SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Holographic Systems, Inc.
(Name of Small Business Issuer in its charter)
Nevada 84-0989940
(State or other jurisdiction of I.R.S. Employer Identification No.)
incorporation or organization)
4685 S. Highland Dr., Suite 202, Salt Lake City, UT 84117
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 801-274-1011
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered Each class is to be registered
________________________ ______________________________
________________________ ______________________________
Securities to be registered under Section 12(g) of the Act:
Common, $.001 par value
(Title of Class)
INFORMATION REQUIRED IN REGISTRATION STATEMENT
This Form 10-SB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-SB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may","will","expect","believe",
"anticipate","estimate" or "continue" or comparable terminology are
intended to identify forward-looking statements. These statements by their
nature involve substantial risks and uncertainties, and actual results may
differ materially depending on a variety of factors, many of which are not
within the Company's control. These factors include but are not limited to
economic conditions generally and in the industries in which the Company
may participate; competition within the Company's chosen industry,
including competition from much larger competitors; technological advances
and failure by the Company to successfully develop business relationships.
PART I
Item 1. Description of Business.
The Company was originally incorporated in the state of Colorado under
the name Mountain Ashe, Inc. on May 16, 1985. On September 23, 1987 the
Company changed its name to Holographic Systems, Inc., and on February 7,
2000, the Company changed its domicile to the state of Nevada.
The Company has not had active business operations since 1999 and is
considered a development stage company. The Company intends to seek,
investigate, and if warranted, acquire an interest in a business
opportunity. The Company does not propose to restrict its search for a
business opportunity to any particular industry or geographical area and
may, therefore, engage in essentially any business in any industry. The
Company has unrestricted discretion in seeking and participating in a
business opportunity, subject to the availability of such opportunities,
economic conditions and other factors.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise
of its business judgment. There is no assurance that the Company will be
able to identify and acquire any business opportunity which will ultimately
prove to be beneficial to the Company and its shareholders.
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no
specific business and may acquire or participate in a business opportunity
based on the decision of management which will, in all probability, act
without the consent, vote, or approval of the Company's shareholders.
Reports to Security Holders
Prior to the filing of this registration statement on Form 10-SB, the
Company was not subject to the reporting requirements of Section 12(a) or
15(d) of the Exchange Act. Upon effectiveness of this registration
statement, the Company will file annual and quarterly reports with the
Securities and Exchange Commission ("SEC"). The public may read and copy
any materials filed by the Company with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The Company is an electronic filer
and the SEC maintains an Internet site that contains reports and other
information regarding the Company which may be viewed at
http://www.sec.gov.
Sources of Opportunities
It is anticipated that business opportunities may be available to the
Company from various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals.
The Company will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other business
and professional people. Although the Company does not anticipate engaging
professional firms specializing in business acquisitions or
reorganizations, if management deems it in the best interests of the
Company, such firms may be retained. In some instances, the Company may
publish notices or advertisements seeking a potential business opportunity
in financial or trade publications.
Criteria
The Company will not restrict its search to any particular business,
industry or geographical location. The Company may acquire a business
opportunity or enter into a business in any industry and in any stage of
development. The Company may enter into a business or opportunity
involving a "start up" or new company. The Company may acquire a business
opportunity in various stages of its operation.
In seeking a business venture, the decision of management of the
Company will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management group,
or product or industry, but will be based upon the business objective of
seeking long-term capital appreciation in the real value of the Company.
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; the history of
operations, if any; prospects for the future; the nature of present and
expected competition; the quality and experience of management services
which may be available and the depth of the management; the potential for
further research, development or exploration; the potential for growth and
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services, trade or service marks, name
identification; and other relevant factors.
Generally, the Company will analyze all available factors in the
circumstances and make a determination based upon a composite of available
facts, without reliance upon any single factor as controlling.
Methods of Participation of Acquisition
Specific business opportunities will be reviewed and, on the basis of
that review, the legal structure or method of participation deemed by
management to be suitable will be selected. Such structures and methods
may include, but are not limited to, leases, purchase and sale agreements,
licenses, joint ventures, other contractual arrangements, and may involve a
reorganization, merger or consolidation transaction. The Company may act
directly or indirectly through an interest in a partnership, corporation,
or other form of organization.
Procedures
As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and conduct other reasonable measures.
The Company will generally request that it be provided with written
materials regarding the business opportunity containing such items as a
description of product, service and company history; management resumes;
financial information; available projections with related assumptions upon
which they are based; an explanation of proprietary products and services;
evidence of existing patents, trademarks or service marks or rights
thereto; present and proposed forms of compensation to management; a
description of transactions between the prospective entity and its
affiliates; relevant analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; and other
information deemed relevant.
Competition
The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity. The primary competition is from
other companies organized and funded for similar purposes, small venture
capital partnerships and corporations, small business investment companies
and wealthy individuals.
Employees
The Company does not currently have any employees but relies upon the
efforts of its officer and director to conduct the business of the Company.
Item 2. Management's Discussion And Analysis Of Financial Statements
Plan of Operation
The Company has little cash and has experienced losses from inception.
As of March 31, 2000, the Company had no cash. As of that date, the
Company had no outstanding liabilities. The Company has no material
commitments for capital expenditures for the next twelve months.
The Company was previously in the business of marketing PC computers
and accessories and during 1999 ceased operations. The Company is
currently considered to be a development stage company and is actively
seeking a new business opportunity.
The Company believes that its current cash needs can be met for at
least the next twelve months and by loans from its officers or the sale of
stock. However, should the Company obtain a business opportunity, it may
be necessary to raise additional capital. This may be accomplished by
selling common stock of the Company, taking loans from officers or seeking
other forms of debt financing.
Management of the Company intends to actively seek business
opportunities for the Company during the next twelve months.
Item 3. Description of Property
The Company does not currently own any property. The Company utilizes
office space on a rent-free basis in the office of its officer located at
4685 S. Highland Drive, Suite 202, Salt Lake City, UT 84117. This
arrangement is expected to continue until such time as the Company becomes
involved in a business opportunity which necessitates expansion or
relocation.
Item 4. Security Ownership of Certain Beneficial Owners and Management;
Changes in Control
The following table sets forth as of May 16, 2000, the name and the
number of shares of the Registrant's Common Stock, par value $.001 per
share, held of record or beneficially by each person who held of record, or
was known by the Registrant to own beneficially, more than 5% of the
186,964 issued and outstanding shares of the Registrant's Common Stock, and
the name and shareholdings of each director and of all officers and
directors as a group.
Title of Name and Address of Amount and Nature of
Class Beneficial Owner Beneficial Ownership % of Class
Common Justeene Blankenship (1) -0- -0-
4685 S. Highland Dr., Suite 202
Salt Lake City, UT 84117
Common John Chymboryk 25,000 13.37%
5882 S. 900 E., #202
Salt Lake City, UT 84121
Common Kip Eardley 25,000 13.37%
5882 S. 900 E., #202
Salt Lake City, UT 84121
Common Brigitte Kalb 11,000 5.88%
256 E. Hamilton #E
Campbell, CA 95008
Common Ronald J. Miller 12,125 6.48%
501 S. Cherry St., #500
Denver, CO 80222
Common Glenn G. Smith 47,652 25.49%
1250 Silverado Dr.
San Jose, CA 95008
Common Ao Vnitt 12,000 6.42%
18, Unnatov Street
125083 Moscow, Russia
Common Parker Waechter 11,000 5.88%
256 E. Hamilton, #E
Campbell, CA 95008
Common Officers and Directors -0- -0-
as a Group: 1 person
(1) Officer and/or director.
There are no contracts or other arrangements that could result in a
change of control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth as of May 16, 2000, the name, age, and
position of each executive officer and director and the term of office of
each director of the Corporation.
Name Age Position Director or Officer Since
Justeene Blankenship 41 President, Secretary, December 30, 1999
Treasurer and Sole
Director
All officers hold their positions at the will of the Board of
Directors. All directors hold their positions for one year or until their
successors are elected and qualified.
Set forth below is certain biographical information regarding each of
the Company's executive officers and directors:
Justeene Blankenship, age 41, President, Secretary, Treasurer and Sole
Director. Ms. Blankenship is Chief Financial Officer for Pacific
Management Services, Inc., a merger and acquisition company, with over
fifteen years of experience working with the financial side of publicly
traded corporations, including directing accountants and attorneys. She
has had a diverse background working with the computer hardware, mortgage
banking and real estate industries and has had extensive experience in
Initial Public Offerings and assisting with reverse mergers. Early in her
career, Ms. Blankenship ran Blankenship & Associates, an accounting firm
whose main focus was small companies.
Ms. Blankenship is also the sole officer and director of Digicom Tech,
Inc., a publicly traded company and is on the Board of trustees of PEACE, a
non-profit charitable organization created to provide environmental
education for children.
