. The name and address of the corporation's registered agent in
the State of Nevada is Shawn F. Hackman, 3360 W. Sahara, Suite 200, Las
Vegas, NV 89102, at said address, until such time as another agent is duly
authorized and appointed by the corporation.
Third: Purpose and Business
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may now or hereafter be organized under the
Nevada Revised Statutes of the State of Nevada, including, but not limited to
the following:
(a) The Corporation may at any time exercise such rights,
privileges, and powers, when not inconsistent with the
purposes and object for which this corporation is
organized;
(b) The Corporation shall have power to have succession by
its corporate name in perpetuity, or until dissolved and
its affairs wound up according to law;
(c) The Corporation shall have power to sue and be sued in
any court of law or equity;
(d) The Corporation shall have power to make contracts;
(e) The Corporation 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;
(f) The corporation shall have power to appoint such
officers and agents as the affairs of the Corporation
shall requite and allow them suitable compensation;
(g) The Corporation shall have power to make bylaws 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
stockholders;
(h) The Corporation shall have the power to wind up and
dissolve itself, or be wound up or dissolved;
(i) The Corporation shall have the power to adopt and use a
common seal or stamp, or to not use such seal or stamp
and if one is used, to alter the same. 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 non-use shall not
in any way affect the legality of the document;
(j) The Corporation Shall have the 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 evidence 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 another lawful object;
(k) The Corporation shall have the 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 evidence in indebtedness
created by any other corporation or corporations in the
State of Nevada, or any other state or government and,
while the owner of such stock, bonds, securities or
evidence of indebtedness, to exercise all the rights,
powers and privileges of ownership, including the right
to vote, if any;
(l) The Corporation shall have the 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;
(m) The Corporation shall have 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 in any foreign country;
(n) The Corporation shall have the power to do all and
everything necessary and proper for the accomplishment
of the objects enumerated in its articles of
incorporation, or any amendments 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 purposes of the Corporation, whether or not such
business is similar in nature to the purposes set forth
in the articles of incorporation of the Corporation, or
any amendment thereof;
(o) The Corporation shall have the power to make donations
for the public welfare or for charitable, scientific or
educational purposes;
(p) The Corporation shall have the power to enter
partnerships, general or limited, or joint ventures, in
connection with any lawful activities.
Forth: Capital Stock
1. Classes and Number of Shares. The total number of shares of all classes of
stock, which the corporation shall have authority to issue Twenty-Five
Million (25,000,000) shares of Common Stock, par value of $.001 per share
(The "Common Stock").
2. Powers and Rights of Common Stock
(a) Preemptive Right. No shareholders of the Corporation holding
common stock shall have any preemptive or other right to
subscribe for any additional un-issued or treasury shares of
stock or for other securities of any class, or for rights,
warrants or options to purchase stock, or for scrip, or for
securities of any kind convertible into stock or carrying stock
purchase warrants or privileges unless so authorized by the
Corporation;
(b) Voting Rights and Powers. With respect to all matters upon which
stockholders are entitled to vote or to which stockholders are
entitled to give consent, the holders of the outstanding shares
of the Common Stock shall be entitled to cast thereon one (1)
vote in person or by proxy for each share of the Common Stock
standing in his/her name;
(c) Dividends and Distributions
(i) Cash Dividends. Subject to the rights of holders of
Preferred Stock, holders of Common Stock shall be
entitled to receive such cash dividends as may be
declared thereon by the Board of Directors from time
to time out of assets of funds of the Corporation
legally available therefor;
(ii) Other Dividends and Distributions. The Board of
Directors may issue shares of the Common Stock in the
form of a distribution or distributions pursuant to a
stock dividend or split-up of the shares of the
Common Stock;
(iii) Other Rights. Except as otherwise required by the
Nevada Revised Statutes and as may otherwise be
provided in these Articles of Incorporation, each
share of the Common Stock shall have identical
powers, preferences and rights, including rights in
liquidation;
3. Preferred Stock The powers, preferences, rights, qualifications,
limitations and restrictions pertaining to the Preferred Stock, or any
series thereof, shall be such as may be fixed, from time to time, by the
Board of Directors in its sole discretion, authority to do so being hereby
expressly vested in such board.
