As filed with the Securities and Exchange Commission on November 8, 2000
Registration No. 333-_____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Chineseinvestors.com, Inc.
-------------------------------------------------------------------------------
(Name of small business issuer in its charter)
Indiana 7374 35-2089868
---------------------- ---------------------------- ----------------------
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
411 E. Huntington Dr., #313, Arcadia, CA 91006 (626) 254-9018
-------------------------------------------------------------------------------
(Address and telephone number of principal executive offices)
411 E. Huntington Dr., #313, Arcadia, CA 91006 (626) 254-9018
-------------------------------------------------------------------------------
(Address of principal place of business or intended principal place of business)
Mr. Warren Wei Wang, President, 411 E. Huntington Dr., #313, Arcadia, CA 91006,
(626) 254-9018
-------------------------------------------------------------------------------
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of the registration statement and date of the
prospectus.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================
Title of Each Class of Amount Proposed Proposed Amount of
Securities Being Being Maximum Maximum Registration
Registered Registered Offering Aggregate Fee
Price Per Offering
Unit (1) Price(1)
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------
Shares of Common Stock 1,212,650 $2.50 $3,031,625 $800.35
-------------------------------------------------------------------------------
TOTAL $3,031,625 $800.35
===============================================================================
</TABLE>
(1) Estimated for purposes of computing the registration fee pursuant to
Rule 457.
We hereby amends the registration statement on such date or dates as may
be necessary to delay its effective date until we file a further amendment which
specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until the registration statement shall become effective on such date
as the Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED November 7, 2000
CHINESEINVESTORS.COM, INC.
1,212,650 Shares of Common Stock
We are registering 1,212,650 shares of our Common Stock, par value $.001
per share, on behalf of the selling shareholders identified under the heading
"Selling Security Holders" in this prospectus. We will not receive any portion
of the proceeds from the resale of the shares registered on behalf of the
selling shareholders. For information on the methods of sale of the shares we
are registering on behalf of the selling shareholders, refer to the discussion
under the heading "Plan of Distribution."
Prior to this offering, no public market has existed for shares of our
common stock. We cannot guarantee that a trading market in the shares of our
common stock will ever develop. We plan to have our common stock quoted on the
OTC Bulletin Board.
Investing in our Common Stock involves high risks. Investors may lose their
entire investment. See "Risk Factors" for risks concerning us and this offering.
Neither the Securities and Exchange Commission nor any state securities
commission approved or disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
<PAGE>
Cross Reference Sheet
Showing the Location In Prospectus of
Information Required by Items of Form SB-2
Part I. Information Required in Prospectus
Item
No. Required Item Location or Caption
---- ------------- --------------------
1. Front of Registration Statement Front of Registration
and Outside Front Cover of Statement and Outside
Prospectus Front Cover of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page
Cover Pages of Prospectus of Prospectus and Outside
Front Cover Page of
Prospectus
3. Summary Information and Risk Prospectus Summary;
Factors Risk Factors
4. Use of Proceeds Not Applicable
5. Determination of Offering Not Applicable
Price
6. Dilution Not Applicable
7. Selling Security Holders Selling Security Holders
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Legal Proceedings
10. Directors, Executive Officers, Management
Promoters and Control Persons
11. Security Ownership of Certain Principal Stockholders
Beneficial Owners and Management
12. Description of Securities Description of Securities
13. Interest of Named Experts and Legal Matters; Experts
Counsel
14. Disclosure of Commission Position Management -
on Indemnification for Securities Indemnification of
Act Liabilities Directors and Officer
15. Organization Within Last Certain Transactions
Five Years
16. Description of Business Business
17. Management's Discussion Management's Discussion
and Analysis or Plan of and Analysis of Financial
Operation Condition and Results of
Operations
18. Description of Property Business - Description of
Property
19. Certain Relationships and Related Certain Transactions
Transactions
20. Market for Common Equity and Market for Common Equity
Related Stockholder Matters and Related Stockholder
Matters
21. Executive Compensation Management -
Executive Compensation
22. Financial Statements Financial Statements
23. Changes in and Disagreements Not Applicable
with Accountants on Accounting
and Financial Disclosure
<PAGE>
PROSPECTUS SUMMARY
Our Business
Chineseinvestors.com develops, markets and supports Chinese language based
financial Internet portal for the Chinese speaking people worldwide. We have
established a presence on the Internet with our investment and financial portal
located at www.chineseinvestors.com. We believe the Chinese speaking online
community is growing and is becoming a significant market segment. Our
objective is to become the leading Chinese language Web-based financial provider
of content, online community products and e-commerce. We anticipate our
financial Internet portal will become an important tool for companies seeking
investors to reach the Chinese speaking online community worldwide.
Chineseinvestors.com will provide a one-stop gateway to the Internet
that aggregates, organizes and delivers information to meet the needs of the
Chinese speaking investors online community worldwide. We also plan to
continuously enhance the offerings on our financial portal, including new audio
and video features. By continuously adding new features, we expect to increase
traffic to our financial Internet portal, develop a loyal base of subscribers
and users, and attract new sponsors and advertisers.
Our Corporate History
We were incorporated on January 6, 1997 in the State of Indiana under the
corporate name "MAS Acquisition LII Corp." Prior to June 12, 2000, we were a
blank check company seeking a business combination with unidentified business.
On June 12, 2000, we acquired 8,200,000 shares of common stock, representing
100% of the outstanding shares of Chineseinvestors.com, Inc., which was
incorporated in the State of California on June 15, 1999. In connection with
this acquisition, our former sole officer and director was replaced by
Chineseinvestors.com, Inc.'s officers and directors. The stockholders of
Chineseinvestors.com, Inc. were issued 8,200,000 shares of our common stock,
or approximately 96% of our total outstanding common shares after giving
effect to the acquisition. Chineseinvestors.com, Inc. became a wholly owned
subsidiary and we changed our name to Chineseinvestors.com, Inc.
Our principal executive offices are located at 411 E. Huntington Dr., #313,
Arcadia, CA 91006. Our telephone number is (626) 254-9018
<PAGE>
THE OFFERING
Common Stock Offered
by Selling Shareholders ............1,212,650
Use of Proceeds .........................We will not receive any proceeds from
the sale of the shares of common stock.
Risk Factors ............................For a discussion of certain factors you
should consider before buying shares of
our common stock, see "Risk Factors."
Dividend Policy .........................We do not intend to pay dividends on
our common stock. We plan to retain any
earnings for use in the operations of
our business and to fund future growth.
SUMMARY FINANCIAL DATA
The following table summarizes the historical consolidated financial data
for our business. The income statement data and balance sheet data for the year
ended May 31, 2000, are the operations of Chineseinvestors.com, Inc., the
company we acquired on June 12, 2000. The income statement data and balance
sheet data set forth below for the three months ended August 31, 1999 and
August 31, 2000 are derived from our unaudited financial statements as
August 31, 2000, included at the end of this prospectus.
<TABLE>
<CAPTION>
Balance Sheet Data: For the Three Months Ended
May 31, 2000 August 31, 1999
------------------------------ ------------------ --------------------------
<S> <C> <C>
Current assets $ 139,625 143,532
Working Capital 120,114 126,623
Current liabilities 19,511 16,909
Total stockholders' equity 153,018 160,748
<CAPTION>
Statement of Operations Data: For the Year Ended For the Three Months Ended For the Three Months Ended
May 31,2000 August 31, 1999 August 31, 2000
------------------------------ ------------------ -------------------------- --------------------------
<S> <C> <C> <C>
Revenue $ 85,493 $ - $ 228,052
Operating expenses 2,056,975 123,262 345,321
Net income (loss) (1,971,482) (123,262) (117,269)
Weighted average shares
outstanding - basic and fully
diluted 6,980,203 5,471,667 8,316,850
Net (loss) per share - basic and
fully diluted (0.28) (0.02) (0.01)
</TABLE>
<PAGE>
RISK FACTORS
You should carefully consider the following risks before making an
investment decision. The risks described below are not the only ones facing our
company. Additional risks may also impair our business operations. If any of
the following risks occur, our business, results of operations or financial
condition could be materially and adversely affected. In such case, the trading
price of our common stock could decline, and you may lose all or part of your
investment. You should also refer to the other information set forth in this
prospectus, including our financial statements and the notes to those
statements.
This prospectus contains certain "forward-looking statements" based on our
current expectations, assumptions, estimates and projections about us and our
industry. These forward-looking statements involve risks and uncertainties.
Our actual results could differ materially from those anticipated in such
forward-looking statements as a result of certain factors, as more fully
described in this section and elsewhere in this prospectus. We undertake no
obligation to update publicly any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future.
Such factors include those set forth in this section and elsewhere in this
prospectus.
RISKS RELATED TO OUR BUSINESS
WE HAVE A LIMITED OPERATING HISTORY
We commenced our operations on June 15, 1999. Accordingly, we have only a
limited operating history upon which you can evaluate our business and
prospects. An investor in our common stock must consider the risks, expenses
and difficulties frequently encountered by early stage companies in new and
rapidly evolving markets, including Chinese language based Internet portal
companies. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations".
WE HAVE A HISTORY OF LOSSES AND WE ANTICIPATE LOSSES WILL CONTINUE
As of August 31, 2000, we had an accumulated deficit of $2,088,752. We
expect to continue to incur net losses in 2000 and subsequent fiscal periods.
We expect to continue to incur significant operating expenses and, as a result,
will need to generate significant revenues to achieve profitability, which may
not occur. Even if we do achieve profitability, we may be unable to sustain or
increase profitability on a quarterly or annual basis in the future. See
"Summary Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations".
WE DEPEND ON OUR EDITORS
Our future success depends substantially upon the continued efforts of our
editors to produce original, timely, comprehensive and trustworthy content. If
we lose the services of our editors, our business, results of operations and
financial condition could be materially and adversely affected.
WE FACE INTENSE COMPETITION
An increasing number of financial news and information sources compete for
consumers' and advertisers' attention and spending. We expect this competition
to continue to increase. We will compete for advertisers, users, staff and
outside contributors with many types of companies, including:
* online services or web sites focused on business, finance and investing,
such as MarketWatch.com, The Wall Street Journal Interactive Edition and The
Motley Fool;
* publishers and distributors of traditional media, including print, radio and
television, such as The Wall Street Journal, Fortune, Bloomberg Business
Radio and CNBC;
* providers of terminal-based financial news and data, such as Bloomberg
Business News, Reuters News Service, Dow Jones Markets and Bridge News
Service;
* web "portal" companies, such as Yahoo! and America Online; and
* online brokerage firms, many of which provide financial and investment news
and information, such as Charles Schwab and E*TRADE.
<PAGE>
Our ability to compete will depend on many factors, including the
originality, timeliness, comprehensiveness and trustworthiness of our content,
the ease of use of services developed either by us or our competitors and the
effectiveness of our sales and marketing efforts.
Many of our existing competitors, as well as a number of potential new
competitors, have longer operating histories, greater name recognition, larger
customer bases and significantly greater financial, technical and marketing
resources than we do. This may allow them to devote greater resources than we
can to the development and promotion of their services. These competitors may
also engage in more extensive research and development, undertake more far-
reaching marketing campaigns and make more attractive offers to existing and
potential employees, outside contributors, strategic partners and advertisers.
Our competitors may develop content that is equal or superior to ours or that
achieves greater market acceptance than ours. It is also possible that new
competitors may emerge and rapidly acquire significant market share. We may not
be able to compete successfully for readers, staff and outside contributors
which could have a material adverse effect on our business, results of
operations and financial condition. Increased competition could result in
reduced margins or loss of market share, any of which could materially and
adversely affect our business, results of operations and financial condition.
WE DEPEND ON MAINTAINING AND INCREASING OUR USER BASE
Our future success is highly dependent on an increase in the number of
Internet users who are willing to subscribe to online financial news and
information publications. The number of Internet users willing to pay for online
financial news and information may not continue to increase. If the market for
subscription-based online investment and financial information develops more
slowly than we expect, our business, results of operations and financial
condition could be materially and adversely affected. Further, we presently
offers a portion of our content for without charge. In the future we intend to
increase the free portion of our content to increase traffic. However, this
change may reduce the number of our new or renewing subscribers, which could
have a material and adverse effect on our business, results of operations and
financial condition.
MANAGEMENT OF GROWTH; DEPENDENCE ON KEY PERSONNEL
Our success in the future is dependent upon our ability to grow rapidly and
effectively manage growth. Such growth, if any, will require increased
managerial, technical, direct sales, and other personnel, expanded information
systems and additional financial and administrative control procedures.
Expansion of our indirect and direct sales channels will require significant
financial and managerial commitments by us. We can not assure you that we
will be able to effectively manage such growth, if any. Our failure to do so
could have a material and adverse effect on our business, operating results, and
financial condition.
Competition for qualified technical, sales, and other qualified personnel
is intense, and we can not assure you that we will be able to attract or
retain highly qualified employees in the future. Our future success also
depends on the continued service of our key technical, sales and senior
management personnel. We do not currently maintain any "key person" insurance
and the loss of the services of one or more of these key employees could have a
material and adverse effect on our business, operating results, and financial
condition.
UNEXPECTED INCREASES IN TRAFFIC MAY STRAIN OUR SYSTEMS
In the past, we have experienced significant spikes in traffic to our Web
sites when there have been important financial news or other events. In
addition, the number of our Internet users has continued to increase over time
and we are seeking to increase our Internet user base further. Accordingly, our
portal must be able to accommodate a high volume of traffic, often at
unexpected times. Our Web sites have in the past, and may in the future,
experience slower response time than usual or other problems for a variety of
reasons. These occurrences could cause our Internet users to perceive our
portal as not functioning properly and, therefore, cause them to use other
methods to obtain their financial news and information. In such a case, our
business, results of operations and financial condition could be materially and
adversely affected.
<PAGE>
RISK OF SYSTEM FAILURE
Our ability to provide timely information and continuous news updates
depends on the efficient and uninterrupted operation of our computer and
communications hardware and software systems. These systems and operations are
vulnerable to damage or interruption from human errors, natural disasters,
telecommunication failures, break-ins, sabotage, computer viruses, intentional
acts of vandalism and similar events. Any system failure, including network,
software or hardware failure, that causes an interruption in our service or a
decrease in responsiveness of our portal could result in reduced traffic,
reduced revenue and harm to our reputation, our brand and our relations with our
advertisers. Our business, results of operations and financial condition could
be materially and adversely affected by any event, damage or failure that
interrupts or delays our operations.
RISKS ASSOCIATED WITH OUR BRAND DEVELOPMENT AND POSSIBLE HARM TO OUR REPUTATION
We believe that maintaining and growing awareness about the
Chineseinvestors.com brand is an important aspect of our efforts to continue to
attract subscribers and readers. The importance of brand recognition will
increase in the future because of the growing number of web sites providing
financial news and information. We cannot assure you that our efforts to build
brand awareness will be successful. It is very important that we maintain our
reputation as a trustworthy news organization. The occurrence of certain
events, including our misreporting a news story or the non-disclosure of stock
ownership by one or more of our writers in breach of our compliance policy,
could harm our reputation for trustworthiness. These events could result in a
significant reduction in the number of our readers, which could materially and
adversely affect our business, results of operations and financial condition.
FAILURE TO BUILD BRAND AWARENESS
Our future success will depend, in part, on our ability to increase our
brand awareness. In order to build brand awareness and increase traffic to our
portal, we must succeed in our marketing efforts and provide high-quality
services. Our ability to increase advertising and subscription revenues from our
portal will depend in part on the success of our marketing campaign and our
ability to increase the number of visitors and subscribers to our portal. If
our marketing efforts are unsuccessful or if we cannot increase our brand
awareness and traffic to our portal, our business, operating results and
financial condition could be materially and adversely affected.
POTENTIAL LIABILITY FOR INFORMATION DISPLAYED ON OUR PORTAL
We may be subject to claims for defamation, libel, copyright or trademark
infringement or based on other theories relating to the information we publish
on our portal. These types of claims have been brought, sometimes successfully,
against online services as well as other print publications in the past. We
could also be subject to claims based upon the content that is accessible from
our portal through links to other web sites. These claims could materially and
adversely affect our business, results of operations and financial condition.
WE RELY ON OUR INTELLECTUAL PROPERTY
To protect our rights to our intellectual property, we rely on a
combination of copyright law, trade secret protection, confidentiality
agreements and other contractual arrangements with our affiliates, clients,
strategic partners and others. The protective steps we have taken may be
inadequate to deter misappropriation of our proprietary information. We may be
unable to detect the unauthorized use of, or take appropriate steps to enforce,
our intellectual property rights. In addition, although we believe that our
proprietary rights do not infringe on the intellectual property rights of
others, other parties may assert infringement claims against us or claims that
we have violated a patent or infringed a copyright, trademark or other
proprietary right belonging to them. These claims, even if not meritorious,
could result in the expenditure of significant financial and managerial
resources on our part, which could materially and adversely affect our business,
results of operations and financial condition.
<PAGE>
DIFFICULTIES IN DEVELOPING NEW AND ENHANCED SERVICES AND FEATURES
We intend to introduce additional and enhanced services in order to retain
our current users and attract new users. If we introduce a service that is not
favorably received, our current users may choose a competitive service over ours
or fail to renew their subscriptions. We may also experience difficulties that
could delay or prevent us from introducing new services. These difficulties may
include the loss of, or inability to obtain or maintain, third-party technology
license agreements. Furthermore, we may discover errors after new services are
introduced. We may need to modify significantly the design or implementation
of such services on our portal to correct these errors. As a result, our
business, results of operations and financial condition could be materially and
adversely affected if we experience difficulties in introducing new services
or if these new services are not accepted by our users.
RELIANCE ON THIRD-PARTY RELATIONSHIPS
We expect to rely on a number of third-party relationships to create
traffic and provide content in order to make our portal more attractive to
advertisers and consumers. It is anticipated that most of these arrangements
will not be exclusive and will be short-term or in some cases may be terminated
at the convenience of the other party. We can not assure you that our existing
or future relationships will result in sustained business partnerships,
successful service offerings, significant traffic on our portal or in
significant revenues.
RELIANCE ON MERCHANDISE VENDORS AND SHIPPERS
Our plans are to supply certain products or merchandise to one or more of
our portal through various vendors. We do not expect to carry any inventory and
will rely to a large extent on rapid fulfillment from our vendors. We currently
have no contracts or arrangements with any vendors that guarantee the
availability of merchandise, the continuation of particular payment terms or the
extension of credit limits. We can not assure you that we will be able to
establish vendor relationships to ensure acquisition of merchandise in a
timely and efficient manner and on acceptable commercial terms. If we are
unable to develop and maintain relationships with vendors that will allow us to
obtain sufficient quantities of merchandise on acceptable commercial terms, our
future business, prospects, financial condition and results of operations could
be materially or adversely affected. We also plan to use various shipping and
delivery services for substantially all of our products. Should any such
shipping or delivery services be unable to deliver our products for a sustained
time period as a result of a strike or for any other reason, our business,
results of operations and financial condition could be materially and adversely
affected.
RISKS OF INTERNATIONAL EXPANSION
We intend to expand our presence in Greater China, Asia and other foreign
markets. Accordingly, we have recently opened an office location in Shanghai to
further expand our operations overseas. We believe that we may incur
significant costs in establishing international facilities and operations, in
promoting our name internationally, in developing localized versions of our
portal and other systems and in sourcing, marketing and distributing products
in foreign markets. We can not assure you that our international efforts
will be successful. If the revenues resulting from international activities are
inadequate, or fail to offset the expenses of establishing and maintaining
foreign operations, such inadequacy could have a material and adverse effect on
our business, prospects, financial condition and results of operations. In
addition, there are certain risks inherent in doing business on an international
level, such as unexpected changes in regulatory requirements, export and import
restrictions, tariffs and other trade barriers, difficulties in staffing and
managing foreign operations, longer payment cycles, political instability,
fluctuations in currency exchange rates, seasonal reductions in business
activity in other parts of the world and potentially adverse tax consequences,
any of which could adversely impact the success of our international operations.
We can not assure you that one or more of such factors would not have a
material adverse impact on our future international operations and,
consequently, on our business, prospects, financial condition and results of
operations.
<PAGE>
DELAY OR FAILURE TO DEVELOP OUR PORTAL
The development of a viable Chinese language specific Internet portal
network potentially may take from one to three years, or longer. In light of
the foregoing, it is unlikely that there will be any immediate or short term
profits, or any profits at all, resulting from the establishment, management and
development of our portal. If there is a delay or failure to establish and
develop our portal, we may have to delay or abandon certain planned activities.
We can not assure you that we will be successful in developing our portal,
or that such portal development will meet our objectives. Accordingly, this
could correspondingly delay or reduce the possibility of any potential receipt
of income and cash flow from such investments and may be detrimental to our
operations.
We also expect to rely on certain technology which we will license from
third parties, including software which will be integrated with internally
developed software and used in our software to perform key functions. In this
regard, all of our products will incorporate technology licensed from third
parties. We can not assure you that our anticipated third party technology
licenses will be available to us on commercially reasonable terms or at all.
The loss of or inability to maintain any of these technology licenses could
result in delays in introduction of our products until equivalent technology, if
available, is identified, licensed and integrated, which could have a material
and adverse effect on our business, financial condition or operating results.
RELIANCE ON ADVISORS AND CONSULTANTS
We plan to retain the services of independent or affiliated advisors and
consultants to review, develop and market our Chinese language based portal.
We can not assure you that these parties will be able to perform their
responsibilities in a manner satisfactory to us. Moreover, a conflict of
interest may arise with respect to advisors and consultants that are affiliated
with us, since such affiliated advisors and consultants are rendering advice to
and earning compensation from us. In the event that one or more of the
independent advisors and consultants becomes unavailable, suitable replacements
will need to be obtained and we can not assure you that such replacements could
be obtained under conditions suitable to us.
DEVELOPING MARKET AND UNCERTAIN ACCEPTANCE OF OUR PORTAL
The market for Chinese language based portal has only recently begun to
develop and is rapidly evolving. As is typical for a new and rapidly evolving
industry, demand and market acceptance for recently introduced portal are
subject to a high level of uncertainty and risk. Moreover, since the market for
Chinese language specific portal is new and evolving, it is difficult to
predict the size of this market and the future growth rate, if any. The success
of any of our portal will be substantially dependent upon widespread acceptance
by a broad base of consumers. However, we can not assure you that such
acceptance of any of our portal by consumers will ever materialize. If the
markets for any of our portal fail to develop, develop more slowly than
expected, or become saturated with competitors, or if any of our portal do not
achieve market acceptance, our business, results of operations and financial
condition could be materially and adversely effected.
<PAGE>
RISKS RELATED TO OUR INDUSTRY
DEPENDENCE ON THE CONTINUED GROWTH OF THE INTERNET
Our business depends on consumers continuing to increase their use of the
Internet for obtaining news and financial information as well as for conducting
commercial transactions. The rapid growth and use of the Internet is a recent
phenomenon, as a result, this acceptance and use may not continue to develop
at historical rates. Internet usage may be inhibited for a number of reasons,
such as:
* inadequate network infrastructure;
* security concerns;
* inconsistent quality of service; and
* unavailability of cost-effective, high-speed access to the Internet.
<PAGE>
If Internet usage grows, the Internet infrastructure may not be able to
support the demands placed on it by this growth or its performance and
reliability may decline. In addition, web sites in general have experienced
interruptions in their services as a result of outages and other delays
occurring throughout the Internet network infrastructure. If these outages or
delays frequently occur in the future, web usage, as well as usage of our
portal, could grow more slowly or decline.
RISKS ASSOCIATED WITH ONLINE ADVERTISING
No standards have been widely accepted to measure the effectiveness of web
advertising. If standards do not develop, potential advertisers may not be
found or, once contracted, continue or increase their levels of web advertising.
If standards develop and we are unable to meet such standards, advertisers may
not continue advertising on our site. Furthermore, advertisers that have
traditionally relied upon other advertising media may be reluctant to advertise
on the web. Our business, results of operations and financial condition could
be materially and adversely affected if the market for web advertising declines
or develops more slowly than expected.
We compete with other web sites, television, radio and print media for a
share of advertisers' total advertising budgets. If advertisers perceive the
web in general or our web site in particular to be a limited or an ineffective
advertising medium, they may be reluctant to devote a portion of their
advertising budget to online advertising or to advertising on our web site.
Different pricing models are used to sell advertising on the web. It is
difficult to predict which, if any, will emerge as the industry standard. This
uncertainty makes it difficult to project our future advertising rates and
revenues. We cannot assure you that we will be successful under alternative
pricing models that may emerge. Moreover, "filter" software programs that limit
or prevent advertising from being delivered to a web user's computer are
available. Widespread adoption of this software could materially and adversely
affect the commercial viability of web advertising, which could materially and
adversely affect our advertising revenues.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES RELATING TO THE WEB
Certain existing laws or regulations specifically regulate communications
or commerce on the web. Further, laws and regulations that address issues such
as user privacy, pricing, online content regulation, taxation and the
characteristics and quality of online products and services are under
consideration by federal, state, local and foreign governments and agencies.
Several telecommunications companies have petitioned the Federal Communications
Commission to regulate Internet service providers and online services providers
in a manner similar to the regulation of long distance telephone carriers and to
impose access fees on such companies. Such regulation, if imposed, could
increase the cost of transmitting data over the web. Moreover, it may take
years to determine the extent to which existing laws relating to issues such as
intellectual property ownership and infringement, libel, obscenity and personal
privacy are applicable to the web. The Federal Trade Commission and government
agencies in certain states have been investigating certain Internet companies
regarding their use of personal information. We could incur additional expenses
if any new regulations regarding the use of personal information are introduced
or if these agencies chose to investigate our privacy practices. Any new laws
or regulations relating to the web, or certain application or interpretation of
existing laws, could decrease the growth in the use of the web, decrease
the demand for our web site or otherwise materially and adversely affect our
business.
CONCERNS ABOUT WEB SECURITY
Concern about the transmission of confidential information over the
Internet has been a significant barrier to electronic commerce and
communications over the Web. Any well-publicized compromise of security could
deter more people from using the Web or from using it to conduct transactions
that involve the transmission of confidential information, such as signing up
for a paid subscription, executing stock trades or purchasing goods or services.
Because many of our advertisers seek to advertise on our portal to encourage
people to use the Web to purchase goods or services, our business, results of
operations and financial condition could be materially and adversely affected if
Internet users significantly reduce their use of the Web because of security
concerns. We may also incur significant costs to protect ourself against the
threat of security breaches or to alleviate problems caused by these breaches.
<PAGE>
RISKS RELATED TO THIS OFFERING
NO ASSURANCE OF PROFITABILITY
Our business objectives are dependent upon numerous factors outside of our
control. Therefore we can not assure you that we will be able to achieve or
sustain profitability in the future. Even if our operations prove to be
profitable, the value of shares of our common stock, and the potential return to
investors, could decline. Consequently, an investment in us is highly
speculative and no assurance can be given that purchasers of the shares of our
common stock will realize any return on their investment or that purchasers
will not lose their entire investment.
SHARES ELIGIBLE FOR PUBLIC SALE AFTER THIS OFFERING COULD
ADVERSELY AFFECT OUR STOCK PRICE
After this offering there will be outstanding 9,155,000 shares of our
common stock. Of these shares, the shares sold in this offering will be freely
tradeable except for any shares purchased by our "affiliates" as defined in
Rule 144 under the Securities Act. The remaining 7,942,350 shares will be
"restricted securities," subject to the volume limitations and other conditions
of Rule 144 under the Securities Act.
We cannot predict if future sales of our common stock, or the availability
of our common stock for sale, will materially and adversely affect the market
price for our common stock or our ability to raise capital by offering equity
securities. See "Description of Securities" and "Shares Eligible for Future
Sale".
AN INVESTMENT IN OUR COMMON STOCK MAY BE VERY ILLIQUID
We plan to have our shares trade on the Over-The-Counter Bulletin Board
(the "OTC Bulletin Board") of the National Association of Securities Dealers
("NASD"). There is no trading market for our shares, and we cannot assure you
that any such market will ever develop or be maintained. The absence of an
active trading market would reduce the liquidity of an investment in our
shares.
To the extent that brokerage firms act as market makers for our shares on
the OTC Bulletin Board, they may be a dominating influence in any market that
might develop, and the degree of participation by such firms may significantly
affect the price and liquidity of our shares. These firms may discontinue their
market making activities at any time. The prices at which our shares are traded
in the market will be determined by these firms and by the purchasers and
sellers of our shares, but such prices may not necessarily relate to our
assets, book value, results of operations or other established and quantifiable
criteria of value.
THE APPLICATION OF THE "PENNY STOCK" RULES COULD ADVERSELY AFFECT THE MARKET
FOR OUR STOCK.
The Securities and Exchange Act of 1934 requires additional disclosure
relating to the market for "penny stocks." A penny stock is generally defined to
be any equity security not listed on NASDAQ or a national securities exchange
that has a market price of less than $5.00 per share, subject to certain
exceptions. Among these exceptions are shares issued by companies that have:
o net tangible assets of at least $2 million, if the issuer has been
in continuous operation for three years;
o net tangible assets of at least $5 million, if the issuer has been
in continuous operation for less than three years; or
o average annual revenue of at least $6 million for each of the last
three years.
We do not currently meet the requirements of these exceptions and,
therefore, our shares would be deemed penny stocks for purposes of the Exchange
Act if and at any time while our common stock trades below $5.00 per share. In
such case, trading in our shares would be regulated pursuant to Rules 15-g-1
through 15-g-6 and 15-g-9 of the Exchange Act. Under these rules, brokers or
dealers recommending our shares to prospective buyers would be required, unless
an exemption is available, to:
o deliver a lengthy disclosure statement in a form designated by the
SEC relating to the penny stock market to any potential buyers, and
obtain a written acknowledgement from each buyer that such
disclosure statement has been received by the buyer prior to any
transaction involving our shares;
<PAGE>
o provide detailed written disclosure to buyers of current price
quotations for our shares, and of any sales commissions or other
compensation payable to any broker or dealer, or any other related
person, involved in the transaction;
o send monthly statements to buyers disclosing updated price
information for any penny stocks held in their accounts, and these
monthly statements must include specified information on the limited
market for penny stocks.
In addition, if we are subject to the penny stock rules, all brokers or
dealers involved in a transaction in which our shares are sold to any buyer,
other than an established customer or "accredited investor," must make a special
written determination that our shares would be a suitable investment for the
buyer, and the brokers or dealers must receive the buyer's written agreement to
purchase our shares, as well as the buyer's written acknowledgement that the
suitability determination made by the broker or dealer accurately reflects the
buyer's financial situation, investment experience and investment objectives,
prior to completing any transaction in our shares.
These Exchange Act rules may limit the ability or willingness of brokers
and other market participants to make a market in our shares and may limit the
ability of our shareholders to sell in the secondary market, through brokers,
dealers or otherwise. We also understand that many brokerage firms will
discourage their customers from trading in shares falling within the "penny
stock" definition due to the added regulatory and disclosure burdens imposed by
these Exchange Act rules.
The SEC from time to time may propose and implement even more stringent
regulatory or disclosure requirements on shares not listed on NASDAQ or on a
national securities exchange. The adoption of the proposed changes that may be
made in the future could have an adverse effect on the trading market for our
shares.
CONTROL BY OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS
Upon completion of this offering, our officers, directors and
greater-than-five-percent stockholders (and their affiliates) will, in the
aggregate, beneficially own approximately 88.5% of the outstanding common
stock. As a result, these persons, acting together, will have the ability to
control substantially all matters submitted to our stockholders for approval
(including the election and removal of directors and any merger, consolidation
or sale of all or substantially all of our assets) and to control our management
and affairs. Accordingly, this concentration of ownership may have the effect
of delaying, deferring or preventing a change in control of us, impeding a
merger, consolidation, takeover or other business combination involving us or
discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control of us, which in turn could materially and adversely
affect the market price of the common stock. See "Management" and "Principal
Stockholders".