To the knowledge of management, during the past five years, no present
or former directors, executive officer or person nominated to become a
director or an executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within two years before
the time of such filing, or any corporation or business association of
which he was an executive officer at or within two years before the time of
such filing;
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations or other minor
offenses);
(3) was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from or otherwise limiting, the
following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, associated person of any of the foregoing, or as an
investment advisor, underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment company, or
engaging in or continuing any conduct or practice in connection with such
activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of
federal or state securities laws or federal commodities laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or state
authority barring, suspending, or otherwise limiting for more than 60 days
the right of such person to engage in any activity described above under
this Item, or to be associated with persons engaged in any such activity.
(5) was found by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission to have violated any federal
or state securities law, and the judgment in such civil action or finding
by the Securities and Exchange Commission has not been subsequently
reversed, suspended, or vacated
(6) was found by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any federal
Commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
Item 6. Executive Compensation.
The Company has no arrangements for the remuneration of its officers
and directors, except that they will be entitled to receive reimbursement
for actual, demonstrable out-of-pocket expenses, including travel expenses,
if any, made on the Company's behalf in the investigation of business
opportunities. No remuneration has been paid to the Company's officers or
directors prior to the filing of this Form 10-SB. There are no agreements
or understandings with respect to the amount or remuneration those officers
and directors are expected to receive in the future. Management takes no
salaries from the Company and does not anticipate receiving any salaries in
the foreseeable future.
Compensation of Directors
None.
Employment Contracts and Termination of Employment and Change in Control
Arrangement
There are no employment contracts between the Company and any of its
officers or directors. Management takes no salaries from the Company and
does not anticipate receiving any salaries in the foreseeable future.
There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person which would in any
way result in payments to any such person's employment with the company or
its subsidiaries, or any change in control of the Company, or a change in
the person's responsibilities following a change in control of the Company.
Item 7. Certain Relationships and Related Transactions.
Although there are no current related party transactions, the
Company's officers, directors and major shareholder have made an oral
undertaking to make loans to the Company in amounts sufficient to enable
the Company to satisfy its reporting requirements and other obligations
incumbent on it as a public company, and to commence, on a limited basis,
the process of investigating possible merger and acquisition candidates.
Any such loans will be interest free and are intended to be repaid at a
future date, if or when the Company shall have sufficient funds. The
potential loans are intended to provide for the payment of filing fees,
professional fees, printing and copying fees and other miscellaneous fees.
The Company utilizes office space provided by Justeene Blankenship,
President of the Company, at no charge to the Company.
Item 8. Description of the Securities.
The Company is presently authorized to issue 100,000,000 shares of
$.001 par value common stock. All shares, when issued, will be fully paid
and nonassessable. All shares are equal to each other with respect to
liquidation and dividend rights. Holders of voting shares are entitled to
one vote for each share they own at any Shareholders' meeting.
Holders of shares of common stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds legally
available therefor, and upon liquidation are entitled to participate pro-
rata in a distribution of assets available for such distribution to
Shareholders. There are no conversion, preemptive, or other subscription
rights or privileges with respect to any shares.
The common stock of the Company does not have cumulative voting rights
which means that the holders of more than 50% of the voting shares voting
for election of directors may elect all of the directors if they choose to
do so. In such event, the holders of the remaining shares aggregating less
than 50% will not be able to elect any directors.
The Company has appointed Securities Transfer Corporation, 16910
Dallas Parkway, Suite 100, Dallas, TX 75248, telephone 972-447-9890, as
the transfer agent and registrar for the Company's securities.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters.
The Company's common stock is listed on the Pink Sheets under the
symbol "HLGS". As of May 16,2000, the Company had 106 shareholders holding
186,964 shares of common stock. There was no active trading market for the
Company's common stock in 1998 or 1999. A bid for the Company's common
stock was first available on February 24, 2000.
YEAR CLOSING BID CLOSING ASK
HIGH LOW HIGH LOW
1998 No trading activity
1999 No trading activity
2000
Feb. 24 through .001 .001 None None
March 31
The above quotations, as provided by the National Quotation Bureau,
LLC., represent prices between dealers and do not include retail markup,
markdown or commission. In addition, these quotations do not represent
actual transactions.
The Company has not paid, nor declared, any dividends since its
inception and does not intend to declare any such dividends in the
foreseeable future. The Company's ability to pay dividends is subject to
limitations imposed by Nevada law. Under Nevada law, dividends maybe paid
to the extent that the corporation's assets exceed its liabilities and it
is able to pay its debts as they become due in the usual course of
business.
Item 2. Legal Proceedings.
No legal proceedings are threatened or pending against the Company or
any of its officers or directors. Further none of the Company's officers
or directors or affiliates of the Company are parties against the Company
or have any material interests in actions that are adverse to the Company's
interests.
Item 3. Changes in and Disagreements with Accountants.
None.
Item 4. Recent Sales of Unregistered Securities.
In February 2000, the Company sold 50,000 shares of common stock to
two individuals for services rendered valued at $1,000. The Company relied
upon Section 4(2) of the Securities Act of 1933 to effect the transaction.
The shares were issued in a private transaction that did not involve any
public solicitation or sales.
Item 5. Indemnification of Directors and Officers.
There are no provisions in the Nevada corporate law or the Articles of
Incorporation of the Company requiring the corporation to indemnify any of
the Company's officers and directors.
The Articles of Incorporation of the Company provide indemnification as
follows:
As the Board of Directors may from time to time provide in the By-laws
or by resolution, the corporation may indemnify its officers, directors,
agents and other persons to the full extent permitted by the laws of the
State of Nevada.
The registrant's Articles of Incorporation limit liability of its
Officers and Directors to the full extent permitted by the Nevada Business
Corporation Act.
(a) Section 78.751 of the Nevada Business Corporation Act provides
that each corporation shall have the following powers:
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation,
by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suitor proceeding if he acted in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contenders or its equivalent, does not, of itself create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal
action or proceeding, he had reasonable cause to believe that his
conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him
in connection with the defense or settlement of the action or suit if
he acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to
which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction,
determines upon application that in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity
for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections 1 and 2,
or in defense of any claim, issue or matter therein, he must be
indemnified by the corporation against expenses, including attorneys'
fees, actually and reasonably incurred by him in connection with the
defense.
4. Any indemnification under subsections 1 and 2, unless ordered by a
court or advanced pursuant to subsection 5, must be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee
or agent is proper in the circumstances. The determination must be
made: (a) By the stockholders; (b) By the board of directors by
majority vote of a quorum consisting of directors who were not parties
to the act, suit or proceeding; (c) If a majority vote of a quorum
consisting of directors who were not parties to the act, suit or
proceeding so orders, by independent legal counsel, in a written
opinion; or (d) If a quorum consisting of directors who were not
parties to the act, suit or proceeding cannot be obtained, by
independent legal counsel in a written opinion.
5. The certificate or articles of incorporation, the bylaws or an
agreement made by the corporation may provide that the expenses of
officers and directors incurred in defending a civil or criminal
action, suit or proceeding must be paid by the corporation as they are
incurred and in advance of the final disposition of the action, suit
or proceeding, upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined
by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this subsection do
not affect any rights to advancement of expenses to which corporate
personnel other than directors or officers may be entitled under any
contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section: (a) Does not exclude any
other rights to which a person seeking indemnification or advancement
of expenses may be entitled under the certificate or articles of
incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his
official capacity or an action in another capacity while holding his
office, except that indemnification, unless ordered by a court
pursuant to subsection 2 or for the advancement of expenses made
pursuant to subsection 5, may not be made to or on behalf of any
director or officer if a final adjudication establishes that his acts
or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action. (b)
Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to officers and directors of the
Company pursuant to the provisions of the Company's Certificate of
Incorporation, the Company has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
PART F/S
The financial statements of the Company appear at the end of this report
following the signature page, beginning with the Index to Financial
Statements.
PART III
Item 1. Index and Description of Exhibits.
Exhibit
Number Title of Document Location
1 Articles of Incorporation (Colorado) EX-3.(i).1
2 Amendment to Articles of Incorporation EX-3.(i).2
3 Plan of Merger EX-2.1
4 Articles of Merger EX-2.2
5 Articles of Incorporation (Nevada) EX-3.(i).3
6 Bylaws EX-3.(ii)
7 Financial Data Schedule EX-27
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
HOLOGRAPHIC SYSTEMS, INC.
Date: May 23, 2000 By: /s/ Justeene Blankenship
------------------------
Justeene Blankenship
President and Sole Director
INDEX TO THE FINANCIAL STATEMENTS
Independent Auditors Report
Audited Balance Sheet for the Years Ended December 31, 1999 and 1998.
Audited Statements of Operations for the Years Ended December 31, 1999,
1998 and 1997.
Audited Statement of Changes in Stockholders' Equity from January 1, 1997
to December 31, 1999.
Audited Statement of Cash Flows for the Years Ended December 31, 1999, 1998
and 1997.
Notes to the Financial Statements.
Reviewed Balance Sheet for the Period Ended March 31, 2000 (unaudited) and
December 31, 1999.
Reviewed Statements of Operations for the Three Months Ended March 31, 2000
(unaudited) and the Years Ended December 31, 1999 and 1998 and the Period
January 1, 2000 to March 31, 2000.