4. Issuance of the Common Stock and the Preferred Stock. The Board of
Directors of the Corporation may from time to time authorize by resolution
the issuance of any or all shares of the Common Stock and the Preferred
Stock herein authorized in accordance with the terms and conditions set
forth in these Articles of Incorporation for such purposes, in such
amounts, to such persons, corporations, or entities, for such
consideration and in the case of the Preferred Stock, in one or more
series, all as the Board of Directors in its discretion may determine and
without any vote or other action by the stockholders, except as otherwise
required by law. The Board of Directors, from time to time, also may
authorize, by resolution, options, warrants and other rights convertible
into Common or Preferred stock (collectively "securities.") The securities
must be issued for such consideration, including cash, property, or
services, as the Board or Directors may deem appropriate, subject to the
requirement that the value of such consideration be no less than the par
value if the shares issued. Any shares issued for which the consideration
so fixed has been paid or delivered shall be fully paid stock and the
holder of such shares shall not be liable for any further call or
assessment or any other payment thereon, provided that the actual value of
such consideration is not less that the par value of the shares so issued.
The Board of Directors may issue shares of the Common Stock in the form of
a distribution or distributions pursuant to a stock divided or split-up of
the shares of the Common Stock only to the then holders of the outstanding
shares of the Common Stock.
5. Cumulative Voting. Except as otherwise required by applicable law, there
shall be no cumulative voting on any matter brought to a vote of
stockholders of the Corporation.
Fifth: Adoption of Bylaws.
In the furtherance and not in limitation of the powers conferred by
statute and subject to Article Sixth hereof, the Board of Directors is
expressly authorized to adopt, repeal, rescind, alter or amend in any respect
the Bylaws of the Corporation (the "Bylaws").
Sixth: Shareholder Amendment of Bylaws.
Notwithstanding Article Fifth hereof, the bylaws may also be adopted,
repealed, rescinded, altered or amended in any respect by the stockholders of
the Corporation, but only by the affirmative vote of the holders of not less
than fifty-one percent (51%) of the voting power of all outstanding shares of
voting stock, regardless of class and voting together as a single voting
class.
Seventh: Board of Directors
The business and affairs of the Corporation shall be managed by and
under the direction of the Board of Directors. Except as may otherwise be
provided pursuant to Section 4 or Article Forth hereof in connection with
rights to elect additional directors under specified circumstances, which may
be granted to the holders of any class or series of Preferred Stock, the
exact number of directors of the Corporation shall be determined from time to
time by a bylaw or amendment thereto, providing that the number of directors
shall not be reduced to less than one (1). The directors holding office at
the time of the filing of these Articles of Incorporation shall continue as
directors until the next annual meeting and/or until their successors are
duly chosen.
Eighth: Term of Board of Directors.
Except as otherwise required by applicable law, each director shall
serve for a term ending on the date of the third Annual Meeting of
Stockholders of the Corporation (the "Annual Meeting") following the Annual
Meeting at which such director was elected. All directors, shall have equal
standing.
Not withstanding the foregoing provisions of this Article Eighth each
director shall serve until his successor is elected and qualified or until
his death, resignation or removal; no decrease in the authorized number of
directors shall shorten the term of any incumbent director; and additional
directors, elected pursuant to Section 4 or Article Forth hereof in
connection with rights to elect such additional directors under specified
circumstances, which may be granted to the holders of any class or series of
Preferred Stock, shall not be included in any class, but shall serve for
such term or terms and pursuant to such other provisions as are specified in
the resolution of the Board or Directors establishing such class or series.
Ninth: Vacancies on Board of Directors
Except as may otherwise be provided pursuant to Section 4 of Article
Forth hereof in connection with rights to elect additional directors under
specified circumstances, which may be granted to the holders of any class or
series of Preferred Stock, newly created directorships resulting from any
increase in the number of directors, or any vacancies on the Board of
Directors resulting from death, resignation, removal, or other causes, shall
be filled solely by the quorum of the Board of Directors. Any director
elected in accordance with the preceding sentence shall hold office for the
remainder of the full term of directors in which the new directorship was
created or the vacancy occurred and until such director's successor shall
have been elected and qualified or until such director's death, resignation
or removal, whichever first occurs.
Tenth: Removal of Directors
Except as may otherwise be provided pursuant to Section 4 or Article
Fourth hereof in connection with rights to elect additional directors under
specified circumstances, which may be granted to the holders of any class or
series of Preferred Stock, any director may be removed from office only for
cause and only by the affirmative vote of the holders of not less than fifty-
one percent (51%) of the voting power of all outstanding shares of voting
stock entitled to vote in connection with the election of such director,
provided, however, that where such removal is approved by a majority of the
Directors, the affirmative vote of a majority of the voting power of all
outstanding shares of voting stock entitled to vote in connection with the
election of such director shall be required for approval of such removal.