POSSIBLE VOLATILITY OF OUR STOCK PRICE
We cannot predict the extent to which investor interest in us will lead to
the development of a trading market or how liquid that market might become. The
stock market has experienced significant price and volume fluctuations and the
market prices of securities of technology companies, particularly Internet-
related companies, have been highly volatile.
In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted against such a company. The institution of such litigation against
us could result in substantial costs and a diversion of our management's
attention and resources, which could materially and adversely affect our
business, results of operations and financial condition.
NO INTENTION TO PAY DIVIDENDS
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain any future earnings for funding growth and,
therefore, do not expect to pay any dividends in the foreseeable future. See
"Dividend Policy".
<PAGE>
NEED FOR SUBSEQUENT FUNDING
We may need further funding to proceed with our proposed plan of business.
We do not have a commitment with respect to any additional capital. We have no
loan commitments from, or lines of credit with, banks or other financial
institutions. Therefore, the continuation of our business will depend on our
ability to raise additional funds through equity and/or debt financing. We can
not assure you that we will be able to obtain additional funding when it is
needed, or that such funding, if available, will be obtainable on terms
favorable to and affordable by us. Our inability to obtain additional funding,
as required, would impair severely our business operations.
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of our
common stock.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common
stock and do not anticipate paying any cash dividends on our common
stock for the foreseeable future.
CAPITALIZATION
The following table sets forth the capitalization of Chineseinvestors.com,
Inc. as of August 31, 2000. This table should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and the notes to those statements
included elsewhere in this prospectus.
<TABLE>
<CAPTION>
August 31, 2000
------------
Actual
------------
<S> <C>
Note payable.................................................. $ -
Stockholders' equity:
Preferred Stock, $0.001 par value,
20,000,000 shares authorized, none
issued and outstanding.................................... -
Common Stock, $.001 par value,
30,000,000 shares authorized; 8,211,850
shares issued and outstanding ........................... 2,249,500
Accumulated deficit .......................................... (2,088,752)
Total stockholders' equity.................................... 160,748
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial
statements and the notes to those statements which appear elsewhere in this
prospectus. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and elsewhere in this prospectus, particularly in
"Risk Factors".
OVERVIEW
Chineseinvestors.com develops, markets and supports Chinese language based
financial Internet portal for the Chinese speaking people worldwide. We have
established a presence on the Internet with our leading investment and financial
portal located at www.chineseinvestors.com.
We have only a limited operating history upon which you can evaluate our
business and prospects. We have not achieved profitability, and expect to
continue to incur net losses in the year 2000 and subsequent fiscal periods. We
expect to continue to incur significant operating expenses and, as a result,
will need to generate significant revenues to achieve profitability, which
may not occur. Even if we do achieve profitability, we may be unable to
sustain or increase profitability on a quarterly or annual basis in the future.
We believe that quarter-to-quarter comparisons of our operating results
may not be a good indication of our future performance, nor would our operating
results for any particular quarter be indicative of future operating results.
CAPITAL AND SOURCE OF LIQUIDITY.
As of August 31, 2000, our cash balance was $140,032 and we had a working
capital of $126,623. For the year end May 31, 2000, our cash balance was
$136,125 and we had a working capital of $120,114.
Total cash flows from financing activities, for the three months ended
August 31, 2000 which consists of $125,000 in proceeds from stock issuance to
affiliated and unaffiliated entities. For the year ended May 31, 2000 cash
flows from financing activities were $758,800 in proceeds from stock issuance to
affiliated and unaffiliated entities.
Our working capital requirements depend upon numerous factors, including,
without limitation, levels of resources that we devote to the further
development of our Web sites and marketing capabilities, technological advances,
status of our competitors and our ability to establish collaborative
arrangements with other organizations. We intend to seek additional capital from
private investors to fund our activities. We believe that our current cash
resources should be sufficient to fund our current operations into the end of
year 2000.
RESULTS OF OPERATIONS
We have generated $228,052 in revenue for the three months ended August 31,
2000. For the year ended May 31, 2000 we have generated $ 85,493 in revenue. In
view of the explosive growth of the Internet industry and limited history of
operations, it would be difficult to forecast future revenues.
For the three months ended August 31, 2000, we had a net loss of $117,269
which is largely attributable to general and administrative expenses of
$343,854. For the year ended May 31, 2000, we had net loss of $1,971,482, which
is largely attributable to general and administrative expenses of $678,869 and
non-cash stock compensation of $1,365,700.
BUSINESS
Chineseinvestors.com develops, markets and supports Chinese language based
financial Internet portal for the Chinese speaking people worldwide. We have
established a presence on the Internet with our investment and financial portal
located at www.chineseinvestors.com. We believe the Chinese speaking online
community is growing and is becoming a significant market segment. Our objective
is to become the leading Chinese language Web-based provider of content, online
community products and e-commerce. We anticipate our Internet portal will
become an important tool for companies seeking to reach the Chinese speaking
online community worldwide.
<PAGE>
INDUSTRY BACKGROUND
We believe that the Chinese speaking community that access the Internet is
a growing market. The statistics for the number of Chinese speaking people
living outside of the People Republic of China with personal computers and
modems is not currently available. This information may be estimated based on
the overall U.S. Internet market trends which will grow from 70.1 million users
at the end of 1998 to 181.1 million users in 2003, reflecting a compound annual
growth rate of 20.9%. Industry research also projects that Internet users
outside the United States will surpass U.S. users by the end of the year 2000.
The China IT Market Overview estimates that China is currently the fastest
growing market in Asia and that by the end of the year 2000, excluding Japan,
China is expected to have the largest share of the Internet market in the
Asia/Pacific region. Moreover, a recent study conducted by BDA, Ltd. and the
Strategis Group, estimates that there will be 33 million Internet users in China
by 2003. According to IDC, an IT research firm, in 2001 there will be 27 million
Chinese online and e-commerce transactions in China valued at about $4 billion.
With over 4 million Asian households in the U.S. and Canada, IDC estimates this
market alone represents buying power in excess of $150 billion a year. This
rapid growth in the popularity of the Internet is due in large part to
increasing computer and modem penetration, development of the Web, the
introductions of easy-to-use navigational tools and utilities, and the growth in
the number of informational, entertainment and commercial applications available
on the Internet. We also believe there are tremendous opportunities in the U.S
By Charles Schwab's estimates, the Chinese community in the U.S. may hold as
much as $150 billion in investable assets. Chinese Americans number only 2.6
million, but they've got plenty of money. The median Chinese-American household
income is $65,000 a year, compared with $40,000 for Americans in general,
according to Boston research firm Forrester Research Inc. And about 69% of
Chinese households are accessed to the Internet, compared with 43% for the
population at large.
PRODUCTS
Our product consists of a leading Chinese language based online financial
portal.
CHINESEINVESTORS.COM
Chineseinvestors.com was developed to take advantage of the latent demand
for real time financial, business, stock market news and information of the
world's Chinese speaking population. By providing 24-hour round-the-clock
coverage of the world's stock markets including the U.S. and Asian and
exchanges, proactive information and commentary, we expect to fill an untapped
niche market. Our goal is to become the foremost Chinese language specific
Web-based source for unbiased, original, real time financial news, programming
and analysis worldwide. We derive our revenues primarily from sales of
subscriptions to our web site and from sales of advertising targeted to our
desirable reader demographic.
Chineseinvestors.com has been designed with simple interface navigation
to accommodate even the most elementary Internet user. The Chineseinvestors.com
community/portal concept will allow users to conveniently access information
around the clock. Chineseinvestors.com plans to offer the following
"neighborhoods" or categories of information:
* Home Page. The Chineseinvestors.com home page presents a picture of what's
happening in the markets each day including market movers, news, commentary
and other relevant informative information.
* Internet Stocks. Offering up-to-the-minute developments affecting the
fast-moving Internet segment.
* Technology Stocks. Covering breaking news on tech stocks such as software,
hardware, semiconductors and other issues.
* Message/Chat Room. Users will be able to Interact and exchange investment
ideas and information with other members, research analysts and portfolio
managers in an informal atmosphere.
* Asian Stocks. Quotes and investment information on Hong Kong listed stocks.
* Book Store. Users can browse through stacks of books and publications
covering most topics to do with investing.
* Research. This section summarizes earnings estimates, consensus broker
opinions, institutional ownership, insider activity and short interest
reports.
<PAGE>
* Market Commentary. This section features financial news, commentary and
opinion on market and economic trends, industry sectors, fundamental
and technical analysis and more.
* Mutual Funds. Users can keep up with their fund's latest net asset value,
peer performance, asset allocation, major holdings, sector distribution
and investment fees.
* IPO Research. Prices, calendar, filings, profiles and aftermarket activity.
* Portfolio Services. Keeps track of users buys, sells, and holds 24 hours
round-the-clock.
* We currently offer business model based on both subscription-based and free
content.
* Fees for on-line subscription of stock research and analysis:
Duration Fees
------------ -------------
1 Month $ 29.95
3 Month $ 80.95
6 Month $159.95
9 Month $239.95
12 Month $287.95
BUSINESS STRATEGIES
Our strategy is to capitalize on the Internet growth among Chinese speaking
people worldwide. We believe that Chinese language based users globally,
represent one of the fastest growing and potentially one of the largest user
groups on the Internet today. In order to capitalize on the growth opportunity
in this market, our strategy includes the following key elements:
* Providing a First-to-Market Solution. We believe that the first provider to
market with a Web-based solution has the opportunity to establish the leading
brand on the Web. Accordingly, we launched Chineseinvestors.com in June 1999
in order to be first-to-market with a Web-based Chinese language specific
solution for providing unbiased, original, real time financial news,
programming and analysis for Chinese speaking users.
* Expand Content. We intend to produce, collect, translate, enhance and
supplement content for our financial Internet portal network. As Chinese
language specific online financial content improves, we expect our Internet
financial portal network to create visibility, generate traffic and become
a forum for directed advertising. We anticipate that each our web site will
provide access to specific content, community and commerce that appeals to
individual Chinese speaking users, and thereby, potentially satisfy all of
their information, product and service needs without leaving our Internet
financial portal network. Moreover, we seek to make our Internet portal
network the first and most frequent destination for Chinese language specific
Internet users through online financial communities which, in turn, results in
increased user affinity and "stickiness". Accordingly, our products and
services are being designed to create a sense of community among our users. We
believe that community building will be a major source of our traffic and
brand loyalty as the Internet becomes an integral part of the Chinese
lifestyle.
* Capitalize on Chinese Language Specific Demographics. We believe that our
desirable Chinese language specific demographics will enable us to build a
growing advertising business. To reach this attractive market, we expect that
our advertisers will pay rates that will be among the highest of Web sites.
We expect that as we increase traffic to Chineseinvestors.com and expand our
offering of news and commentary, community features and investment tools to
Chinese speaking investors, we will create significant opportunities both for
increased financial services-related advertising as well as other forms of
advertising.
* Develop Strategic Partnerships. We believe that strategic relationships are
important for increasing brand awareness and attracting new visitors to our
Internet portal. We intend to build our subscriber base and brand awareness
through both subscription distribution and content syndication relationships.
In addition, we also believe that developing strategic relationships will
allow us to market our Portal and provide premium services and other content
more efficiently and effectively than would be possible through our direct
efforts alone. By syndicating our Internet portal network content to other
leading sites, we can expose our brand name to millions of potential
subscribers and drive additional traffic to our Portal.
<PAGE>
* Building Brand Name Recognition and User Loyalty. We believe that establishing
our brand and building brand recognition is critical to our ability to attract
new users to our Internet portal network. Therefore, we expect to engage in a
major campaign to develop awareness of our brand among Chinese speaking users.
We plan to allocate significant resources to develop and build brand
recognition through online and offline advertising, strategic alliances and
other promotional activities and marketing initiatives. In addition, we expect
to build user loyalty by expanding the breadth of our services by acquiring
content and services that are complementary to our Internet portal network.
We intend to incorporate technology into our products and services that has
either been developed by us internally or licensed from third parties to
further enhance and distinguish our brand and provide our Chinese speaking
users with a richer, more satisfying Internet experience.
* Establish an International Presence. We believe that the value of our
information, products and services will grow as the number of connected
Chinese speaking users increases. Our approach is to target Chinese language
specific markets where we can gain critical mass and expand worldwide. We plan
to enter into strategic relationships with both national and international
participants that have significant market share in specific regions of the
world. In addition, we also intend to leverage our existing relationships to
penetrate other new regions and markets.
STRATEGIC ALLIANCES
A key element of our business strategy is to enter into strategic alliances
with companies that will increase our content and navigation services, support
our advertising services and expand our distribution networks. Thus far, we
have entered into content license agreements with the following companies:
* Yahoo! Inc. On December 3, 1999, we entered into a one year content license
agreement with Yahoo! Inc. to provide content to their Yahoo Chinese language
section.
* Sina.com. On December 13, 1999, we entered into a one year content license
agreement with Sina.com, the largest Chinese portal on the World Wide Web, to
provide content to their site.
In addition to the above, we are currently in discussions with China.com,
and several other companies with regard to entering into content license
agreements with those firms. We believe that developing ongoing relationships
with leading business partners who offer quality content, technology and
distribution capabilities as well as marketing and cross-promotional
opportunities will enhance the our brand name, increase traffic to our Portal
and increase our ability to attract new subscribers and users.
MARKETING STRATEGY
Chineseinvestors.com is Chinese language based and we intend to
build our marketing plan on the solid foundation of a community/portal business
model. We believe that the community/portal model is best suited for e-commerce
because more and more online users are gravitating to a particular starting
point of interest as a "gateway" to the Internet's increasing store of
information and services. Online communities are the largest repositories of
value in a medium that clearly has value. Our web site users and subscribers
will be able to access unlimited amounts of information from within the online
financial community as well as by searching the Web through the community. The
large numbers of Internet users and audiences accessing communities allow
e-media and e-service oriented businesses to attract "user eyes," thus
potentially creating higher premiums from advertisers and merchants who want to
appeal to the broadest possible market.
According to Forrester Research Group, community/portal sites already
account for 15% of all World Wide Web page views. Online ad dollars are
currently flowing to large portals such as America Online, Inc. and Yahoo!,
Inc., but studies show that online advertising dollars will increasingly flow to
demographically and topically targeted Web sites. Indeed, targeted Web sites
are emerging as the most efficient Web media properties in revenue generated per
page. This is because advertisers are willing to pay much higher prices per
1,000 impressions ("CPM's") to reach a focused audience. For instance, CPM's are
averaging near $20 on broad portals such as Yahoo! and Lycos. However, CPM's are
ranging from $30 to more than $60 on focused services such as one of
Chineseinvestors.com's English language competitors TheStreet.com. Moreover, it
appears that this trend is directly relevant to online trading, which we believe
will be a key source of advertising revenue for our Internet portal network.
Currently, there are only a few in-depth investment information related sites
such as Chineseinvestors.com for Chinese speaking and reading people. As a
result, we believe that this limited competition will allow us to forge superior
<PAGE>
marketing advantages due to the comprehensiveness of information offered on our
Chineseinvestors.com Portal.
We also plan to engage in a significant branding and promotional campaign
to increase awareness of our brand. We intend to employ a combination of online
advertising and other marketing and promotional efforts aimed at defining a
desirable online destination for Chinese language specific users, attracting new
Chinese speaking users, increasing traffic on our Internet portal network and
developing additional revenue opportunities. In addition, our senior management
also expects to play an active role in the sales process by cultivating new and
existing industry contacts. We plan to market our services through direct sales
contacts, strategic relationships and the sales and marketing organizations of
our strategic partners. We will also promote our Web-based services through
traditional print media, including trade journals, newspapers and magazines
targeted at Chinese language specific users, and participate in trade shows,
conferences and speaking engagements as part of an ongoing public relations
program.
COMPETITION
The market for Chinese language based Internet information, services and
products is relatively new, intensely competitive and rapidly changing.
Moreover, the number of Web sites offering users content, products and services
is increasing at a rapid rate. In addition, traditional media and Internet
providers compete for consumers' attention both through traditional means as
well as through new Internet initiatives. As a result, we believe that
competition for Chinese speaking users will continue to increase as the Internet
grows as a communication and commercial medium. We believe that in the Internet
portal industry the principal competitive factors are the depth, breadth and
timeliness of services and content, the ability to offer compelling content and
services and brand recognition. Other important factors in attracting and
retaining users include ease of use, quality of service and cost. Although
future competition is difficult to characterize due principally to the variety
of potential competitors and the emerging nature of the market, we believe that
to be competitive we must continuously enhance our services and content, respond
to technological advances and emerging industry standards and practices on a
timely and cost-effective basis and build brand recognition.
INTELLECTUAL PROPERTY
We expect to rely primarily on a combination of copyright, trademark, trade
secret laws, our user policy and restrictions on disclosure to protect our
intellectual property, such as content, trademarks, trade names and trade
secrets. We also intend to enter into confidentiality agreements with our
employees and consultants to control access to and distribution of any other
proprietary information. Despite these precautions, it may be possible for a
third party to copy or otherwise obtain and use the content on our Internet
portal network or our other intellectual property without authorization.
Further, these precautions may not prevent misappropriation or infringement of
our intellectual property and our business could be harmed if we fail to protect
our intellectual property in a meaningful manner. Additionally, we may need to
engage in litigation in order to enforce our intellectual property rights in the
future or to determine the validity and scope of the proprietary rights of
others. Litigation could result in substantial costs and diversion of management
and other resources, either of which could harm our business.
We also expect to use certain licensed third-party technology and data and
content from third parties. In these license agreements, we generally expect the
licensors to agree to defend, indemnify and hold us harmless with respect to any
claim by a third party that the licensed software or content infringes any
person's proprietary rights. Litigation between licensors and a third party or
between us and a third party could lead to royalty obligations for which we are
not indemnified or for which we are not sufficiently covered. In the future, we
may seek to license additional technology or content in order to enhance our
Internet portal network's current features or to introduce new services. These
licenses may not be available on commercially reasonable terms, if at all. The
loss of or inability to obtain or maintain any of these technology licenses
could result in delays in introduction of new services until equivalent
technology, if available, is identified, licensed and integrated.
GOVERNMENT REGULATION
There are currently few laws or regulations that specifically regulate
communications or commerce on the Web. However, laws and regulations may be
adopted in the future that address issues such as user privacy, pricing, and the
characteristics and quality of products and services. The Telecommunications
Act, for example, sought to prohibit transmitting certain types of information
and content over the Web. Additionally, several telecommunications companies
<PAGE>
have petitioned the Federal Communications Commission to regulate Internet
service providers and online services providers in a manner similar to long
distance telephone carriers and to impose access fees on these companies. This
could increase the cost of transmitting data over the Internet. Moreover, it may
take years to determine the extent to which existing laws relating to issues
such as property ownership, libel and personal privacy are applicable to the
Web. Any new laws or regulations relating to the Web could adversely affect our
business.
EMPLOYEES
We believe that the success of our business will depend, in part, on our
ability to attract, retain and motivate highly qualified sales, technical and
management personnel, and upon the continued service of our senior management
and key sales and technical personnel. As of the date of this registration
statement, we have 23 employees and independent contractors, 7 work in the
product and content development, 4 in sales and marketing, 10 in editorial and 2
in administration. We consider our employee relations to be good and we have
never experienced any work stoppages. We can not assure you that we will be able
to successfully attract, retain and motivate a sufficient number of qualified
personnel to conduct our business in the future.
<PAGE>
DESCRIPTION OF PROPERTY
We presently lease approximately 1,083 square feet for our corporate
headquarters located at: 411 E. Huntington Drive, Suite #313, Arcadia,
California 91006. Rent is approximately $1,354 per month. In addition to our
corporate headquarters, we also maintains a small office in Shanghai. We believe
that our current office space is sufficient to meet our present needs and does
not anticipate any difficulty securing additional space, as needed, on terms
acceptable to the us.
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following persons are the Directors and Executive Officers of our
Company.
Name Age Position(s)
------------------ --- ------------------------------------------
Warren Wei Wang 31 President, Chief Executive Officer,
Chairman of the Board and Director
Lan Jiang 30 Treasurer and Director
Clayton Miller 30 Chief Operations Officer, Vice President,
Secretary and Director
Stephen C.C. Chen 62 Director
WARREN WEI WANG
Warren Wei Wang, has served as President, Chief Executive Officer, Chairman
of the Board and Director of Chineseinvestors.com, Inc. since its inception.
Prior to that, Mr. Wang served as a Vice President of Investments for Tradeway
Securities Group from September, 1998 until October, 1999. From November, 1997
to September, 1998, he served as a Senior Financial Consultant for Waldron & Co.
From September, 1996 to November, 1997, Mr. Wang was a Senior Account Executive
with Donald & Co. Securities. Mr. Wang has hands on business experience in
business management, project development, sales, marketing, accounting and
administration.
LAN JIANG
Lan Jiang has served as Treasurer and Director of Chineseinvestors.com,
Inc. since its inception. Mrs. Jiang is also the wife of Warren Wei Wang, the
Chief Executive Officer, Chairman of the Board and Director of the Company.
From August, 1998 to October, 1999, Ms. Jiang has worked as an accountant for
Lotus Travel. From June, 1996 to July, 1998 she was the Chief Financial Officer
for Lin Dong Enterprises. Mrs. Jiang's business experience includes accounting,
travel and international import/export. Mrs. Jiang received a Degree in
Accounting from Li Xin College in China.
CLAYTON MILLER
Clayton Miller has served as Chief Operations Officer, Vice President,
Secretary and Director of Chineseinvestors.com, Inc. since its inception.
Prior to joining the Company, Mr. Miller served as a Corporate Account
Executive for Creative Computers, and its subsidiaries Ubid.com and Ecost.com,
from March, 1999 to September, 1999. From March, 1997 until March, 1999,
he served as an Account Representative for Ingram Micro, the world's largest
distributor of computer products. From February, 1994 to March, 1997,
Mr. Miller served as Vice President of Sales for Texas Capital Securities.
His business experience includes information technology, management, sales,
marketing and financial services.
STEPHEN C.C. CHEN
Stephen C. C. Chen has served as Director of Chineseinvestors.com, Inc.
since its inception. Mr. Chen has over 15 years experience in the
import/export trade. Since 1994, Mr. Chen has served as President of Pacific
CC. Enterprises, and he currently owns several other companies involved in
both manufacturing and import/export. Mr. Chen holds an M.D. from Fujien
Medical University and a Ph.D. in Acupuncture and Oriental Medicine from the
Asian American University in San Diego.
<PAGE>
EXECUTIVE COMPENSATION
We may award stock options and cash bonus to key employees,
directors, officers and consultants under a stock option plan
not yet adopted as bonus based on service and performance. The annual
salaries of executive officers are listed as follows:
<TABLE>
Name and Principal Position Year Annual Salary (1)(2)
--------------------------- ----------- -----------------
<S> <C> <C>
Warren Wei Wang 2000 $ 48,000
Lan Jiang 2000 30,000
Clayton Miller 2000 36,000
--------------------------- ----------- -----------------
(1) We intend to pay each of our current officers the same in annual
salary for the Year 2001.
(2) We intent to pay 20% commissions as bonuses to Warren Wei Wang and Clayton
Miller for the revenues they each generate after the company reach certain
levels of profitability.
</TABLE>
EMPLOYMENT AGREEMENTS
We currently have no written employment with any of our officers
and directors.
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We indemnify to the fullest extent permitted by, and in the manner
permissible under the laws of the State of Indiana, any person made, or
threatened to be made, a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact that he/she is or
was a director or officer of our Company, or served any other enterprise as
director, officer or employee at our request. Our Board of Directors, in its
discretion, shall have the power on behalf of the Company to indemnify any
person, other than a director or officer, made a party to any action, suit or
proceeding by reason of the fact that he/she is or was our employee.
<PAGE>
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No public trading market currently exists for our Common Stock. We plan to
apply to have our Common Stock traded on the over-the-counter market and listed
on the OTC Bulletin Board. We can not assure you that we will obtain OTC
Bulletin Board listing, a trading market will ever develop or, if such a market
does develop, that it will continue.
As of the date of this prospectus, the number of holders of the our Common
Stock was approximately 178.
CERTAIN TRANSACTIONS
We have agreed to pay MAS Financial Corp.("MASF"), an entity controlled by
our sole former officer and director, a consulting fee consisting of cash
aggregating $30,000.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of the date of the prospectus,
by (i) each stockholder known by us to be the beneficial owner of more than
5% of our Common Stock, (ii) by each of our executive officer and Director
and (iii) by all of our executive officers and Directors as a group. Each
of the persons named in the table has sole voting and investment power with
respect to common stock beneficially owned. The shares represented are shares
owned as of October 20, 2000.
<TABLE>
<CAPTION>
Number of Shares
Name and Address Beneficially Percent of
of Beneficial Owner Owned Class
------------------------ -------------------- --------------
<S> <C> <C>
Warren Wei Wang (1)(4) 2,250,000 24.6%
Chairman of the Board,
President and CEO
Lan Jiang (1)(4) 2,250,000 24.6%
Treasurer and Director
Leon J. Sabean (2) 2,850,000 31.1%
Clayton Miller (1) 1,500,000 16.4%
Chief Operations Officer,
Vice President,
Secretary and Director
Stephen C. C. Chen (1) 749,850 8.2%
Director
Toni Ruby (3) 748,500 8.2%
All Officers and Directors 4,499,850 49.2%
(4 persons)
___________________________
</TABLE>
(1) The address for each officer/director is c/o ChineseInvestors.com Inc.,
411 E. Huntington Dr., #313, Arcadia, CA 91006.
(2) Includes a) 1,650,000 shares held by Superior Trading Inc. which is
controlled by Leon J. Sabean, b) 800,000 shares held by World Financial
DBA. which is controlled by Leon J. Sabean, c) 400,000 shares held by
Bombay Associates Inc. which is controlled by Leon J. Sabean. The address
for Superior Trading Company, Inc.is c/o 400 W. King Street, Suite# 301,
Carson City, NV 89703. The address for World Financial DBA is c/o 12626
Bellflower Blvd., Downey, CA 90242. The address for Bombay Associates
Inc. is c/o 1502 N. Carson St., Suite # 10, carson City, NV 89701.
(3) Shares are held by Breyer Ashton Corp. The address for Breyer Ashton
Corp. is c/o 318 N. Carson Suite 214, Carson City, NV 89701
(4) Mr. Warren Wei Wang and his wife Mrs. Lan Jiang beneficially hold a total
of 2,250,000 shares.
<PAGE>
DESCRIPTION OF SECURITIES
COMMON STOCK
Our Articles of Incorporation currently authorizes us to issue Eighty
Million (80,000,000) shares of Common Stock at $.001 par value. Each holder of
our Common Stock is entitled to one vote for each share of Common Stock held.
As of the date of this prospectus, there are 9,155,000 shares of our Common
Stock outstanding.
PREFERRED STOCK
Our Articles of Incorporation currently authorizes us to issue Twenty
Million (20,000,000) shares of Preferred Stock at $.001 par value. The
Preferred Stock may be divided into Series or Classes, with special voting
rights and preferences, to be established by our management upon the approval of
a majority vote of our Directors. As of the date of this prospectus, there are
no shares of our Preferred Stock outstanding.
If our Board of Directors authorized the issuance of shares of Preferred
Stock with conversion rights, the number of shares of our Common Stock
outstanding could potentially be increased by up to the authorized amount.
Issuance of our Preferred Stock could, under certain circumstances, have the
effect of delaying or preventing a change in control of our Company and may
adversely affect the rights of holders of our other classes of Preferred Stock
or holders of our Common Stock. Also, our Preferred Stock could have
preferences over our Common Stock and other series of our Preferred Stock with
respect to dividends and liquidation rights.
Upon liquidation of our Company, each shareholder is entitled to receive a
proportionate share of our assets available for distribution to shareholders
after the payment of liabilities and after distribution in full of preferential
amounts, if any. All shares of our Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of our Common Stock are entitled to share
pro rata in dividends and distributions with respect to our Common Stock, as may
be declared by our Board of Directors out of funds legally available therefor.
TRANSFER AGENT
We are the Transfer Agent for shares of our Common Stock. We plan to
appoint Registrar and Transfer Company as our transfer agent for our Common
Stock. Their address is 10 Commerce Drive, Cranford, NJ 07016-3572, and their
phone number at this location is (800) 456-0596.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of our common stock in the public market could
adversely affect prevailing market prices of our common stock. Furthermore,
since no shares will be available for sale shortly after this offering because
of certain legal restrictions on resale described below, sales of substantial
amounts of common stock in the public market after these restrictions lapse
could adversely affect the prevailing market price and our ability to raise
equity capital in the future.
Upon completion of this offering, we will have outstanding an aggregate
of 9,155,000 shares of our common stock. Of these shares, all of the shares
sold in this offering will be freely tradable without restriction or further
registration under the Securities Act, unless such shares are purchased by
"affiliates" as that term is defined in Rule 144 under the Securities Act (the
"Affiliates"). The remaining 7,942,350 shares of common stock held by existing
stockholders are "restricted securities" as that term is defined in Rule 144
under the Securities Act. Restricted securities may be sold in the public
market only if registered or if they qualify for an exemption from registration
under Rule 144 promulgated under the Securities Act, which rules are summarized
below.
RULE 144
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned shares of our
common stock for at least one year would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of:
* 1% of the number of shares of common stock then outstanding, which will equal
approximately 91,550 shares immediately after this offering; or
<PAGE>
* the average weekly trading volume of the common stock on the OTC Bulletin
Board during the four calendar weeks preceding the filing of a notice on Form
144 with respect to such sale.
Sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about us.
RULE 144(K)
Under Rule 144(k), a person who is not deemed to have been one of our
Affiliates at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years,
including the holding period of any prior owner other than an Affiliate, is
entitled to sell such shares without complying with the manner of sale,
public information, volume limitation or notice provisions of Rule 144.
Therefore, unless otherwise restricted, "144(k) shares" may be sold immediately
upon the completion of this offering.
PLAN OF DISTRIBUTION
It is anticipated that the selling security holders will offer the shares
in direct sales to private persons and in open market transactions. The
selling security holders may offer the shares to or through registered
broker-dealers who will be paid standard commissions or discounts by the
selling security holders. We believe that no selling security holders have
any arrangements or agreements with any underwriters or broker/dealers
to sell the shares, and they may contact various broker/dealers to identify
prospective purchasers. Additionally, agents, brokers or dealers may
acquire shares or interests in shares and may, from time to time, effect
distributions of the shares or interests in such capacity.
SELLING SECURITY HOLDERS
This prospectus concerns the transfer by the selling security holders
of an aggregate of 1,212,650 shares of common stock. The selling security
holders may transfer the common stock at those prices that they are able to
obtain in the market or as otherwise negotiated. In addition, the selling
stockholders may transfer the shares in exchange for consideration other than
cash, or for no consideration, as determined by the selling stockholders in
their sole discretion. This prospectus may be used by the selling stockholders
to transfer shares of the common stock to affiliates of the selling
stockholders. We will receive no proceeds from the sale of common stock by the
selling security holders.
The following table sets forth the name of the selling security holders,
the number of shares of common stock owned by the selling security holders
before this offering, the number of shares of common stock being registered, and
the number and percentage of shares of common stock owned after this offering.
None of the selling security holders has held any position or office, or had
any marital relationship with our officers or directors in the past three years
except as noted below.