Reviewed Statement of Cash Flows for the Three Months Ended March 31, 2000
(unaudited) and the Years Ended December 31, 1999 and 1998 and the Period
January 1, 2000 to March 31, 2000.
Notes to the Financial Statements.
[Letterhead]
Board of Directors
Holographic Systems, Inc.
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of Holographic Systems,
Inc. at December 31, 1999 and December 31, 1998 and the statements of
operations, stockholders' equity, and cash flows for the years ended
December 31, 1999, 1998 and 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted 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 balance sheet presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Holographic Systems,
Inc. at December 31, 1999, and December 31, 1998, and the results of
operations, and cash flows for the years ended December 31, 1999, 1998, and
1997, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered
recurring losses from operations from its inception and does not have the
necessary working capital for any future planned activity, which raises
substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters are described in Note 4. these
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Anderson, Anderson & Strong
Salt Lake City, Utah
March 6, 2000
<TABLE>
Holographic Systems, Inc.
BALANCE SHEETS
December 31, 1999 and December 31, 1998
<CAPTION>
Dec 31, Dec 31,
1999 1998
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 483 $ 637
-------- --------
Total Current Assets $ 483 $ 637
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,000 $ -
-------- -------
Total Current Liabilities 2,000 -
-------- -------
STOCKHOLDERS' EQUITY
Common stock
100,000,000 shares authorized,
at $0.001 par value;
136,964 shares issued and
outstanding 137 137
Capital in excess of par value 791,204 791,204
Accumulated deficit (792,858) (790,704)
-------- --------
Total Stockholders'
Equity (Deficiency) $ ( 1,517) $ 637
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 483 $ 637
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
Holographic Systems, Inc.
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1999, 1998 and 1997
<CAPTION>
Dec 31, Dec 31, Dec 31,
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
REVENUES $ 74,240 $ 79,433 $ 186,520
COST OF SALES 40,877 49,833 142,703
------- ------- --------
Gross Profit 33,363 29,600 43,817
EXPENSES 35,517 31,575 57,088
------- ------- --------
NET PROFIT (LOSS) -
before other expenses (2,154) (1,975) (13,271)
LOSS OF ASSETS - - 530,000
------- ------- --------
NET PROFIT (LOSS) $ (2,154) $ (1,975) $(543,271)
======= ======= ========
NET LOSS PER COMMON SHARE
Basic $ (.02) $ (.01) $ (3.97)
------- ------- --------
AVERAGE OUTSTANDING SHARES
Basic 136,964 136,964 136,964
------- ------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
Holographic Systems, Inc.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period January 1, 1997 to December 31, 1999
<CAPTION>
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
------ ------ ---------- -----------
<S> <C> <C> <C> <C>
Balance
January 1, 1997 136,949 $ 137 $ 791,204 $ (245,458)
Net operating loss
for the year ended
December 31, 1997 - - - (543,271)
Net operating loss
for the year ended
December 31, 1998 - - - (1,975)
------- ------ ------- -------
Balance
December 31, 1998 136,949 137 791,204 (790,704)
Net operating loss
for year ended
December 31, 1999 - - - (2,154)
------- ---- ------- -------
Balance
December 31, 1999 136,949 $ 137 $ 791,204 $ (792,858)
======= ==== ======== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
Holographic Systems, Inc.
STATEMENT OF CASH FLOWS
For the Years Ended December 31, 1999, 1998 and 1997
<CAPTION>
Dec 31, Dec 31, Dec 31,
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(2,154) $(1,975) $(543,271)
Adjustments to
reconcile net loss
to net cash provided
by operating activities
Change in accounts payable 2,000 - -
Loss of assets - - 530,000
----- ----- -------
Net Cash Used in Operations (154) (1,975) (13,271)
----- ----- -------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
----- ----- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Contributions to capital - - 11,400
----- ----- -------
Net Increase (Decrease)in Cash (154) (1,975) (1,871)
Cash at Beginning of Period 637 2,612 4,483
----- ----- -------
Cash at End of Period $ 483 $ 637 $ 2,612
===== ===== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
Holographic Systems, Inc.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the state of Colorado on May
16, 1985 with the name of "Mountain Ashe, Inc." with authorized common
stock of 100,000,000 shares at a par value of $.0001. On September 23,
1987 the name was changed to "Holographic Systems, Inc." and on February 7,
2000 the domicile was changed to the state of Nevada in connection with a
change in par value to $0.001.
On February 7, 2000 the Company completed a reverse common stock split of
one share for 20 outstanding shares. This report has been prepared showing
after stock split shares with a par value of $.001 from inception.
The Company has been in the business of marketing PC computers and
accessories and during 1999 ceased operations.
After 1999 the Company is considered to be a development stage company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On December 31, 1999, the Company had a net operating loss carry forward of
$792,858. The tax benefit from the loss carry forwards have been fully
offset by a valuation reserve because the use of the future tax benefit is
undeterminable since the Company has no operations. The loss carry forwards
expire starting in years 2001 though 2021.
Earnings (Loss) Per Share
Earnings (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding, after the stock split.
Financial instruments
The carrying amounts of financial instruments, including accounts payable,
are considered by management to be their estimated fair values.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130.
The adoption of this standard had no impact on the total stockholders'
equity on December 31, 1999.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
3. RELATED PARTY TRANSACTIONS
The statement of changes in stockholders' equity shows 136,964 shares of
common stock outstanding of which 93,902 shares are issued to related
parties.
4. GOING CONCERN
The Company intends to acquire interests in various business opportunities
which, in the opinion of management, will provide a profit to the Company
however there is insufficient working capital for any future planned
activity.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed
a strategy, which it believes will accomplish this objective through
additional equity funding and long term debt which will enable the Company
to operate for the coming year.
There can be no assurance that they will be successful in this effort.
5. SUBSEQUENT EVENTS
During February 2000 the Company issued 50,000 post split shares at $.02
per share to related parties for services.
<TABLE>
Holographic Systems, Inc.
BALANCE SHEETS
March 31, 2000 and December 31, 1999
<CAPTION>
Mar 31, Dec 31,
2000 1999
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ - $ 483
-------- --------
Total Current Assets $ - $ 483
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ - $ 2,000
-------- -------
Total Current Liabilities - 2,000
-------- -------
STOCKHOLDERS' EQUITY
Common stock
100,000,000 shares authorized,
at $0.001 par value; 186,964
shares issued and outstanding
on March 31, 2000; 136,964
on December 31, 1999 187 137
Capital in excess of par value 793,821 791,204
Accumulated deficit (794,008) (792,858)
-------- --------
Total Stockholders'
Equity (Deficiency) $ - $ (1,517)
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ - $ 483
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
Holographic Systems, Inc.
STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2000 and the
Years Ended December 31, 1999, 1998 and the Period
January 1, 2000 (date of inception of development stage)
To March 31, 2000
<CAPTION>
Jan 1, 2000
Mar 31, Dec 31, Dec 31, To Mar 31,
2000 1999 1998 2000
------- ------- ------- ----------
<S> <C> <C> <C> <C>
REVENUES $ - $ 74,240 $ 79,433 $ -
COST OF SALES - 40,877 49,833 -
------ ------ ------ ------
Gross Profit - 33,363 29,600 -
EXPENSES 1,150 35,517 31,575 1,150
------ ------ ------ ------
NET PROFIT (LOSS) $(1,150) $ (2,154) $ (1,975) $ (1,150)
====== ====== ====== ======
NET LOSS PER COMMON SHARE
Basic $ - $ (.01) $ - $ -
------ ------ ------ ------
AVERAGE OUTSTANDING SHARES
Basic 161,964 136,964 136,964
------- ------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
Holographic Systems, Inc.
STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 2000 and the
Years Ended December 31, 1999, 1998 and the Period
January 1, 2000 (date of inception of development stage)
To March 31, 2000
<CAPTION>
Jan 1, 2000
Mar 31, Dec 31, Dec 31, To
2000 1999 1998 Mar 31, 2000
------ ------ ------ ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(1,150) $(2,154) $(1,975) $ (1,150)
Adjustments to
reconcile net loss
to net cash provided
by operating activities
Change in accounts payable (2,000) 2,000 - (2,000)
Issuance of capital stock
and contributions to
capital - expenses 2,667 - - 2,667
----- ----- ----- -----
Net Cash Used in Operations (483) (154) (1,975) (483)
----- ----- -----
CASH FLOWS FROM INVESTING ACTIVITIES - - - -
----- ----- ----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Contributions to capital - - - -
----- ----- ----- -----
Net Increase (Decrease)in Cash (483) (154) (1,975) (483)
Cash at Beginning of Period 483 637 2,612 483
----- ----- ----- -----
Cash at End of Period $ - $ 483 $ 637 $ -
===== ===== ===== =====
</TABLE>
The accompanying notes are an integral part of these financial statements.
Holographic Systems, Inc.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the state of Colorado on May
16, 1985 with the name of "Mountain Ashe, Inc." with authorized common
stock of 100,000,000 shares at a par value of $.0001. On September 23,
1987 the name was changed to "Holographic Systems, Inc." and on February 7,
2000 the domicile was changed to the state of Nevada in connection with a
change in par value to $0.001.