Failure of an incumbent director to be nominated to serve an additional term
of office shall not be deemed a removal from office requiring any stockholder
vote.
Eleventh: Stockholder Action
Any action required or permitted to be taken by the stockholders of the
Corporation must be effective at a duly called Annual Meeting or at a special
meeting of stockholders of the Corporation, unless such action requiring or
permitting stockholder approval is approved by a majority of the Directors,
in which case such action may be authorized or taken by the written consent
of the holders of outstanding shares of Voting Stock having not less than the
minimum voting power that would be necessary to authorize or take such action
at a meeting of stockholders at which all shares entitled to vote thereon
were present and voted, provided all other requirements of applicable law
these Articles have been satisfied.
Twelfth: Special Stockholder Meeting
Special meetings of the stockholders of the Corporation for any purpose
or purposes may be called at any time by a majority of the Board of Directors
by the Chairman of the Board or the President, or by Shareholders holding at
least ten percent (10%) of the issued and outstanding stock of the
corporation. Special meeting may not be called by any other person or
persons. Each special meeting shall be held at such date and time as is
requested by the person or persons calling the meeting, within the limits
fixed by law.
Thirteenth: Location of Stockholder Meetings.
Meetings of stockholders of the Corporation may be held within or
without the State of Nevada, as the Bylaws may provide. The books of the
Corporation may be kelp (subject to any provision of the Nevada Revised
Statutes) outside the State of Nevada at such place or places as may be
designated from time to time by the Board of Directors or in the Bylaws.
Fourteenth: Private Property of Stockholders.
The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever and the stockholders shall
not be personally liable for the payment of the corporation's debts.
Fifteenth: Stockholder Appraisal Rights in Business Combinations.
To the maximum extent permissible under the Nevada Revised Statutes of
the State of Nevada, the stockholders of the Corporation shall be entitled to
the statutory appraisal rights provided therein, with respect to any business
Combination involving the Corporation and any stockholder (or any affiliate
or associate of any stockholder), which required the affirmative vote of the
Corporation's stockholders.
Sixteenth: Other Amendments.
The Corporation reserves the right to adopt, repeal, rescind, alter or
amend in any respect any provision contained in these Articles of
Incorporation in the manner now or hereafter prescribed by applicable law and
all rights conferred on stockholders herein granted subject to this
reservation.
Seventeenth: Term of Existence.
The Corporation is to have perpetual existence.
Eighteenth: Liability of Directors.
No director of this Corporation shall have personal liability to the
Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director or officers involving any act or omission of any
such director or officer. The foregoing provision shall not eliminate or
limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or, which involve intentional misconduct or a knowing
violation of law, (iii) under applicable Sections of the Nevada Revised
Statutes, (iv) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes or, (v) for any transaction from which the director
derived an improper personal benefit. 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.
Nineteenth: Name and Address of first Directors and Incorporators.
The name and address of the incorporators of the Corporation and the
first Directors of the Board of Directors of the Corporation which shall be
one (1) in number is as follows:
DIRECTOR #1
Shawn F. Hackman
3360 W. Sahara, Suite 200
Las Vegas, NV 89102
I, Shawn F. Hackman, being the first director and Incorporator herein
before named, for the purpose of forming a corporation pursuant to the Nevada
Revised Statutes of the State of Nevada, do make these Articles, hereby
declaring and certifying that this is my act and deed and the facts herein
stated are true and accordingly have hereunto set my hand this 14th day of
February, 2000.
By:_____________________________
Shawn F. Hackman
VERIFICATION
State Of Nevada )
)ss.
County Of Clark )
On this 14th day of February, 2000, before me, the undersigned, a Notary
Public in and for said State, personally appeared Shawn F. Hackman,
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person who subscribed his name to the Articles of
Incorporation and acknowledged to me that he executed the same freely and
voluntarily and for the use and purposes therein mentioned.
By: _______________________________
Notary Public in and for said
County and State
BYLAWS
OF
THE HARBOR GROUP.NET CO.
Article I: Offices
The principal office of THE HARBOR GROUP.NET CO. ("Corporation") in
the Sate of Nevada shall be located in Las Vegas, County of
Clark. The Corporation may have such other offices, either
within or without the State of Nevada, as the Board of
Directors my designate or as the business of the Corporation
my require from time to time.