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Beneficial Ownership Beneficial Ownership
Beneficial Owner Prior to the After the
Offering Number of Offering (1)
--------------------- Shares -----------------------
Number Percent Registered Number Percent
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------
World Financial DBA 800,000 8.7% 700,000 100,000 1.1%
-----------------------------------------------------------------------------------------------
Stephen C.C. Chen 749,850 8.2% 100,000 649,850 7.1%
-----------------------------------------------------------------------------------------------
MAS Capital Inc. 297,500 3.2% 297,500 0 0
-----------------------------------------------------------------------------------------------
Continental Capital 92,750 1.0% 92,750 0 0
-----------------------------------------------------------------------------------------------
Stanislav Nikolaevich Gemes 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Sergei Konstantinovich Afon 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Pavel Alexandrovich Sidorkin 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Stepan Alexandrovich Dybov 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Ilona Yanochevna Nerba 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Larisa Nikolaevna Timoshina 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Natalya Petrovna Timoshilova 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Anatoly Ivanovich Kim 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Nina Nikolaevna Kern 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Alexei Dmitrievich Basuk 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Vadim Alexandrovich Yuchno 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Maxim Vladimirovitch Golodnitsky 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Ludmila Viktorovna Sandaluk 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Vladimir Viktorovich Knyshov 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Michael Dmitrievich Nerba 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Irina Vladimirovna Kern 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Sergei Michaelovich Nerba 750 * 750 0 0
-----------------------------------------------------------------------------------------------
Vitaly Alexandrovich Boyarkin 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Victoria Vitalyevna Boyarkina 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Natalya Alexandrovna Boyarkina 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Evgeni Nikolaevich Kern 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Elena Viktorovna Dobrynina 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Alexander Nilolaevich Dobrynin 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Denis Michaelovich Nevzorov 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Tatyana Alexandrovna Nevzorova 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Michael Nikolaevich Nevzorov 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Olga Nikolaevna Nerba 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Tatyana Tichonovna Rumina 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Nikolai Petrovich Rumin 250 * 250 0 0
-----------------------------------------------------------------------------------------------
<PAGE>
Vladimir Yrevich Dobrov 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Natalya Vladimirovna Prishkolnik 250 * 250 0 0
-----------------------------------------------------------------------------------------------
Charles S. Roberson 100 * 100 0 0
-----------------------------------------------------------------------------------------------
David E. Carra 100 * 100 0 0
-----------------------------------------------------------------------------------------------
April K. Carlisle 600 * 600 0 0
-----------------------------------------------------------------------------------------------
Rich Hemmer 600 * 600 0 0
-----------------------------------------------------------------------------------------------
Stephen Lee 600 * 600 0 0
-----------------------------------------------------------------------------------------------
Susan Elizabeth Cormell 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Julie Caroline Avery 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Pamela Avery 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Robert George William Avery 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Roger Thomas Sant 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Victor Charles Bowmer 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Robert Charles Bowmer 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Barbara Jean Ellson 100 * 100 0 0
-----------------------------------------------------------------------------------------------
John Peter Debney 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Emma Weight 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jean Weight 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jose Luis Guevara Diaz 100 * 100 0 0
-----------------------------------------------------------------------------------------------
David Guevara Diaz 600 * 600 0 0
-----------------------------------------------------------------------------------------------
Mevert Aurelio Serrano Selazco 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Pablo Hernandez Gallon 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Juan Dario Hernandez Cano 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Mario J. Lemoine Iragorri 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Frank Enrique Ladera Ladera 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Felipe Enrique Betancourt Garcia 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Fernandez Quintero Reinaldo Alberto 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Mena Matute Mayerling Daliath 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Guevara Diaz Monica 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Carlos Jesus Guevara Diaz 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Eduardo Jose Banco 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jose Luis Loreto Gutierrez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Alexander Luis Barretto 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Leonardo Pedrin Vargas 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jeans Carlos Herrera 100 * 100 0 0
-----------------------------------------------------------------------------------------------
David Curbenos Garcia 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Pedro Pablo Gutierrez Moreno 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Julio Cesar Rodriguez Revette 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Neil Alberto Alcala Bello 100 * 100 0 0
-----------------------------------------------------------------------------------------------
<PAGE>
Victor Jose Monillo 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Angel Jose Oneca 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Leonel Antonio Borreso Herrera 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Carlos Alberto Armas 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Hector Jose Alvarez Mejias 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jose Luis Vegas 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Daisy Oviedo De Lara 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Mitzy Capriles De Ledezma 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Rosalia Romero 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jesus Amoyo Gomez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Amadeo Leyba 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Mercedes Vargas 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Daniela Schadendorf De Esparis 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Leonardo Velazquez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Susana Prada De Allulli 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jose Pimentel Latvaa 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Esdgan Mujica 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jose Feliz Oletta 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Dulce Delgado 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Maria Cristina Parra 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Nelson Jose Lara 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Nancy Montero 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Luis Enrique Oberto 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Mariztza Matiozzi 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jorge Carvajal Morales 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Fernando Pereira 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Wilmer Jose De Abrev Vazquez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jacqueline Carrasco Gamez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Iraida De La Corteza Carrasco De John 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Victor Jovanny Suarez Valdes Pino 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Abranham Giraud L. 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Pablo Rafael Barretto 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jhonny Emiliano Diaz Pacheco 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jorge A. Briones Torrealba 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Omar Antonio Morales Mancano 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Williams Montes 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Pedro Pacheco 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Manuel Antonio Gonzalez Gonzalez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Rafael Chenubini Ocando 100 * 100 0 0
-----------------------------------------------------------------------------------------------
<PAGE>
Pedro Miguel Cardozo Azuaje 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jose Luis Ferreira 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Brieda Aular Perez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Henry Rossenschein 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Ernesto Fernandez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Dumas Roberto Gomez Gonzalez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Guillermo Paredes 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jose Dominguez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Hugo Cesar Bastidas 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Richard Tovar 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Feliz Morales Marcano 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Mario Olivares Marcano 100 * 100 0 0
-----------------------------------------------------------------------------------------------
George Dao Dao 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Alejandro Andres H. 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Francis Carolina Maldonado Gonzalez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Leonardo George Bastardo 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Elba Elena Diaz Acero 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Roberto Carlos Diaz 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Silio Antonio Manzanero Lariva 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Eduardo Jose Crespo 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Josueismael Gomez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Eduardo Palomar Lopez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Miguel Enrique Ravelo Vouteris 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Ibain Gregorio Lopez Artiaga 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Gabriel Antonio Caraballo Soto 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Edgar Jose Maldonado Garcia 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Maria Particia Pichardo 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Rafael Angel Chavez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Eric David Domingo Azaujo 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Maikel Lopez Lopez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Gustavo Heiten Aguylar 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Carlos Alfredo Ferreira Moron 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Maria Josefa Cheda Saavedra 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Hermogenes Francisco Gil Suarez 100 * 100 0 0
-----------------------------------------------------------------------------------------------
William Rommel Montes Rojas 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Miguel Antonio Flores Vargas 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Ruben Silva Boico 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Ersel Susar 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Jeriah D. Civlei 100 * 100 0 0
-----------------------------------------------------------------------------------------------
<PAGE>
John Tsai 350 * 350 0 0
-----------------------------------------------------------------------------------------------
Guillermo Guevara 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Elizabeth Hudson 100 * 100 0 0
-----------------------------------------------------------------------------------------------
Graham Bowmer 100 * 100 0 0
-----------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%.
(1) Assuming all shares registered are sold.
Following selling stockholders have served as our Directors in the past:
Aaron Tsai, Charles S. Roberson, David E. Carra, April K. Carlisle,
Rich Hemmer, Stephen Lee, Ersel Susar, Jeriah D. Civlei, John Tsai,
Guillermo Guevara, Elizabeth Hudson and L.J. Sabean.
<PAGE>
LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings.
LEGAL MATTERS
Charlotte M. Liebig, Attorney-At-Law has acted as our counsel in
connection with this offering, including the validity of the issuance of the
shares offered under this prospectus.
<PAGE>
EXPERTS
The financial statements of Chineseinvestors.com, Inc. at May 31, 2000
appearing in this Prospectus and Registration Statement have been audited by
Stark Tinter & Associates, LLC, independent auditors, as stated in their report
appearing elsewhere herein, and are included in reliance upon such report given
on the authority of such firm as experts in accounting and auditing.
<PAGE>
ADDITIONAL INFORMATION
We filed a registration statement with the SEC on Form SB-2 relating to the
shares offered in this prospectus. This prospectus does not contain all of the
information included in the registration statement. For further information
about us and the shares we are offering in this prospectus, refer to the
registration statement and its exhibits. The statements we make in this
prospectus regarding the content of any contract or other document are
necessarily not complete, and you may examine the copy of the contract or other
document that we filed as an exhibit to the registration statement. All our
statements about those contracts or other documents are qualified in their
entirety by referring you to the exhibits to the registration statement.
As of the effective date of the registration statement, we will be a
reporting company and will be subject to the reporting requirements of the
Securities Exchange Act. Our filings may be inspected and copied without charge
at the public reference facility of the SEC at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional
Offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such materials can be obtained by mail from the Public Reference Section of
the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, we are required to file electronic
versions of these documents with the SEC through the SEC's Electronic Data
Gathering, Analysis and Retrieval ("EDGAR") system. The SEC maintains a Web
site at http://www.sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically with the SEC.
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Content Page
------------------------------------------------------------------------ ----
<S> <C>
Balance Sheet at August 31, 2000 F-2
Statements of Operations for the Three Months Ended August 31, 2000 & 1999 F-3
Statements of Cash Flows for the Three Months Ended August 31, 2000 & 1999 F-4
Notes to Financial Statement at August 31, 2000 F-5
Independent Auditor's Report F-6
Balance Sheet at May 31, 2000 F-7
Statement of Operations for the Year Ended May 31, 2000 F-8
Statement of Stockholders' Equity for the Year Ended May 31, 2000 F-9
Statement of Cash Flows for the Year Ended May 31, 2000 F-10
Notes to Financial Statements at May 31, 2000 F-11
</TABLE>
F-1
<PAGE>
See the accompanying notes to the financial statements
Chineseinvestors.com, Inc.
Balance Sheet
August 31,2000
<TABLE>
<CAPTION>
August 31,
2000
Assets ------------
<S> <C>
Current Assets:
Cash $ 140,032
Other current assets 3,500
------------
Total Current Assets 143,532
------------
Property and equipment, net 26,643
------------
Other assets
Deposits 6,200
Other 1,282
------------
$ 7,482
------------
177,657
============
Liabilities and stockholders' equity
Current Liabilities:
Accounts payable and accrued expenses $ 16,909
------------
Stockholders' equity
Common stock, no par value
30,000,000 shares authorized,
8,211,850 shares issued and outstanding 2,249,500
Common stock subscriptions 1,000,000
Accumulated deficit (2,088,752)
------------
1,160,748
Receivable for stock subscription (1,000,000)
------------
160,748
------------
$ 177,657
============
</TABLE>
F-2
<PAGE>
See the accompanying notes to the financial statements
Chineseinvestors.com, Inc.
Statements of Operations
For the Three Months Ended August 31, 2000 and 1999
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
August 31 August 31
2000 1999
------------ ------------
<S> <C> <C>
Revenue $ 228,052 $ -
Operating expenses:
General and administrative expenses 343,854 19,436
Non cash stock compensation - 103,700
Depreciation 1,467 126
------------ ------------
345,321 123,262
------------ ------------
Net (Loss) $ (117,269) $ (123,262)
============ ============
Per share information:
Weighted average shares outstanding -
basic and fully diluted 8,316,850 5,471,667
============ ============
Net (loss) per share - basic and fully diluted $ (0.01) $ (0.02)
============ ============
</TABLE>
F-3
<PAGE>
See the accompanying notes to the financial statements
Chineseinvestors.com, Inc.
Statements of Cash Flows
For the Three Months Ended August 31, 2000 and 1999
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
August 31 August 31
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net cash (used in) operating activities $ (118,345) $ (15,773)
------------ ------------
Cash flows from investing activities:
Acquisition of property and equipment (2,748) (8,117)
------------ ------------
Net cash (used in) operating activities (2,748) (8,117)
------------ ------------
Cash flows from financing activities:
Proceeds from stock issuance 125,000 112,800
------------ ------------
Net cash provided by financing activities 125,000 112,800
------------ ------------
Net increase in cash 3,907 88,910
Beginning - cash balance 136,125 -
------------ ------------
Ending - cash balance $ 140,032 $ 88,910
============ ============
</TABLE>
F-4
<PAGE>
Chineseinvestors.com, Inc.
Notes to Financial Statements
August 31, 2000
(Unaudited)
(1) Basis Of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP") for interim financial
information and Item 310(b) of Regulation SB. They do not include all of the
information and footnotes required by GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) considered necessary for a fair presentation have been
included. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year. For
further information, refer to the financial statements of the Company as of May
31, 2000, including notes thereto.
(2) Earnings Per Share
The Company calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. During the periods presented common stock
equivalents were not considered as their effect would be anti dilutive.
(3) Impairment of Long Lived Assets
Long lived assets and certain identifiable intangibles held and used by the
Company are reviewed for possible impairment whenever events or circumstances
indicate the carrying amount of an asset may not be recoverable or is impaired.
Management has not identified any impairment losses as of August 31, 2000.
(4) Stockholders' Equity
During the period from June 1, 2000 through June 30, 2000 the Company issued
125,000 shares of its common stock for cash aggregating $125,000. In addition,
the Company accepted a subscription for 400,000 shares of its common stock in
exchange for a note receivable in the amount of $1,000,000.
F-5
<PAGE>
Chineseinvestors.com, Inc.
Notes to Financial Statements
August 31, 2000
(Unaudited)
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Chineseinvestors.com, Inc.
We have audited the accompanying balance sheet of Chineseinvestors.com, Inc. as
of May 31, 2000, and the related statements of operations, stockholders' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chineseinvestors.com, Inc. as
of May 31, 2000, and the results of its operations, and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered a significant loss from
operations. This factor raises substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to this matter are
also discussed in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Stark Tinter & Associates, LLC
Denver, Colorado
September 11, 2000
F-6
<PAGE>
See the accompanying notes to the financial statements
Chineseinvestors.com, Inc.
Balance Sheet
May 31,2000
<TABLE>
<CAPTION>
May 31, 2000
Assets ------------
<S> <C>
Curent Assets:
Cash $ 136,125
Other current assets 3,500
------------
Total Current Assets 139,625
------------
Property and equipment, net 25,362
------------
Other assets
Deposits 6,200
Other assets 1,342
------------
7,542
------------
$ 172,529
============
Liabilities and stockholders' equity
Current Liabilities:
Accounts payable and accrued expenses $ 19,511
------------
Stockholders' equity
Common stock, no par value,
30,000,000 shares authorized,
8,211,850 shares issued and outstanding 2,124,500
Accumulated deficit (1,971,482)
------------
153,018
------------
$ 172,529
============
</TABLE>
F-7
<PAGE>
See the accompanying notes to the financial statements.
Chineseinvestors.com, Inc.
Statement of Operations
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Revenue $ 85,493
Operating expenses:
Cost of sales 7,364
General and administrative expenses 678,869
Non cash stock compensation 1,365,700
Depreciation 5,042
------------
2,056,975
------------
Net (Loss) $(1,971,482)
============
Per share information:
Weighted average shares outstanding -
basic and fully diluted 6,980,203
============
Net (loss) per share - basic and fully diluted $ (0.28)
============
</TABLE>
F-8
<PAGE>
See the accompanying notes to the financial statements.
Chineseinvestors.com, Inc.
Statement of Stockholders' Equity
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
Common Stock
-------------------------- Accumulated
Shares Amount Deficit Total
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Beginning balance - $ - $ - $ -
Issuance of common shares
for cash at inception 780,000 7,800 - 7,800
Issuance of common shares
for services at inception 4,620,000 46,200 - 46,200
Issuance of common shares
for cash 1,492,350 751,000 - 751,000
Issuance of common shares
for services 1,319,500 1,391,500 - 1,319,500
Net (loss) for the year - - (1,971,482) (1,971,482)
------------ ------------ ------------ ------------
Balance at May 31, 2000 8,211,850 $ 2,124,500 $(1,971,482) $ 153,018
============ ============ ============ ============
</TABLE>
F-9
<PAGE>
See the accompanying notes to the financial statements.
Chineseinvestors.com, Inc.
Statement of Cash Flows
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Net (loss) $(1,971,482)
Adjustments to reconcile net (loss) to net cash
used in operating activities:
Depreciation 5,042
Common shares issued for services 1,365,700
(Increase) in other current assets (3,500)
(Increase) in other assets (7,542)
Increase in accounts payable and accrued expenses 19,511
------------
Net cash (used in) operating activities (592,271)
------------
Cash flows from investment activities:
Acquisition of property and equipment (30,404)
------------
Net cash (used in) operating activities (30,404)
------------
Cash flows from financing activities:
Proceeds from stock issuance 758,800
------------
Net cash provided by financing activities 758,800
------------
Net increase in cash 136,125
Beginning - cash balance -
------------
Ending - cash balance $ 136,125
============
Supplemental cash flow information:
Cash paid for income taxes $ -
Cash paid for interest $ -
</TABLE>
F-10
<PAGE>
See the accompanying notes to the financial statements.
Chineseinvestors.com, Inc.
Notes to Financial Statements
May 31,2000
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated on June 15, 1999 in the State of California. The
Company is a provider of Chinese language web based real time financial
information.
Revenue Recognition
The Company recognizes revenue when its products are delivered or services are
provided.
Product Development Costs
The Company's web site will comprise multiple features and offerings that are
currently under development, and it is anticipated that the offerings will
require future development and refinement. In connection with the development of
its products, the Company will incur external costs for hardware, software, and
consulting services, and internal costs for payroll and related expenses of its
technology employees directly involved in the development. All hardware costs
will be capitalized. Purchased software costs will be capitalized in accordance
with Statement of Position 98-1 Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. All other costs will be reviewed for
determination of whether capitalization or expense as product development cost
is appropriate.
Property, Equipment and Depreciation
Property and equipment are stated at cost. Depreciation is calculated using the
straight-line method over the following estimated useful lives:
Years
-----
Computer software 3
Furniture and Fixtures 7
Other Equipment 5
Cash, Cash Equivalents and Short-term Investments
The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents. At May 31, 2000 the Company
maintained on deposit at a financial institution of $134,366, which deposit
exceeds the federal insurance limit of $100,000.
Advertising Costs
The Company expenses all costs of advertising as incurred. Advertising costs
included in selling, general and administrative expenses aggregated $148,982.
Financial Instruments
Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of May 31, 2000. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include cash and
accounts payable and accrued expenses. Fair values were assumed to approximate
carrying values for these financial instruments because they are short term in
nature and their carrying amounts approximate fair values or they are receivable
or payable on demand.
Long Lived Assets
The carrying value of long lived assets is reviewed on a regular basis for the
existence of facts and circumstances that suggest impairment. To date, no such
impairment has been indicated. Should there be an impairment in the future, the
Company will measure the amount of the impairment based on the undiscounted
expected future cash flows from the impaired assets.
F-11
<PAGE>
Chineseinvestors.com, Inc.
Notes to Financial Statements
May 31,2000
Net Income (Loss) per Common Share
The Company calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. During the periods presented common stock
equivalents were not considered as their effect would be anti dilutive.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Segment Information
The Company follows SFAS No. 131, Disclosures about Segments of an Enterprise
and Related Information." Certain information is disclosed, per SFAS No. 131,
based on the way management organizes financial information for making operating
decisions and assessing performance. The Company currently operates in a single
segment and will evaluate additional segment disclosure requirements as it
expands its operations.
Income taxes
The Company follows Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes" ("SFAS No. 109") for recording the provision for
income taxes. Deferred tax assets and liabilities are computed based upon the
difference between the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when the related
asset or liability is expected to be realized or settled. Deferred income tax
expenses or benefits are based on the changes in the asset or liability each
period. If available evidence suggests that it is more likely than not that some
portion or all of the deferred tax assets will not be realized, a valuation
allowance is required to reduce the deferred tax assets to the amount that is
more likely than not to be realized. Future changes in such valuation allowance
are included in the provision for deferred income taxes in the period of change.
Recent Pronouncements
The FASB recently issued Statement No 137, "Accounting for Derivative
Instruments and Hedging Activities-Deferral of Effective Date of FASB Statement
No. 133". The Statement defers for one year the effective date of FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities". The
rule now will apply to all fiscal quarters of all fiscal years beginning after
June 15, 2000. In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which is required to be adopted
in years beginning after June 15, 1999. The Statement permits early adoption as
of the beginning of any fiscal quarter after its issuance. The Statement will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of the hedged assets, liabilities, or firm commitments
through earnings or recognized in other comprehensive income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings. The Company has not
yet determined if it will early adopt and what the effect of SFAS No. 133 will
be on the earnings and financial position of the Company.
Note 2. BASIS OF REPORTING
The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
The Company has experienced a significant loss from operations as a result of
its investment necessary to achieve its operating plan, which is long-range in
nature. For the year ended May 31, 2000 the Company incurred a net loss of
$1,971,482.
F-12
<PAGE>
Chineseinvestors.com, Inc.
Notes to Financial Statements
May 31,2000
The Company's ability to continue as a going concern is contingent upon its
ability to secure financing, increase ownership equity and attain profitable
operations. In addition, the Company's ability to continue as a going concern
must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which the Company operates.
The Company is pursuing financing for its operations and seeking additional
private investments. Failure to secure such financing or to raise additional
equity capital may result in the Company depleting its available funds and not
being able pay its obligations.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
NOTE 3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following at May 31, 2000:
Furniture and fixtures $ 6,847
Equipment 18,130
Software 5,427
------------
30,404
Less: accumulated depreciation 5,042
------------
$ 25,362
============
Depreciation expense charged to operations was $5,042.
Note 4. STOCKHOLDERS' EQUITY
At May 31, 2000, the Company's no par value common stock authorized was
30,000,000 shares with 8,211,850 shares issued and outstanding. During March
2000 the Company effected a 3 for 2 forward stock split. All share and per share
amounts have been adjusted for this split.
At inception, the Company issued 780,000 shares of its common stock for cash
aggregating $7,800 ($.01 per share) and 4,620,000 shares of its common stock for
services valued at $46,200 ($.01 per share) which management believes is the
fair market value of the services provided.
During the year ended May 31, 2000 the Company issued shares of common stock for
cash as follows:
Shares Per share Amount
---------- ----------- ----------
15,000 $0.06 $ 1,000
802,350 $0.09 $ 75,000
675,000* $1.00 $ 675,000
* Issued to an entity controlled by one of the company's directors.
In addition, the Company issued 1,319,500 shares of common stock for services
valued at $1,319,500 ($1.00 per share) which per share value corresponds to the
cash price received for common shares sold during the periods which the common
shares were issued for services.
Subsequent to May 31, 2000 the Company issued 125,000 shares of its common stock
for cash aggregating $125,000 to an entity controlled by one of its directors
and 400,000 shares of common stock for a note receivable of $1,000,000.
During the periods covered by these financial statements the Company issued
shares of common stock without registration under the Securities Act of 1933.
Although the Company believes that the sales did not involve a public offering
of its securities and that the Company did comply with the "safe harbor"
exemptions from registration, it could be liable for rescission of the sales if
such exemptions were found not to apply and this could have a material negative
impact on the Company.
F-13
<PAGE>
Chineseinvestors.com, Inc.
Notes to Financial Statements
May 31,2000
Note 5. INCOME TAXES
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (FAS 109), "Accounting for Income Taxes", which requires use
of the liability method. FAS 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
purposes, referred to as temporary differences. Deferred tax assets and
liabilities at the end of each period are determined using the currently enacted
tax rates applied to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled or realized.
The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes.
The sources and tax effects of the differences are as follows:
Income tax provision at
the federal statutory rate 35 %
Effect of operating losses (35)%
-----
-
=====
As of May 31, 2000, the Company has a net operating loss carryforward of
approximately $700,000, which will be available to offset future taxable income.
If not used, these carryforwards will expire in 2020. The deferred tax asset
relating to the operating loss carryforward of approximately $245,000 has been
fully reserved at May 31, 2000.
Note 6. COMMITMENTS
Lease
During August 1999 the Company entered into a three year lease, commencing on
September 1, 1999, for its office facilities. The lease calls for monthly rent
payments of $1,354 which increase by 5% on each anniversary date of the lease.
Minimum annual future rent payments under non-cancelable leases having a
remaining term in excess of one year are as follows:
2001: $ 18,561
2002: 20,052
2003: 5,073
----------
$ 43,686
==========
Rent expense was $19,615 for the year ended May 31, 2000.
Other
During May 2000 the Company entered into an agreement with MAS Financial Corp.
("MASF") whereby MASF agreed to transfer control of MAS Acquisition LII Corp.
("MASA"), a development stage corporation with no operations or significant
assets, which it controls to the Company. Pursuant to the terms of the agreement
the Company will acquire approximately 96% of the MASA in exchange for all of
its issued and outstanding common stock.
The Company also agreed to pay MASF a consulting fee consisting of $30,000
payable $15,000 upon the signing of the agreement and $15,000 upon the Company's
clearance for quotation on the OTC Bulletin Board.
During June 2000 the Company completed the reorganization with MASA. In
conjunction therewith, MASA. issued 8,200,000 shares of its restricted common
stock for all of the issued and outstanding common shares of the Company. This
reorganization will be accounted for as though it were a recapitalization of the
Company and sale by the Company of 319,900 shares of common stock in exchange
for the net assets of MASA. In conjunction with the reorganization MASA changed
its name to Chineseinvestors.com, Inc.
F-14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to provisions described in Item 14, or
otherwise, the registrant 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 and is therefore
unenforceable. In the event that a claim for indemnification by the
registrant against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer, or controlling person of
the registrant in the successful defense of any action, suit, or proceeding)
is asserted by such director, officer, or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against pubic policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
<PAGE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an itemized statement of our expenses in
connection with the registration of our common stock. All the expenses are
estimated, execept for the SEC registration fee.
<TABLE>
<S> <C>
SEC Registration Fee ..................................... $ 800.35
Printing and engraving expenses .......................... $ 2,000.00
Legal fees and expenses .................................. $ 500.00
Auditors' fees and expenses .............................. $ 3,000.00
Transfer Agent and Registrar fees ........................ $ 5,000.00
----------
TOTAL $11,300.35
==========
</TABLE>
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Chineseinvestors.com Inc., a California Corporation
(subsidiary)
Since our inception, we have issued securities without registration under
the Securities Act in the transactions set forth below and in reliance on the
exemptions provided by Section 4(2) of the Securities Act of 1933, as amended.
In connection with all of these transactions, we determined that all of the
investors were sophisticated and had access to the kind of information that
would otherwise be contained in a registration statement.
On July 21, 1999, we issued 2,250,000 shares of our common stock to Mr. Warren
Wei Wang and Mrs. Lan Jiang for $7,800 cash and service rendered at $ 0.01 per
share.
On July 21, 1999, we issued 1,500,000 shares of our common stock to Clayton
Miller for services rendered at $ 0.01 per share.
On July 21, 1999, we issued 1,650,000 shares of our common stock to Superior
Trading Inc. for services rendered at $ 0.01 per share.
On August 9, 1999, we issued 40,000 shares of our common stock to Capital Access
Bureau for services rendered at $ 1.00 per share.
On August 12, 1999, we issued 100,000 shares of our common stock to World
Financial DBA for $100,000 cash at the price of $ 1.00 per share.
On August 18, 1999, we issued 37,500 shares of our common stock to Ming Jun Guo
for $ 5,000 cash at the price of $ 0.13 per share.
On August 18, 1999, we issued 15,000 shares of our common stock to Ming Jun Guo
for services rendered cash at the price of $ 1 per share.
On August 18, 1999, we issued 22,500 shares of our common stock to Jing Wang
for services rendered at $ 1.00 per share.
On September 7, 1999, we issued 748,500 shares of our common stock to Breyer
Ashton Corp. for services rendered at $ 1.00 per share.
On September 13, 1999, we issued 50,000 shares of our common stock to World
Financial DBA for $50,000 cash at $ 1.00 per share.
On September 14, 1999, we issued 50,000 shares of our common stock to World
Financial DBA for $50,000 cash at $ 1.00 per share.
On October 27, 1999, we issued 749,850 shares of our common stock to Stephen
C. C. Chen for $70,000 cash at $0.093 per share.
On October 27, 1999, we issued 30,000 shares of our common stock to William Fox
for services rendered at $ 1.00 per share.
On October 27, 1999, we issued 15,000 shares of our common stock to Nan Hsun for
services rendered at $ 1.00 per share.
On December 15, 1999, we issued 50,000 shares of our common stock to World
Financial DBA for $50,000 cash at $ 1.00 per share.
On December 17, 1999, we issued 50,000 shares of our common stock to World
Financial DBA for $50,000 cash at $ 1.00 per share.
On January 19, 2000, we issued 100,000 shares of our common stock to World
Financial DBA for $100,000 cash at $ 1.00 per share.
On January 27, 2000, we issued 75,000 shares of our common stock to World
Financial DBA for $75,000 cash at $ 1.00 per share.
On February 24, 2000, we issued 125,000 shares of our common stock to World
Financial DBA for $125,000 cash at $ 1.00 per share.
On March 7, 2000, we issued 75,000 shares of our common stock to Ming-Fen Hung
for services rendered at $ 1.00 per share.
On April 26, 2000, we issued 75,000 shares of our common stock to Charmine
Palmer for services rendered at $ 1.00 per share.
<PAGE>
On May 23, 2000, we issued 75,000 shares of our common stock to World Financial
DBA for $75,000 cash at $ 1.00 per share.
On May 31, 2000, we issued 15,000 shares of our common stock to Clifford Hunt
for $1,000 at $ 0.067 per share.
On May 31, 2000, we issued 15,000 shares of our common stock to Qing Li for
services rendered at $ 1.00 per share.
On May 31, 2000, we issued 15,000 shares of our common stock to Li Zheng for
services rendered at $ 1.00 per share.
On May 31, 2000, we issued 15,000 shares of our common stock to Lexington
Advisers Inc. for services rendered at $ 1.00 per share.
On May 31, 2000, we issued 7,500 shares of our common stock to Liang Jiang for
services rendered at $ 1.00 per share.
On May 31, 2000, we issued 75,000 shares of our common stock to Ying Li Diep for
services rendered at $ 1.00 per share.
On May 31, 2000, we issued 75,000 shares of our common stock to Akifumi Sakiyama
for services rendered at $ 1.00 per share.
On May 31, 2000, we issued 100,000 shares of our common stock to Zheng Ge for
services rendered at $ 1.00 per share.
On May 31, 2000, we issued 5,000 shares of our common stock to Amanda Kim for
services rendered at $ 1.00 per share.
On May 31, 2000, we issued 3,000 shares of our common stock to Wei Zheng for
services rendered at $ 1.00 per share.
On May 31, 2000, we issued 3,000 shares of our common stock to Tun-yu Wang for
services rendered at $ 1.00 per share.
<PAGE>
ChineseInvestors.com Inc. an Indiana Corporation
(Parent Company)
On January 6, 1997, we issued 8,500,000 shares of Common Stock to Aaron Tsai,
our former President for $90, which was below the par value at $.001 per common
share. We relied on exemption provided by Section 4(2) of the Securities Act of
1933, as amended, for the issuance of 8,500,000 shares of Common Stock to Aaron
Tsai. On January 6, 1997, we issued 500 shares of Common Stock and on September
30, 1998 we issued 750 shares of Common Stock to our former directors as
compensation for their services valued at $1 and $1, respectively. On October
1, 1999, we issued 100 shares of Common Stock to an individual as compensation
for his service valued at $0. We relied on exemption provided by Section 4(2) of
the Securities Act of 1933, as amended, for the issuance of 500 shares and 750
shares of Common Stock to our former directors and 100 shares of Common Stock to
an individual.
On January 6, 1997, Aaron Tsai gifted 50,000 shares of Common Stock each to
three of our former directors for a total of 150,000 shares of Common Stock.