On February 7, 2000 the Company completed a reverse common stock split of
one share for 20 outstanding shares. This report has been prepared showing
after stock split shares with a par value of $.001 from inception.
The Company has been in the business of marketing PC computers and
accessories and during 1999 ceased operations.
After 1999 the Company is considered to be a development stage company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On March 31, 2000, the Company had a net operating loss carry forward of
$794,008. The tax benefit from the loss carry forwards have been fully
offset by a valuation reserve because the use of the future tax benefit is
undeterminable since the Company has no operations. The loss carry forwards
expire starting in years 2001 though 2021.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding. Diluted net income
(loss) per shares amounts are computed using the weighted average number of
common shares and common equivalent shares outstanding as if shares had
been issued on the exercise of the preferred share rights unless the
exercise becomes antidilutive and then only the basic per share amounts are
shown in the report
Financial instruments
The carrying amounts of financial instruments, including accounts payable,
are considered by management to be their estimated fair values.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130.
The adoption of this standard had no impact on the total stockholders'
equity on March 31, 2000.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
3. GOING CONCERN
The Company intends to acquire interests in various business opportunities
which, in the opinion of management, will provide a profit to the Company
however there is insufficient working capital for any future planned
activity.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed
a strategy, which it believes will accomplish this objective through
additional equity funding and long term debt which will enable the Company
to operate for the coming year.
There can be no assurance that they will be successful in this effort.
ARTICLES OF INCORPORATION
MOUNTAIN ASHE, INC.
The undersigned natural person, being more than eighteen (18) years of
age, hereby establishes a corporation pursuant to the statutes of Colorado
and adopts the following Articles of Incorporation.
FIRST: The name of the corporation is:
MOUNTAIN ASHE, INC.
SECOND: The corporation shall have perpetual existence.
THIRD: (a) Purposes. The nature, objects and purposes for which the
corporation is organized are to develop, design, manufacture and market
games and other novelty items, to invest in real and personal property, and
to engage in any other lawful activity permitted under the laws of the
State of Colorado, whether or not connected with any of the foregoing
objects and purposes, which is calculated, directly or indirectly, to
promote the interests of the corporation or to enhance the value of its
property.
(b) Powers. In furtherance of the foregoing purposes the corporation
shall have and may exercise all of the rights, powers, and privileges now
or hereafter conferred upon corporations organized under the laws of
Colorado. In addition, it may do everything necessary, suitable or proper
for the accomplishment of any of its corporate purposes.
FOURTH: (a) Authorized Shares. The aggregate number of shares which
the corporation shall have authority to issue is one hundred million
(100,000,000) shares of Common Stock, each having a par value of $.0001,
which shares shall be designated "Common Stock".
(b) Consideration for Shares. All shares of Common Stock shall be
issued by the corporation for cash, property, or services actually
performed, for no less than the par value of $.0001 per share of Common
Stock. All shares shall be fully paid and nonassessable.
(c) Dividends. Dividends in cash, property or shares of the
corporation may be paid upon the Common Stock, as and when declared by the
board of directors, out of funds of the corporation to the extent and in
the manner permitted by law.
(d) Voting Rights; Cumulative Voting. Each outstanding share of
Common Stock shall be entitled to one vote and each fractional share of
Common Stock shall be entitled to a corresponding fractional vote on each
matter submitted to a vote of shareholders. Cumulative voting shall not be
allowed in the election of directors of the corporation.
(e) Denial of Preemptive Rights. No holder of any shares of the
corporation, whether now or hereafter authorized, shall have any preemptive
or preferential right to acquire any shares or securities of the
corporation, including shares or securities held in the treasury of the
corporation.
(f) Distribution in Liquidation. Upon any liquidation, dissolution
or winding up of the corporation, and after paying or adequately providing
for the payment of all its obligations, the remainder of the assets of the
corporation shall be distributed, either in cash or in kind, pro rata to
the holders of the Common Stock.
(g) Partial Liquidation. The Board of Directors may, from time to
time, distribute to the shareholders in partial liquidation, out of stated
capital, or capital surplus of the corporation, a portion of its assets, in
cash or property, subject to the limitations contained in the statutes of
Colorado.
FIFTH: Three directors shall constitute the initial board, their names
and addresses being as follows:
Richard Peltz Gregory B. Weinstein Anthony J. Ramirez
1532 Jackson St. 368 E. 88th Avenue 1390 Emerson
Denver, Co 80206 #636 #506
Thornton, CO 80229 Denver, CO 80218
SIXTH: The address of the registered office of the corporation is 469
South Cherry Street, Suite 200, Denver, Colorado 80222. The name of its
initial registered agent at such address is Ronald J. Miller. The
corporation may conduct part or all of its business in any other part of
Colorado, or of the United States or of the World. It may hold, purchase,
mortgage, lease and convey and personal property in any of such places.
SEVENTH: The corporation shall be entitled to treat the registered holder
of any shares of the corporation as the owner thereof for all purposes,
including all rights deriving from such shares, and shall not be bound to
recognize any equitable or other claim to, or interest in , such purchaser,
assignee, transferee or other person becomes the registered holder of such
shares, whether or not the corporation shall have either actual or
constructive notice of the interests of such purchaser, assignee, or
transferee or other person. The purchaser, assignee, or transferee of any
of the shares of the corporation shall not be entitled: to receive notice
of the meetings of the shareholders; or to own, enjoy and exercise any
other property or rights deriving from such shares against the corporation,
until such purchaser, assignee, or transferee has become the registered
holder of such shares.
EIGHTH: The following provisions are inserted for the management of the
new business and for the conduct of the affairs of the corporation, and the
same are in furtherance of and not in limitation or exclusion of the powers
conferred by law.
(a) Right of Directors to Contract with Corporation. No contract or
other transaction between the corporation and one or more of its directors
or any other corporation, firm, association, or entity in which one or more
of its directors are directors or officers or are financially interested
shall be either void or voidable solely because of such relationship or
interest or solely because such directors are present at the meeting of the
board of directors or a committee thereof which authorizes approves, or
ratifies such contract or transaction or solely because their votes are
counted for such purpose if:
(i) The fact of such relationship of interest is disclosed or known
to the board of directors or committee which authorizes, approves, or
ratifies the contract or transaction by a vote or consent sufficient
for the purpose without counting the votes or consents of such
interested directors; or
(ii) The fact of such relationship or interest is disclosed or known
to the shareholders entitled to vote and they authorize, approve, or
ratify such contract or transaction by vote or written consent; or
(iii) The contract or transaction is fair and reasonable to the
corporation.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or a committee
thereof which authorizes, approves, or ratifies such contract or
transaction.
(b) Corporate Opportunity. The officers, directors and other members
of management of this corporation shall be subject to the doctrine of
"corporate opportunities" only insofar as it applies to business
opportunities in which this corporation has expressed an interest as
determined from time to time by this corporation's board of directors as
evidenced by resolutions appearing in the corporation's minutes. Once such
areas of interest are delineated, all such business opportunities within
such areas of interest which come to the attention of the officers,
directors, and other members of management of this corporation shall be
disclosed promptly to this corporation and made available to it. The board
of directors may reject any business opportunity presented to it and
thereafter any officer, director or other member of management may avail
himself of such opportunity. Until such time as this corporation, through
its board of directors, has designated an area of interest, the officers,
directors and other members of management of this corporation shall be free
to engage in such areas of interest on their own and this doctrine shall
not limit the rights of any officer, director or other member of management
of this corporation to continue a business existing prior to the time that
such area of interest is designated by the corporation. This provision
shall not be construed to release any employee of this corporation (other
than an officer, director or member of management) from any duties which he
may have to this corporation.
(c) Indemnification of Directors and Others.
(i) The corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonablely incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that the person
did not act in good faith and in a manner which he reasonably believed
to be in the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that
his conduct was unlawful.
(ii) The corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suite if
he acted in good faith and in a manner he reasonably believed to be in the
best interest of the corporation; but no indemnification shall be made in
respect of any claim, issue or matter as to which such person has been
adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless and only to the extent that the court in
which such action or suit was brought determines upon application that,
despite the adjudication of liability, but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to
indemnification for such expenses which such court deems proper.
(iii) To the extent that a director, officer, employee of agent of the
corporation has been successful on the merits in defense of any action,
suit, or proceeding referred to in this section, or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under (i) or (ii) of this section (unless
ordered by a court) shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the
director, officer, employee of agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in said paragraphs
(i) or (ii) of this Article. Such determination shall be made by the board
of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or, if such a quorum
is not obtainable or even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or by the
shareholders.
(v) Expenses (including attorneys' fees) incurred in defending a civil or
criminal action, suit, or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the board of directors as provided in paragraph (iv) of this
section upon receipt of any undertaking by or on behalf of the director,
officer, employee or agent or repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the corporation as
authorized in this section.
(vi) The indemnification provided by this section shall not be deemed
exclusive of other rights to which those indemnified may be entitled under
the Articles of Incorporation, any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise, and any procedure provided for by
any of the foregoing, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of heirs, executors, and administrators of such
a person.
(vii) The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
(d) Shareholder Voting.