Article II: Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders shall be held during the first ten (10) days in
the month of June in each year, or on such other date during
the calendar year as may be designated by the Board of
Directors. If the day fixed for the annual meeting shall be
a legal holiday in the Sate of Nevada, such meeting shall be
held on the next succeeding business day. If the election
of Directors shall be held on the day designated herein for
any annual meeting of the shareholders or at any adjournment
thereof, the Board of Directors shall cause the election to
be held at a special meeting of the shareholders as soon
thereafter as conveniently may be.
Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or by
the Board of Directors, and shall be called by the President
at the request of the holders of not less than ten percent
(10%) of all the outstanding shares of the Corporation
entitled to vote at the meeting.
Section 3. Place of Meeting. The Board of Directors my
designate any place, either within our without the State of
Nevada, unless otherwise prescribed by statute, as the place
of meeting for any annual meeting or for any special
meeting. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any place,
either within our without the State of Nevada, unless
otherwise prescribed by statute, as the place for the
holding of such meeting. If no designation is made, the
place of meeting shall be the principal office of the
Corporation.
Section 4. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is
called, shall unless otherwise prescribed by statute, be
delivered not less than ten (10) nor more than sixty (60)
days before the date of the meeting, to each shareholder of
record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the
United States Mail, addressed to the shareholder at his
address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record.
For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive
payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of
Directors of the Corporation may provide that the stock
transfer books shall be closed for a stated period, but not
to exceed in any case fifty (50) days. If the stock
transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at
a meeting of shareholders, such books shall be closed for at
least fifteen (15) days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any
case to be not more than thirty (30) days and, in case of a
meeting of shareholders, not less than ten (10) days, prior
to the date on which the particular action requiring such
determination of shareholders is to be taken. If the stock
transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for
such determination of shareholders. When a determination
of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
Section 6. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the
Corporation shall make a complete list of shareholders
entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged in alphabetical order, with
the address of and the number of shares held by each. Such
lists shall be produced and kept open at the time and place
of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the
purposes thereof.
Section 7. Quorum. A majority of the outstanding shares of
the Corporation entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of
shareholders. If less than a majority of the outstanding
shares are represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to
time without further notice. At such adjourned meeting at
which a quorum shall be present or represented, any business
may be transacted which might have been transacted at the
meeting as originally noticed. The shareholders present at
a duly organized meeting may continue to transact business
until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Section 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in
writing by the shareholder or by his or duly authorized
attorney-in-fact. Such proxy shall be filed with the
secretary of the Corporation before or at the time of the
meeting. A meeting of the Board of Directors my be had by
means of telephone conference or similar communications
equipment by which all persons participating in the meeting
can hear each other, and participation in a meeting under
such circumstances shall constitute presence at the meeting.
Section 10. Voting of Shares by Certain Holders. Shares
standing in the name of another Corporation may be voted by
such officer, agent or proxy as the Bylaws of such
Corporation may prescribe or, in the absence of such
provision, as the Board of Directors of such Corporation may
determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him either in person or by
proxy, without a transfer of such shares into his name.
Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be
entitled to vote shares held by him without a transfer of
such shares into his name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name, if authority to do so be contained in
an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into
the name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
Shares of its own stock belonging to the Corporation shall
not be voted directly or indirectly, at any meeting, and
shall not be counted in determining the total number of
outstanding shares at any given time.
Section 11. Informal Action by Shareholders. Unless
otherwise provided by law, any action required to be taken
at a meeting of the shareholders, or any other action which
may be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof.
Article III: Board of Directors
Section 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number
of Directors of the Corporation shall be fixed by the Board
of Directors, but in no event shall be less than one ( 1 ).
Each Director shall hold office until the next annual
meeting of shareholder and until his successor shall have
been elected and qualified.
Section 3. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than
this Bylaw immediately after, and at the same place as, the
annual meeting of shareholders. The Board of Directors may
provide, by resolution, the time and place for the holding
of additional regular meetings without notice other than
such resolution.
Section 4. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the
President or any two Directors. The person or persons
authorized to call special meetings of the Board of
Directors may fix the place for holding any special meeting
of the Board of Directors called by them.
Section 5. Notice. Notice of any special meeting shall be
given at least one (1) day previous thereto by written
notice delivered personally or mailed to each Director at
his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the
United Sates mail so addressed, with postage thereon
prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to
the telegraph company. Any Directors may waive notice of
any meeting. The attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting, except
where a Director attends a meeting for the express purpose
of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 6. Quorum. A majority of the number of Directors
fixed by Section 2 of the Article III shall constitute a
quorum for the transaction of business at any meeting of the
Board of Directors, but if less than such majority is
present at a meeting, a majority of the Directors present
may adjourn the meeting from time to time without further
notice.