Aaron Tsai relied on exemption provided by Section 4(2) of the Securities Act of
1933, as amended, for the transfer of the 150,000 shares. On January 6, 1997 and
on January 31, 1998, Aaron Tsai gifted 50,000 shares of Common Stock each to two
non-U.S. persons for a total of 100,000 shares of Common Stock as gift. Aaron
Tsai relied on exemption provided by Regulation S of the Securities Act of 1933,
as amended, for the transfer of 100,000 shares of Common Stock to these two
non-U.S. persons.
All of the investors except one, who received securities issued in reliance on
Section 4(2), are accredited investors. We have made available to them all
corporate documents.
On March 31, 1997, we completed a distribution of 7,750 shares of Common
Stock to 31 non-U.S. persons as gift. On September 30, 1998 we completed a
distribution of 10,800 shares of Common Stock to 108 non-U.S. persons as gift.
We relied on exemption provided by Regulation S of the Securities Act of 1933,
as amended, for the issuance of 7,750 shares and 10,800 shares of Common Stock
to these non-U.S. persons. All of these shares are "restricted" shares as
defined by Regulation S under the Securities Act of 1933, as amended (the
"Act").
On June 1, 2000, we issued 5,500 shares of our common stock to Jianping Wu for
services rendered at $ 1.00 per share.
On June 1, 2000, we issued 25,000 shares of our common stock to World Financial
DBA for $25,000 cash at $ 1.00 per share.
On June 12, 2000, we issued 40,000 shares of our common stock to World Financial
DBA for $40,000 cash at $ 1.00 per share.
On July 20, 2000, we issued 60,000 shares of our common stock to World Financial
DBA for $60,000 cash at $ 1.00 per share.
On June 12, 2000, we issued 8,200,000 shares of our common stock to the
shareholders of our subsidiary company, Chineseinvestors.com Inc. in an one to
one excahnge.
On September 15, 2000, we issued 11,850 shares of our common stock to Warren Wei
Wang & Lan Jiang in an one to one exchange for shares of our subsidiary company,
Chineseinvestors.com Inc.
On September 26, 2000, we issued 92,750 shares of our common stock to
Continental Capital for services rendered at $ 1.00 per share.
On August 8, 2000, we issued 400,000 shares of our common stock to Bombay
Associates Inc. for $1,000,000 Note.
<PAGE>
ITEM 27. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF EXHIBIT
------- --------------------------------------------------------
<S> <C>
2.1 Merger Agreement
3.1 Articles of Incorporation - MAS Acquisition LII Corp.
3.11 Certificate of Incorporation of MAS Acquisition LII Corp.
3.2 Articles of Amendment of the Article of Incorporation -
MAS Acquisition LII Corp.
3.3 Articles of incorporation - CHINESEINVESTORS.COM Inc.
3.4 Certificate of Amendment of Article of Incorporation
of Chineseinvestors.com, Inc.
3.5 By-laws
5.1 Opinion Regarding Legality
10.1 Standard Shopping Center Lease
10.2 YAHOO! INC. Content License Agreement (Revenue Share)
10.3 Co-Branding Cooperation Agreement with SINA
10.4 Consulting Agreement
10.5 Client Service Agreement
23.1 Consent of Counsel
23.2 Consent of Stark Tinter & Associates, LLC, Certified
Public Accountants
------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497 (h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bonafide offering thereof.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of Arcadia, California.
Chineseinvestors.com, Inc.
Date: November 7, 2000 By: /s/ Warren Wei Wang
__________________________________
Warren Wei Wang
Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, the
registration statement was signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
--------------------- ------------------------------------ ---------
<S> <C> <C>
/s/ Warren Wei Wang Chairman of the Board, President,
--------------------- Chief Executive Officer and Director November 7, 2000
Warren Wei Wang
/s/ Lan Jiang Treasurer and Director November 7, 2000
---------------------
Lan Jiang
/s/ Clayton Miller Chief Operating Officer, Director, November 7, 2000
--------------------- Secretary and Vice President
Clayton Miller
/s/ Stephen C.C. Chen Director November 7, 2000
---------------------
Stephen C.C. Chen
</TABLE>
<PAGE>
EXHIBIT 2.1 Merger Agreement
MERGER AGREEMENT
PLAN AND AGREEMENT OF REORGANIZATION
BETWEEN
MAS Acquisition LII Corp.
(an Indiana corporation)
AND
Chineseinvestors.com, Inc.
(a California corporation)
This Plan and Agreement of Reorganization is entered into this 12th day of
June, 2000, by and between MAS Acquisition LII Corp., an Indiana corporation,
with offices at 17 N. Governor Street, Evansville, Indiana 47711, hereafter
referred to as "MAS" and Chineseinvestors.com, Inc. a California corporation,
with offices at 411 E. Huntington Drive, #313, Arcadia, California 91006, and
its shareholders, hereinafter referred to as "CHI".
This Plan or Reorganization is within the meaning of Section 368 (a)(1)(B) of
the Internal Revenue Code of 1986, as amended, MAS will acquire from the
shareholders of CHI all of the issued and outstanding shares of CHI in return
for 8,200,000 shares of the authorized but unissued shares of MAS. CHI will
then become and operate as a wholly owned subsidiary of MAS.
AGREEMENT
In order to consummate such plan of reorganization, the parties hereto, in
consideration of the mutual agreements and on the basis of the representations
and warranties hereafter set forth, do hereby agree, as follows:
ARTICLE I
1.01. Transfer of CHI capital stock and consideration for transfer: Subject to
the terms and conditions of this Agreement, each CHI shareholder shall have
endorsed and delivered his or her certificate to Warren Wei Wang, Chairman of
CHI, as Trustee, prior to the closing date, who shall, at such closing,
deliver said certificates to Aaron Tsai in exchange for the stated number of
shares of MAS (subject to the provisions of Section 3(a)(9) of the Securities
Act of 1933, as amended) as set forth in 1.02 below.
1.02. Consideration for transfer to MAS: On the closing date, subject to the
terms and conditions of this Agreement, and in full consideration for the
transfer and delivery to MAS of all the issued and outstanding shares of CHI.
MAS shall cause to be delivered, 8,200,000 shares of the authorized but
unissued capital stock of MAS. Said MAS shares shall be broken down into
individual names and amounts as requested in writing by Warren Wei Wang,
authorized agent for the CHI shareholders, and when issued, such shares to
be fully paid and nonassessable. Such shares shall not be free trading as
they are not at this time registered or covered by any exemption. Said shares
will be restricted in nature and said restriction shall be reflected on the
face of all certificates included in the MAS shares.
ARTICLE II
2.01. Closing: The time of delivery by CHI stockholders of their respective
shares as provided in Paragraph 1.01 of this Agreement having already taken
place, said shares being held by Warren Wei Wang, as authorized agent, and the
certificate(s) for MAS shares as authorized by the Board of Directors of MAS
being in hand for delivery to Aaron Tsai, as authorized agent, closing shall
be effective with the signing of this Agreement. For purposes of record,
closing shall be effective as of the 12th day of June, 2000, 5 p.m. Central
Time.
ARTICLE III
3.01. Representations and Warranties by CHI:
(1) CHI is a corporation duly organized and validly existing and in good
standing under the laws of the State of California. It has all requisite
corporate power and authority to carry on its business as now being
conducted, to enter into this Agreement and to carry out and perform the
terms and provisions of this Agreement. CHI is duly qualified, licensed,
or domesticated and in good standing as a foreign corporation authorized
<PAGE>
to do business in each jurisdiction wherein the nature of its activities
conducted or the character of its properties make such qualification,
licensing, or domestication necessary.
(2)(a) CHI is duly and lawfully authorized by its Articles of Incorporation,
to issue the shares of capital stock required by this Agreement;
further, CHI has no other authorized series or class of stock. All of
the outstanding shares of CHI's capital stock have been duly issued.
(b) CHI is not presently liable on account of any indebtedness for borrowed
monies, except as reflected on the Balance Sheet described in
Subparagraph (4), below.
(c) There are no outstanding subscriptions, options, warrants, calls,
contracts, demands, commitments, convertible securities, or other
agreements or arrangements of any character or nature whatsoever under
which CHI is or may be obligated to issue or purchase shares of its
capital stock.
(3) Each CHI stockholder severally and for himself at the time of the Closing
on the Closing Date will be the lawful owner of the shares of the capital
stock of CHI held in his name, free and clear of all liens, claims and
encumbrances of every kind. Each stockholder has full legal right, power,
and authority to sell, assign, and transfer his shares of capital stock of
CHI; and the delivery of such shares to any person pursuant to the
provisions of this Agreement will transfer valid title thereto, free and
clear of all liens, encumbrances and claims of every kind.
(4) CHI has furnished MAS with an unaudited Balance Sheet of CHI as of March
31, 2000, hereinafter referred to as the Balance Sheet. Such financial
statement presents fairly the financial condition of CHI at such date.
Specifically, but not by way of limitation, the Balance Sheet discloses
all of the debts, liabilities, and obligations of any nature (whether
absolute, accrued, contingent, or otherwise, and whether due or to become
due) of CHI at the date thereof.
(5) CHI has not, since March 31, 2000:
(a) Incurred any obligations or liabilities, absolute, accrued, contingent,
or otherwise and whether due or to become due, except current liabilities
incurred in the ordinary course of business, none of which adversely
affects the business or prospects of CHI.
(b) Discharged or satisfied any liens or encumbrances, or paid any obligation
or liability, absolute, accrued, contingent or otherwise and whether due or
to become due, other than current liabilities shown on the Balance Sheet and
current liabilities incurred since the closing of business on the date of
the Balance Sheet, in each case, in the ordinary course of business;
(c) Declared or made any payment or distribution to its Stockholders or
purchased or redeemed, or obligated itself to purchase or redeem, any of
its shares of Capital Stock or other securities;
(d) Mortgaged, pledged, or subjected to lien, or other encumbrances or
charges, of its assets, tangible or intangible;
(e) Sold or transferred any of its assets except for inventory sold in the
ordinary course of business or canceled debt or claim;
(f) Suffered any damage, destruction, or loss (whether or not covered by
insurance) affecting the properties, business, or prospects of CHI, or
waived any rights of substantial value;
(g) Entered into any transaction other than in the ordinary course of
business.
<PAGE>
(6) There are no legal actions, suits, arbitration, or other legal or
administrative proceedings pending against CHI which would affect it, its
properties, assets, or business. CHI is not in default with respect to any
judgment, order or decree of any government agency or instrumentality.
(7) CHI has good and marketable title to all of its properties and assets,
including without limitation those reflected in the Balance Sheet and
those used or located on property controlled by CHI in its business on the
date of the Balance Sheet and acquired thereafter (except assets sold in
the ordinary course of business), subject to no mortgage, pledge, lien,
<PAGE>
charge, security interest, encumbrance, or restriction except those which
(a) are disclosed on the Balance Sheet as securing specified liabilities;
(b) are disclosed in the Schedule of Assets referred to in Subparagraph
3.01(8) hereof; or (c) do not materially adversely affect the use thereof.
The building and equipment of CHI are in good condition and repair,
reasonable wear and tear excepted. CHI has not been, to the knowledge of
any officer of CHI, threatened with any action or proceeding under any
building or zoning ordinance, regulation or law.
(8) Prior to Closing Date, CHI will have delivered to MAS a separate Schedule
of Assets, specifically referring to this paragraph, containing:
(a) A true and complete aged list of accounts receivable (if any) as of a
date no earlier than the Closing Date.
(b) A true and complete list of all capitalized machinery, tools, equipment,
and rolling stock owned by CHI, setting forth all liens, claims,
encumbrances, charges, restrictions, covenants, and conditions.
(c) A complete schedule of all fire and other casualty and liability
policies of CHI in effect at the time of delivery of said schedule.
(9) CHI is not a party to, or otherwise bound by, any written or oral:
(a) Contract or agreement not made in the ordinary course of business;
(b) Lease with respect to any property, real or personal, whether as lessor
or lessee, except as reflected in the Balance Sheet.
(c) Contract or other commitment continuing for a period of more than thirty
days and which is not terminable without cost or other liability to CHI
or its successor except as shown on the Balance Sheet.
CHI has in all respects performed all obligations required to be performed by
it to date and is not in material default under any of the contracts,
agreements, leases, documents, or other arrangement to which it is a party or
by which it is otherwise bound.
(10) The books of account, minute books, stock certificate books, and stock
transfer ledgers of CHI are complete at Closing and also correct, and
there have been no transactions involving the business of CHI which
properly should have been set forth in said respective books, other then
those set forth therein.
(11) Since the Balance Sheet there has not been any material adverse change in,
or event or condition materially and adversely affecting the condition
(financial or otherwise) of the properties, assets or liabilities of CHI.
3.02 MAS represents and warrants to CHI and its stockholders as follows:
(1) MAS is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Indiana.
(2) MAS is considered a non-reporting company by the SEC.
(3) MAS's authorized capital stock consists of 80,000,000 shares of common
stock and 20,000,000 shares of preferred stock, par value $.001. After the
completion of this Agreement 8,519,900 shares of common stock will be
validly issued and outstanding. This figure reflects the shares
beneficially issued to the shareholders of CHI under Rule 3(a)(9) of the
Securities Act of 1933.
(4) The execution, delivery, and performance of this Agreement has been duly
authorized by all requisite corporate action. This Agreement constitutes a
valid and binding obligation of MAS in accordance with its terms. No
provision of the Articles of Incorporation and the amendments thereto,
by-laws and any amendments thereto, or of any contract to which MAS is a
party or otherwise bound, which prevents MAS from delivering good title to
<PAGE>
its shares of such capital stock in the manner contemplated hereunder.
(5) MAS has furnished CHI and its shareholders with a statement of management,
and previous management, that there are little or no assets and no
liabilities, and that the corporation, and its predecessor have had no
activities in which it could have incurred any liabilities since the March
31, 2000 financials.
<PAGE>
(6) All of the MAS common shares to be issued to CHI shareholders will, when so
issued, be validly issued and outstanding, fully paid and non-assessable.
(7) Since the financial condition statement, there has not been any material or
adverse change in, or event or condition materially and adversely affecting
the condition of MAS.
ARTICLE IV
4.01 CHI covenants that all statements made herein and hereto are true and
correct and may be relied upon by MAS.
4.02. CHI covenants and warrants that all books, records and financial
statements employed or used in connection with this Agreement are true
and correct and that the right to examine same has been extended to MAS
and its representatives.
4.03. Federal Securities Act-Unregistered Stock:
(1) Each CHI stockholder acknowledges that the shares of MAS common stock to be
delivered to him pursuant to this Agreement have not and are not registered
under the 1933 Act, as amended, and that accordingly such stock is not
fully transferable except as permitted under various exemptions contained
in the 1933 Act, and the rules of the Securities and Exchange Commission
interpreting said Act. The provisions contained in this paragraph are
intended to ensure compliance with the 1933 Act, as amended.
(2) Each CHI stockholder agrees that the certificates evidencing the shares he
will receive shall contain substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THE SAME ARE REGISTERED UNDER THE
SECURITY ACT OF 1933, OR THE COMPANY RECEIVES AN OPINION FROM COUNSEL
SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT REQUIRED FOR SALE OR TRANSFER
OR THAT THE SHARES HAVE BEEN LEGALLY SOLD IN BROKER TRANSACTIONS PURSUANT TO
RULE 144 OF THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION
PROMULGATED UNDER SECURITY ACT OF 1933."
ARTICLE V
5.01 Conditions Precedent:
(1) The aggregate number of shares of the corporation's capital stock tendered
by the CHI stockholders at the closing shall constitute 100 percent of all
of the issued and outstanding Capital Stock of CHI.
ARTICLE VI
6.01 Paragraph and other headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
6.02. This Agreement shall be construed under and in accordance with the laws
of the State of Indiana.
6.03. This Agreement shall be binding on and inure to the benefit of and be
enforceable by the CHI shareholders and MAS, their respective heirs,
executors, administrators, legal representatives, successors, and assigns
except as otherwise expressly provided herein.
6.04. Should there be any litigation arising from this transaction, the
prevailing party shall be entitled to recover reasonable attorney's fees
from the other party, which fees may be set by the court in the trial of
such action or may be enforced in a separate action brought for that
purpose. These fees shall be in addition to any other relief which may
be awarded.
IN WITNESS WHEREOF, the parties hereto have executed this Plan and Agreement
of Reorganization on the date first set forth, at 411 E. Huntington Dr., #313,
Arcadia, California, 91006.
FOR MAS ACQUISITION LII CORP.,
an Indiana Corporation
By /s/ Aaron Tsai
----------------------
Aaron Tsai, President
FOR Chineseinvestors.com, Inc.
a California corporation
By /s/ Warren Wei Wang
--------------------------
Warren Wei Wang, President
<PAGE>
EXHIBIT 3.1 Articles of Incorporation - MAS Acquisition LII Corp.
[SEAL] 1997010490
ARTICLES OF INCORPORATION SUE ANNIE GILROY
State form 4159 (R10 / 8-95) SECRETARY OF STATE
Approved by State Board of Accounts 1995 CORPORATIONS DIVISION
302 W. Washington St., Rm.E018
Indianapolis, IN 46204
Telephone: (317) 232-6576
INSTRUCTIONS: Use 8 1/2" x 11" white paper Indiana Code 23-1-21-2
for inserts.
Present original and two (2) Filing Fee: $90.00
copies to address in upper right
hand corner of this form.
Please TYPE of PRINT
Upon completion of filing, the Secretary of State will issue
a receipt
ARTICLES OF INCORPORATION
The undersigned, desiring to form a corporation (hereinafter referred to as
"Corporation") pursuant to the provision of:
X Indiana Business Corporation Law Indiana Professional Corporation
Act 1983, Indiana Code 23-1.5-1-
As amended, executes the following 1, et seq. (Professional
Articles of Incorporation: corporations must include
Certificate of Registration.)
ARTICLE I - NAME AND PRINCIPAL OFFICE
Name of Corporation (the name must include the word "Corporation",
"Incorporated", "Limited", "Company" or an abbreviation thereof.)
MAS Acquisition LII Corp.
Principal Office: The address of the principal office of the Corporation is:
Post office address City State ZIP Code
1922 North Bedford Ave. Evansville IN 47711
ARTICLE II - REGISTERED OFFICE AND AGENT
Registered Agent: The name and street address of the Corporation's Registered
Agent and Registered Office for service of process are:
Name of Registered Agent
Aaron Tsai
Address of Registered Office (street or building) City ZIP Code
1922 North Bedford Ave. Evansville Indiana 47711
ARTICLE III - AUTHORIZED SHARES
Number of shares of the
Corporation is authorized to 20 million Preferred shares par value $0.001
issue: 80 million Common shares par value $0.001
If there is more than one class of shares, shares with rights and
preferences, list such information as "Exhibit A."
ARTICLE IV - INCORPORATIONS
[the name(s) and address(es) of the incorporators of the corporation]
NUMBER AND STREET
NAME OR BUILDING CITY STATE ZIP CODE
Aaron Tsai 1922 North Bedford Evansville IN 47711
Ave.
In Witness Whereof, the undersigned being all the incorporators of said
Corporation execute these Article of Incorporation and verify, subject to
penalties of perjury, that the statements contained herein are true,
this 28th day of December , 1996.
Signature /s/ Aaron Tsai Printed name Aaron Tsai
Signature Printed name
Signature Printed name
The instrument was prepared by: (name)
Aaron Tsai
Address (number, street, city and state) ZIP code
1922 North Bedford Ave., Evansville IN 47711
<PAGE>
EXHIBIT 3.11 Certificate of Incorporation of MAS Acquisition LII Corp.
Articles of Incorporation - MAS Acquisition LII Corp.
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
OF
MAS ACQUISITION LII CORP.
I, SUE ANN GILROY, Secretary of State of Indiana, hereby certify that Articles
of Incorporation of the above corporation have been presented to me at my
office accompanied by the fees prescribed by law; that I have found such
Articles conform to law; all as prescribed by the provisions of the Indiana
Business Corporation Law, as amended.
NOW, THEREFORE, I hereby issue to such corporation this Certificate of
Incorporation, and further certify that its corporate existence will begin
January 06, 1997.
[SEAL] In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
Sixth day of January, 1997.
/s/ Sue Anne Gilroy
SUE ANNE GILROY, Secretary of State
<PAGE>
EXHIBIT 3.12 Article of Amendment of the Article of Incorporation of
MAS Acquisition LII Corp.
ARTICLES OF AMENDMENT OF THE SUE ANNIE GILROY
ARTICLES OF INCORPORATION SECRETARY OF STATE
State form 38333 (R8 / 12-96) CORPORATIONS DIVISION
Approved by State Board of Accounts 1995 302 W. Washington St., Rm.E018
Indianapolis, IN 46204
Telephone: (317) 232-6576
INSTRUCTIONS: Use 8 1/2" x 11" white paper Indiana Code 23-138-1 et seq.
for inserts.
Present original and two copies Filing Fee: $30.00
to address in upper right hand
corner of this
Please TYPE of PRINT
<PAGE>
EXHIBIT 3.2 Articles of Amendment of the Article of Incorporation -
MAS Acquisition LII Corp.
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
Name of Coporation Date of incorporation
MAS Acquisition LII Corp. January 6, 1997
The undersigned officers of the above referenced Corporation (hereinafter
referred to as the "Corporation") existing pursuant to the provisions of:
(indicate appropriate act)
X Indiana Business Indiana Professional
Coporation Law Corporation Act of 1983
as amended (hereinafter referred to as the "Act"), desiring to give notice
of corporate action effectuating amendment of certain provisions of its
Articles of Incorporation, certify the following facts:
ARTICLE I Amendment(s)
The exact text of Article(s) I of the Articles
(NOTE: If amending the name of corporation, write Article "I" in space
above and write "The name of the Corporation is ----------," below.)
The name of the corporation is Chineseinvestors.com, Inc.
ARTICLE II
Date of each amendment's adoption:
June 12, 2000
<PAGE>
ARTICLE III
Mark applicable section: NOTE - Only in limited situations does Indiana law
permit an Amendment without shareholder approval. Because a name change
requires shareholder approval, Section 2 must be marked and either A or B
completed.
SECTION 1 This amendment was adopted by the Board of Director or
incorporators and shareholder action was not required.
X SECTION 2 The shareholders of the Corporation entitled to vote in
respect to the amendment adopted the proposed amendment. The
amendment was adopted by: (Shareholder approval may be by
either A or B.)
A. Vote of such shareholders during a meeting called by the
Board of Directors. The result of such vote is as
follows:
8,519,900 Shares entitled to vote
8,200,000 Number of shares represented at the meeting
8,200,000 Shares voted in favor
0 Shareds voted against
B. Unanimous written consent executed on June 12, 2000 and
signed by all shareholders entitled to vote.
ARTICLE IV Compliance with Legal Requirements
The manner of the adoption of the Articles of Amendment and the vote by which
they were adopted constitute full legal compliance with the provisions of the
Act, the Articles of Incorporation, and the By-Laws of the Corporation.
I hereby verify, subject to penalties of perjury, that the statements contained
herein are true, this 12th day of June, 2000.
Signature of current officer or Printed name of officer or
chairman of the board chairman of the board
/s/ Warren Wei Wang Warren Wei Wang
Signature's Title
President, Chief Executive Officer, Chairman of the Board and Director
<PAGE>
EXHIBIT 3.3 Articles of incorporation - CHINESEINVESTORS.COM Inc.
Articles of Incorporation - Chineseinvestors.com, Inc.
2141046
State of California
SECRETARY OF STATE
I, BILL JONES, Secretary of State of the State of California, hereby
certify:
That the attached transcript of 1 page(s) has been compared with the
record on file in this office, of which it purports to be a copy, and that it is
full, true and correct.
[SEAL] IN WITNESS WHEREOF, I execute this
certificate and affix the Great
Seal of the State of California
this day of
JUN 18, 1999
----------------------------------
/s/ Bill Jones
Secretary of State
<PAGE>
ARTICLE OF INCORPORATION
OF
CHINESEINVESTORS.COM INC.
-------------------------
ARTICLE I
The name of this corporation is CHINESEINVESTORS.COM INC.
ARTICLE II
The purpose of this corporation is to engage in any lawful act or activity for
which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
corporation code.
ARTICLE III
The name and address in the state of California of this Corporation's initial
agent for service of process is: Lan JIANG
Address: 4953 Ardsley Dr., Temple City, CA 91780
ARTICLE IV
The corporation is authorized to issue only one class of shares of stock; and
the total number of shares which this corporation is authorized to issue is
10,000,000.
DATED: 6-11-99 /s/ Lan Jiang Lan JIANG
/s/ Clayton Miller Clayton Miller
-------------------- -----------------------
Signature(s) of In- (Typed name of
corporator/ of incorporators(s)
I (We) hereby declare that I (We) am (are) the person(s) who executed the
foregoing Article of Incorporation, which execution is my (our) act and deed.
/s/ Lan JIANG Lan JIANG
/s/ Clayton Miller Clayton Miller
<PAGE>
EXHIBIT 3.4 Certificate of Amendment of Article of Incorporation of
Chineseinvestors.com, Inc.
Certificate of Amendment of Article of Incorporation
of Chineseinvestors.com, Inc.
A0542141
State of California
SECRETARY OF STATE
I, BILL JONES, Secretary of State of the State of California, hereby
certify:
That the attached transcript of 1 page(s) has been compared with the
record on file in this office, of which it purports to be a copy, and that it is
full, true and correct.
[SEAL] IN WITNESS WHEREOF, I execute this
certificate and affix the Great
Seal of the State of California
this day of
APR - 3, 2000
----------------------------------
/s/ Bill Jones
Secretary of State
<PAGE>
EXHIBIT 3.4
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
Lan JIANG AND Clayton Miller certify that:
1. They are the president and the secretary, respectively, of
CHINESEINVESTORS.COM INC., a California Corporation.
2. Article IV of the articles of incorporation of this corporation is amended
to read as follows:
The corporation is authorized to issue only one class of shares of stock;
and the total number of shares which this corporation is authorized to
issue is 30,000,000.
3. The foregoing amendment of articles of incorporation has been duly approved
by the board of directors.
4. The foregoing amendment of articles of incorporation has been duly approved
by the required vote of shareholders in accordance with Section 902 of the
Corporations Code. The total number of outstanding shares of the
corporation is 4,653,899. The number of shares voting in favor of the
amendment equaled of exceeded the vote required. The percentage vote
required was more than 50%.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Date: February 9, 2000 /s/ Lan Jiang
--------------------------
Lan Jiang President
[Seal]
/s/ Clayton Miller
--------------------------
Clayton Miller Vice President
<PAGE>
EXHIBIT 3.5 By-laws
Chineseinvestors.com, Inc.
(An Indiana Corporation)
BYLAWS
ARTICLE ONE: NAME AND OFFICES
1.01 Name. The name of the Corporation is Chineseinvestors.com, Inc.,
hereinafter referred to as the "Corporation"
1.02 Registered Office and Agent. The Corporation shall establish, designate
and maintain a registered office and agent in the State of Indiana. The
registered office of the Corporation shall be at 17 N. Governor St.,
Evansville, Indiana 47711.
1.03 Change of Registered Office or Agent. The Corporation may change its
registered office or change its registered agent, or both, as the Board of
Directors may from time to time determine.
1.04 Other Offices. The Corporation may have offices at such places both
within and without the State of California, or within or without the United
States and in any foreign countries as the Board of Directors may from time to
time determine or the business of the Corporation may require.
ARTICLE TWO: SHAREHOLDERS
2.01 Place of Meetings. All meetings of the Shareholders for the election of
Directors and for any other purpose may be held at such time and place, within
or without the State of Indiana, as stated in the notice of the meeting or in a
duly executed waiver of notice thereof.
2.02 Annual Meeting. An annual meeting of the Shareholders for the election
of Directors and for the transaction of such other business as may properly come
before the meeting shall be held each year on the first Monday in January,
beginning in 1997, or such other date as may be selected by the Board of
Directors from time to time. At the meeting, the Shareholders shall elect
Directors and transact such other business as may properly be brought before the
meeting.
2.03 Special Meeting. Special meetings of the Shareholders, for any purpose
or purposes, unless otherwise prescribed by statute or by the Articles of
Incorporation, or by these Bylaws, may be called by the President, the
Secretary, the Board of Directors, or the holders of not less than one tenth of
all the shares entitled to vote at the meeting. Business transacted at a
special meeting shall be confined to the subjects stated in the notice of the
meeting.
2.04 Notice. Written or printed notice stating the place, day and hour of
the meeting and, in case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten nor more than sixty
days before the date of the meeting, either personally or by mail, by or at the
direction of the person calling the meeting, to each Shareholder of record
entitled to vote at the meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to the Shareholder
at his address as it appears on the stock transfer books of the Corporation,
with postage thereon prepaid.
2.05 Voting List. At least ten days before each meeting of Shareholders a
complete list of the Shareholders entitled to vote at such meeting, arranged in
alphabetical order and setting forth the address of each and the number of
voting shares held by each, shall be prepared by the Officer or agent having
charge of the stock transfer books. Such list, for a period of ten days prior
to such meeting, shall be kept on file at the registered office of the
Corporation and shall be subject to inspection by any Shareholder during the
whole time of the meeting.
2.06 Quorum. The holders of a majority of the shares issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
be requisite and shall constitute a quorum at all meetings of the Shareholders
for the transaction of business except as otherwise provided by statute, by the
Articles of Incorporation or by these Bylaws. If a quorum is not present or
represented at a meeting of the Shareholders, the Shareholders entitled to vote
thereat, present in person or by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum is present or represented. At such adjourned meeting at which a quorum
<PAGE>
is present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
2.07 Majority Vote: Withdrawal of Quorum. When a quorum is present at any
meeting, the vote of the holders of a majority of the shares having voting
power, present in person or represented by proxy, shall decide any question
brought before such meeting, unless the question is one upon which, by express
provision of the statutes or of the Articles of Incorporation or of these
Bylaws, a different vote is required, in which case such express provision shall
govern and control the decision of such question.
2.08 Method of Voting. Each outstanding share, regardless of class, shall be
entitled to one vote on each matter subject to a vote at a meeting of
Shareholders, except to the extent that the voting rights of the shares of any
class or classes are limited or denied by the Articles of Incorporation. The
Board of Directors may, in the future, at their discretion, direct that voting
be cumulative, according to any plan adopted by the Board. At any meeting of
the Shareholders, every Shareholder having the right to vote may vote either in
person or by proxy executed in writing by the Shareholder or by his duly
authorized attorney-in-fact.
No proxy shall be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy. Each proxy shall be revocable unless
expressly provided therein to be irrevocable or unless otherwise made
irrevocable by law. Each proxy shall be filed with the Secretary of the
Corporation prior to, or at the time of, the meeting. Voting for Directors
shall be in accordance with Section 3.06 of these Bylaws. Any vote may be taken
via voice or by show of hands unless someone entitled to vote objects, in which
case written ballots shall be used. Cumulative voting is not prohibited.
2.09 Record Date: Closing Transfer Books. The Board of Directors may fix in
advance a record date for the purpose of determining Shareholders entitled to
notice of, or to vote at, a meeting of Shareholders, such record date to be not
less than ten nor more than sixty days prior to such meeting; or the Board of
Directors may close the stock transfer books for such purpose for a period of
not less than ten nor more than sixty days prior to such meeting. In the
absence of any action by the Board of Directors, the date upon which the notice
of the meeting is mailed shall be the record date.
2.10 Action Without Meeting. Unless otherwise provided in the Certificate of
Incorporation, any action required to be taken at any annual or special meeting
of Shareholders or any action which may be taken at any annual or special
meeting of Shareholders, may be taken without a meeting, without prior notice,
and without a vote, if a consent or consents in writing, setting forth the
action so taken, is signed by the holder or holders of shares having not less
than the minimum number of votes that would be necessary to take such action at
a meeting at which the holders of all shares entitled to vote on the action were
present and voted.
Such consent or consents shall have the same force and effect as the requisite
vote of the Shareholders at a meeting. The signed consent or consents, or a
copy or copies thereof, shall be placed in the minute book of the Corporation.