(i) One third of the shares entitled to vote represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders.
(ii) When, with respect to any action to be taken by shareholders of this
Corporation, the laws of Colorado require the vote or concurrence of the
holders of two-thirds of the outstanding shares, of the shares entitled to
vote thereon, or of any class or series, such action may be taken by the
vote or concurrence of a majority of such shares or class or series
thereof.
(e) Adoption and Amendment of Bylaws. The initial bylaws of the
corporation shall be adopted by its board of directors. The power to
alter, amend or repeal the bylaws or adopt new bylaws shall be vested in
the board of directors, but the holders of common stock may also alter,
amend or repeal the bylaws or adopt new bylaws. The bylaws may contain any
provisions for the regulation and management of the affairs of the
corporation not inconsistent with the law or these Articles of
Incorporation.
Ninth: The name and address of the incorporator is:
Ronald J. Miller
469 South Cherry Street, Suite 200
Denver, Colorado 80222
Dated this 15th day of May, 1985.
/s/ Ronald J. Miller
---------------------
Ronald J. Miller
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
MOUNTAIN ASHE, INC.
Pursuant to the provisions of the Colorado Corporation Code, Mountain
Ashe, Inc. (the "Corporation") adopts the following Articles of Amendment
to its Articles of Incorporation:
FIRST: The name of the Corporation is Mountain Ashe, Inc.
SECOND: The following amendments were adopted vote of the shareholders
of the Corporation sufficient for approval on August 19, 1987, in the
manner prescribed by the Colorado Corporation Code:
Amendment to Articles of Incorporation. The Articles of Incorporation are
amended by deletion of the current Article First and substitution of the
following:
"FIRST: The name of the corporation is Holographic Systems, Inc."
THIRD: This amendment does not provide for any exchange,
reclassification, or cancellation of issued shares.
FOURTH: This amendment does not effect a change in the amount of stated
capital of the Corporation.
MOUNTAIN ASHE, INC.
By: /s/ Glenn G. Smith
----------------------
Glenn G. Smith, President
and Secretary
STATE OF COLORADO )
)ss
COUNTY OF ARAPAHOE )
Before me, Rosemarie Simone, a Notary Public in and for the said County
and State, personally appeared Glenn G. Smith, who acknowledged before me
that he is the President of Mountain Ashe, Inc., a Colorado corporation,
and that he signed the foregoing Articles of Amendment as his free and
voluntary act and deed for the uses and purposes therein set forth, and
that the facts contained therein are true.
In witness whereof, I have hereunto set my hand and seal this 17th day of
September, 1987.
My Commission Expires: August 12, 1991.
/s/ Rosemarie J. Simone
Notary Public
Plan of Merger
of
Holographic Systems, Inc.
(A Colorado Corporation)
and
Holographic Systems, Inc.
(A Nevada Corporation)
THIS PLAN OF MERGER (the "Plan") dated as of February 7, 2000 is entered
into by and between Holographic Systems, Inc., a Colorado corporation
("HSCO"), and Holographic Systems, Inc., a Nevada corporation ("HSNV"),
such corporations being hereinafter collectively referred to as the
"Constituent Corporations."
Premises
WHEREAS, HSNV is a corporation duly organized and existing under the laws
of the state of Nevada, having an authorized capital of 100,000,000 shares
of common stock, par value $0.001 per share (the "Common Stock of HSNV"),
of which 1000 shares are issued and outstanding as of the date hereof;
WHEREAS, HSCO is a corporation duly organized and existing under the laws
of the state of Colorado, having an authorized capital of 100,000,000
shares of common stock, par value $0.0001 per share (the "Common Stock of
HSCO"), of which 3,652,979 shares are issued and outstanding as of the date
hereof; and
WHEREAS, the respective boards of directors and shareholders of the
Constituent Corporations have each duly approved this Plan providing for
the merger of HSCO with and into HSNV with HSNV as the surviving
corporation as authorized by the statutes of the states of Colorado and
Nevada.
Agreement
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for the purpose of setting forth the
terms and conditions of said merger and the manner and basis of causing the
shares of HSCO to be converted into shares of stock of HSNV and such other
provisions as are deemed necessary or desirable, the parties hereto have
agreed and do hereby agree, subject to the approval and adoption of this
Plan by the requisite vote of the stockholders of each Constituent
Corporation, and subject to the conditions hereinafter set forth, as
follows:
Article I
Merger and Name of Surviving Corporation
On the effective date of the merger, HSCO and HSNV shall cease to exist
separately and HSCO shall be merged with and into HSNV, which is hereby
designated as the "Surviving Corporation," the name of which on and after
the Effective Date (as hereinafter defined) of the merger shall be
"Holographic Systems, Inc." or such other name as may be available and to
which the parties may agree.
Article II
Terms and Conditions of Merger
The terms and conditions of the merger (in addition to those set forth
elsewhere in this Plan) are as follows:
(a) On the Effective Date of the merger:
(1) HSCO shall be merged into HSNV to form a single corporation, and
HSNV shall be designated herein as the Surviving Corporation.
(2) The separate existence of HSCO shall cease.
(3) The Surviving Corporation shall have all the rights, privileges,
immunities, and powers and shall be subject to all duties and liabilities
of a corporation organized under the laws of the state of Nevada.
(4) The Surviving Corporation shall thereupon and thereafter possess
all the rights, privileges, immunities, and franchises, of a public as well
as a private nature, of each of the Constituent Corporations; all property,
real, personal, and mixed, and all debts due of whatever account, including
subscriptions to shares, and all and every other interest, of or belonging
to or due to each of the Constituent Corporation shall be taken and deemed
to be transferred to and vested in the Surviving Corporation without
further act or deed; the title to any real estate, or any interest therein,
vested in either Constituent Corporation shall not revert or be in any way
impaired by reason of the merger; the Surviving Corporation shall
thenceforth be responsible and liable for all the liabilities and
obligations of each of the Constituent Corporations; any claim existing or
action or proceeding pending by or against either of such Constituent
Corporations may be prosecuted as if the merger had not taken place, or the
Surviving Corporation may be substituted in place of the Constituent
Corporation; and neither the rights of creditors nor any liens on the
property of either of the Constituent Corporations shall be impaired by the
merger.
(b) On the Effective Date of the merger, the board of directors of the
Surviving Corporation shall consist of the members of the board of
directors of HSNV immediately prior to the merger, to serve thereafter in
accordance with the bylaws of the Surviving Corporation and until their
respective successors shall have been duly elected and qualified in
accordance with such bylaws and the laws of the state of Nevada.
(c) On the Effective Date of the merger, the officers of the Surviving
Corporation shall be the officers of HSNV immediately prior to the merger,
with such officers to serve thereafter in accordance with the bylaws of the
Surviving Corporation and until their respective successors shall have been
duly elected and qualified in accordance with such bylaws and the laws of
the state of Nevada.
If on the Effective Date of the merger, a vacancy shall exist in the
board of directors or in any of the offices of the Surviving Corporation,
such vacancy may be filled in the manner provided for in the bylaws of the
Surviving Corporation.
Article III
Manner and Basis of Converting Shares
The manner and basis of converting the shares of the Constituent
Corporations and the mode of carrying the merger into effect are as
follows.
(a) Each share of Common Stock of HSCO outstanding on the Effective Date
of the merger shall, without any action on the part of the holder thereof,
be converted into one fully paid and nonassessable share of Common Stock of
HSNV which shall, on such conversion, be validly issued and outstanding,
fully paid, and nonassessable, and shall not be liable to any further call,
nor shall the holder thereof be liable for any further payments with
respect thereto. After the Effective Date of the merger, each holder of an
outstanding certificate which prior thereto represented shares of Common
Stock of HSCO shall be entitled, on surrender thereof along with the
payment of $15 to HSCO's transfer agent Securities Stock Transfer, 16910
Dallas Parkway, Suite 100, Dallas, TX 75248, to receive in exchange
therefore a certificate or certificates representing the number of whole
shares of Common Stock of HSNV, which such shares shall have converted
into. Until so surrendered, each such outstanding certificate (which prior
to the Effective Date of the merger represented shares of Common Stock of
HSCO) shall for all purposes evidence the ownership of the shares of HSNV
into which such shares shall have been converted.
(b) All shares of the Common Stock of HSNV into which shares of the
Common Stock of HSCO shall have been converted pursuant to Article III
shall be issued in full satisfaction of all rights pertaining to the shares
of Common Stock of HSCO, as applicable.
(c) If any certificate for shares of HSNV is to be issued in a name
other than that in which the certificate surrendered in exchange therefor
is registered, it shall be a condition of the issuance thereof that the
certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer, that the transfer be in compliance with
applicable federal and state securities laws, and that the person
requesting such exchange pay to HSNV or any agent designated by it any
transfer or other taxes required by reason of the issuance of a certificate
for shares of HSNV in any name other than that of the registered holder of
the certificate surrendered, or establish to the satisfaction of HSNV or
any agent designated by it that such tax has been paid or is not payable.