Section 7. Manner of Acting. The act of the majority of
the Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 8. Action Without a Meeting. Any action that may
be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the
action so to be taken, shall be signed before such action by
all of the Directors.
Section 9. Vacancies. Any vacancy occurring in the Board
of Directors may be filled by the affirmative vote of a
majority of the remaining Directors though less than a
quorum of the Board of Directors, unless otherwise provided
by law. A Director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office.
Any Directorship to be filled by reason of an increase in
the number of Directors may be filled by election by the
Board of Directors for a term of office continuing only
until the next election of Directors by the shareholders.
Section 10. Compensation. By resolution of the Board of
Directors, each Director may be paid his expenses, if any,
of attendance at each meeting of the Board of Directors, and
may be paid a stated salary as a Director or a fixed sum for
attendance at each meeting of the Board of Directors or
both. No such payment shall preclude any Director from
serving the Corporation in any other capacity and receiving
compensation thereof.
Section 11. Presumption of Assent. A Director of the
Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken
shall be presumed to have assented to the action taken
unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such
action with the person acting as the Secretary of the
meeting before the adjournment thereof, or shall forward
such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
Article IV: Officers
Section 1. Number. The officers of the Corporation shall
be a President, one or more Vice Presidents, a Secretary and
a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as
may be deemed necessary may be elected or appointed by the
Board of Directors, including a Chairman of the Board. In
its discretion, the Board of Directors may leave unfilled
for any such period as it may determine any office except
those of President and Secretary. Any two or more offices
may be held by the same person. Officers may be Directors
or shareholders of the Corporation.
Section 2. Election and Term of Office. The officers of
the Corporation to be elected by the Board of Directors
shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of
officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be.
Each officer shall hold office until his successor shall
have been duly elected and shall have qualified, or until
his death, or until he shall resign or shall have been
removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent may be removed by
the Board of Directors whenever, in its judgement, the best
interests of the Corporation will be served thereby, but
such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself
create contract rights, and such appointment shall be
terminable at will.
Section 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise,
may be filled by the Board of Directors for the unexpired
portion of the term.
Section 5. President. The President shall be the
principal executive officer of the Corporation and, subject
to the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the
Corporation. He shall, when present, preside at all
meetings of the shareholders and of the Board of Directors,
unless there is a Chairman of the Board, in which case the
Chairman shall preside. He may sign, with the Secretary or
any other proper officer of the Corporation thereunto
authorized by the Board of Directors, certificates for
shares of the Corporation, any deed, mortgages, bonds,
contract, or other instruments which the Board of Directors
has authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated
by the Board of Directors or by there Bylaws to some other
officer or agent of the Corporation, or shall be required by
law to be otherwise signed or executed; and in general shall
perform all duties incident to the office of President and
such other duties as may be prescribed by the Board of
Directors from time to time.
Section 6. Vice President. In the absence of the President
or in the event of his death, inability or refusal to act,
the Vice President shall perform the duties of the
President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.
The Vice President shall perform such other duties as from
time to time may be assigned to him by the President or by
the Board of Directors, If there is more than one Vice
President, each Vice President shall succeed to the duties
of the President in order of rank as determined by the Board
of Directors. If no such rank has been determined, then
each Vice President shall succeed to the duties of the
President in order of date of election, the earliest date
having the first rank.
Section 7. Secretary. The Secretary shall: (a) keep the
minutes of the Board of Directors in one or more minute
books provided for the purpose; (b) see that all notices
are duly given in accordance with the provisions of the
Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all
documents, the execution of which on behalf of the
Corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder
which shall be furnished to the Secretary by such
shareholder; (e) sign with the President certificates for
share of the Corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the
Corporation, and (g) in general perform all duties incident
to the office of the Secretary and such other duties as from
time to time may be assigned to him by the President or by
the Board of Directors.
Section 8. Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the Corporation; (b) receive and give
receipts for moneys due and payable to the Corporation in
such banks, trust companies or other depositories as shall
be selected in accordance with the provisions of Article VI
of these Bylaws; and (c) in general perform all of the
duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to him by the
President or by the Board of Directors. If required by the
Board of Directors, the Treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such
sureties as the Board of Directors shall determine.
Section 9. Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors, and no
officer shall be prevented from receiving such salary by
reason of the fact that he is also a Director of the
Corporation.