Such consents may be signed in multiple counterparts, each of which shall
constitute an original for all purposes, and all of which together shall
constitute the requisite written consent or consents of the Shareholders, if
applicable. A telegram, telex, cablegram, or similar transaction by a
Shareholder, or a photographic, photostatic, facsimile or similar reproduction
of a writing signed by a Shareholder, shall be regarded as signed by the
Shareholder for purposes of this Section 2.10.
2.11 Order of Business at Meetings. The order of business at annual
meetings, and so far as practicable at other meetings of Shareholders, shall be
as follows unless changed by the Board of Directors:
(a) Call to order
(b) Proof of due notice of meeting
(c) Determination of quorum and, if necessary, examination of proxies
(d) Announcement of availability of voting list (See Bylaw 2.05)
(e) Announcement of distribution of annual reports (See Bylaw 8.03)
(f) Reading and disposing of minutes of last meeting of Shareholders
(g) Reports of Officers and committees, if deemed necessary
(h) Appointment of voting inspectors
(I) Unfinished business
(j) New business
(k) Nomination of Directors
(l) Opening of polls for voting
(m) Recess
(n) Reconvening; closing of polls
<PAGE>
(o) Report of voting inspectors
(p) Other business
(q) Adjournment
ARTICLE THREE: DIRECTORS
3.01 Management. The business and affairs of the Corporation shall be
managed by the Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not, by statute or by
the Articles of Incorporation or by these Bylaws, directed or required to be
exercised or done by the Shareholders.
3.02 Number; Qualification; Election; Term. The Board of Directors shall
consist of not less than one member nor more than five members; provided
however, the Board of Directors in effect as of the date of effectiveness of
these Bylaws consists of three members. A Director need not be a Shareholder or
resident of any particular state or country. The Directors shall be elected at
the annual meeting of the Shareholders, except as provided in Bylaw 3.03 and
3.05. Each Director elected shall hold office until his successor is elected
and qualified. Each person elected as a Director shall be deemed to have
qualified unless he states his refusal to serve shortly after being notified of
his election.
3.03 Change in Number. The number of Directors may be increased or decreased
from time to time by amendment to the Bylaws, but no decrease shall have the
effect of shortening the term of any incumbent Director. Any directorship to
be filled by reason of an increase in the number of Directors shall be filled
by the Board of Directors for a term of office continuing only until the next
election of one or more Directors by the Shareholders; provided that the Board
of Directors may not fill more than two such directorships during the period
between any two successive annual meetings of Shareholders.
3.04 Removal. Any Director may be removed either for or without cause at any
special or annual meeting of Shareholders by the affirmative vote of a
majority, in number of shares, of the Shareholders present in person or by
proxy at such meeting and entitled to vote for the election of such Director
if notice of intention to act upon such matter is given in the notice calling
such meeting.
3.05 Vacancies. Any unfilled directorship position, or any vacancy occurring
in the Board of Directors (by death, resignation, removal or otherwise), shall
be filled by an affirmative vote of a majority of the remaining Directors
though less than a quorum of the Board of Directors.
A Director elected to fill a vacancy shall be elected for the unexpired term
of his predecessor in office, except that a vacancy occurring due to an increase
in the number of Directors shall be filled in accordance with Section 3.03 of
these Bylaws.
3.06 Election of Directors. Directors shall be elected by majority vote.
3.07 Place of Meeting. Meetings of the Board of Directors, regular or
special, may be held either within or without the State of Indiana.
3.08 First Meeting. The first meeting of each newly elected Board of
Directors shall be held without further notice immediately following the annual
meeting of Shareholders, and at the same place, unless the Directors change such
time or place by unanimous vote.
3.09 Regular Meetings. Regular meetings of the Board of Directors may be
held without notice at such time and place as determined by the Board of
Directors.
3.10 Special Meetings. Special meetings of the Board of Directors may be
called by the President or by any Director on three days notice to each
Director, given either personally or by mail or by telegram. Except as
otherwise expressly provided by statute, or by the Articles of Incorporation,
or by these Bylaws, neither the business to be transacted at, nor the purpose
of, any special meeting of the Board of Directors need be specified in a
notice or waiver of notice.
3.11 Majority Vote. At all meetings of the Board of Directors, a majority of
the number of Directors then elected and qualified shall constitute a quorum
for the transaction of business. The act of a majority of the Directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors, except as otherwise specifically provided by statute or
by the Articles of Incorporation or by these Bylaws.
<PAGE>
If a quorum is not present at a meeting of the Board of Directors, the Directors
present thereat my adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum is present.
Each Director who is present at a meeting will be deemed to have assented to any
action taken at such meeting unless his dissent to the action is entered in the
minutes of the meeting, or unless he files his written dissent thereto with the
Secretary of the meeting or forwards such dissent by registered mail to the
Secretary of the Corporation immediately after such meeting.
3.12 Compensation. By resolution of the Board of Directors, the Directors
may be paid their expenses, if any, of attendance at each meeting of the Board
of Directors and may be paid a fixed sum for attendance of each meeting of the
Board of Directors, or a stated salary as Director. No such payment shall
preclude any Director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of any executive, special or standing
committees established by the Board of Director, may, by resolution of the
Board of Directors, be allowed like compensation and expenses for attending
committee meetings.
3.13 Procedure. The Board of Directors shall keep regular minutes of its
proceedings. The minutes shall be placed in the minute book of the Corporation.
3.14 Interested Directors, Officers and Shareholders.
(a) If Paragraph (b) is satisfied, no contract or other transaction
between the Corporation and any of its Directors, Officers or Shareholders (or
any corporation or firm in which any of them are directly or indirectly
interested) shall be invalid solely because of such relationship or because of
the presence of such Director, Officer or Shareholder at the meeting authorizing
such contract or transaction, or his participation in such meeting or
authorization.
(b) Paragraph (a) shall apply only if:
(1) The material facts of the relationship or interest of each such
Director, Officer or Shareholder are known or disclosed:
(A) To the Board of Directors and it nevertheless authorizes or
ratifies the contract or transaction by a majority of the
Directors present, each such interested Director to be counted
in determining whether a quorum is present but not in
calculating the majority necessary to carry the vote; or
(B) To the Shareholders and they nevertheless authorize or ratify
the contract or transaction by a majority of the shares
present, each such interested person to be counted for a
quorum and voting purposes; or
(2) The contract or transaction is fair to the Corporation as of the
time it is authorized or ratified by the Board of Directors, a
committee of the Board or the Shareholders.
(c) This provision shall not be construed to invalidate a contract or
transaction which would be valid in the absence of this provision.
3.15 Certain Officers. The President shall be elected from among the members
of the Board of Directors.
3.16 Action Without Meeting. Any action required or permitted to be taken at
a meeting of the Board of Directors may be taken without a meeting if a consent
in writing, setting forth the action so taken, is signed by all members of the
Board of Directors. Such consent shall have the same force and effect as
unanimous vote of the Board of Directors at a meeting. The signed consent, or
a signed copy thereof, shall be placed in the minute book of the Corporation.
Such consents may be signed in multiple counterparts, each of which shall
constitute an original for all purposes, and all of which together shall
constitute the unanimous written consent of the Directors.
ARTICLE FOUR: EXECUTIVE COMMITTEE
4.01 Designation. The Board of Directors may, by resolution adopted by a
majority of the whole Board, designate an Executive Committee from among its
members.
4.02 Number; Qualification; Term. The Executive Committee shall consist of
one or more Directors. The Executive Committee shall serve at the pleasure of
the Board of Directors.
<PAGE>
4.03 Authority. The Executive Committee shall have and may exercise the
authority of the Board of Directors in the management of the business and
affairs of the Corporation except where action of the full Board of Directors
is required by statute or by the Articles of Incorporation, and shall have
power to authorize the seal of the Corporation to be affixed to all papers
which may require it; except that the Executive Committee shall not have
authority to amend the Articles of Incorporation; approve a plan of merger
or consolidation; recommend to the Shareholders the sale, lease, or exchange
of all or substantially all of the property and assets of the Corporation
other than in the usual and regular course of its business; recommend to the
Shareholders the voluntary dissolution of the Corporation; amend, alter, or
repeal the Bylaws of the Corporation or adopt new Bylaws for the Corporation;
fill any vacancy in the Board of Directors or any other corporate committee;
fix the compensation of any member of any corporate committee; alter or
repeal any resolution of the Board of Directors; declare a dividend; or
authorized the issuance of shares of the Corporation. Each Director shall
be deemed to have assented to any action of the Executive Committee unless,
within seven days after receiving actual or constructive notice of such
action, he delivers his written dissent thereto to the Secretary of the
Corporation.
4.04 Change in Number. The number of Executive Committee members may be
increased or decreased (but not below one) from time to time by resolution
adopted by a majority of the Board of Directors.
4.05 Removal. Any member of the Executive Committee may be removed by the
Board of Directors by the affirmative vote of a majority of the Board of
Directors whenever in its judgment the best interests of the Corporation
will be served thereby.
4.06 Vacancies. A vacancy occurring in the Executive Committee (by death,
resignation, removal or otherwise) shall be filled by the Board of Directors in
the manner provided for original designation in Section 4.01 above.
4.07 Meetings. Time, place and notice, if any, of Executive Committee
meetings shall be as determined by the Executive Committee.
4.08 Quorum: Majority Vote. At meetings of the Executive Committee, a
majority of the members shall constitute a quorum for the transaction of
business. The act of a majority of the members present at any meeting at which
a quorum is present shall be the act of he Executive Committee, except as
otherwise specifically provided by statute or by the Articles of Incorporation
or by these Bylaws. If a quorum is not present at a meeting of the Executive
Committee, the members present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum is
present.
4.09 Compensation. By resolution of the Board of Directors, the members
of the Executive Committee may be paid their expenses, if any, of attendance at
each meeting of the Executive Committee and may be paid a fixed sum for
attendance at each meeting of the Executive Committee or a stated salary as a
member thereof. No such payment shall preclude any member from serving the
Corporation in any other capacity and receiving compensation therefor.
4.10 Procedure. The Executive Committee shall keep regular minutes of its
proceedings and report the same to the Board of Directors when required. The
minutes of the proceedings of the Executive Committee shall be placed in the
minute book of the Corporation.
4.11 Action Without Meeting. Any action required or permitted to be taken
at a meeting of the Executive Committee may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all the
members of the Executive Committee. Such consent shall have the same force and
effect as a unanimous vote at a meeting. The signed consent, or a signed copy
thereof, shall be placed in the minute book. Such consents may be signed in
multiple counterparts, each of which shall constitute an original for all
purposes, and all of which together shall constitute the unanimous written
consent of the Directors.
4.12 Responsibility. The designation of an Executive Committee and the
delegation of authority to it shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed by law.
ARTICLE FIVE: NOTICE
5.01 Method. Whenever by statute or the Articles of Incorporation or these
Bylaws notice is required to be given to any Director or Shareholder and no
provision is made as to how such notice shall be given, it shall not be
<PAGE>
construed to mean personal notice, but any such notice may be given:
(a) in writing, by mail, postage prepaid, addressed to such Director or
Shareholder at such address as appears on the books of the
Corporation; or
(b) by any other method permitted by law.
Any notice required or permitted to be given by mail shall be deemed to be given
at the time it is deposited in the United States mail.
5.02 Waiver. Whenever, by statute or the Articles of Incorporation or these
Bylaws, notice is required to be given to a Shareholder or Director, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated in such notice, shall be equivalent to
the giving of such notice. Attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting except where a Director attends
for the express purpose of objecting to the transaction of any business on the
grounds that the meeting is not lawfully called or convened.
5.03 Telephone Meetings. Shareholders, Directors, or members of any
committee, may hold any meeting of such Shareholders, Directors, or committee by
means of conference telephone or similar communications equipment which permits
all persons participating in the meeting to hear each other. Actions taken at
such meeting shall have the same force and effect as a vote at a meeting in
person. The Secretary shall prepare a memorandum of the actions taken at
conference telephone meetings.
ARTICLE SIX: OFFICERS AND AGENTS
6.01 Number: Qualification: Election: Term.
(a) The Corporation shall have:
(1) A Chairman of the Board (should the Board of Directors so
choose to select), a President, a Vice-President, a
Secretary and a Treasurer, and
(2) Such other Officers (including one or more Vice-Presidents,
and assistant Officers and agents) as the Board of
Directors authorizes from time to time.
(b) No Officer or agent need be a Shareholder, a Director or a resident
of Indiana except as provided in Sections 3.15 and 4.02 of these
Bylaws.
(c) Officers named in Section 6.01(a)(1) above shall be elected by the
Board of Directors on the expiration of an Officer's term or
whenever a vacancy exists. Officers and agents named in Section
6.01 (a)(2) may be elected by the Board of Directors at any
meeting.
(d) Unless otherwise specified by the Board at the time of election or
appointment, or in an employment contract approved by the Board,
each Officer's and agent's term shall end at the first meeting of
Directors after the next annual meeting of Shareholders. He shall
serve until the end of his term or, if earlier, his death,
resignation or removal.
(e) Any two or more offices may be held by the same person.
6.02 Removal and Resignation. Any Officer or agent elected or appointed by
the Board of Directors may be removed with or without cause by a majority of the
Directors at any regular or special meeting of the Board of Directors. Any
Officer may resign at any time by giving written notice to the Board of
Directors or to the President or Secretary.
Any such resignation shall take effect upon receipt of such notice if no
date is specified in the notice, or, if a later date is specified in the notice,
upon such later date; and unless otherwise specified in the notice, the
acceptance of such resignation shall not be necessary to make it effective. The
removal of any Officer or agent shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an Officer
or agent shall not of itself create contract rights.
6.03 Vacancies. Any vacancy occurring in any office of the Corporation (by
death, resignation, removal or otherwise) may be filled by the Board of
Directors.
<PAGE>
6.04 Authority. Officers shall have full authority to perform all duties in
the management of the Corporation as are provided in these Bylaws or as may be
determined by resolution of the Board of Directors from time to time not
inconsistent with these Bylaws.
6.05 Compensation. The compensation of Officers and agents shall be fixed
from time to time by the Board of Directors.
6.06 Chairman of the Board. The Chairman of the Board, if any, shall preside
at all meetings of the Board of Directors and shall exercise and perform such
other powers and duties as may be assigned to him by the Board of Directors or
prescribed by the Bylaws.
6.07 Executive Powers. The Chairman of the Board, if any, and the President
of the Corporation respectively, shall, in the order of their seniority, unless
otherwise determined by the Board of Directors or otherwise are positions held
by the same person, have general and active management of the business and
affairs of the Corporation and shall see that all orders and resolutions of the
Board are carried into effect.
They shall perform such other duties and have such other authority and
powers as the Board of Directors may from time to time prescribe. Within this
authority and in the course of their respective duties the Chairman of the
Board, if any, and the President of the Corporation, respectively, shall have
the general authority to:
(a) Conduct Meetings. Preside at all meetings of the Shareholders and
at all meetings of the Board of Directors, and shall be ex official
members of all the standing committees, including the Executive
Committee, if any.
(b) Sign Share Certificates. Sign all certificates of stock of the
Corporation, in conjunction with the Secretary or Assistant
Secretary, unless otherwise ordered by the Board of Directors.
(c) Execute Instruments. When authorized by the Board of Directors or
required by law, execute, in the name of the Corporation, deeds,
conveyances, notices, leases, checks, drafts, bills of exchange,
warrants, promissory notes, bonds, debentures, contracts, and other
papers and instruments in writing, and unless the Board of
Directors orders otherwise by resolution, make such contracts as
the ordinary conduct of the Corporation's business requires.
(d) Hire and Discharge Employees. Subject to the approval of the Board
of Directors, appoint and remove, employ and discharge, and
prescribe the duties and fix the compensation of all agents,
employees and clerks of the Corporation other than the duly
appointed Officers, and, subject to the direction of the Board of
Directors, control all of the Officers, agents and employees of the
Corporation.
6.08 Vice-Presidents. The Vice-Presidents, if any, in the order of their
seniority, unless otherwise determined by the Board of Directors, shall, in the
absence or disability of the President, perform the duties and have the
authority and exercise the powers of the President. They shall perform such
other duties and have such other authority and powers as the Board of Directors
may from time to time prescribe or as the senior Officers of the Corporation may
from time to time delegate.
6.09 Secretary. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the Shareholders and record all votes and minutes
of all proceedings in a book to be kept for that purpose, and shall perform like
duties for the Executive Committee when required. He shall:
(a) give, or cause to be given, notice of all meetings of the
Shareholders and special meetings of the Board of Directors;
(b) keep in safe custody the Seal of the Corporation and, when
authorized by the Board of Directors or the Executive Committee,
affix the same to any instrument requiring it, and when so affixed,
it shall be attested by his signature or by the signature of the
Treasurer or an Assistant Secretary. He shall be under the
supervision of the senior Officers of the Corporation;
(c) perform such other duties and have such other authority and powers
as the Board of Directors may from time to time prescribe or as the
senior Officers of the Corporation may from time to time delegate.
<PAGE>
6.10 Assistant Secretaries. The Assistant Secretaries, if any, in the order
of their seniority, unless otherwise determined by the Board of Directors,
shall, in the absence or disability of the Secretary, perform the duties and
have the authority and exercise the powers of the Secretary. They shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe or as the senior Officers of the Corporation may from
time to time delegate.
6.11 Treasurer. The Treasurer shall:
(a) have the custody of the corporate funds and securities and shall
keep full and accurate accounts of all income, expense, receipts
and disbursement of the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board
of Directors.
(b) disburse the funds of the Corporation as may be ordered by the
Board of Directors, taking proper vouchers for such disbursements,
and
(c) render to the senior Officers of the Corporation and Directors, at
the regular meeting of the Board, or whenever they may request it,
accounts of all his transactions as Treasurer and of the financial
condition of the Corporation.
If required by the Board of Directors, he shall:
(a) give the Corporation a bond in such form, in such sum, and with
such surety or sureties as satisfactory the Board, for the faithful
performance of the duties of his office and for the restoration to
the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, paper, vouchers, money and other
property of whatever kind in his possession or under his control
belonging to the Corporation.
(b) perform such other duties and have such other authority and powers
as the Board of Directors may from time to time prescribe or as the
senior Officers of the Corporation may from time to time delegate.
6.12 Assistant Treasurers. The Assistant Treasurers, if any, in the order of
their seniority, unless otherwise determined by the Board of Directors, shall,
in the absence or disability of the Treasurer, perform the duties and exercise
the powers of the Treasurer. They shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe or as the
senior Officers of the Corporation may from time to time delegate.
ARTICLE SEVEN: CERTIFICATE AND TRANSFER REGULATIONS
7.01 Certificates. Certificates in such form as may be determined by the
Board of Directors shall be delivered, representing all shares to which
Shareholders are entitled. Certificates shall be consecutively numbered and
shall be entered in the books of the Corporation as they are issued. Each
certificate shall state on the face thereof that the Corporation is organized
under the laws of the State of Indiana, the holder's name, the number and class
of shares, the par value of such shares or a statement that such shares are
without par value, and such other matters as may be required by law.
They shall be signed by the President or a vice-president and either the
Secretary or Assistant Secretary or such other Officer or Officers as the Board
of Directors designates, and may be sealed with the Seal of the Corporation or a
facsimile thereof. If any certificate is countersigned by a transfer agent, or
an assistant transfer agent, or registered by a registrar (either of which is
other than the Corporation or an employee of the Corporation), the signature of
any such Officer may be a facsimile thereof. If any certificate is countersigned
by a transfer agent, or an assistant transfer agent, or registered by a
registrar (either of which is other than the Corporation or an employee of the
Corporation), the signature of any such Officer may be a facsimile thereof.
7.02 Issuance of Certificates. Shares both treasury and authorized but
unissued may be issued for such consideration (not less than par value) and to
such persons as the Board of Directors determines from time to time. Shares may
not be issued until the full amount of the consideration, fixed as provided by
law, has been paid. In addition, Shares shall not be issued or transferred
until such additional conditions and documentation as the Corporation (or its
transfer agent, as the case may be) shall reasonably require, including without
limitation, the surrender of such stock certificate or certificates of proper
evidence of succession, assignment or other authority to obtain transfer
thereof, as the circumstances may require, and such legal opinions with
<PAGE>
reference to the requested transfer as shall be required by the Corporation (or
its transfer agent) pursuant to the provisions of these Bylaws and applicable
law, shall have been satisfied.
7.03 Legends on Certificates.
(a) Shares in Classes or Series. If the Corporation is authorized to
issue shares of more than one class, the certificates shall set
forth, either on the face or back of the certificate, a full or
summary statement of all of the designations, preferences,
limitations relative rights of the shares of such class and, if the
Corporation is authorized to issue any preferred or special class
in series, the variations in the relative rights and preferences of
the shares of each such series so far as the same have been fixed
and determined, and the authority of the Board of Directors to fix
and determine the relative rights and preferences of subsequent
series. In lieu of providing such a statement in full on the
certificate, a statement on the face or back of the certificate may
provide that the Corporation will furnish such information to any
shareholder without charge upon written request to the Corporation
at its principal place of business or registered office and that
copies of the information are on file in the office of the
Secretary of State.
(b) Restriction on Transfer. Any restrictions imposed by the
Corporation on the sale or other disposition of its shares and on
the transfer thereof may be copied at length or in summary form on
the face, or so copied on the back and referred to on the face, of
each certificate representing shares to which the restriction
applies. The certificate may, however, state on the face or back
that such a restriction exists pursuant to a specified document and
that the Corporation will furnish a copy of the document to the
holder of the certificate without charge upon written request to
the Corporation at its principal place of business, or refer to
such restriction in any other manner permitted by law.
(c) Preemptive Rights. Any preemptive rights of a Shareholder to
acquire unissued or treasury shares of the Corporation which are or
may at any time be limited or denied by the Articles of
Incorporation may be set forth at length on the face or back of the
certificate representing shares subject thereto. In lieu of
providing such a statement in full on the certificate, a statement
on the face or back of the certificate may provide that the
Corporation will furnish such information to any Shareholder
without charge upon written request to the Corporation at its
principal place of business and that a copy of such information is
on file in the office of the Secretary of State, or refer to such
denial of preemptive rights in any other manner permitted by law.
(d) Unregistered Securities. Any security of the Corporation,
including, among others, any certificate evidencing shares of the
Common Stock or warrants to purchase Common Stock of the
Corporation, which is issued to any person without registration
under the Securities Act of 1933, as amended, or the securities
laws of any state, shall not be transferable until the Corporation
has been furnished with a legal opinion of counsel with reference
thereto, satisfactory in form and content to the Corporation and
its counsel, if required by the Corporation, to the effect that
such sale, transfer or pledge does not involve a violation of the
Securities Act of 1933, as amended, or the securities laws of any
state having jurisdiction. The certificate representing the
security shall bear substantially the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNLESS SUCH OFFER, SALE OR
TRANSFER WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE BLUE SKY LAWS. ANY OFFER, SALE OR TRANSFER OF THESE SECURITIES
MAY NOT BE MADE WITHOUT THE PRIOR WRITTEN APPROVAL OF THE CORPORATION".
7.04 Payment of Shares.
(a) Kind. The consideration for the issuance of shares shall consist
of money paid, labor done (including services actually performed
for the Corporation) or property (tangible or intangible) actually
received. Neither promissory notes nor the promise of future
services shall constitute payment for shares.
<PAGE>
(b) Valuation. In the absence of fraud in the transaction, the
judgment of the Board of Directors as to the value of consideration
received shall be conclusive.
(c) Effect. When consideration, fixed as provided by law, has been
paid, the shares shall be deemed to have been issued and shall be
considered fully paid and nonassessable.
(d) Allocation of Consideration. The consideration received for shares
shall be allocated by the Board of Directors, in accordance with
law, between Stated Capital and Capital Surplus accounts.
7.05 Subscriptions. Unless otherwise provided in the subscription agreement,
subscriptions for shares shall be paid in full at such time or in such
installments and at such times as determined by the Board of Directors. Any
call made by the Board of Directors for payment on subscriptions shall be
uniform as to all shares of the same series. In case of default in the payment
on any installment or call when payment is due, the Corporation may proceed to
collect the amount due in the same manner as any debt due to the Corporation.
7.06 Lien. For any indebtedness of a Shareholder to the Corporation, the
Corporation shall have a first and prior lien on all shares of its stock owned
by him and on all dividends or other distributions declared thereon.
7.07 Lost, Stolen or Destroyed Certificates. The Corporation shall issue a
new certificate in place of any certificate for shares previously issued if the
registered owner of the certificate.
(a) Claim. Submits proof in affidavit form that it has been lost,
destroyed or wrongfully taken; and
(b) Timely Request. Requests the issuance of a new certificate before
the Corporation has notice that the certificate has been acquired
by a purchaser for value in good faith and without notice of an
adverse claim; and
(c) Bond. Gives a bond in such form, and with such surety or sureties,
with fixed or open penalty, if the Corporation so requires, to
indemnify the Corporation (and its transfer agent and registrar, if
any) against any claim that may be made on account of the alleged
loss, destruction, or theft of the certificate; and
(d) Other Requirements. Satisfies any other reasonable requirements
imposed by the Corporation.
When a certificate has been lost, apparently destroyed or wrongfully
taken, and the holder of record fails to notify the Corporation within a
reasonable time after he has notice of it, and the Corporation registers a
transfer of the shares represented by the certificate before receiving such
notification, the holder of record shall be precluded from making any claim
against the Corporation for the transfer or for a new certificate.
7.08 Registration of Transfer. The Corporation shall register the transfer
of a certificate for shares presented to it for transfer if:
(a) Endorsement. The certificate is properly endorsed by the
registered owner or by his duly authorized attorney; and
(b) Guaranty and Effectiveness of Signature. If required by the
Corporation, the signature of such person has been guaranteed by a
national banking association or member of the New York Stock
Exchange, and reasonable assurance is given that such endorsements
are effective; and
(c) Adverse Claims. The Corporation has no notice of an adverse claim
or has discharged any duty to inquire into such a claim; and
(d) Collection of Taxes. Any applicable law relating to the collection
of taxes has been complied with.
7.09 Registered Owner. Prior to due presentment for registration of transfer
of a certificate for shares, the Corporation may treat the registered owner or
holder of a written proxy from such registered owner as the person exclusively
entitled to vote, to receive notices and otherwise exercise all the rights and
powers of a Shareholder.
7.10 Preemptive Rights. No Shareholder or other person shall have any
preemptive rights of any kind to acquire additional, unissued or treasury shares
of the Corporation, or securities of the Corporation convertible into, or
<PAGE>
carrying rights to subscribe to or acquire, shares of any class or series of the
Corporation's capital stock, unless, and to the extent that, such rights may be
expressly granted by appropriate action.
ARTICLE EIGHT: GENERAL PROVISIONS
8.01 Dividends and Reserves.
(a) Declaration and Payment. Subject to statute and the Articles of
Incorporation, dividends may be declared by the Board of Directors
at any regular or special meeting and may be paid in cash, in
property or in shares of the Corporation. The declaration and
payment shall be at the discretion of the Board of Directors.
(b) Record Date. The Board of Directors may fix in advance a record
date for the purpose of determining Shareholders entitled to
receive payment of any dividend, such record date to be not more
than sixty days prior to the payment date of such dividend, or the
Board of Directors may close the stock transfer books for such
purpose for a period of not more than sixty days prior to the
payment date of such dividend. In the absence of any action by the
Board of Directors, the date upon which the Board of Directors
adopts the resolution declaring such dividend shall be the record
date.
(c) Reserves. By resolution, the Board of Directors may create such
reserve or reserves out of the Earned Surplus of the Corporation as
the Directors from time to time, in their discretion, think proper
to provide for contingencies, or to equalize dividends, or to
repair or maintain any property of the Corporation, or for any
other purpose they think beneficial to the Corporation. The
Directors may modify or abolish any such reserve in the manner in
which it was created.
8.02 Books and Records. The Corporation shall keep correct and complete
books and records of account and shall keep minutes of the proceedings of its
Shareholders and Board of Directors, and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its Shareholders, giving the names and addresses of all
Shareholders and the number and class of the shares held by each.
8.03 Annual Reports. The Board of Directors shall cause such reports to be
mailed to Shareholders as the Board of Directors deems to be necessary or
desirable from time to time.
8.04 Checks and Notes. All checks or demands for money and notes of the
Corporation shall be signed by such Officer or Officers or such other person or
persons as the Board of Directors designates from time to time.
8.05 Fiscal Year. The fiscal year of the Corporation shall be the calendar
year.
8.06 Seal. The Corporation Seal (of which there may be one or more examples)
may contain the name of the Corporation and the name of the state of
incorporation. The Seal may be used by impressing it or reproducing a facsimile
of it, or otherwise. Absence of the Corporation Seal shall not affect the
validity or enforceability or any document or instrument.
8.07 Indemnification.
(a) The Corporation shall have the right to indemnify, to purchase
indemnity insurance for, and to pay and advance expenses to,
Directors, Officers and other persons who are eligible for, or
entitled to, such indemnification, payments or advances, in
accordance with and subject to the provisions of Indiana law, to
the extent such indemnification, payments or advances are either
expressly required by such provisions or are expressly authorized
by the Board of Directors within the scope of such provisions. The
right of the Corporation to indemnify such persons shall include,
but not limited to, the authority of the Corporation to enter into
written agreements for indemnification with such persons.
(b) To the fullest extent permitted by, and in the manner permissible
under the laws of the State of Indiana, any person made, or
threatened to be made, a party to an action or proceeding, whether
criminal, civil, administrative or investigative, by reason of the
fact that he is or was a director or officer of the Corporation, or
served any other enterprise as director, officer or employee at the
<PAGE>
request of the Corporation. The Board of Directors, in its
discretion, shall have the power on behalf of the Corporation to
indemnify any person, other than a director or officer, made a
party to any action, suit, or proceeding by reason of the fact that
he/she is or was an employee of the Corporation. A Director of the
Corporation shall not be liable to the Corporation or its
shareholders for monetary damages for an act or omission in the
Director's capacity as a Director, except that this provision does
not eliminate or limit the liability of a Director to the extent
the Director is found liable for:
(1) a breach of the Director's duty of loyalty to the Corporation
or its shareholders;
(2) an act or omission not in good faith that constitutes a breach
of duty of the Director to the Corporation or an act or
omission that involves intentional misconduct or a knowing
violation of the law;
(3) a transaction from which the Director received an improper
benefit, whether or not the benefit resulted from an action
taken within the scope of the Director's office; or
(4) an act or omission for which the liability of a Director is
expressly provided by an applicable statute.
8.08 Amendment of Bylaws. These Bylaws may be altered, amended or repealed
at any meeting of the Board of Directors at which a quorum is present, by the
affirmative vote of a majority of the Directors present thereat, provided notice
of the proposed alteration, amendment, or repeal is contained in the notice of
such meeting.
8.09 Construction. Whenever the context so requires, the masculine shall
include the feminine and neuter, and the singular shall include the plural, and
conversely. If any portion of these Bylaws are ever finally determined to be
invalid or inoperative, then, so far as is reasonable and possible:
(a) The remainder of these Bylaws shall be valid and operative; and
(b) Effect shall be given to the intent manifested by the portion held
invalid or inoperative.
8.10 Table of Contents; Headings. The table of contents and headings are for
organization, convenience and clarity. In interpreting these Bylaws, they shall
be subordinated in importance to the other written material.
Signed for Identification,
Chineseinvestors.com, Inc..
An Indiana Corporation
BY: /s/ Warren Wei Wang
___________________________________________
Its: Chairperson of the Board of Directors
<PAGE>
EXHIBIT 5.1 Opinion Regarding Legality
Charlotte M. Liebig
Attorney at Law
Ovenight Delivery and Mailing Address: Telephone: 716-853-2888
Brisbane Building FAX: 716-853-2892
403 Main Street St. E-Mail: [email protected]
Suite 716
Buffalo, New York 14203
LEGAL OPINION
FILING OF FORM SB2 REGISTRATION STATEMENT
FOR CHINESEINVESTORS.COM, INC.