Article IV
Certificate of Incorporation and Bylaws
The articles of incorporation of HSNV shall, on the merger becoming
effective, be and constitute the articles of incorporation of the Surviving
Corporation until amended in the manner provided by law. The bylaws of
HSNV shall, on the merger becoming effective, be and constitute the bylaws
of the Surviving Corporation until amended in the manner provided by law.
Article V
Shareholder Approval
This Plan shall be submitted to the stockholders of each of the
Constituent Corporations as provided by the laws of the States of Colorado
and Nevada. After the approval or adoption thereof by the stockholders of
each Constituent Corporation in accordance with the requirements of the
applicable laws, all required documents shall be executed, filed, and
recorded, and all required acts shall be done in order to accomplish the
merger under the provisions of the laws of the states of Colorado and
Nevada.
Article VI
Officers and Directors
The officers and directors of HSNV shall remain the officers and
directors of HSNV, after the Merger, and such officers and directors shall
serve until the next annual meeting of shareholders and until such time as
their successors are duly elected and shall qualify.
Article VII
Approval and Effective Date of the Merger; Miscellaneous Matters
1. The merger shall become effective when all the following actions
shall have been taken:
(a) This Plan shall be authorized, adopted, and approved by and on
behalf of each Constituent Corporation in accordance with the laws of the
states of Colorado and Nevada;
(b)This Plan, or certificate of merger in the form required, executed
and verified in accordance with the laws of the states of Colorado and
Nevada, shall be filed in the Offices of the Secretary of State of Colorado
and Nevada; and
(c) The date on which such actions are completed and such merger is
effected is herein referred to as the "Effective Date."
2. If at any time the Surviving Corporation shall deem or be advised
that any further grants, assignments, confirmations, or assurances are
necessary or desirable to vest, perfect, or confirm title in the Surviving
Corporation, of record or otherwise, to any property of HSCO acquired or to
be acquired by, or as a result of, the merger, the officers and directors
of HSCO or any of them shall be severally and fully authorized to execute
and deliver any and all such deeds, assignments, confirmations, and
assurances and to do all things necessary or proper so as to best prove,
confirm, and ratify title to such property in the Surviving corporation and
otherwise carry out the purposes of the merger and the terms of this Plan.
3. The Surviving Corporation may be served with process in the State of
Colorado in any proceeding for the enforcement of any obligation of HSCO as
well as for enforcement of any obligation of the Surviving Corporation
arising from the merger and in any proceeding for the enforcement of the
rights of a dissenting shareholder of HSCO against the Surviving
Corporation.
4. Such Surviving Corporation will promptly pay to the dissenting
shareholders of HSCO the amount, if any, to which they shall be entitled
under the provisions of the Colorado Revised Business Corporation Act with
respect to the rights of dissenting shareholders
5. The Secretary of State of the State of Colorado shall be irrevocable
appointed as the agent of the Surviving Corporation to accept service of
process in any such proceeding;
6. The Surviving Corporation's address for any service of process
received by the Secretary of State is Gateway Enterprises, 3230 E. Flamingo
Road, Suite 156, Las Vegas, NV 89121.
7. This Plan cannot be altered or amended, except pursuant to an
instrument in writing signed on behalf of the parties hereto.
8. For the convenience of the parties and to facilitate the filing and
recording of this Plan, any number of counterparts hereof may be executed,
each such counterpart shall be deemed to be an original instrument, and all
such counterparts together shall be considered one instrument.
9. This Plan shall be governed by and construed in accordance with the
laws of the state of Nevada.
The foregoing Plan of Merger, having been approved by the board of
directors of each Constituent Corporation, the president and secretary of
HSCO, and the president and secretary of HSNV, do hereby execute this Plan
of Merger this 7th day of February, 2000, declaring and certifying that
this is our act and deed and the facts herein stated are true.
Holographic Systems, Inc.
a Colorado corporation
/s/ Justeene Blankenship
By: Justeene Blankenship, President/Secretary
Holographic Systems, Inc.
a Nevada corporation
/s/ Justeene Blankenship
By: Justeene Blankenship, President/Secretary
ARTICLES OF MERGER
OF
HOLOGRAPHIC SYSTEMS, INC.
(A Colorado Corporation)
INTO
HOLOGRAPHIC SYSTEMS, INC.
(A Nevada Corporation)
The Undersigned, being sole Director of Holographic Systems, Inc., a
Colorado Corporation, and the sole officer and director of Holographic
Systems, Inc., a Nevada Corporation, hereby certify as follows:
1. A merger for the purpose of changing domicile has been approved
by the Board of Directors of Holographic Systems, Inc., a
Colorado corporation, and Holographic Systems, Inc., a Nevada
corporation. The Plan of Merger is located at the registered
office of the surviving corporation.
2. Shareholders owning 2,653,025 of the shares of common stock of
Holographic Systems, Inc., a Colorado corporation, voted in favor
of such merger on February 7, 2000, which number of shares is a
majority of the 3,652,979 shares outstanding and are sufficient
in number for approval. The sole shareholder of Holographic
Systems, Inc., a Nevada corporation, voted for such a plan of
merger on February 7, 2000.
3. A Notice, including a summary of the merger, was mailed to all
shareholders of the Colorado corporation on or about January 25,
2000.
4. Holographic Systems, Inc., a Nevada corporation, hereby agrees
that it will promptly pay to the dissenting shareholders, if any,
of Holographic Systems, Inc., a Colorado corporation, the amount,
if any, to which they shall be entitled under the provisions of
the Colorado Corporation Statutes with respect to the rights of
dissenting shareholders.
Effective the 7th day of February, 2000.
HOLOGRAPHIC SYSTEMS, INC. HOLOGRAPHIC SYSTEMS, INC.
A Colorado Corporation A Nevada Corporation
By: /s/ Justeene Blankenship By: /s/ Justeene Blankenship
------------------------ ------------------------
Justeene Blankenship, Justeene Blankenship,
President/Secretary President/Secretary
ARTICLES OF INCORPORATION
OF
HOLOGRAPHIC SYSTEMS, INC.
The undersigned, a natural person being more than eighteen years of
age, acting as incorporator of a corporation pursuant to the provisions of
the General Corporation Laws of the State of Nevada, does hereby adopt the
following Articles of Incorporation for such corporation:
Article I
Name
The name of the corporation is Holographic Systems, Inc..
Article II
Duration
The duration of the corporation is perpetual.
Article III
Purposes
The purposes for which this corporation is organized are:
Section 1. To engage in any lawful business or activity
which may be conducted under the laws of the State of Nevada or
any other state or nation wherein this corporation shall be
authorized to transact business.
Section 2. To purchase or otherwise acquire, own, mortgage,
sell, manufacture, assign and transfer or otherwise dispose of,
invest, trade, deal in and with real and personal property, of
every kind, class and description.
Section 3. To issue promissory notes, bonds, debentures and
other evidences of indebtedness in the furtherance of any of the
stated purposes of the corporation.
Section 4. To enter into or exercise contracts of any kind
and character, sealed or unsealed, with individuals, firms,
associations, corporations (private, public or municipal),
political subdivisions of the United States or with the
Government of the United States.
Section 5. To acquire and develop any interest in patents,
trademarks and copyrights connected with the business of the
corporation.
Section 6. To borrow money, without limitation, and give a
lien on any of its property as security for any borrowing.
Section 7. To acquire by purchase, exchange or otherwise,
all or any part of, or any interest in, the properties, assets,
business and good will of any one or more persons, firms,
associations or corporations either within or out of the State of
Nevada heretofore or hereafter engaged in any business for which
a corporation may now or hereafter be organized under the laws of
the State of Nevada; pay for the same in cash, property or the
corporation's own securities; hold, operate, reorganize,
liquidate, sell or in any manner dispose of the whole or any part
thereof; and in connection therewith, assume or guaranty
performance of any liabilities, obligations or contracts of such
persons, firms, associations or corporations and to conduct the
whole or any part of any business thus acquired.
Section 8. To purchase, receive, take, acquire or otherwise
acquire, own and hold, sell, lend, exchange, reissue, transfer or
otherwise dispose of, pledge, use, cancel and otherwise deal in
and with the corporation's shares and its other securities from
time to time to the extent, in the manner and upon terms
determined by the Board of Directors; provided that the
corporation shall not use its funds or property for the purchase
of its own shares of capital stock when its capital is impaired
or when the purchase would cause any impairment of the
corporation's capital, except to the extent permitted by law.
Section 9. To reorganize, as an incorporator, or cause to be
organized under the laws of any state of the United States of
America, or of any commonwealth, territory, agency or
instrumentality of the United States of America, or of any
foreign country, a corporation or corporations for the purpose of
conducting and promoting any business or purpose for which
corporations may be organized, and to dissolve, wind up,
liquidate, merge or consolidate any such corporation or
corporations or to cause the same to be dissolved, wound up,
liquidated, merged or consolidated.
Section 10. To do each and every thing necessary, suitable
or proper for the accomplishment of any of the purposes or the
attainment of any of the objects herein enumerated, or which
shall at any time appear conductive to or expedient for the
protection or benefit of the corporation.