Article V: Indemnity
Section 1. Definitions. For purposes of this Article,
"Indemnitee" shall mean each Director or Officer who was or
is a party to, or is threatened to be made a party to, or is
otherwise involved in, any Proceeding (as hereinafter
defined), by reason of the fact that he or she is or was a
Director or Officer of this Corporation or is or was serving
in any capacity at the request of this Corporation as a
Director, Officer, employee, agent, partner, or fiduciary
of, or in any other capacity for, another corporation,
partnership, joint venture, trust, or other enterprise. The
term "Proceeding" shall mean any threatened, pending or
completed action or suit (including, without limitation, an
action, suit or proceeding by or in the right of this
Corporation), whether civil, criminal, administrative or
investigative.
Section 2. Indemnification. Each Indemnitee shall be
indemnified and held harmless by this Corporation for all
actions taken by him or her, and for all omissions
(regardless of the date of any such action or omission), to
the fullest extent permitted by Nevada law, against all
expense, liability and loss (including, without limitation,
attorney fees, judgments, fines, taxes, penalties, and
amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Indemnitee in connection with
any Proceeding. Indemnification pursuant to this Section
shall continue as to an Indemnitee who has ceased to be a
Director or Officer and shall inure to the benefit of his or
her heirs, executors and administrators. This Corporation
may, by action of its Board of Directors, and to the extent
provided in such action, indemnify employees and other
persons as though they were Indemnitees. The rights to
indemnification as provided in this Article shall be non-
exclusive of any other rights that any person may have or
hereafter acquire under an statute, provision of this
Corporation's Articles of Incorporation or Bylaws,
agreement, vote of stockholders or Directors, or otherwise.
Section 3. Financial Arrangements. This Corporation may
purchase and maintain insurance or make other financial
arrangements on behalf of any person who is or was a
Director, Officer, employee or agent of this Corporation, or
is or was serving at the request of this Corporation in such
capacity for another corporation, partnership, joint
venture, trust or other enterprise for any liability
asserted against him or her and liability and expenses
incurred by him or her in such capacity, whether or not this
Corporation has the authority to indemnify him or her
against such liability and expenses.
The other financial arrangements which may be made by this
Corporation may include, but are not limited to, (a)
creating a trust fund; (b) establishing a program of self-
insurance; (c) securing its obligation of indemnification by
granting a security interest or other lien on any of this
Corporation's assets, and (d) establishing a letter of
credit, guarantee or surety. No financial arrangement made
pursuant to this section may provide protection for a person
adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable for
intentional misconduct, fraud, or a knowing violation of
law, except with respect to advancing expenses or
indemnification ordered by a court. Any insurance or other
financial arrangement made on behalf of a person pursuant to
this section may be provided by this Corporation or any
other person approved by the Board of Directors, even if all
or part of the other person's stock or other securities is
owned by this Corporation. In the absence of fraud:
(a) the decision of the Board of Directors as to the
propriety of the terms and conditions of any insurance or
other financial arrangement made pursuant to this section,
and the choice of the person to provide the insurance or
other financial arrangement is conclusive; and
(b) the insurance or other financial arrangement is not
void or voidable; does not subject any Director approving it
to personal liability for his action; and even if a Director
approving the insurance or other financial arrangement is a
beneficiary of the insurance or other financial arrangement.
Section 4. Contract of Indemnification. The provisions of
this Article relating to indemnification shall constitute a
contract between this Corporation and each of its Directors
and Officers, which may be modified as to any Director or
Officer only with that person's consent or as specifically
provided in this section. Notwithstanding any other
provision of the Bylaws relating to their amendment
generally, any repeal or amendment of this Article which is
adverse to any Director or Officer shall apply to such
Director or Officer only on a prospective basis and shall
not limit the rights of an Indemnitee to indemnification
with respect to any action or failure to act occurring prior
to the time of such repeal or amendment. Notwithstanding any
other provision of these Bylaws, no repeal or amendment of
these Bylaws shall affect any or all of this Article so as
to limit or reduce the indemnification in any manner unless
adopted by (a) the unanimous vote of the Directors of this
Corporation then serving, or (b) the stockholders as set
forth in Article XII hereof; provided that no such amendment
shall have retroactive effect inconsistent with the
preceding sentence.