1. Chineseinvestors.com Inc., formerly known as MAS Acquisition LII Corp. is a
corporation validly existing and in good standing under the laws of the State
of Indiana, and has full corporate power to own and hold its respective
properties and carry on its respective business as now conducted.
2. This opinion is given in connection with the registration with the
Securities and Exchange Commission (SEC) of the one million, two hundred
thirty-nine thousand, six hundred (1,212,650) shares of common stock of the
corporation for the proposed resale by the corporation's existing shareholders.
3. The authorized capital stock of Chineseinvestors.com, Inc. consists of
eighty million (80,000,000) shares of common stock having a par value of $0.001
per share.
4. There are nine million, one hundred fifty five thousand (9,155,000) common
shares are currently issued and outstanding. There are no preferred shares
currently issued and outstanding. All of the outstanding shares of the
ChineseInvestors.com, Inc. common stock are duly authorized, validly issued, and
fully paid and non-assessable. There are no outstanding subscription, options,
warrants, calls, rights, convertible securities or other agreements or
commitments of any character relating to the capital stock of
ChineseInvestors.com, Inc. ChineseInvestors.com, Inc. does not hold, directly or
indirectly, any outstanding, equitable, legal or beneficial interest in any
corporation or other entity.
5. There are no known legal, administrative, arbitration or other proceedings
or governmental investigations against Chineseinvestors.com, Inc. which, if
resolved unfavorably, would have a material adverse effect on
Chineseinvestors.com, Inc.
/s/ Charlotte M. Liebig
--------------------------
Charlotte M. Liebig
Date: October 25, 2000
<PAGE>
EXHIBIT 10.1 Standard Shopping Center Lease
STANDARD SHOPPING CENTER LEASE
Name of Center: ARCADIA LANDMARK (411 E. Huntington Dr.)
1. PARTIES. This lease dated as of this 19th day of August, 1999, is
made by and between Arcadia Landmark, A California Limited Partnership
(hereinafter called "Landlord") and Lan Jiang, An Individual dba
CHINESEINVESTORS.COM, INC. (hereinafter called "Tenant").
2. PREMISES. Landlord does hereby lease to Tenant, and Tenant hereby
leases from Landlord, that certain space (herein called "Premises"), and
containing approximately 1,083 square feet of floor space. The location and
dimensions of said Premises are delineated on Exhibit "A" attached hereto, and
incorporated by reference herein. Said Premises are located in the City of
Arcadia, County of Los Angeles, State of California. (411 E. Huntington Dr.,
#313)
This Lease is subject to the terms, covenants and conditions herein set
forth, and the Tenant covenants, as a material part of the consideration for
this Lease, to keep and perform each and all of said terms, covenants and
conditions by it to be kept and performed.
3. USE. Tenant shall use the Premises for General office for Internet
Web Site, and shall not use or permit the Premise to be used for any other
purposes without the prior written consent of Landlord.
4. MINIMUM RENT.
4.A tenant agrees to pay to Landlord as Minimum Rent, without notice or
demand, the monthly sum of $1,353.75 Dollars in advance, on or before the
first day of each and every successive calendar month during the term
hereof, except the first month's rent shall be paid upon execution hereof.
The rental shall commence:
On the 1st day of Sept., 1999, if the Premises are being leased in its "as
is" condition or subject to such incidental work as is to be performed by
Landlord prior to said date. This work, if any, is set forth in the
attached Exhibit "B." The rental shall commence on said date, only if
Landlord shall have completed said work; or
5. TERM. The Lease term shall be commence 9/01/99 and expires 8/30/02,
full calendar years. The parties hereto acknowledge that certain obligations
under various articles hereof may commence prior to the Lease term (i.e.
construction, hold harmless liability insurance, etc.), and the parties agree to
be bound by these articles prior to commencement of the Lease term.
6. SECURITY DEPOSIT. Concurrently with Tenant's execution of this lease,
Tenant has deposited with Landlord the sum of $5,600.00. Said sum shall be held
by Landlord as security for the faithful performance by Tenant of all the terms,
covenant, and conditions of this Lease to be kept and performed by Tenant during
the term hereof. If Tenant defaults with respect to any provision of this
Lease, including, but not limited to, the provisions relating to the payment of
rent, Landlord may (but shall not be required to) use, apply or retain all or
any part of this security deposit for the payment of any rent or any other sum
in default, or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of said
deposit is so used or applied, Tenant shall, within five (5) days after written
demand therefore, deposit cash with Landlord in an amount sufficient to restore
the security deposit to its original amount, and Tenant's failure to do so shall
be a default under this lease. Landlord shall not be required to keep this
security deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit, or any balance thereof, shall be returned to Tenant (or, at Landlord's
option, to the last assignee or Tenant's interest hereunder) within ten (10)
days following expiration of the Lease term. In the event of termination of
Landlord's interest in this Lease, Landlord shall transfer said deposit to
Landlord's successor in interest.
8. USES PROHIBITED. Tenant shall not do or permit anything to be done in
or about the Premises, nor bring or keep anything therein which is not within
the permitted use of the Premises which will in any way increase the existing
rate of or affect any fire or other insurance upon the Building or any of its
contents, or cause a cancellation of any insurance policy covering said
Buildings or any part thereof or any of its contents. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way
<PAGE>
obstruct or interfere with the rights of other tenants or occupants of the
Building, or injury or annex them, or use or allow the Premises to be used for
any improper, immoral, unlawful or objectionable purpose; nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises. Tenant
shall not commit, or allow to be committed, any waste in or upon the Premises.
Tenant shall not be permitted to place vending machines in or about the
Premises.
9. COMPLIANCE WITH LAW. Tenant shall not use the Premises, or permit
anything to be done in or about the Premises, which will in any way conflict
with any law, statute, ordinance or governmental rule or regulation now in
force, or which may hereafter be enacted or promulgated. Tenant shall, at its
sole cost and expense, promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force, or which may
hereafter be in force, and with the requirements of any board of fire
underwriters or other similar bodies now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Premise, excluding structural
changes not related to or affected by Tenant's improvements or acts. The
judgement of any court of competent jurisdiction or the admission of Tenant in
any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of that fact, as between the Landlord and
the Tenant.
10. ALTERATIONS AND ADDITIONS. Tenant shall not make or allow to be made
any alterations, additions or improvements to or of the Premises, or any part
thereof, without first obtaining the written consent of the Landlord, and any
alterations, additions or improvements to or of said Premises, including, but
not limited to, wall covering, paneling and built-in cabinet work, but excepting
movable furniture and trade fixtures, shall at once become a part of the realty
and belong to the Landlord, and shall be surrendered with the Premises. In the
event Landlord consents to the making of any alterations, additions or
improvements to the Premises by Tenant, the same shall be made by Tenant at
Tenant's sole cost and expense. Upon the expiration or sooner termination of
the term hereof, Tenant shall, upon written demand by Landlord, given at least
thirty (30) days prior to the end of the term, at Tenant's sole cost and
expense, forthwith and with all due diligence, remove any alterations,
additions, or improvements made by Tenant, designated by Landlord to be removed,
and Tenant shall, forthwith and with all due diligence, at its sole cost and
expense, repair any damage to the Premises caused by such removal.
11. REPAIRS.
11.A. By entry hereunder, Tenant shall be deemed to have accepted the
Premises as being in good, sanitary order, condition and repair. Tenant shall,
at Tenant's sole cost and expense, keep the Premises and every part thereof in
good condition and repair (except as hereinafter provided, with respect to
Landlord's obligations), including, without limitation, the maintenance,
replacement and repair of any storefront, doors, window casements, glazing,
heating and air conditioning system (when there is an air conditioning system,
Tenant shall obtain a service contract for repairs and maintenance of said
system, said maintenance to conform to the requirements under the warranty, if
any, on said system, or Landlord may obtain a master contract and charge Tenant
for its equitable share of the cost thereof), plumbing, pipes, electrical wiring
and conduits. Tenant shall, upon the expiration or sooner termination of this
Lease hereof, surrender the Premises to the Landlord in good condition, broom
clean, ordinary wear and tear and damage from causes beyond the reasonable
control of Tenant excepted. Any damage to adjacent premises caused by Tenant's
use of the Premises shall be repaired at the sole cost and expense of Tenant.
11.B. Landlord shall repair and maintain the structural portions of the
Building, including the exterior walls and roof, unless such maintenance repairs
are caused in part or in whole by the act, neglect, fault or omission of any
duty by the Tenant, its agents, servants, employees, invitees, or any damage
caused by breaking and entering, in which case Tenant shall pay to Landlord the
actual cost of such maintenance and repairs. Landlord shall not be liable for
any failure to make such repairs or to perform any maintenance, unless such
failure shall persist for an unreasonable time, after written notice of the need
of such repairs or maintenance is given to Landlord by Tenant. Except as
provided in Article 25 hereof, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant's
business arising from the making of any repairs, alterations or improvements in
or to any portion of the Building or the Premises, or in or to Fixtures,
appurtenances and equipment therein. Tenant waives the right to make repairs at
Landlord's expense under any law, statute or ordinance now or hereafter in
effect. Tenant shall reimburse Landlord for its prorata share of the cost of
said repair and maintenance incurred by Landlord, in accordance with Article
7.B. hereof.
<PAGE>
12. LIENS. Tenant shall keep the Premises and the property in which the
Premises are situated free from any liens arising out of any work performed,
materials furnished, or obligations incurred by or on behalf of Tenant.
Landlord may require at Landlord's sole option, that Tenant shall provide to
Landlord, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half (1-1/2) times the estimated cost of any
improvements,additions, or alterations in the Premises which the Tenant desires
to make, to insure Landlord against any liability for mechanics' and
materialmen's liens, and to insure completion of the work.
13. ASSIGNMENT AND SUBLETTING. tenant shall not either voluntarily, or by
operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber
this Lease or any interest therein, and shall not sublet the said Premises or
any part thereof, or any right or privilege appurtenant thereof, or allow any
other person (the employees, agents, servants and invitees of Tenant excepted)
to occupy or use the said Premises, or any portion thereof, without first
obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld. A consent to one assignment, subletting, occupation or
use by any other person, shall not be deemed to be a consent to any subsequent
assignment, subletting, occupation or use by another person. Consent to any
such assignment or subletting shall in no way relieve Tenant of any liability
under this Lease. Any such assignment or subletting without such consent shall
be void, and shall, at the option of Landlord, constitute a default under the
terms of this Lease.
In the event that Landlord shall consent to a sublease or assignment
hereunder, Tenant shall pay Landlord reasonable fees, not to exceed One Hundred
and no/100 Dollars ($100.00), incurred in connection with the Processing of
documents necessary to giving such consent.
14. HOLD HARMLESS. Tenant shall indemnify Landlord against and from any
and all claims arising from Tenant's use of the Premises, or from the conduct of
its business, or from any activity, work, or other things done, permitted or
suffered by the Tenant in or about the Premises, and shall further indemnify and
hold harmless Landlord against and from any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or arising from any act or negligence
of the Tenant, or any officer, agent, employee, guest or invitee of Tenant, and
from all costs, attorney's fees, and liabilities incurred in or about the
defense of any such claim or any action or proceeding brought thereon, and in
case any action or proceeding be brought against Landlord by reason of such
claim. Tenant, upon notice from Landlord, shall defend the same at Tenant's
expense, by counsel reasonable satisfactory to Landlord. Tenant, as a material
part of the consideration to Landlord, hereby assumes all risks of damage to
property, or injury to person in, upon or about the Premises, from any cause
other than Landlord's negligence, and Tenant hereby waives all claims in respect
thereof against Landlord. Tenant shall give prompt notice to Landlord in case
of casualty or accidents on the Premises.
15. SUBROGATION. As long as their respective insurers so permit,
Landlord and Tenant hereby mutually waive their respective rights of recovery
against each other for any loss insured by fire, extended coverage and other
property insurance policies existing for the benefit of the respective parties.
Each party shall apply to their insurers to obtain said waivers. Each party
shall obtain any special endorsements, if required by their insurer, to evidence
compliance with the aforementioned waiver.
16. LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and
keep in force during the term of this Lease, a policy of comprehensive public
liability insurance, insuring Landlord and Tenant against any liability arising
out of the ownership, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto. Such insurance shall be in the amount of not less
than $1,000,0000.00 for injury or death of one (1) person in any one accident or
occurrence, and in the amount of not less than $1,000,000.00 for injury or death
of more than one (1) person in any (1) accident or occurrence. Such insurance
shall further insure Landlord and Tenant against liability for property damage
of at least $49,000.00. The limit of any such insurance shall not, however,
limit the liability of the Tenant hereunder. Tenant may provide this insurance
under a blanket policy, provided that said insurance shall have a Landlords
protective liability endorsement attached thereto. If Tenant shall fail to
procure and maintain said insurance, Landlord may, but shall not be required to,
procure and maintain same, but at the expense of Tenant. Insurance required
hereunder shall be in companies rated A+ AAA or better in "Best's Insurance
Guide." Tenant shall deliver to Landlord, prior to right of entry, copies of
policies of liability insurance required herein, or certificates evidencing
existence and amounts of such insurance, with loss payable clauses satisfactory
to Landlord, No policy shall be cancelable or subject to reduction of coverage.
All such policies shall be written as primary policies not contributing with,
<PAGE>
and not in excess of, coverage which Landlord may carry.
17. UTILITIES. Tenant shall pay for all Water, gas, heat, light, power,
sewer charges, telephone service, and all other services and utilities supplied
to the Premises, together with any taxes thereon. If any such services are not
separately metered to Tenant, Tenant shall pay a reasonable proportion, to be
determined by Landlord, of all charges jointly metered with other premises. If
Landlord elects to provide water, gas, electricity, chilled water, or any other
utility service to Tenant, Tenant shall purchase its requirements for such
utility service from Landlord. Charges for such service shall be on metered or
other equitably calculated basis, and shall not exceed the charges that would
have been made by the public utility company serving the Premises.
18. PERSONAL PROPERTY TAXES. Tenant shall pay, or cause to be paid, before
delinquency, any and all taxes levied or assessed, and which become payable
during the term hereof upon all Tenant's leasehold improvements, equipment,
furniture, fixtures, and any other personal property located in the Premises.
In the event any or all of the Tenant's leasehold improvements, equipment,
furniture, fixtures and other personal property shall be assessed and taxed with
the real property, Tenant shall pay to Landlord its share of such taxes within
ten (10) days after delivery to Tenant by Landlord of a statement in writing
setting forth the amount of such taxes applicable to Tenant's property.
20. HOLDING OVER. If Tenant remains in possession of the Premises or any
part thereof after the expiration of the term hereof with the express written
consent of Landlord, such occupancy shall be a tenancy from month to month, at a
rental in the amount of the last Monthly Minimum Rent, plus all other charges
payable hereunder, and upon all the terms hereof applicable to a month to month
tenancy.
21. ENTRY BY LANDLORD. Landlord reserves, and shall at any and all times
have, the right to enter the Premises to inspect the same, to submit said
Premises to prospective purchasers or tenants, to post notices of
non-responsibility, to repair the Premises and any portion of the Building of
which the Premises are part that Landlord may deem necessary or desirable,
without abatement of rent, and may for the purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed, always providing that the entrance to the Premises shall not be
unreasonably blocked thereby, and further providing that the business of the
Tenant shall not be interfered with unreasonably. Tenant hereby waives any
claim for damages or for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and
any other loss occasioned thereby. For each of the aforesaid purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in, upon and about the Premises, excluding Tenant's vaults, safes and files, and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open said doors in an emergency, in order to obtain entry to the
Premises without liability to Tenant, except for any failure to exercise due
care for Tenant's property, and any entry to the Premises obtained by Landlord
by any of said means, or otherwise shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction of Tenant from the Premises or any portion thereof.
22. TENANT'S DEFAULT. The occurrence of any one or more the following
events shall constitute a default and breach of this Lease by Tenant:
22.A. The vacating or abandonment of the Premises by Tenant.
22.B. The failure by Tenant to make any payment of rent or any other
payments required to be made by Tenant hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof by Landlord to Tenant.
22.C. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease, to be observed or performed by the
Tenant, other than described in Article 22.B. above, where such failure shall
continue for a period of thirty (30) days after written notice hereof by
Landlord to Tenant, provided, however, that if the nature of Tenant's default is
such that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure within
said thirty (30) day period, and thereafter diligently prosecutes such cure to
completion.
22.D. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors, or the filing by or against Tenant of
a petition to have Tenant adjudged a bankruptcy, or a petition for
reorganization, or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed within sixty
<PAGE>
(60) days), or the appointment of a trustee or a receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in the Lease, where possession is not restored to Tenant within thirty
(30) days, or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged in thirty (30)
days.
23. REMEDIES IN DEFAULT. In the event of any such default or breach by
Tenant, Landlord may, at any time thereafter, in his sole discretion, with or
without notice or demand, and without limiting Landlord in the exercise of a
right or remedy which Landlord may have by reason of such default or breach:
23.A. Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate, and Tenant shall
immediately surrender possession of the Premises to landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including, but not limited to, the cost
of recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorney's fees,
and worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent and other charges and adjustments called for
herein for the balance of the term after the time of such award exceeds the
amount of such loss for the same period that Tenant proves could be reasonably
avoided, and that portion of any leasing commission paid by Landlord and
applicable to the unexpired term of this Lease. Unpaid installments of rent or
other sums shall bear interest from the date due at the maximum legal rate; or
23.B. Maintain Tenant's right to possession, in which case this
Lease shall continue in effect, whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the rent and any other charges and adjustments as may become due hereunder; or
23.C. Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state in which the Premises are
located.
24. DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord, and to the holder of any first mortgage or deed of trust covering
the Premises whose name and address shall have theretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance, then Landlord
shall not be in default if Landlord commences performance within such thirty
(30) day period, and thereafter diligently prosecutes the same to completion.
In no event shall Tenant have the right to terminate this Lease as a result of
Landlord's default, and Tenant's remedies shall be limited to damages and/or an
injunction.
25. RECONSTRUCTION. In the event the Premises are damaged by fire or
other perils covered by extended coverage insurance, Landlord agrees to
forthwith repair same, and this Lease shall remain in full force and effect,
except that Tenant shall be entitled to a proportionate reduction of the Minimum
Rent from the date of the damage, and while such repairs are being made, such
proportionate reduction to be based upon the extent to which the damage and
making of such repairs shall reasonably interfere with the business carried on
by the tenant in the Premises. If the damage is due to the fault or neglect of
the Tenant or its employees, there shall be no abatement of rent.
In the event the Premises are damaged as a result of any cause other
than the perils covered by fire and extended coverage insurance, then Landlord
shall forthwith repair the same, provided the extent of the destruction of the
Premises is to an extent of ten percent (10%) or more of the full replacement
cost, then Landlord shall have the option:
A. To repair or restore such damage, this Lease continuing in full
force and effect, but the Minimum Rent to be proportionately reduced as
hereinabove in this Article provided; or
B. Give notice to Tenant at any time within sixty (60) days after such
damage, terminating this Lease as of the date specified in such notice, which
date shall be no more than thirty (30) days after the giving of such notice.
In the event of giving such notice, this Lease shall expire, and all
interest of the Tenant in the Premises shall terminate on the date so specified
<PAGE>
in such notice, and the Minimum Rent, reduced by a proportionate reduction,
based upon the extent, if any, to which such damage interfered with the business
carried on by the Tenant in the Premises, shall be paid, up to the date of such
termination.
Notwithstanding anything to the contrary contained in this Article,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises when the damage resulting from any casualty covered under
this Article occurs during the last twenty-four (24) months of the term of this
Lease, or any extension thereof.
Landlord shall not be required to repair any injury or damage by fire or
other cause, or to make any repairs or replacements of any leasehold
improvements, fixtures, or other personal property of Tenant.
26. EMINENT DOMAIN. If more than twenty-five percent (25%) of the
Premises shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain, either party hereto shall have the right, at
its option, within sixty (60) days after said taking, to terminate this Lease
upon thirty (30) days written notice. If either less than or more than
twenty-five percent (25%) of the Premises are taken (and neither party elect to
terminate as herein provided), the Minimum Rent thereafter to be paid shall be
equitably reduced. If any part of the Shopping Center other than the Premises
may be no taken or appropriated, Landlord shall, within sixty (60) days of said
taking, have the right at its option to terminate this Lease upon written notice
to Tenant. In the event of any taking or appropriation whatsoever, Landlord
shall be entitled to any and all awards and/or settlements which may be given,
and Tenant shall have no claim against Landlord for the value of any unexpired
term of this Lease.
Initials: /s/ L.J.
<PAGE>
27. PARKING AND COMMON AREAS. Landlord covenants that, upon completion
of the Shopping Center, an area approximately equal to the common and parking
areas as shown on the attached Exhibit "A" shall be at all times available for
the non-exclusive use of Tenant during the full term of this Lease, or any
extension of the term hereof, provided that the condemnation or other taking by
any public authority, or sale in lieu of condemnation, of any or all of such
common and parking areas shall not constitute a violation of this covenant.
Landlord reserves the right to change the entrances, exits, traffic lanes, and
the boundaries and locations of such parking area or areas, provided, however,
that anything to the contrary notwithstanding contained in this Article 27, said
parking area or areas shall at all times be substantially equal or equivalent to
that shown on the attached Exhibit "A."
27.A. Prior to the date of Tenant's opening for business in the
Premises, Landlord shall cause said common and parking area or areas to be
graded, surfaced, marked and landscaped at no expense to Tenant.
27.B. The Landlord shall keep said automobile parking and common areas
in a neat, clean and orderly condition, and shall repair any damage to the
facilities thereof, but all expenses in connection with said automobile parking
and common areas shall be charged and prorated in the manner set forth in
Article 7 hereof.
27.C. Tenant, for the use and benefit of Tenant, its agents, employees,
customers, licensees and subtenants, shall have the non-exclusive right in
common with Landlord, and other present and future owners, tenants and their
agents, employees, customers, licensees and subtenants, to use said common and
parking areas during the entire term of this Lease, or any extension thereof,
for ingress and egress, and automobile parking.
27.D. The Tenant, in the use of said common and parking areas, agrees
to comply with such reasonable rules, regulations and charges for parking as the
Landlord may adopt from time to time for the orderly and proper operation of
said common and parking areas. Such rules may include, but shall not be limited
to, the following:
I. The restricting for employee parking to a limited,
designated area or areas; and
II. The regulation of the removal, storage and disposal of
Tenant's refuse and other rubbish at the sole cost and expense of Tenant.
28. ENCLOSED MALL. N/A.
29. SIGNS. The Tenant may affix and maintain upon the glass panes and
supports of the show windows, and within twelve inches (12") of any window, and
upon the exterior walls of the Premises, only such signs, advertising placards,
names, insignia, trademarks and descriptive material as shall have first
received the written approval of the Landlord as to type, size, color, location,
copy nature, and display qualities, Anything to the contrary in this Lease
notwithstanding, Tenant shall not affix any sign to the roof. Tenant shall,
however, erect one sign on the front of the Premises, not later than the date
Tenant opens for business, in accordance with a design to be prepared by Tenant
and approved in writing by Landlord.
Tenant shall install at Tenant's expense, on the front of the leased
Premises, a business sign in accordance with the Sign Criteria in Exhibit "C"
attached hereto and made a part hereof. At the termination of this Lease,
Tenant shall remove at Tenant's expense, the said business sign, and repair and
repaint the area affected thereby.
30. DISPLAYS. The Tenant may not display or sell merchandise, or allow
grocery carts or other similar devises within the control of Tenant to be stored
or to remain outside the defined exterior walls and permanent doorways of the
Premises. Tenant further agrees not to install any exterior lighting,
amplifiers or similar devices, or use in or about the Premises, any advertising
medium which may be heard or seen outside the Premises, such as flashing lights,
searchlights, loudspeakers, phonographs or radio broadcasts.
31. AUCTIONS. Tenant shall not conduct or permit to be conducted any sale
by auction in, upon or from the Premises, whether said auction be voluntary,
involuntary, pursuant to any assignment for the payment of creditors, or
pursuant to any bankruptcy or other insolvency proceeding.
32. HOURS OF BUSINESS. Subject to the provisions of Article 25 hereof,
Tenant shall continuously, during the entire term hereof, conduct and carry on
Tenant's business in the Premises, and shall keep the Premises open for
business, and cause Tenant's business to be conducted therein, during the usual
<PAGE>
business hours of each and every business day, as is customary for business of
like character in the city in which the Premises are located to be open for
business; provided, however, that this provision shall not apply if the Premises
should be closed and the business of Tenant temporarily discontinued therein on
account of strikes, lockouts or similar causes beyond the reasonable control of
Tenant. Tenant shall keep the Premises adequately stocked with merchandise, and
with sufficient sales personnel to care for the patronage, and to conduct said
business in accordance with sound business practice.
In the event of breach by the Tenant of any of the conditions contained in
this Article, the Landlord shall have, in addition to any and all remedies
herein provided, the right at its option to collect not only the Minimum Rent
herein provided, but additional rent at the rate of one-thirtieth (1/30) of the
Minimum Rent herein provided for each and every day that the Tenant shall fail
to conduct its business as herein provided; said additional rent shall be deemed
to be in lieu of any percentage rent that might have been earned during such
period of the Tenant's failure to conduct its business as herein provided.
33. MERCHANTS' ASSOCIATION. Tenant will become a member of, and
participate fully in, and remain in good standing in, the merchants' Association
(as soon as the same has been formed), organized for tenants occupying premises
in the Shopping Center, and Tenant will abide by the regulations of such
Association. Each member tenant shall have one (1) vote, and the Landlord shall
also have one (1) vote, in the operation of said Association. The objects of
such Association shall be to encourage its members to deal fairly and
courteously with their customers, to encourage ethical business practices, and
to assist the business of the tenants by sales promotion and center wide
advertising. The Tenant agrees to pay minimum dues to the Merchants'
Association, provided, however, that in no event shall dues paid by Tenant in
any fiscal year of said Association be in excess of twenty cents ($.20) per
square foot of Premises leased to Tenant. Default in payment of dues shall be
treated in similar manner to default in rent, with like rights of Landlord, at
its option, to the collection thereof on behalf of the merchants' Association.
Tenant shall, within fifteen (15) days after receipt of an invoice
therefore, pay an opening period assessment to the Association equal to five
cents ($.05) per square foot of the leased Premises. Opening period shall mean
the period of time commencing with the date thirty (30) days in advance of the
opening of the Shopping Center, and terminating upon the expiration of ninety
(90) days after the opening of the Shopping Center. Any portion of the
assessment for the opening period which is not expended shall be refunded to the
tenants on a proportionate basis of each tenant's assessment to the total
assessments for the opening period.
34. LENDER'S MODIFICATIONS. Landlord intends to finance the improvements
in the Center by borrowing from an institutional lender. If prior to the date
of commencement of construction of the building, or the one hundred twentieth
(120th) day after the date hereof, whichever shall last occur, any such lender
shall require, as a condition to providing financing requested by Landlord, that
any of the terms or provisions hereof be modified, and Tenant shall refuse to
consent to such modification within thirty (30) days after written request to do
so, Landlord may terminate this Lease by written notice to Tenant. In such
event, Landlord shall refund to Tenant any sums paid by Tenant upon execution
hereof. No such requested modification shall change the size or location of the
Premises, or increase the rent payable hereunder, or Tenant's share of tax
increases, or Common Area Maintenance Costs.
Initials: /s/ L.J.
<PAGE>
GENERAL PROVISIONS
35.A. Plats and Riders. Clauses, plats, riders and addendums, if any,
affixed to this Lease, are a part thereof.
35.B. Waiver. The waiver by Landlord of any term, covenant or condition
herein contained shall no be deemed to be a waiver of such term, covenant or
condition, or any subsequent breach of the same or any other term, covenant or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding default by Tenant
of any term, covenant or condition of this Lease, other than the failure of the
Tenant to pay the particular rental so accepted, regardless of Landlord's
knowledge of such preceding default at the time of the acceptance of such rent.
35.C. Joint Obligation. if there be more than one (1) tenant, the
obligations hereunder imposed shall be joint and several.
35.D. Marginal Headings. The marginal headings and article titles to the
articles of this Lease are not a part of the Lease, and shall have no effect
upon the construction or interpretation of any part hereof.
35.E. Time. Time is of the essence of this Lease, and each and all of its
provisions in which performance is a factor.
35.F. Successors and Assigns. The covenants and conditions herein contained
subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of the parties hereto.
35.G. Recordation. Neither Landlord nor Tenant shall record this Lease, but
a short form memorandum hereof may be recorded at the request of Landlord.
35.H. Quiet Possession. Upon Tenant paying the rent reserved hereunder, and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof, subject to all the
provisions of this Lease.
36.I. Late Charges. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent or other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any sum due from Tenant shall not be
received by Landlord or Landlord's designees within ten (10) days after written
notice that said amount is past due, then Tenant shall pay to landlord a late
charge equal to the maximum amount permitted by law (and in the absence of any
governing law, ten percent (10%) of such overdue amount), plus any attorneys'
fees incurred by Landlord by reason of Tenant's failure to pay rent and/or other
charges when due hereunder. The parties hereby agree that such late charges
represent a fair and reasonable estimate of the cost that Landlord will incur by
reason of the late payment by Tenant. Acceptance of such late charges by the
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
35.J. Prior Agreements. The Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease,
and no prior agreements or understanding pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended or added
to, except by an agreement in writing signed by the parties hereto, or their
respective successors in interest. This Lease shall not be effective or binding
on any part until fully executed by both parties hereto.
35.K. Inability to Perform. This Lease and the obligations of the Tenant
hereunder shall not be affected or impaired because the Landlord is unable to
fulfill any of its obligations hereunder, or is delayed in doing so, if such
inability or delay is caused by reason of strike, labor troubles, acts of God,
or any other cause beyond the reasonable control of the Landlord.
36.L. Partial Invalidity. Any provision of this Lease which shall prove to
be invalid, void, or illegal shall in no way affect, impair or invalidate any
other provision hereof, and such other provision shall remain in full force and
effect.
35.M. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive, but shall, whenever possible, be cumulative with all other remedies
at law or in equity.
<PAGE>
35.N. Choice of Law. This Lease shall be governed by the laws of the state
in which the Premises are located.
35.O. Attorneys' Fees. In the event of any action or proceeding brought by
either party against the other under this Lease, the prevailing party shall be
entitled to recover for the fees of its attorney in such action or proceeding,
including costs of appeal, if any, in such amount as the court may adjudge
reasonable as attorneys' fees. In addition, should it be necessary for Landlord
to employ legal counsel to enforce any of the provisions herein contained,
Tenant agrees to pay all attorneys' fees and court costs reasonably incurred.
35.P. Sale of Premises by Landlord. In the event of any sale of the
Premises by Landlord, Landlord shall be, and is hereby entirely freed and
relieved of, all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission occurring after the consummation of such sale; and the Purchaser, at
such sale or any subsequent sale of the Premises, shall be deemed, without any
further agreement between the parties or their successors in interest, or
between the parties and any such Purchaser, to have assumed and agreed to carry
out any and all of the covenants and obligations of the Landlord under this
Lease.
35.Q. Subordination, Attornment. Upon request of the Landlord, Tenant will,
in writing, subordinate its rights hereunder to the lien of any mortgage or deed
of trust, to any bank, insurance company or other lending institution now or
hereafter in force against the Premises, and to all advances made or hereafter
to be made upon the security thereof.
In the event any proceedings are brought for foreclosure, or in the
event of the exercise of the power of sale under mortgage or Deed of Trust made
by the Landlord covering the Premises, the Landlord shall attorn to the
Purchaser upon any such foreclosure or sale, and recognize such Purchaser as the
Landlord under this Lease.