Article IV
Capitalization
Section 1. The authorized capital of this corporation shall consist of
the following stock: One hundred million common shares, par value $.001 per
share. Each common share shall have equal rights as to voting and in the
event of dissolution and liquidation. There shall be no cumulative voting
by shareholders.
Section 2. The shareholders shall have no preemptive rights to acquire
any shares of this corporation.
Section 3. The common and preferred stock of the corporation, after
the amount of the subscription price has been paid in, shall not be subject
to assessment to pay the debts of the corporation.
Article V
Principal Office
The address of the registered office and registered agent of the
corporation is Gateway Enterprises, 3230 E. Flamingo Road, Suite 156, Las
Vegas, Nevada, zip code 89121, Clark county. The corporation may maintain
such other office, either within or out of the State of Nevada, as the
Board of Directors may from time to time determine or the business of the
corporation may require.
Article VI
Directors
The corporation shall be governed by a Board of Directors. There shall
be one (1) or more directors as to serve, from time to time, as elected by
the Shareholders, or by the Board of Directors in the case of a vacancy.
The original Board of Directors shall be comprised of one (1) person and
the name and address of the person who is to serve as director until the
first annual meeting of shareholders and until successors are elected is:
Justeene Blankenship
4685 S Highland Dr., Ste 202
Salt Lake City, UT 84117
Article VII
Indemnification
As the Board of Directors may from time to time provide in the By-laws
or by resolution, the corporation may indemnify its officers, directors,
agents and other persons to the full extent permitted by the laws of the
State of Nevada.
Article VIII
Incorporator
The name and address of the incorporator is:
Justeene Blankenship
4685 S Highland Dr., Ste 202
Salt Lake City, UT 84117
Article IX
Controlling Interest
The provisions of NRS 78.378 to 78.3793 inclusive shall not be applied
to any acquisition of a controlling interest in the corporation.
Dated this 7th day of February, 2000.
/s/ Justeene Blankenship
------------------------
Justeene Blankenship
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
BY RESIDENT AGENT
In the matter of Holographic Systems, Inc., Gateway Enterprises,
with the address at 3230 E. Flamingo Road, Suite 156, Las Vegas,
Nevada 89121, Clark county, hereby accepts the appointment as Resident
Agent of the above entitled corporation in accordance with NRS 78.090.
FURTHERMORE, the mailing address for the above registered office
is the same as the above address.
In witness whereof, the duly authorized officer has hereunto set
his hand this 7th day of February, 2000.
Gateway Enterprises
Resident Agent
By: /s/ Shirrel Hughes
______________________________________________________________
NRS 78.090 Except during any period of vacancy described in NRS
78.097, every corporation must have a resident agent, who may be either a
natural person or a corporation, resident or located in the state. Every
resident agent must have a street address, where he maintains an office for
the service of process, and may have a separate mailing address such as a
post office box, which may be different from the street address. The
address of the resident agent may be any bank or banking corporation, or
other corporation, located and doing business in this state. This
certificate of acceptance must be filed at the time of the initial filing
of the corporate papers.
BYLAWS OF
HOLOGRAPHIC SYSTEMS, INC.
ARTICLE 1
Corporate Identification
1.01. Name. The corporation shall transact business under the
name of Holographic Systems, Inc.
1.02. Corporate Offices. The Corporation shall maintain such
offices, within or without the State of Nevada, as the Board of Directors
may from time to time designate. The location of the principle office may
be changed by the Board of Directors.
1.03. Seal. The Board of Directors shall provide for a corporate
seal, which shall be circular in form and shall have inscribed thereon the
name of the corporation, the state of incorporation, and the words
"Corporate Seal."
1.04. Fiscal Year. The fiscal year of the corporation shall begin
on the 1st day of January, and shall end on the 31st day of December.
ARTICLE 2
Shareholders
2.01. Place of Meetings. Meetings of the shareholders of the
corporation shall be held at the principal office of the corporation,
unless all shareholders entitled to vote agree in writing to meet
elsewhere.
2.02. Annual Meetings. The annual meeting of the shareholders
shall be held at 10:00 o'clock a.m. on the first Tuesday of April each
year. If this day is a legal holiday, then the meeting shall be held on
the first following day that is not a legal holiday. A failure to hold the
annual meeting shall not impair the ability of the corporation to act or
transact business.
2.03. Special Meetings. Special meetings of the shareholders may
be called by the President or by the Board of Directors, and shall be
called by the President upon the signed written request of the holders of
ten percent or more of the outstanding shares of the corporation entitled
to vote at the meeting. Only business within the purpose or purposes
described in the notice of the meeting may be conducted at a special
meeting of the shareholders.
2.04. Action Without Meeting. Any action required or permitted to
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 is signed by a
majority of the shareholders who would have been entitled to vote on the
action had a meeting been held.
2.05. Notice of Meetings. Written notice stating the place, day,
and hour of the meeting, and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered or mailed
to each shareholder who is entitled to vote at the meeting with the written
or printed signature of the President and Secretary subscribed thereto, not
less than ten nor more than sixty days before the date of the meeting. A
waiver of the notice of any meeting, in writing, signed by the person
entitled to the notice, whether before, at, or after the time stated
therein, shall be deemed equivalent of such notice. Attendance by a
shareholder, without objection to the notice, whether in person or by
proxy, at a shareholders' meeting shall constitute a waiver of notice of
the meeting.
2.06. Closing of Transfer Books. For the purposes of determining
the shareholders who are entitled to notice of or to vote at a meeting of
shareholders or an adjournment thereof, or the shareholders who are
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 not to exceed fifty days. If the stock
transfer book 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 ten 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 fifty days and, in
the case of a meeting of shareholders, not less than ten 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 stockholders entitled
to notice of or to vote at a meeting of shareholders, or of 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 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 except where the determination has
been made through the closing of the stock transfer books and the stated
period of closing has expired.
2.07. Voting Lists. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten
days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order with the address of, and the number of
shares held by each shareholder, which list, for the period between its
compilation and the meeting for which it was compiled, shall be kept on
file at the registered office of the corporation and shall be subject to
inspection by any shareholder at any time during normal business hours.
Such list shall also be produced and kept open at the time and place of the
meeting and shall be subject to inspection by any shareholder during the
meeting. The original stock transfer book shall be prima facie evidence of
the shareholders entitled to examine such list or transfer books or to vote
at any meeting of shareholders.
2.08. Quorum and Voting. A majority of the outstanding shares of
the corporation entitled to vote, when 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 (but
not to exceed sixty days) 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
scheduled. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of shareholders sufficient to leave less than a quorum. Unless
a greater vote on a particular matter is required by law, by the Articles
of Incorporation, or by these Bylaws, a majority vote of the shares present
and entitled to vote shall carry any action proposed or voted on at a
shareholders' meeting.
2.09. Proxies. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by the
shareholder's authorized attorney in fact. Such proxy may be filed with
the Secretary of the corporation before or at the time of the meeting. No
proxy shall be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy.
2.10. 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
provisions, as the Board of Directors of such corporation may determine,
provided, however, that no shares held by another corporation, the election
of whose directors is controlled by this corporation, shall be entitled to
vote.
Shares held by an administrator, executor, guardian, or conservator
may be voted by such person, either in person or by proxy, without a
transfer of such shares into such person's name. Shares standing in the
name of a trustee may be voted by the trustee, either in person or by
proxy, but a trustee shall not be entitled to vote shares so held without a
transfer of such shares into the trustee's name.
Shares standing in the name of a receiver may be voted by the
receiver, and shares held by or under the control of a receiver may be
voted by the receiver without the transfer thereof into the receiver's name
if the authority to do so is contained in an appropriate order of the court
by whom the 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 or held by it in
a fiduciary capacity 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.
ARTICLE 3
Board of Directors
3.01. General Powers. The business and affairs of the corporation
shall be managed by its Board of Directors, except as otherwise provided by
law or by the Articles of Incorporation.
3.02. Number, Tenure, and Qualifications. The number of directors
of the corporation shall be no less than one and no more than five. The
number of directors may be changed only as provided in the Articles of
Incorporation. Each director shall hold office until the next annual
meeting of the shareholders and until his or her successor shall have been
elected and qualified. Directors need not be residents of any particular
state or shareholders of the corporation.
3.03. Regular Meetings. A meeting of the Board of Directors shall
be held without notice other than this provision 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
regular meetings without other notice than such resolution.
3.04. Special Meetings; Notice. 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 any place, wherever located, as the place
for holding a special meeting of the Board of Directors called by them.
Written notice of a special meeting shall be given to each director at
least two days prior to a special meeting, except that if the written
notice is mailed to a director or is given by telegram at least four days
prior notice must be given, which notice shall be deemed given when mailed
or telegraphed. Any director 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. Neither the business to be transacted
nor the purpose of any regular or special meeting of the Board of Directors
need be specified in the notice or waiver of notice of such meeting.
3.05. Action Without Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors, or any committee
thereof, may be taken without a meeting if a written consent setting forth
the action so taken is signed by all of the directors that would have been
entitled to vote on the action had a meeting been held.
3.06. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than such majority be present at a meeting,
a majority of the directors present may adjourn the meeting from time to
time without further notice. The directors present at a meeting may
continue to transact business until adjournment not withstanding the
withdrawal of directors sufficient to leave less than a quorum.