Section 5. Nevada Law. References in this Article to
Nevada law or to any provision thereof shall be to such law
as it existed on the date these Bylaws were adopted or as
such law thereafter may be changed; provided that (a) in the
case of any change which expands the liability of an
Indemnitee or limits the indemnification rights or the
rights to advancement of expenses which this Corporation may
provide, the rights to limited liability, to indemnification
and to the advancement of expenses provided in this
Corporation's Articles of Incorporation, these Bylaws, or
both shall continue as theretofore to the extent permitted
by law; and (b) if such change permits this Corporation,
without the requirement of any further action by
stockholders or Directors, to limit further the liability of
Indemnitees or to provide broader indemnification rights or
rights to the advancement of expenses than this Corporation
was permitted to provide prior to such change, liability
thereupon shall be so limited and the rights to
indemnification and advancement of expenses shall be so
broadened to the extent permitted by law. The Corporation
shall indemnify its Directors, officers and employees as
follows:
Article VI: Contracts, Loans, Checks, and Deposits
Section 1. Contracts. The Board of Directors may authorize
any office or officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name
of and on behalf of the Corporation, and such authority may
be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the
Board of Directors. Such authority may be general or
confined to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the
Corporation, shall be signed by such officer or officers,
agent or agents of the Corporation and in such manner as
shall from time to time be determined by resolution of the
Board of Directors.
Section 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to
the credit of the Corporation in such banks, trust companies
or other depositories as the Board of Directors may select.
Article VII: Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form
as shall be determined by the Board of Directors. Such
certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by
the Board of Directors so to do, and sealed with the
corporate seal. All certificates for shares shall be
consecutively numbered or otherwise identified. The name
and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the
Corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificate for
a like number of shares shall have been surrendered and
cancelled, expect that in case of a lost, destroyed or
mutilated certificate a new one may be issued therefore upon
such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books
of the Corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with
the Secretary of the Corporation, and on surrender for
cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the Corporation
shall be deemed by the Corporation to be the owner thereof
for all purposes, Provided, however, that upon any action
undertaken by the shareholder to elect S Corporation status
pursuant to Section 1362 of the Internal Revenue Code and
upon any shareholders agreement thereto restricting the
transfer of said shares so as to disqualify said S
Corporation status, said restriction on transfer shall be
made a part of the Bylaws so long as said agreements is in
force and effect.
Article VIII: Fiscal Year
The fiscal year of the Corporation shall begin on the 1st
day of January and end on the 31st day of December of each
year.
Article IX: Dividends
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares
in the manner and upon the terms and condition provided by
law and its Articles of Incorporation.
Article X: Corporate Seal
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon
the name of the Corporation and the state of incorporation
and the words "Corporate Seal."
Article XI: Waiver of Notice
Unless otherwise provided by law, whenever any notice is
required to be given to any shareholder or Director of the
Corporation under the provision of the Articles of
Incorporation or under the provisions of the applicable
Business Corporation Act, a waiver thereof in writing,
signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
Article XII: Amendments
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by the Board of Directors at any
regular or special meeting of the Board of Directors, or by
the shareholder as any regular or special meeting of the
shareholders.
The above Bylaws are certified to have been adopted by the
Board of Directors of the Corporation on the ________ day of
________, 2000.
Ken Heim, Director
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
FINANCIAL STATEMENTS
March 24, 2000
TABLE OF CONTENTS
PAGE #
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 2
STATEMENT OF OPERATIONS 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-9
INDEPENDENT AUDITORS' REPORT
Board of Directors March 27, 2000
THE HARBOR GROUP.NET CO.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of THE HARBOR GROUP.NET CO. (A
Development Stage Company), as of March 24, 2000 and the related statements
of operations, stockholders' equity and cash flows for the period February
15, 2000 (inception) to March 24, 2000. These financial statements are the
responsibility of the Company's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of THE HARBOR GROUP.NET CO. (A
Development Stage Company), as of March 24, 2000, and the results of its
operations and cash flows for the period February 15, 2000 (inception) to
March 24, 2000, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #5 to the financial
statements, the Company has suffered recurring losses from operations and has
no established source of revenue. This raises substantial doubt about its
ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/S/___________________________
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702) 361-8414
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
March 24, 2000
BALANCE SHEET
<TABLE>
ASSETS
<CAPTION>
CURRENT ASSETS
<S> <C>
Cash $ 0
TOTAL CURRENT ASSETS $ 0