The provisions of this Article to the contrary notwithstanding, and so
long as Tenant is not in default hereunder, this Lease shall remain in full
force and effect for the full term hereof.
35.R. Notices. All notices and demands which may, or are to be, required or
permitted to be given by either party on the other, hereunder shall be in
writing. All notices and demands by the Landlord to the Tenant shall be sent by
United States Mail, postage prepaid, addressed to the Tenant at the Premises,
and/or the address herein below, or to such other place as Tenant may from time
to time designate in a notice to the Landlord. All notices and demands by the
Tenant to the Landlord shall be sent by United States Mail, postage prepaid,
addressed to the Landlord at the address set forth herein, and to such other
person or place as the Landlord may from time to time designate in a notice to
the Tenant.
To LANDLORD: Arcadia Landmark, A California Limited Partnership
411 E. Huntington Dr., #305
Arcadia, CA 91006
(626) 446-2988
TO TENANT: Lan Jiang, An Individual dba CHINESEINVESTORS.COM, INC.
4953 Ardsley Dr.
Temple City, CA 91780
(626) 864-3006
35.S. Tenant's Statement. Tenant shall, at any time and from time to time,
upon not less than three (3) days prior written notice from Landlord, execute,
acknowledge and deliver to Landlord a statement in writing:
I. Certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect), and
the date to which the rental and other charges are paid in advance, if any; and
II. Acknowledging that there are not, to Tenant's knowledge,
any uncured defaults on the part of the Landlord hereunder, or specifying such
defaults if any are claimed; and
III. Setting forth the date of commencement of rents and
expiration of the term hereof.
Any such statement may be relied upon by the prospective
purchaser, or encumbrance of all or any portion of the real property of which
the Premises are a part.
<PAGE>
35.T. Authority of Tenant. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation, in accordance with the bylaws of said corporation, and that this
Lease is binding upon said corporation.
36. BROKERS. Tenant warrants that it has had no dealings with any real
estate broker or agents in connection with the negotiation of this Lease, and
knows of no real estate broker or agent who is entitled to a commission in
connection with this Lease, with the exception of B.P. International, Inc.
37. SEE ADDENDUM.
38. Upon Tenant's execution of this lease, tenant shall pay first months
rent, and security deposit.
39. This Lease has been prepared for submission to your attorney who will
review the document and assist you to determine whether your legal rights are
adequately protected. BP International, Inc. is not authorized to give legal or
tax advise; no representation or recommendation is made by BP INTERNATIONAL,
INC. or its agents or employees as to the legal sufficiency, legal effect or tax
consequences of this document or any transaction relating thereto. These are
questions for your attorney with whom you should consult before signing this
document.
AGREED: AGREED:
LANDLORD: TENANT:
Arcadia Landmark Lan Jiang
A California Limited Partnership An Individual
dba CHINESEINVESTORS.COM, INC.
/S/ Arcadia Landmark /S/ Lan Jiang
<PAGE>
ADDENDUM (1) TO LEASE AGREEMENT DATED AUGUST 19, 1999
BY AN BETWEEN ARCADIA LANDMARK, A CALIFORNIA LIMITED
PARTNERSHIP AS LANDLORD AND LAN JIANG, AN INDIVIDUAL
DBA CHINESEINVESTORS.COM, INC.
AS TENANT
37.A OPTION TO RENEW Provided that this Lease is in effect and TENANT is
not at the time of exercise of the herein option, and has not been at any time
prior to any such exercise, in default under this Lease, TENANT shall have the
right and option to renew the term of this Lease from the date upon which it
would otherwise expire for an additional 3-year period. Said renewal shall be
upon the same term and conditions as set forth herein, with the exception of
minimum rent payable hereunder, which shall be adjusted on the first day of said
renewal term according to Paragraph 4.B Rental Schedule of this Lease. If
TENANT desires to exercise the option to renew granted hereunder, TENANT shall
do so by giving written notice of Tenant's irrevocable election to so exercise
said option no earlier than 240 days and no later than 180 days prior to the
date upon which the initial term of this Lease would otherwise expire. Such
written notice shall be delivered from TENANT to LANDLORD by personal delivery,
or if mailed, then by certified or registered mail, return receipt requested, to
ensure Landlord's actual receipt of such notice. The option to renew shall not
be assigned or otherwise transfer said option rights except upon landlord's
expressed prior written consent, regardless of landlord's approval of an
assignment or transfer of tenant's other rights and obligations under this
Lease. In the event that more than one (1) option to renew is granted
hereunder, any such second or subsequent option shall not be validly exercised
unless all prior options have been properly exercised.
37.B The Base Rent shall be increased on each September 1st of the lease
term by an amount equal to five (5%) percent of the base rent payable during the
prior year.
37.C Landlord shall not provide reception outlets or television or radio
antennas for television or radio broadcast reception, and Tenant shall not
install any such equipment without prior written approval from Landlord, which
approval may be withheld in Landlord's reasonable discretion. Tenant shall have
the right to install up to One (1) satellite dish on the roof. Said satellite
dish shall not exceed two (2) feet in diameter. The means of the installation
shall require the prior approval of Landlord which shall not be unreasonably
withheld.
/s/ Landlord /s/ Lan
------------- -------------
Landlord Tenant
<PAGE>
EXHIBIT A
SITE PLAN
(drawing)
THIRD FLOOR PLAN
/s/ Landlord /s/ Lan
------------- -------------
Landlord Tenant
<PAGE>
EXHIBIT "B"
LANDLORD'S WORK
Premises leased to Tenant in its "As-Is' condition.
/s/ Landlord /s/ Lan
------------- -------------
Landlord Tenant
<PAGE>
EXHIBIT 10.2 YAHOO! INC. Content License Agreement (Revenue Share)
YAHOO! INC.
CONTENT LICENSE AGREEMENT
(REVENUE SHARE)
THIS CONTENT LICENSE AGREEMENT (the "Agreement') is made as of this 3rd day of
December, 1999 (the "Effective Date") between YAHOO!, INC., a Delaware
corporation, with offices at 3420 Central Expressway, Santa Clara, CA 95051,
("YAHOO") and Chineseinvestors.com Inc., ("Licensor"), a California corporation,
with offices at 411 E. Huntington Dr. Suite 313, Arcadia, CA 91006.
In consideration of the mutual promises contained herein, the parties agree as
follows:
SECTION 1: DEFINITIONS.
Unless otherwise specified, capitalized terms used in this Agreement shall have
the meanings attributed to them in Exhibit A hereto.
SECTION 2: GRANT OF LICENSES; PAYMENTS
2.1 Grant of Licenses. Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Yahoo, under Licensor's Intellectual
Property Rights:
(a) A non-exclusive, worldwide license to use, modify, reproduce,
distribute, display and transmit the Licensor Content in electronic form in
connection with Yahoo Properties via the Internet or any Wireless Device
(including, without limitation, transmitting the Licensor Content in either the
traditional Chinese (Big 5 code) or the simplified Chinese (GB code) format),
and to permit users of the Yahoo Properties to download and print the Licensor
Content for personal use. Yahoo's license to modify the Licensor content shall
be limited to modifying the Licensor Content to fit the format and look and feel
of the Yahoo Property.
(b) A non-exclusive, worldwide, fully paid license to use, reproduce and
display the Licensor's Brand Features: (i) in connection with the presentation
of the Licensor Content on the Content Pages in the Yahoo Properties; and (ii)
in connection with the marketing and promotion of the Yahoo Properties.
(c) Yahoo shall be entitled to sublicense the rights set forth in this
Section 2.1: (i) to its Affiliates only for inclusion in Yahoo Properties; and
(ii) in connection with any mirror site, derivative site, or distribution
arrangement concerning a Yahoo Property.
(d) Not limiting any other rights provided Yahoo pursuant to this Agreement,
Yahoo shall have the right, at its sole discretion, to display Teaser Content on
pages that link to pages containing Licensor Content.
2.2 Payments. For the Term of this Agreement, and in consideration of the
licenses and rights granted in Section 2.1 hereto, Yahoo shall pay to Licensor,
on a quarterly basis, an amount equal to thirty percent (30%) of Advertising
Revenue recognized by Yahoo. Such payments will be made by Yahoo within
forty-five (45) days following the calendar quarter in which received by Yahoo.
Yahoo will provide with each such payment a report, certified by an officer of
Yahoo, setting forth such Advertising Revenue. Such amounts shall include all
taxes of any kind which result from the license of the Licensor Content
hereunder, which will solely be Licensor s responsibility. If Yahoo does not
actually receive payment for the Advertising Revenue which had previously been
recognized and paid to Licensor, Yahoo shall be entitled to credit such amount
against future payments due Licensor, or, if no further payments are due
Licensor, Licensor shall promptly refund such amount to Yahoo.
2.3 Audit Rights. To ensure compliance with the terms of this Agreement,
Licensor shall have the right, at its own expense, to direct an independent
certified public accounting firm to inspect and audit all of the accounting and
sales books and records of Yahoo which are relevant to the payments set out in
Section 2.2 hereto; provided, however, that: (i) Licensor provides thirty (30)
days notice prior to such audit; (ii) any such inspection and audit shall be
conducted during regular business hours in such a manner as not to interfere
with normal business activities; (iii) in no event shall audits be made more
frequently than once per calendar year; (iv) Licensor shall not disclose Yahoo's
Confidential Information in any manner whatsoever without the prior written
consent of Yahoo; and (v) in the event that any audit shall reveal an
underpayment of more than ten percent (10%) of the amounts due to Licensor for
any calendar quarter, Yahoo will reimburse Licensor for the reasonable cost of
<PAGE>
such audit. If any audit shall reveal an overpayment of the amounts due
Licensor, Yahoo shall be entitled to credit such amounts against further
payments due Licensor, and if no further payments are due Licensor, Licensor
shall promptly refund such amount to Yahoo.
SECTION 3: PRESENTATION OF LICENSOR CONTENT; ADVERTISING REVENUE.
3.1 Yahoo's Responsibilities. In addition to any responsibilities that may
be set forth in Exhibit C, Yahoo will be responsible for the design, layout,
posting, and maintenance of the Content Pages. In no event is Yahoo under any
obligation, express or implied, to post or otherwise include any of the Licensor
Content in any Yahoo Property, including without limitation, in any Content
Pages.
3.2 Licensor Assistance. In addition to any responsibilities that may be set
forth in Exhibit C, Licensor will provide on-going assistance to Yahoo with
regard to technical, administrative and service-oriented issues relating to the
utilization, transmission and maintenance of the Licensor Content, as Yahoo may
reasonably request. Licensor will use its reasonable best efforts to ensure that
the Licensor Content is accurate, comprehensive and updated regularly as set
forth in Exhibit C.
3.3 Advertising Rights. Yahoo shall have the sole right to sell or license
all Advertising Rights with respect to Content Pages. Yahoo shall use reasonable
commercial efforts to sell or license such Advertising Rights; provided,
however, that Yahoo makes no representation or warranty with respect to the
amount of Advertising Revenue to be received from such Advertising Rights.
3.4 Notices. Yahoo will not alter or impair any acknowledgment of copyright
or other Intellectual Property Rights of Licensor that may appear in the
Licensor Content and the Licensor Brand Features, including all copyright,
trademark and similar notices that Licensor may reasonably request.
3.5 Links. The parties will maintain the hypertext links specified in
Exhibit D.
SECTION 4: DELIVERY OF LICENSOR CONTENT
During the term of this Agreement, Licensor shall deliver updates of the
Licensor Content to Yahoo in accordance with the Delivery Specifications set
forth in Exhibit C. Licensor also shall provide Yahoo with reasonable prior
notice of any significant Enhancements that generally affect the appearance,
updating, delivery or other elements of the Licensor Content, and shall make
such Enhancements available to Yahoo upon commercially reasonable terms.
SECTION 5: INDEMNIFICATION
Licensor, at its own expense, will indemnify, defend and hold harmless Yahoo,
its Affiliates and their employees, representatives, agents and affiliates,
against any claim, suit, action, or other proceeding brought against Yahoo or an
Affiliate based on or arising from a claim that the Licensor Content as
delivered to Yahoo or any Licensor Brand Feature infringes in any manner any
Intellectual Property Right of any third party or contains any material or
information that is obscene, defamatory, libelous, slanderous, that violates any
person's right of publicity, privacy or personality, or has otherwise resulted
in any tort, injury, damage or harm to any person; provided, however, that in
any such case: (x) Yahoo provides Licensor with prompt notice of any such claim;
(y)Yahoo permits Licensor to assume and control the defense of such action, with
counsel chosen by Licensor (who shall be reasonably acceptable to Yahoo); and
(z) Licensor does not enter into any settlement or compromise of any such claim
without Yahoo's prior written consent, which consent shall not be unreasonably
withheld. Licensor will pay any and all costs, damages, and expenses, including,
but not limited to, reasonable attorneys' fees and costs awarded against or
otherwise incurred by Yahoo or an Affiliate in connection with or arising from
any such claim, suit, action or proceeding. It is understood and agreed that
Yahoo does not intend and will not be required to edit or review for accuracy or
appropriateness any Licensor Content.
SECTION 6: LIMITATION OF LIABILITY.
EXCEPT AS PROVIDED IN SECTION 5, UNDER NO CIRCUMSTANCES SHALL LICENSOR, YAHOO,
OR ANY AFFILIATE BE LIABLE TO ANOTHER PARTY FOR INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING FROM THIS AGREEMENT, EVEN IF
THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, SUCH AS, BUT NOT
LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS.
<PAGE>
SECTION 7: TERM AND TERMINATION
7.1 Initial Term and Renewals. This Agreement will become effective as of
the Effective Date and shall, unless sooner terminated as provided below or as
otherwise agreed, remain effective for an initial term of twelve (12) months
following the first date of public availability of the Licensor Content on a
Content Page within a Yahoo Property (the "Initial Term"). After the Initial
Term, this Agreement will be automatically renewed for successive additional one
year periods ("Extension Terms"), unless otherwise terminated by either party by
giving notice to the other party not less than sixty (60) days prior to the end
of a Term. As used herein, the "Term" means the Initial Term and any Extension
Term(s).
7.2 Termination for Cause. Notwithstanding the foregoing, this Agreement may
be terminated by either party immediately upon notice if the other party: (w)
becomes insolvent; (x) files a petition in bankruptcy; (y) makes an assignment
for the benefit of its creditors; or (z) breach any of its obligations under
this Agreement in any material respect, which breach is not remedied within
thirty (30) days following written notice to such party.
7.3 Effect of Termination. Any termination pursuant to this Section 7 shall
be without any liability or obligation of the terminating party, other than with
respect to any breach of this Agreement prior to termination. The provisions of
Sections 5, 6, 7, 8, 9,10, and this Section 7.3 shall survive any termination or
expiration of this Agreement.
SECTION 8: OWNERSHIP.
8.1 By Licensor. Yahoo acknowledges and agrees that: (i) as between Licensor
on the one hand, and Yahoo and its Affiliates on the other, Licensor owns all
right, title and interest in the Licensor Content and the Licensor Brand
Features; (ii) nothing in this Agreement shall confer in Yahoo or an Affiliate
any right of ownership in the Licensor Content or the Licensor Brand Features;
and (iii) neither Yahoo or its Affiliates shall now or in the future contest the
validity of the Licensor Brand Features. No licenses are granted by either party
except for those expressly set forth in this Agreement.
8.2 By Yahoo. Licensor acknowledges and agrees that: (i) as between Licensor
on the one hand, and Yahoo and its Affiliates on the other, Yahoo or the
Affiliates own all right, title and interest in any Yahoo Property and the Yahoo
Brand Features; (ii) nothing in this Agreement shall confer in Licensor any
license or right of ownership in the Yahoo Brand Features; and (iii) Licensor
shall not now or in the future contest the validity of the Yahoo Brand Features.
No licenses are hereby granted by Yahoo. Yahoo or its Affiliates shall own all
derivative works created by Yahoo from the Licensor Content, including the
Content Pages, pursuant to this Agreement, to the extent such is separable from
the Licensor Content.
SECTION 9: PUBLIC ANNOUNCEMENTS.
The parties will cooperate to create any and all appropriate public
announcements relating to the relationship set forth in this Agreement. Neither
party shall make any public announcement regarding the existence or content of
this Agreement without the other party's prior written approval and consent.
SECTION 10: NOTICE; MISCELLANEOUS PROVISIONS
10.1 Notices. All notices, requests and other communications called for by
this agreement shall be deemed to have been given immediately if made by
telecopy or electronic mail (confirmed by concurrent written notice sent first
class U.S. mail, postage prepaid), if to Yahoo at 3420 Central Expressway, Santa
Clara, CA 95051, Fax: (408) 731-3400 Attention: President and Chief Operating
Officer (e-mail: [email protected]), with a copy to its General Counsel and
Vice President (e-mail: [email protected]), and if to Licensor at the
physical and electronic mail addresses set forth on the signature page of this
Agreement, or to such other addresses as either party shall specify to the
other. Notice by any other means shall be deemed made when actually received by
the party to which notice is provided.
10.2 Miscellaneous Provisions. This Agreement will bind and inure to the
benefit of each party's permitted successors and assigns. Neither party may
assign this Agreement, in whole or in part, without the other party's written
consent; provided, however, that: (i) either party may assign this Agreement
without such consent in connection with any merger, consolidation, any sale of
all or substantially all of such party's assets or any other transaction in
which more than fifty percent (50%) of such party's voting securities are
transferred; and (ii) Yahoo may assign this Agreement without such consent to an
<PAGE>
Affiliate. Any attempt to assign this Agreement other than in accordance with
this provision shall be null and void. This Agreement will be governed by and
construed in accordance with the laws of the State of California, without
reference to conflicts of laws rules, and without regard to its location of
execution or performance. If any provision of this Agreement is found invalid or
unenforceable, that provision will be enforced to the maximum extent
permissible, and the other provisions of this Agreement will remain in force.
Neither this Agreement, nor any terms and conditions contained herein may be
construed as creating or constituting a partnership, joint venture or agency
relationship between the parties. No failure of either party to exercise or
enforce any of its rights under this Agreement will act as a waiver of such
rights. This Agreement and its exhibits are the complete and exclusive agreement
between the parties with respect to the subject matter hereof, superseding and
replacing any and all prior agreements, communications, and understandings, both
written and oral, regarding such subject matter. This Agreement may only be
modified, or any rights under it waived, by a written document executed by both
parties. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute a single instrument. Execution and
delivery of this Agreement may be evidenced by facsimile transmission.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date first written above.
YAHOO! INC. LICENSOR
By: /s/ Heather Killen By: /s/ Warren Wang
------------------ ---------------
Heather Killen Warren Wang
Title: V.P. International, Title: CEO
------------------- ---------------
Address: 411 E. Huntington Dr. Suite 313
-------------------------------
Arcadia, CA 91006
-------------------------------
Fax: 626-254-9019
-------------------------------
Email: [email protected]
-------------------------------
<PAGE>
EXHIBIT A
DEFINITIONS
"Advertising Revenues" for any period means the sum of the aggregate amounts
recognized by or on behalf of Yahoo in accordance with Yahoo's standard terms
from the license or sale of any Advertising Rights, excluding amounts allocable
to any credits granted for unused services, discounts, bad debts or barter, less
thirty percent (30%) of the remaining amounts, deemed to be for the cost of
such sales.
"Advertising Rights" shall mean the advertising and promotional rights sold or
licensed with respect to Content Pages.
"Affiliates" shall mean any company or any other entity world-wide, including,
without limitation, corporations, partnerships, joint ventures, and Limited
Liability Companies, in which Yahoo owns at least a twenty percent ownership,
equity, or financial interest.
"Confidential Information" shall mean all information concerning Yahoo,
including, without limitation, all commercial, financial, sales, marketing,
technological, customer and software information, that may be deemed to be
proprietary and confidential information of Yahoo.
"Content Pages" shall mean those pages in the Yahoo Property that contain
Licensor Content and that are co-branded with both Licensor Brand Features and
Yahoo Brand Features. Content Pages shall not include pages containing Teaser
Content.
"Enhancements" shall mean any updates, improvements or modifications made to, or
derivative works created from, the Licensor Content by Licensor.
"Intellectual Property Rights" shall mean all rights in and to trade secrets,
patents, copyrights, trademarks, know-how, as well as moral rights and similar
rights of any type under the laws of any governmental authority, domestic or
foreign.
"Internet" shall mean the collection of computer networks commonly known as the
Internet, and shall include, without limitation, the World Wide Web.
"Licensor Brand Features" shall mean all trademarks, service marks, logos and
other distinctive brand features of Licensor that are used in or relate to the
Licensor Content, including, without limitation, the trademarks, service marks
and logos described in Exhibit B hereto.
"Licensor Content" shall mean, collectively, all materials, data, and similar
information collected and owned by Licensor, which is a collection of HTML files
and certain related scripts, as further described in Exhibit B attached hereto,
including, without limitation, all Enhancements.
"Teaser Content" shall mean unmodified headlines and/or the first sentence of
articles from Licensor Content.
"Wireless Devices" shall mean various devices, including, but not limited to,
cellular phones, personal digital assistants and pagers, that receive and/or
transmit voice, data or video signals through the radio spectrum exclusively and
in connection with other technologies (such as the Internet).
"Wireless Device Carriers" shall mean various carriers that use the radio
spectrum, both exclusively and in connection with other technologies (such as
the Internet), for transmitting and receiving voice, data or video signals for
communications.
"Yahoo Brand Features" shall mean all trademarks, service marks, logos and other
distinctive brand features of Yahoo that are used in or relate to a Yahoo
Property, including, without limitation, the trademarks, service marks and logos
described in Exhibit B.
"Yahoo Properties" shall mean any Yahoo branded or co-branded media properties,
including, without limitation, Internet guides, developed in whole or in part by
Yahoo or its Affiliates and distributed or made available by Yahoo or its
Affiliates over the Internet, and any Wireless Device Carrier.
<PAGE>
EXHIBIT B
LICENSOR CONTENT
Licensor's content consisting of categories of market commentary on Chinese
Investors website with daily quantity of stories and weekly updates on special
features to be mutually agreed between Licensor and Yahoo, including, without
limitation, before and after market commentary, IPO coverage and stock picks.
LICENSOR BRAND FEATURES
Chinese Investors
Chineselnvestors.com logo
YAHOO BRAND FEATURES
Yahoo!
Yahoo related logos
<PAGE>
EXHIBIT C
DELIVERY AND TECHNICAL SPECIFICATIONS
A. Licensor's Responsibilities:
1. Licensor will deliver Licensor Content on a schedule mutually
agreed by Licensor and Yahoo!.
2. Licensor will throughout the term of this agreement, provide
ongoing assistance to Yahoo with regard to technical,
administrative and services-oriented issues related to the
utilization, transmission, and maintenance of the Licensor
Content, as Yahoo may reasonably request.
3. Licensor will use its reasonable efforts to ensure that Licensor
Content is accurate, comprehensive, and updated regularly.
4. Licensor will bear the cost of preparing and transmitting
Licensor Content to Yahoo.
B. Yahoo's Responsibilities:
1. Yahoo will be responsible for providing equipment and software
necessary to incorporate the Licensor Content into Yahoo
properties, provided that the Licensor Content is provided in
accordance with the Format of Content Delivery below.
2. Yahoo will host Licensor Content on its servers.
3. Yahoo will present the information specific on pages consistent
with Yahoo's user interface.
4. Yahoo will use commercially reasonable efforts to sell the
advertising inventory created by this partnership. Yahoo will be
responsible for tracking advertising banners served to the
Content Pages, advertising production and rotation.
C. Format of Content Delivery:
The Licensor Content shall be delivered by FTP or email to the address
designated by Yahoo for linking servers serving pages to the Yahoo
properties.
<PAGE>
EXHIBIT D
LINKS
During the Term of this Agreement, the following links will be maintained:
LOCATION OF LINK LINK TO WHERE SPECIFICS OF LINK
Pages display only
Licensor's content Chinese Investor Homepage www.chineseinvestors.com
<PAGE>
EXHIBIT 10.3 Co-Branding Cooperation Agreement with SINA
CO-BRANDING COOPERATION AGREEMENT
This CO-BRANDING COOPERATION AGREEMENT (the "Agreement") is entered into
effective as of December 13, 1999 (the "Effective Date") by and between
SINA.com, a Cayman Islands Company with an office located at 1313 Geneva Drive,
Sunnyvale, CA 94089 ("SINA"), and Chineselnvestors.com, Inc., a California
Corporation with an office located at 411 East Huntington Drive, Suite 313,
Arcadia, CA 91006 ("ChineseInvestors"). Certain capitalized terms are defined in
the Exhibit A as attached hereto.
RECITALS
A. SINA is a global Internet media company that owns and operates the
largest and fastest growing Internet portal and destination web sites serving
the greater China and the Chinese-speaking community worldwide ("STNA Service").
The SINA global network includes properties in China, Hong Kong, Taiwan, North
America and planned sites for other Chinese population centers around the world.
B. Chineselnvestors.com, Inc. is the publisher of Chineselnvestors.com and
is a leading Chinese language web based provider of real-time financial market
information. The company launched its web-based operations earlier this year,
and is based in Arcadia, California. In addition to providing rich financial
market content, it publishes original news stories and commentaries covering the
global markets every business day supplied by its reporters around the world.
With over 500,000 total page views a month Chineseinvestors.com plans to open
overseas offices in Shanghai and in other countries around the world.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the Parties hereto, intending to be legally bound, agree as follows:
Section 1 - Co-Branded Content.
ChineseInvestors and SINA will cooperate to develop and market Co-Branded
Content on the terms and conditions set forth in this Agreement.
ChineseInvestors will provide SINA the content and related materials necessary
to co-develop the Co-Branded Content in accordance with the Description of
Co-Branded Content attached as Exhibit B.
Section 2 - Key Responsibilities.
Development and Operation. During the Term, to promote ChineseInvestors and
certain selected content, SINA will develop, host and ensure that the Co-Branded
Content is accessible to SINA Users. ChineseInvestors will provide and update
the Co-Branded Content, and SINA will develop Links from areas within the SINA
Site to the Co-Branded Content in substantially the manner set forth on Exhibit
C. Additional Links will promote ChineseInvestors and enable SINA Users to
access and visit the ChineseInvestors Site.
Section 3 - Licenses.
3.1 Grant of License by ChineseInvestors. ChineseInvestors hereby grants to
SINA during the Term a non-exclusive, royalty-free, worldwide license under all
of ChineseInvestors's Intellectual Property Rights to use, modify, reproduce,
publicly display, publicly perform, distribute and transmit the ChineseInvestors
Brand Features in the SINA Site (in the manner described in this Agreement),
and in connection with the distribution, marketing and promotion of the
Co-Branded Site.
3.2 Reserved Rights. Without limitation of the foregoing, each party
reserves all rights other than those expressly granted in this Agreement, and no
licenses are granted except as expressly set forth herein.
Section 4- Development and Promotion.
During the Term of this Agreement, SINA and ChineseInvestors will each be
responsible for its development work related to the Co-Branded Content.
ChineseInvestors agrees to share with SINA Thirty percent (30%) of a monthly
promotional program for the Co-Branded Content, with ChineseInvestors' monthly
promotional commitment being:
- Three Thousand Dollars ($3,000) for the Term of the Agreement, provided
, however, that the promotion shall begin from the date that the Co-Branded
Content launch ("Launch Date") and SINA will guarantee a minimum of Five Hundred
Thousand (500,000) impressions each month.
Section 5 -Upside Potential.
<PAGE>
ChineseInvestors and SINA will jointly determine the sharing details of upside
potential, including but not limited to banner advertising revenue, newsletter
(email) advertising revenue, and expansion of registered users.
Section 6- Payment Schedule.
Monthly Promotion. Within Fourteen (14) days following the First of each month,
ChineseInvestors will pay SINA the current monthly promotion fee.
ChineseInvestors agrees to make timely payment by the due dates. SINA reserves
the right to charge ChineseInvestors interest at prevailing market rates on any
past due balances.
Section 7- Hosting Services.
SINA will each be responsible to provide Hosting Services for the Co-Branded
Content, providing appropriate web development services to construct and
maintain the Co-Branded Content and all necessary technical, support, sales,
administrative and management personnel, facilities, equipment and supplies
necessary to construct and maintain the Co-Branded Content. The Co-Branded
Content shall be constructed and maintained such that its average WWW page
response times shall be substantially equivalent to commercially similar WWW
pages.
Section 8- Ownership.
8.1 Co-Branded Content. As between ChineseInvestors and SINA, (i)
ChineseInvestors will have full and exclusive right, title and ownership
interest in and to the ChineseInvestors Brand Features, the Co-Branded Content,
and the Intellectual Property Rights therein and (ii) SINA will have full and
exclusive right, title and ownership interest in and to SINA Brand Features, and
the Intellectual Property Rights therein.
8.2 Information. During the Term, SINA will use reasonable efforts to
provide aggregated user data about the Co-Branded Content requested by
ChineseInvestors from time to time, subject to any restrictions on disclosure
imposed by law. ChineseInvestors may use such data for its own purposes only
(for example targeting advertising within its own sites and services). SINA
grants to ChineseInvestors a non-exclusive license to use such user data
described here.
8.3 Notices. Each party agrees to display mutually agreeable trademark and
copyright notices or legends of the other party when using such other party's
Brand Features. Each party shall in advance submit to the other party the
proposed placement of such notices or legends (including, without limitation,
the place and manner of incorporation into electronic media or transmissions),
and such other party shall have the right, acting reasonably, to approve the
same.
Section 9- Promotion Standards.
SINA and ChineseInvestors reserve the right to refuse to display any
advertisement, including without limitation, any advertisement or advertising
that would violate any applicable law, regulation or third party right, that
promotes sites containing pornographic material, sites with links to
pornographic sites, sites encouraging illegal activity or racism, sites that are
regarded by SINA to be inappropriate or that could result in liability or
adverse publicity to SINA and ChineseInvestors, however SINA and
ChineseInvestors assume no responsibility or obligation to review any
advertisement or WWW site.
Section 10-Term.
This Agreement is non-exclusive and will become effective as of the Effective
Date and shall remain in effect for the Initial Term, and after the Initial Term
this Agreement shall be automatically extended for successive Renewal Terms,
unless either party provides notice of termination at least Thirty (30) days
prior to the end of the Initial Term or Renewal Term, as the case may be, or
unless this Agreement is otherwise terminated as provided in Section 11.
- Initial Term: One (1) year
- Renewal Terms: Ninety (90) days
Section 11 - Termination.
11.1 Early Termination. This Agreement may be terminated at any time by
either party,
<PAGE>
effective immediately upon notice, if the other party:
(i) becomes insolvent;
(ii) files a petition in bankruptcy or
(iii) makes an assignment for the benefit of its creditors.
Each party has the right, during the Term, at its own expenses, to conduct a due
diligence report relating to (including, but not limited to) the evaluation of
the other party's business performance or practice. Each party may, at its own
discretion, terminate this Agreement at any time effective immediately upon a
Thirty (30) days notice, if such party is not satisfied with the other party's
business performance or practice.
Either party may terminate the Agreement, effective upon Thirty (30) days
notice, in the event that the other party breaches any of its responsibilities
or obligations under the Agreement, in any respect (including, without
limitation, failure to pay) which breach is not remedied within Thirty (30) days
following written notice to such party.
11.2 Effect of Termination. The provisions in Section 8.1, 12, 13, 14 and 16
shall survive any termination or expiration of the Agreement.
Section 12 - Confidentiality.
12.1 Confidential Information. Each party agrees to keep confidential and to
use only for purposes of performing under this Agreement, any proprietary or
confidential information relating to the other party's technology, marketing and
business ("Confidential Information") disclosed pursuant to this Agreement which
is appropriately marked as confidential or which could reasonably be considered
of a proprietary or confidential nature. Each party shall not disclose any
applicable Confidential Information to any third party without the prior written
consent of the other party, provided, however, that each party may disclose any
applicable Confidential Information to such party's agent, attorneys and other
representatives or any court of competent jurisdiction or any other party
empowered hereunder as reasonably required to resolve any dispute between the
parties hereto.