3.07. Voting Requirements. Except as otherwise provided by law,
in the Articles of Incorporation, or in these Bylaws, a majority vote of
the directors present at a meeting at which a quorum is present shall be
required for an act or resolution under consideration to constitute an act
or resolution of the Board of Directors.
3.08. Vacancies. Any vacancy occurring in the Board of Directors
shall be filled by the Board of Directors until an annual meeting is held
and new directors are elected by the shareholders. Any directorship to be
filled by reason of an increase in the number of directors shall be filled
by election at an annual meeting of shareholders or at a special meeting of
shareholders called for that purpose. A director chosen to fill a vacancy
resulting from an increase in the number of directors shall hold office
until the director's successor shall have been elected and qualified.
3.09. Compensation. By resolution of the Board of Directors the
directors may be paid their expenses, if any, for attendance at any meeting
of the Board of Directors, and, if such compensation is approved by a
majority vote of the shareholders entitled to vote, may be paid a fixed sum
for attendance at any meeting of the Board of Directors or a stated salary
as director. No payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
3.10. 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 the dissent of the director shall be entered in the minutes of
the meeting or unless the director shall file a written dissent to such
action before 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 the action dissented to.
3.11. Removal of Directors. At a special meeting of the
shareholders called expressly for that purpose, Directors may be removed in
the manner provided in this section. One or more directors or the entire
Board of Directors may be removed, with or without cause, by a vote of the
holders of a majority of the shares then entitled to vote at an election of
directors. No director may be removed if the votes cast against a
director's removal would be sufficient to elect the director if
cumulatively voted at an election of the entire Board of Directors. A
director shall be entitled to receive notice of and a hearing with respect
to his or her removal for cause.
3.12. Standards of Conduct. A director shall discharge his or her
duties as a director, including his or her duties as a member of a
committee, in good faith, with the care an ordinarily prudent person in a
like position would exercise under similar circumstances; and in a manner
that he or she reasonably believes to be in the best interests of the
corporation.
In discharging his or her duties a director is entitled to rely on
information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by:
(1) one or more officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the
matters presented;
(2) legal counsel, public accountants, or other persons as to
matters the director reasonably believes are within the person's
professional or expert competence; or
(3) a committee of the board of directors of which the director
is not a member if the director reasonably believes the committee
merits confidence.
A director is not acting in good faith if the director has knowledge
concerning the matter in question that makes otherwise permissible reliance
unwarranted.
A director is not liable for any action taken as a director, or any
failure to take any action, if he or she performed the duties of office in
compliance with this section.
ARTICLE 4
Officers
4.01. Number, Election and Tenure. The officers of the
corporation shall be a President, a Vice President, 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. All officers of the
corporation shall serve at the pleasure of the Board of Directors for the
compensation fixed under Section 4.09 of these Bylaws. Any two or more
offices may be held by the same person, except as otherwise provided by
law.
4.02. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, with or without cause, by the Board of
Directors whenever in its judgment the best interests of the corporation
would be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
4.03. Vacancies. Whenever a vacancy shall occur in any office by
reason of death, resignation, increase in number of offices of the
corporation, or otherwise, the vacancy shall be filled by the Board of
Directors, and the officer so elected shall hold office as provided in
Section 4.01 of these Bylaws.
4.04. President. The President shall be the principal executive
officer of the corporation, and, subject to the control of the Board of
Directors, shall have general control of the business, affairs, and
property of the corporation, and control over its agents, officers, and
employees. The President shall, when present, preside at all meetings of
the shareholders and of the Board of Directors, and shall perform such
other duties and exercise such other powers as from time to time may be
assigned to the President by these Bylaws or by the Board of Directors.
4.05. Vice President. The Vice President shall perform all duties
incumbent upon the President during the absence or disability of the
President, and shall perform such other duties as from time to time may be
assigned to the Vice President by these Bylaws or by the Board of
Directors.
4.06. The Secretary. The Secretary shall: (a) keep the minutes
of the shareholders' meetings and of the Board of Directors' meetings in
one or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these bylaws as required by
law; (c) be the 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 address of each
shareholder, which shall be furnished to the secretary by such shareholder;
(e) sign with the President, or the Vice President, certificates for shares
of the corporation, the issuance of which shall have been authorized by a
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (g) perform all duties incident to
the office of secretary and such other duties as from time to time may be
assigned to the Secretary by the President or the Board of Directors.
4.07. The Treasurer. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his or her duties
in such sum and with such surety or sureties as the Board of Directors
shall determine. 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 monies due and payable to the corporation from any
source whatsoever; (c) deposit all monies received in the name of the
corporation in the banks or other depositories as shall be selected in
accordance with the provisions of Article 5 of these Bylaws; and (d)
perform the duties as from time to time may be assigned to the Treasurer by
the President or the Board of Directors.
4.08. Assistant Secretaries and Treasurers. One or more Assistant
Secretaries or Assistant Treasurers may be appointed by the Board of
Directors. Such persons shall have such duties as from time to time may be
assigned to them by the Board of Directors, the President, or the Secretary
or Treasurer, as the case may be.
4.09. Compensation. The compensation of the officers shall be
fixed or approved from time to time by the Board of Directors and no
officer shall be prevented from receiving such compensation by reason of
the fact that the officer is also a director of the corporation.
ARTICLE 5
Contracts, Loans, Checks, Deposits, and Official Books and Records
5.01. Contracts. The Board of Directors may authorize any officer
or agent 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 matters.
5.02. Loans. No loans shall be contracted on behalf of the
corporation and no evidence of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. The Board of
Directors shall have the following power with respect to the lending of
funds:
(a) Loans of Funds, Generally. To lend money in furtherance of
any of the purposes of the Corporation; to invest and reinvest the
funds of the Corporation from time to time; and to take and hold any
property as security for the payment of funds so loaned or invested.
(b) Loans to Employees and Directors. If approved by the
holders of a majority of the voting shares, to lend money and use its
credit to assist any employee or director of the Corporation, if the
Board of Directors determines that such loan or assistance may benefit
the Corporation.
5.03. Checks, Drafts, Etc. All checks, drafts, or other orders
for the payment of money, notes, or other evidence of indebtedness issued
in the name of the corporation shall be signed by such officer or agent of
the corporation and in such manner as shall from time to time be determined
by a resolution of the Board of Directors.
5.04. 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 or other depositories as the Board of Directors
may by resolution select.
5.05. Official Books and Records. The official books and records
of the corporation shall consist of the minute book, the stock book, the
stock transfer book, and the books and records of account. The Secretary
shall be responsible for their upkeep and safekeeping. Any shareholder,
either in person or by representative, shall have the right to inspect and
make copies or extracts of the official books and records at any reasonable
time for any lawful purpose.
ARTICLE 6
Capital Stock
6.01. 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 or
the Vice President and by the Secretary or an Assistant Secretary. 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 the date of
issue, shall be entered on the stock transfer books of the corporation.
All certificates surrendered to the corporation for transfer shall be
canceled and no new certificates shall be issued until the former
certificate for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed, or mutilated
certificate a new one may be issued therefor upon such terms and indemnity
to the corporation as the Board of Directors may prescribe.
6.02. Consideration for Shares. The consideration for the
issuance of shares may be paid, in whole or in part, in money, in other
property, tangible or intangible, or in labor or services actually
performed for the Corporation. When payment of the consideration for which
shares are to be issued shall have been received by the Corporation, such
shares shall be deemed to be fully paid and nonassessable. In the absence
of fraud in the transaction, the judgment of the Board of Directors as to
the value of the consideration received for shares shall be conclusive. No
certificate shall be issued for any share until the share is fully paid.
6.03. Issuance of Shares. Shares of capital stock of the
corporation shall not be issued except on a majority vote of the Board of
Directors. The vote of each director shall appear in the written minutes
of each Board of Directors' meeting in which the issuance of shares was
approved.
6.04. Dividends. The holders of the capital stock of the
Corporation shall be entitled to receive, when and as declared by the Board
of Directors, solely out of unreserved and unrestricted earned surplus,
dividends payable either in cash, in property, or in shares of capital
stock. No dividends shall be paid upon the capital stock in any medium if
the source out of which it is proposed to pay the dividend is due to or
arises from unrealized appreciation in value or from a revaluation of
assets, or if the Corporation is, or is thereby rendered, incapable of
paying its debts as they become due in the usual course of its business.
6.05. Uncertified Shares. Shares of the capital stock of the
Corporation shall not be issued without a certificate.
ARTICLE 7
Amendments
7.01. Amendment. These Bylaws may be amended or repealed, and new
bylaws may be adopted, by the holders of a majority of the voting shares at
any annual or special meeting or by a majority vote of the Board of
Directors at any regular or special meeting, except that the shareholders
in amending or repealing a particular bylaw may provide that the Board of
Directors may not amend or repeal that bylaw.
Accepted and Adopted by the Board of Directors on the 7th day of
February, 2000.
By: /s/ Justeene Blankenship
-----------------------------
Justeene Blankenship, President
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