OTHER ASSET $ 0
TOTAL OTHER ASSETS $ 0
TOTAL ASSETS $ 0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $ 0
TOTAL CURRENT LIABILITIES $ 0
STOCKHOLDERS' EQUITY (Note #4)
Preferred Stock
Par value $.001
Authorized 10,000,000
Issued and outstanding at
March 24, 2000 - None $ 0
Common stock
Par value $0.001
Authorized 25,000,000 shares
Issued and outstanding at
March 24, 2000 -
3,000,000 shares 3,000
Additional Paid-In Capital 0
Deficit accumulated during
The Development stage -3,000
TOTAL STOCKHOLDERS' EQUITY $ 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0
</TABLE>
The accompanying notes are an integral part of these financial statements
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
February 15, 2000(inception), to March 24, 2000
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
<S> <C>
INCOME
Revenue $ 0
EXPENSES
General and
Administrative $ 3,000
TOTAL EXPENSES $ 3,000
NET PROFIT/LOSS (-) $ -3,000
Net Profit/Loss(-)
per weighted share
(Note #1) $ -.001
Weighted average
Number of common
shares outstanding 3,000,000
</TABLE>
The accompanying notes are an integral part of these financial statements
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
<TABLE>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
February 15, 2000
Issued for Services 3,000,000 $3,000 $0
Net loss February 15,
2000 (inception) to
March 24, 2000 -3,000
Balance,
March 24, 2000 3,000,000 $3,000 $0 $-3,000
</TABLE>
The accompanying notes are an integral part of these financial statements
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
February 15, 2000 (inception), to March 24, 2000
STATEMENT OF CASH FLOWS
[CAPTION]
<TABLE>
<S> <C>
Cash Flows from
Operating Activities
Net Loss $ -3,000
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services +3,000
Changes in assets and
Liabilities 0
Net cash used in
Operating activities $0
Cash Flows from
Investing Activities 0
Cash Flows from
Financing Activities 0
Net Increase (decrease) 0
Cash,
Beginning of period 0
Cash, End of Period $0
</TABLE>
The accompanying notes are an integral part of these financial statements
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 24, 2000
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized February 15, 2000, under the laws of the State of
Nevada as THE HARBOR GROUP.NET CO. The Company currently has no operations
and in accordance with SFAS #7, is considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing bank that
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents. There are no cash
equivalents as of March 24, 2000.
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 24, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS
#109) "Accounting for Income Taxes". A deferred tax asset or liability is
recorded for all temporary difference between financial and tax reporting.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of Start-Up
Activities" which provides guidance on the financial reporting of start-up
costs and organization costs. It requires most costs of start-up activities
and organization costs to be expensed as incurred. SOP 98-5 is effective for
fiscal years beginning after December 15, 1998. With the adoption of
SOP 98-5, there has been little or no effect on the company's financial
statements.
Loss Per Share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per
share is computed by dividing losses available to common stockholders by the
weighted average number of common shares outstanding during the period.
Diluted loss per share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common stock. As of
February 11, 2000, the Company had no dilative common stock equivalents
such as stock options.
Year End
The Company has selected December 31st as its fiscal year-end.
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 24, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Policy in Regards to Issuance of Common Stock in a Non-Cash Transaction
The Company's accounting policy for issuing shares in a non-cash transaction
is to issue the equivalent amount of stock equal to the fair market value of
the assets or services received.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended March 24, 2000,
due to the net loss and no state income tax in Nevada, the state of the
Company's domicile and operations. The Company's total deferred tax asset as
of March 24, 2000 is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $ 0
Valuation allowance $ 0
Net deferred tax asset $ 0
</TABLE>
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 55,000,000 shares
with a par value $.001 per share.
Preferred Stock
The corporation has 10,000,000 shares of its preferred stock.
On February 15, 2000, the Company issued 3,000,000 shares of its $0.001 par
value common stock to its directors for services of $3,000.00.
THE HARBOR GROUP.NET CO.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 24, 2000
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern. The stockholders/officers and or directors have committed to
advancing the operating costs of the Company interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer
of the corporation provides office services without charge. Such costs are
immaterial to the financial statements and accordingly, have not been
reflected therein. The officers and directors of the Company are involved in
other business activities and may in the future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares
of common stock or preferred stock.
To Whom It May Concern: March 27, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant consents to
the inclusion of their report of February 14, 2000, on the Financial
Statements of THE HARBOR GROUP.NET CO., as of March 24, 2000, in any filings
that are necessary now or in the near future with the U.S. Securities and
Exchange Commission.
Very truly yours,
/S/__________________________
Barry L. Friedman
Certified Public Accountant
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorize, in the City of Las Vegas, State of
Nevada, on February 28th, 2000.
The Harbor Group.Net Co.
By: /s/ __________
Ken Heim, President