12.2 Obligation. The obligation of confidentiality shall not apply to
information which is publicly available through authorized disclosure, is known
by the receiving party at the time of disclosure as evidenced in writing, is
rightfully obtained from a third party who has the right to disclose it, or
which is required by law to be disclosed.
12.3 Termination. All Confidential Information shall remain the property of
the disclosing party. Upon any termination of this Agreement, the receiving
party shall return or destroy all Confidential Information of the disclosing
party, and all copies thereof, in the possession or control of the receiving
party unless otherwise provided herein.
12.4 Remedies. Both parties acknowledge that a breach of any provision
contained under this section may result in irreparable damage to the disclosing
party for which there will be no adequate remedy at law, and the disclosing
party shall be entitled to injunctive relief and/or a decree for specific
performance, and such other relief as may be proper (including monetary damages
if appropriate).
Section 13- Indemnification.
13.1 Indemnification by ChineseInvestors. ChineseInvestors, at its own
expense, will indemnify, defend and hold harmless SINA, and its employees,
representatives and agents, against any claim, suit, action, or other proceeding
brought against SINA or such party, to the extent that such claim, suit, action
or other proceeding is based on or arises from:
(i) any final adjudication that the use of the Co-Branded Site in
accordance with this Agreement infringes any Intellectual
Property Right of any third party, or any right of personality
or publicity, is libelous or defamatory, or otherwise has
resulted in actionable injury or damage to any third party;
(ii) any misrepresentation or breach of representation or warranty of
ChineseInvestors contained herein; or
(iii) any breach of any covenant or agreement to be performed by
ChineseInvestors hereunder.
(iv) ChineseInvestors will pay all costs, damages, and expenses,
including, but not limited to, reasonable attorneys' fees and
costs awarded (as a result of final adjudication) against or
otherwise incurred by SINA in connection with or arising from
any such claim, suit, action or proceeding attributable to any
such claim.
<PAGE>
13.2 Indemnification by SINA. SINA, at its own expense, will indemnify,
defend and hold harmless ChineseInvestors, and its employees, representatives
and agents, against any claim, suit, action, or other proceeding brought against
ChineseInvestors or such party, to the extent that such claim, suit, action or
other proceeding is based on or arises from:
(i) any final adjudication that the use of the Co-Branded Site in
accordance with this Agreement infringes any Intellectual
Property Right of any third party, or any right of personality
or publicity, is libelous or defamatory, or otherwise has
resulted in actionable injury or damage to any third party;
(ii) any misrepresentation or breach of representation or warrany of
SINA contained herein; or
(iii) any breach of any covenant or agreement to be performed by SINA
hereunder. SINA will pay all costs, damages, and expenses,
including, but not limited to, reasonable attorneys' fees and
costs finally awarded against or otherwise incurred by
ChineseInvestors in connection with or arising from any such
claim, suit, action or proceeding attributable to any such
claim.
13.3 Procedures. Each party's obligation to indemnify the other hereunder
shall be conditioned upon:
(i) the indemnified party providing the indemnifying party with
prompt notice of any claim that could lead to a claim for
indemnification;
(ii) the indemnified party permitting the indemnifying party to
assume and control the defense of such action, with counsel
chosen by the indemnifying party (who shall be reasonably
acceptable to the indemnified party); and
(iii) the indemnified party not entering into any settlement or
compromise of any such claim without the indemnifying party's
prior written consent.
Section 14- Representation and Warranties.
14.1 ChineseInvestors represents and warrants to SINA that it shall be
responsible for any misrepresentation or omission of any material fact of the
Co-Branded Content and shall resolve any issue resulting therefrom.
ChineseInvestors also represents and warrants to SINA that it shall be
responsible to SINA Users for any breach of any of ChineseInvestors' obligations
to such users via the development of the Co-Branded Content or the operation of
ChineseInvestors' Site.
14.2 Each party to this Agreement represents and warrants to the other party
that: (a) such party has the full corporate right, power and authority to enter
into this Agreement and to perform the acts required of it hereunder; (b) the
execution of this Agreement by such party, and the performance by such party of
its obligations and duties hereunder, do not and will not violate any agreement
to which such party is a party or by which it is otherwise bound; (c) when
executed and delivered by such party, this Agreement will constitute the legal,
valid and binding obligation of such party, enforceable against such party in
accordance with its terms; and (d) such party acknowledges that the other party
makes no representations, warranties or agreements related to the subject matter
hereof that are not expressly provided for in this Agreement.
Section 15 - Joint Press Release.
SINA and ChineseInvestors shall issue a joint press release, within Thirty (30)
days of Launch Date, the content and form of which shall be mutually agreed to
by both parties.
Section 16 - Miscellaneous.
16.1 Amendments and Waivers. Any term of this Agreement may be amended or
waived only with the written consent of the parties or their respective
successors and assignees. Any amendment or waiver effected in accordance with
Section 14 shall be binding upon the parties and their respective successors and
assignees.
16.2 Successors and Assignees. Neither party may assign this Agreement, in
whole or in part, without the other party's written consent; provided, however,
that each party may assign this Agreement without such consent in connection
<PAGE>
with any merger, consolidation, any sale of all or substantially all of
ChineseInvestors's assets or any other transaction in which more than fifty
percent (50%) of ChineseInvestors's voting securities are transferred, subject
to all of the terms of this Agreement. Any attempt to assign this Agreement
other than in accordance with this provision shall be null and void.
16.3 Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
16.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
16.5 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
16.6 Notices. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon receipt, when delivered personally
or by courier, overnight delivery service, confirmed facsimile, or electronic
mail (confirmed by concurrent written notice sent first class U.S. mail, postage
prepaid), or forty-eight (48) hours after being deposited in the regular mail as
certified or registered mail (airmail if sent internationally) with postage
prepaid, if such notice is addressed to the party to be notified at such party's
address or facsimile number as set forth in the Agreement.
16.7 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith, in order to maintain the economic position enjoyed by
each party as close as possible to that under the provision rendered
unenforceable. In the event that the parties cannot reach a mutually agreeable
and enforceable replacement for such provision, then (a) such provision shall be
excluded from this Agreement, (b) the balance of the Agreement shall be
interpreted as if such provision were so excluded and (c) the balance of the
Agreement shall be enforceable in accordance with its terms.
16.8 Entire Agreement. This Agreement is the product of both of the parties
hereto, and constitutes the entire agreement between such parties pertaining to
the subject matter hereof, and merges all prior negotiations and drafts of the
parties with regard to the transactions contemplated by this Agreement. Any and
all other written or oral agreements existing between the parties hereto
regarding such transactions are expressly superseded.
16.9 Arbitration. Any dispute or claim arising out of or in connection with
this Agreement will be finally settled by binding arbitration in San Francisco,
California in accordance with the then-current Commercial Arbitration Rules of
the American Arbitration Association by three arbitrators appointed in
accordance with said rules. Each party shall select one such arbitrator, and the
two arbitrators so chosen shall select the third arbitrator. The arbitrators
shall apply California law, without reference to rules of conflicts of law or
rules of statutory arbitration, to the resolution of any dispute. Judgment on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof Notwithstanding the foregoing, the parties may apply to any
court of competent jurisdiction for preliminary or interim equitable relief, or
to compel arbitration in accordance with this paragraph, without breach of this
arbitration provision.
16.10 Advice of Legal Counsel. Each party acknowledges and represents that, in
executing this Agreement, it has had the opportunity to seek advice as to its
legal rights from legal counsel and that the person signing on its behalf has
read and understood all of the terms and provisions of this Agreement. This
Agreement shall not be construed against any party by reason of the drafting or
preparation thereof.
16.11 No Partnership Implied: Future Business Activity. Neither this Agreement
nor any terms and conditions contained herein may be construed as creating or
constituting a Partnership, joint venture or agency relationship between the
parties. This Agreement shall not limit either party's present or future
business activities of any nature, including business activities which could be
competitive with the other party, except to the extent such activities would
involve a breach of (a) the confidentiality provisions of Section 12 above or
(b) any other express provision of this Agreement.
The parties have caused this Agreement to be executed by their duly authorized
representatives as of the date first written above.
<PAGE>
CHINESEINVESTORS.COM, INC. SINA.COM
By: /s/ Lan Jiang By: /s/ Hurst Lin
-------------------------- --------------------------
Title: CEO Title: VP of Business Development
Address: Address:
411 East Huntington Drive, Suite 313 1313 Geneva Drive
Arcadia, CA 91006 Sunnyvale, CA 94089
<PAGE>
EXHIBIT A
---------
DEFINITIONS
1. "ChineseInvestors Brand Features" means ChineseInvestors's trademarks,
trade names, service marks, service names and distinct brand elements that
appear from time to time in ChineseInvestors's properties, ventures and services
worldwide and are protected under U.S. copyright law or as to which
ChineseInvestors has established trademarks or trade dress rights and any
modifications to the foregoing that may be created during the Term.
2. "ChineseInvestors Site" means the primary WWW site under
ChineseInvestors's sole brand currently at http://www.ChineseInvestors.com.
3. "Co-Branded Content" means all materials, data or other information
owned or licensed by ChineseInvestors and displayed from time to time on SINA.
Exhibit B contains detailed information about the Co-Branded Content, including
but not limited to the size and placement of logos, the particular
characteristics of the navigation bar, and the size and placement of
advertisements.
4. "Hosting Services" means the provision and management of servers,
telecommunications, facilities, maintenance and operations related to the
delivery of Internet based services and content.
5. "Intellectual Property Rights" means all rights in and to trade secrets,
patents, copyrights, trademarks, know-how, as well as moral rights and similar
rights of any type under the laws of any governmental authority, domestic or
foreign, including rights in and to all applications and registrations relating
to any of the foregoing.
6. "Link" means a URL hidden behind a formatting option that may take the
form of a colored item of text (such as a URL description), logo or image, and
which allows a user to automatically move to or between WWW pages, WWW sites or
within a WWW document.
7. "SINA Brand Features" means SINA's trademarks, trade names, service
marks, service names and distinct brand elements that appear from time to time
in SINA's properties, ventures and services worldwide and are protected under
U.S. copyright law or as to which SINA has established trademarks or trade dress
rights and any modifications to the foregoing that may be created during the
Term.
8. "SINA Site" means SINA's primary WWW site (with the primary URL
specified on the first page of this Agreement) and any other WWW site offered by
SINA solely or principally under SINA's brand.
9. "SINA Users" means unique users who access the Co-Branded Content on the
SINA Site.
10. "Term" means the Initial Term of the Agreement and any Renewal Term(s).
11. "URL" means Universal Resource Locator, which provides a unique Internet
protocol address for accessing an Internet page.
12. "WWW" means the World Wide Web, a system for accessing and viewing text,
graphics, sound and other media via the Internet.
<PAGE>
EXHIBIT B
DESCRIPTION OF CO-BRANDED CONTENT
Section 1 - Description.
1.1 Features and Functionality. The Co-Branded Content shall consist and
promote features and functionality of ChineseInvestors, including but not
limited to the following:
(i) Daily market news and updates
(ii) Weekly analyses
(iii)Recommended stocks and recommended books
(iv) IPO analysis, net investors, earning reports, and economic data
1.2 Branding and Navigation. The Co-Branded Content shall carry elements of
both SINA Brand Features and ChineseInvestors Brand Features, and look and feel.
1.3 Localization. Specific content and customization of the Co-Branded
Content will be determined jointly between ChineseInvestors and SINA.
Section 2 - Format of the Co-Branded Content.
The format of Co-Branded Content will be determined jointly between SINA and
ChineseInvestors.
Section 3 - Delivery Schedule for the Co-branded Content.
Implementation timeline of the Co-Branded Content will be determined jointly by
SINA and ChineseInvestors. Both parties shall make best efforts to deliver and
launch the Co-Branded Content no later than January 31, 2000.
<PAGE>
EXHIBIT C
SINA PROMOTION
1. Within SINA's web site (www.sina.com), ChineseInvestors will be a
non-exclusive provider of financial content, subject to the conditions of this
Agreement.
2. The Co-Branded Content will be promoted from various locations
throughout SINA's web site (www.sina.com). The following promotions will be
determined jointly by SINA and ChineseInvestors:
- Logo sponsorships
- Homepage text link
- Targeted banners
<PAGE>
EXHIBIT 10.4 Consulting Agreement
CONSULTING AGREEMENT
This agreement is entered into on this 24th day of May, 2000 by and between
MAS Financial Corp. (hereinafter referred to as "MAS"), and
ChineseInvestors.com, Inc., their heirs, designees or assignees, (hereinafter
referred to as "Client"), and is made with reference to the following
recitations:
Whereas, MAS has skills and expertise in the fields of business consulting,
due diligence, mergers and acquisitions, and public and private offering
structuring and transactions, and,
Whereas, for the purpose of advancing the business plans of Client, Client
wishes to contract for the control stock of an acquisition company from MAS,
and,
Whereas MAS owns or controls the control stock of a public shell corporation
(hereinafter referred to as "Acquisition" company, a corporation organized
under the laws of the State of Indiana, having those classes and numbers of
shares as more fully set forth on the company information sheet attached
hereto and made a part hereof by reference. MAS has control of Acquisition
company and is prepared to transfer the control block. Now, therefore, the
parties hereto hereby agree and covenant as follows:
(1) MAS agrees to take certain actions, and undertake certain obligations for
the orderly transfer of the control block of stock of Acquisition company
(8,200,000 shares out of a total of 8,519,900 shares excluding 319,900 shares
owned by existing shareholders) as directed by Client. MAS agrees as well to
do all of the following acts:
* Name Change and New Stock Certificates
* Unaudited financial statements brought forward to most recent period.
* Change of officers and directors and resignation of present board.
* Assist Client in the preparation of SB-2 registration statement.
* 15C211 prepared and filed with NASD.
* Deliver control block shares.
* Obtain CUSIP number.
* Obtain a stock symbol for trading on the OTC Bulletin Board.
* Furnish Market Maker.
* Any other document or act needed to make an orderly transfer of control.
All expenses incurred by the Acquisition company, after the transfer of control
by MAS to the Client, shall be the responsibility of the Acquisition company.
(2) The Client agrees to pay MAS a consulting fee of $30,000 as follows:
* The first $15,000 is due and payable upon signing of this Agreement.
* The second $15,000 is due and payable upon clearance for quotation on
the OTC Bulletin Board.
(3) At closing, which shall take place at a time and place mutually agreeable
to the parties hereto, MAS shall deliver to Client or its designee the
following:
(a) Certificates representing the shares being sold hereunder; containing the
following legend:
"The securities represented by this Certificate have not been registered under
the Securities Act of 1933 (the "Act") and are "Restricted Securities" as the
term is defined in Rule 144 under the Act. The Common Shares may not be
offered for sale, sold or otherwise transferred except pursuant to an effective
registration statement under the Act or exemption, the availability of which
is to be established to the satisfaction of the Corporation."
(b) Necessary consents, if any, from the state of domicile of the Acquisition
company;
(c) All corporate books, records, and documents, stock books, ledgers, minute
books, articles and by-laws of the Acquisition company;
(d) Shareholder list of the Acquisition company;
(e) Resignations of all present officers and directors, effective as of the
closing date;
(4) MAS represents and warrants the following:
<PAGE>
(a) that the Acquisition company is a corporation duly organized and existing
under the laws of the State of Indiana, unless otherwise noted;
(b) that the Acquisition company will use its best efforts to preserve its
business organization intact.
(c) that the Acquisition company will not enter into any contract, commitment
or transaction, or declare, set aside or pay any dividend, or make any
distribution in respect of its capital stock, or waive any obligation or
liability, or compromise any claim, or cancel any note, loan or other
obligation owed to it, without the consent of Client.
(5) MAS represents and warrants the following prior to closing:
(a) That MAS will not cause any amendment to be made in the Articles of
Incorporation or By-Laws of the Acquisition company, nor issue or cause to
be issued any additional shares of capital stock; nor issue or cause to be
issued any warrants, obligations, subscriptions, options, convertible
securities, or other commitments under which any additional shares of its
capital stock may be directly or indirectly authorized, issued or
transferred nor will either agree to do any of the acts listed above.
(6) Client represents and warrants the following prior to closing:
(a) That Client is solely responsibly for the decision to by acquired by the
Acquisition company,
(b) That the Client to be acquired by the Acquisition company which is the
subject of this agreement shall be suitable in all respects for such merger,
(7) The parties shall at all times keep each other's information, sources,
trade secrets, processes, and confidential information strictly
confidential.
(8) MAS is not rendering legal advise to Client. Each party is responsible
for all of it's own professional, legal, accounting, Broker-Dealer, and
consulting fees as they may apply to each party.
(9) Should Client terminate this transaction for any reason other than the
malfeasance or nonperformance of MAS prior to the acquisition of the
Acquisition company, all monies paid to MAS up until that point shall be
retained by MAS as liquidated damages. The parties agree to the
reasonableness of these liquidated damages. All documents and work product
prepared for or on behalf of Client by MAS up until that point shall become
the property of Client.
(10) MAS warrants that the Acquisition company being transferred shall be
transferred with no liabilities and little or no assets, and shall defend
and hold Client and the Acquisition company harmless against any action by
any third party against either of them arising out of, or as a consequence
of, any act or omission of MAS or the Acquisition company prior to, or
during the closing contemplated by this contract of sale. MAS reserves the
right, if necessary, to substitute another Acquisition company acceptable
to Client of like worth.
(11) All of the representations and warranties contained within this contract
of sale, whether made by Client, MAS, or MAS on behalf of the Acquisition
company, will be true and correct on the closing date as if made on that
date.
(12) At any time prior to the closing, Client and their counsel, accountants
and other agents shall have full access during normal business hours to
all properties, books, accounts, records, contracts and documents relating
to the Acquisition company.
(13) This agreement shall be governed by the laws of the State of Indiana. The
parties agree to the jurisdiction of the Courts of the State of Indiana
and the United States District Court for the Southern District of Indiana
as the forums for the resolution of any legal disputes between the
parties. Client agrees to pay court costs, attorney fees in a reasonable
amount, and interest on any unpaid balances at the judgment rate then in
effect in the State of Indiana should it become necessary for MAS to
engage in legal action to recover any portion of the purchase price or any
other fees from Client.
<PAGE>
(14) If any bona fide action or proceeding shall be pending against any party
on the closing date that could result in an unfavorable judgment, decree
or order that would prevent or make unlawful the performance of this
agreement, or if any agency of the federal or of any state government
shall have objected to it on or before the closing date to this
transaction, or if any prospectus contemplated with respect to the
issuance and sale of shares by Buyers shall have been disapproved by any
federal or state regulatory agency, either party may cancel and terminate
this agreement without liability to the other. All representations and
warranties of the parties shall expire and terminate and be extinguished
by the closing, and consummation of the closing shall be conclusive proof
that each party is fully satisfied with the facts constituting the basis
of the representations and warranties of the other party and with the
performance of their obligations hereunder. This paragraph shall not
affect any obligation of any party under this contract that is permitted
to be performed in whole or in part after the closing.
(15) Neither party may assign this agreement without the prior written consent
of the other party, which consent shall not be unreasonably withheld.
However, MAS may requires up to 180 days to perform due diligence on any
assignee of Client, and may reject any assignee not qualified by MAS.
(16) This documents contains the entire agreement between the parties hereto.
No oral or other representation or warranty has been given to Client by
MAS, and this agreement controls over any and all oral representations
made by any party to this transaction. This agreement may only be
modified by a writing, signed by the parties.
(17) Each party agrees to execute all of the documents and do all of the things
necessary to effectuate the purpose of this agreement, without delay or
limitations.
Accepted and Agreed: Accepted and Agreed:
/s/ Aaron Tsai /s/ Warren Wei Wang
-------------------------- -------------------------
MAS Financial Corp. ChineseInvestors.com Inc.
By: Mr. Aaron Tsai, President By: Warren Wei Wang,
Chief Executive Officer
<PAGE>
EXHIBIT 10.5 Client Service Agreement
CLIENT SERVICE AGREEMENT
THIS AGREEMENT is made and entered into this 2nd day of October 2000, between
CONTINENTAL CAPITAL & EQUITY CORPORATION, located at 195 Wekiva Springs Road,
Suite 200, Longwood, FL 32779, (hereinafter referred to as "CCEC") and
ChineseInvestors.com located at 411 East Huntington Drive Suite 313, Arcadia,
CA 91006 (hereinafter referred to as the "Company").
WITNESSETH:
WHEREAS, CCEC is a financial relations and direct marketing advertising
firm specializing in the dissemination of information about publicly traded
companies, and
WHEREAS, the Company is publicly held with its common stock trading on the
NASD Over the Counter Electronic Bulletin Board, and
WHEREAS, the Company desires to publicize itself with the intention of
making its name and business better known to shareholders, investors, brokerage
houses, institutional investors, analysts and other industry professionals, and
WHEREAS, CCEC is willing to accept the Company as a client.
NOW THEREFORE, in consideration of the mutual covenants herein contained, it is
agreed:
1. ENGAGEMENT: The Company hereby engages CCEC to publicize the Company to
brokers, prospective investors, institutional investors, analysts, other
industry professionals and shareholders described in Section 2 of this
Agreement, and subject to the further provisions of this Agreement. CCEC hereby
accepts the Company as a client and agrees to publicize it as described in
Section 2 of this Agreement, but subject to the further provisions of this
Agreement.
2. MARKETING PROGRAM: Consists of the following components:
(A) CCEC will review and analyze various aspects of the Company's goals and
make recommendations on feasibility and achievement of desired goals.
(B) CCEC will review the general information and recent filings from the
Company and produce up to a 100,000 piece direct mail package to include
an 11" X 17" self mailer and an ample number of corporate profiles so as
to allow for one profile for each respondent to the original mailing,
both items to be approved by the Company prior to circulation.
(C) CCEC will provide exposure to its network of firms and brokers that may
be interested in participating with the Company and schedule and conduct
the necessary due diligence and obtain the required approvals necessary
for those firms to participate. CCEC will also interview and make
determinations on any firms or brokers referred by the Company with
regard to their participation.
(D) At the Company's request, CCEC will be available to the Company to field
any calls from firms and brokers inquiring about the Company.
Company Initial /s/ DH CCEC Initial /s/ MFM Page 1 of 4
<PAGE>
(E) CCEC will use its best efforts to obtain the Company exposure on radio
programming, in independent financial newsletters, and through on-line
fax and Internet broadcast services.
(F) CCEC will promote the Company on the Worldwide Internet via CCEC's home
web site (www.insidewallstreet.com).
(G) At the Company's request, CCEC shall write, produce and assist the
Company in releasing all press announcements. The Company shall be
solely responsible for paying all fees associated with the actual
release(s) through BusinessWire, P.R. Newswire, or any other comparable
news dissemination source.
(H) CCEC will create, build and continually enhance a fax database of all
brokers, investors, analysts and media contacts who have expressed an
interest in receiving on-going information on the Company. CCEC will
assist the Company in setting up an account with a fax broadcasting
agency to manage the actual broadcasting in the event Company does not
have this capability in-house. Further, CCEC will, at its election,
mass-fax broadcast select releases to its network of U.S. stockbrokers,
analysts and institutional investors.
(I) CCEC will obtain express written approval from the Company on all
material produced by CCEC prior to disseminating the information to the
public.
3. TIME OF PERFORMANCE: Services to be performed under this Agreement shall
commence upon execution of this Agreement and shall continue for a period of
six (6) months.
4. COMPENSATION AND EXPENSES: In consideration of the services to be performed
by CCEC, the Company agrees to pay compensation to CCEC as follows:
(A) Ninety-two Thousand Seven Hundred Fifty (92,750) shares of the Company's
common stock and due upon execution of this Agreement and subject to
registration rights.
AND
(B) An option to purchase Three Hundred Thousand (300,000) shares of the
Company's common stock as follows:
One Hundred Fifty Thousand (150,000) shares at a per share price of ($4.20) and
One Hundred Fifty Thousand (150,000) shares at a per share price of ($4.80).
The options shall expire 24 months from the day the Registration
Statement registering the underlying shares of the option is deemed
effective. The Company agrees to issue piggy-back registration rights to
the Common Shares referenced above for resale by CCEC pursuant to its
filing of an SEC Registration Statement on Form S-3, or such other
applicable form as may be appropriate. The Company agrees to initiate a
Registration Statement at Company's cost to register the shares
underlying the options, if such shares are "in the money," within thirty
(30) days of CCEC's written request to do so. The Company shall use its
best efforts to make the Registration effective on a timely basis.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY: The Company represents and
warrants to CCEC, each such representation and warranty being deemed to be
material that:
(A) The Company will cooperate fully and timely with CCEC to enable CCEC to
perform its obligations under this Agreement.
(B) The execution and performance of this Agreement by the Company has been
duly authorized by the Board of Directors of the Company in accordance
with applicable law, and, to the extent required, by the requisite number
of shareholders of the Company;
(C) The performance by the Company of this Agreement will not violate any
applicable court decree, law or regulation, nor will it violate any
provisions of the organizational documents of the Company or any
contractual obligation by which the Company may be bound.
(D) The Company will promptly deliver to CCEC a complete due diligence
package to include latest 10K, latest 10Q, last six (6) months of press
releases and all other relevant materials, including but not limited to
corporate reports, brochures, etc.
Company Initial /s/ DH CCEC Initial /s/ MFM Page 2 of 4
<PAGE>
(E) The Company will promptly deliver to CCEC a list of names and addresses
of all shareholders of the Company of which it is aware.
(F) The Company will promptly deliver to CCEC a list of brokers and market
makers of the Company's securities that have been following the Company.
(G) Because CCEC will rely on such information to be supplied it by the
Company, all such information shall be true, accurate, complete and not
misleading, in all respects.
(H) The Company will act diligently and promptly in reviewing materials
submitted to it by CCEC to enhance timely distribution of the materials
and will inform CCEC of any inaccuracies contained therein prior to the
projected publication date.
6. DISCLAIMER BY CCEC: CCEC WILL BE THE PREPARER OF CERTAIN PROMOTIONAL
MATERIALS. CCEC MAKES NO REPRESENTATION THAT (A) ITS SERVICE WILL RESULT IN ANY
ENHANCEMENT TO THE COMPANY (B) THE PRICE OF THE COMPANY'S PUBLICLY TRADED
SECURITIES WILL INCREASE, (C) ANY PERSON WILL PURCHASE SECURITIES IN THE
COMPANY, OR (D) ANY INVESTOR WILL LEND MONEY TO OR INVEST IN OR WITH THE
COMPANY.
7. EARLY TERMINATION: If the Company fails to cooperate with CCEC, or fails to
make timely payment of the compensation set forth in Section 4 of this Agreement
CCEC shall have the right to terminate any further performance under this
Agreement. In such event all compensation shall become immediately due and
payable and/or deliverable, and CCEC shall be entitled to receive and retain the
same as liquidated damages, and not as a penalty, in lieu of all other remedies,
the parties acknowledging and agreeing that it would be too difficult currently
to determine the exact extent of CCEC's damage, but that the receipt and
retention of such compensation is reasonable present estimate of such damage.
8. LIMITATION OF CCEC LIABILITY: If CCEC fails to perform its services
hereunder, its entire liability to the Company shall not exceed the lessor of
(a) the amount of cash compensation CCEC has received from the Company under
Section 4 of this Agreement or (b) the actual damage to the Company as a result
of such non-performance. IN NO EVENT WILL CCEC BE LIABLE FOR ANY INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES NOR FOR ANY CLAIM AGAINST THE COMPANY BY ANY
PERSON OR ENTITY ARISING FROM OR IN ANY WAY RELATED TO THIS AGREEMENT, UNLESS
SUCH DAMAGES RESULT FROM THE USE, BY CCEC, OF INFORMATION NOT AUTHORIZED BY THE
COMPANY.
9. OWNERSHIP OF MATERIALS: All right, title and interest in and to materials to
be produced by CCEC in connection with the contract and other services to be
rendered under this Agreement shall be and remain the sole and exclusive
property of CCEC, except that if the Company performs fully and timely its
obligations hereunder, it shall be entitled to receive upon written request, one
hundred (100) copies of all such materials.
10. CONFIDENTIALITY: Until such time as the same may become publicly known,
CCEC agrees that any information of a confidential nature will not be revealed
or disclosed to any person or entity, except in the performance of this
Agreement, and upon completion of its services and upon written request of the
Company all materials and original documentation provided by the Company will be
returned to it. CCEC will, however, require Confidentiality Agreements from its
own employees and from contractors CCEC reasonably believes will come in contact
with confidential material.
11. NOTICES: All notices hereunder shall be in writing and addressed to the
party at the address herein set forth and shall be given by personal delivery,
by certified mail, express mail or by national overnight courier services.
Notices will be deemed given upon the earlier of actual receipt or three (3)
business days after being mailed or delivered to such courier service. Any
notices to be given hereunder will be
Company Initial /s/ DH CCEC Initial /s/ MFM Page 3 of 4
<PAGE>
effective if executed by and sent by the attorneys for the parties giving such
notice, and in connection therewith the parties and their respective counsel
agree that in giving such notice such counsel may communicate directly in
writing with such parties to the extent necessary to give such notice.
12. SEPARABILITY: If one or more of the provisions of this Agreement shall be
held invalid, illegal, or unenforceable in any respect, such provision, to
the extent invalid, illegal, or unenforceable, and provided that such
provision is not essential to the transaction provided for by this
Agreement, shall not affect any other provision hereof, and the Agreement
shall be construed as if such provision had never been contained herein.
13. ARBITRATION: Any controversy or claim arising out of or relating to the
Client Service Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the commercial arbitration rules of the
American Arbitration Association, and judgement upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof.
14. MISCELLANEOUS:
(A) GOVERNING LAW: This Agreement shall be governed by and interpreted under
the laws of the State of Florida where CCEC has been organized and this
Agreement has been accepted by CCEC. Venue for all litigation shall be
Seminole County, Florida.
(B) CURRENCY: In all instances, references to dollars shall be deemed to be
United States Dollars.
(C) MULTIPLE/FAXED COUNTERPARTS: This Agreement may be executed in multiple
counterparts, and by fax transmission, each of which shall be deemed an
original.
Executed as a sealed instrument as of the last day and year shown hereunder.
CONFIRMED AND AGREED ON THE 2 DAY OF OCTOBER 2000
CONTINENTAL CAPITAL & EQUITY CORPORATION
By: /s/ Michael F. Manion /s/ Dodi B. Handy
--------------------- -----------------------
CCEC Representative CCEC Officer
Michael F. Manion Dodi B. Handy
--------------------- -----------------------
Print Name Print Name
CONFIRMED AND AGREED ON THE 2 DAY OF OCT 2000
ChineseInvestors.com
By: /s/ Wei Wang
--------------------------- ----------------------
Duly Authorized Witness
Wei Wang
--------------------------- ----------------------
Print Name Print Witness
Page 4 of 4
<PAGE>
EXHIBIT 23.1 Consent of Counsel
CONSENT OF COUNSEL
The undersigned consents to the use of this letter in the corporation's Form
SB-2 Registration Statement of ChineseInvestors.com, Inc. common shares.
/s/ Charlotte M. Liebig
--------------------------
Charlotte M. Liebig
Date: October 25, 2000
<PAGE>
EXHIBIT 23.2 Consent of Stark Tinter & Associates, LLC, Certified
Public Accountants
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form SB-2 of our
report dated September 11, 2000 relating to the financial statements of
Chineseinvestors.com, Inc. as of May 31, 2000.
Date: October 27, 2000 /s/ Stark Tinter & Associates, LLC
Denver, Colorado Stark Tinter & Associates, LLC
Certified Public Accountants
<PAGE>
