As filed with the Securities and Exchange Commission on June___, 2000
Registration No. ___________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-SB-12(g)
GENERAL FORM FOR REGISTRANTS OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
MILL CREEK RESEARCH, INC.
(Name of Small Business Issuer in its charter)
Utah 87-0633677
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8 Corporate Park, Ste. 200, Irvine, California 92606
(Address of principal executive officers) (Zip Code)
Issuer's telephone number: (714) 633-8083; Fax (603) 375-6582
(Name, address, and telephone number of agent for service)
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
(Title of Class)
MILL CREEK RESEARCH, INC.
FORM 10-SB-12(g)
TABLE OF CONTENTS
PAGE
PART I
ITEM 1. Description of Business 3
ITEM 2. Management's Discussion and Analysis or 5
Plan of Operation
ITEM 3. Description of Property 12
ITEM 4. Security Ownership of Certain Beneficial 12
Owners and Management
ITEM 5. Directors, Executive Officers, Promoters 12
and Control Persons
ITEM 6. Executive Compensation 14
ITEM 7. Certain Relationships and Related Transactions 14
ITEM 8. Description of Securities 15
PART II
ITEM 1. Market Price of and Dividends on Registrant's 15
Common Equity and Other Shareholder Matters
ITEM 2. Legal Proceedings 17
ITEM 3.Changes in and Disagreements with Accountants 17
ITEM 4.Recent Sales of Unregistered Securities 17
ITEM 5.Indemnification of Directors and Officers 17
PART F/S
Financial Statements 18
PART III
ITEM 1.Index to Exhibits 23
ITEM 2.Description of Exhibits 23
Signatures 23
ITEM 1.DESCRIPTION OF BUSINESS
Background
Mill Creek Research, Inc. (the Company) is a Utah corporation formed on June
3, 1999. Its principal place of business is located at 8 Corporate Park,
Ste. 200, Irvine, California 92606. The Company was organized to engage in
any lawful corporate business, including but not limited to, participating
in mergers with and acquisitions of other companies and/or businesses. The
Company has been a developmental stage since inception and has no operating
history other than organizational matters.
The Company was incorporated by Mr. James Barber. He no longer holds any
position with the Company, and holds none of the Company's outstanding
common stock. The Company has never had any operations. On June 21, 1999,
founder's shares of the Company's common stock were issued to Rita Thomas,
the Company's sole officer and director. The shareholder has held her stock
since that time. The primary activity of the Company currently involves
seeking a business or businesses that it can acquire or with whom it can merge.
The Company has not selected any specific business or entity as an
acquisition target or merger partner. The Company does not intend to limit
potential candidates to any particular field or industry, but does retain
the right to limit candidates, if it so chooses, to a particular field or
industry.
The Board of Directors has begun to implement the Company's principal
business plan, described below under Item 2. Therefore, the Company can be
defined as a "shell" or "blank check" company whose sole purpose, at this
time, is to locate and consummate a merger or acquisition with a private
entity or business.
The Company's business plan classify it as a blank check company. Many
states have enacted statutes, rules, and regulations limiting the sale of
securities of blank check companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a market to
develop in the Company's securities until such time as the Company has
successfully implemented its business plan.
The Company is filing this registration statement on a voluntary basis,
pursuant to section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), in order to ensure that public information is readily
accessible to all shareholders and potential investors, and to increase the
Company's access to financial markets. The Company anticipates that it will
continue to file such reports, notwithstanding the fact that it may not
otherwise be required to file a registration statement under Section 12(g)
of the Exchange Act.
Risk Factors
The Company's business is subject to numerous risk factors including, but
not limited to, the following:
No Operating History or Revenues and Minimal Assets. The Company has had no
operating history and has received no revenues or earnings from operations.
The Company has no significant assets or financial resources and, in all
likelihood, will sustain operating expenses without corresponding revenues
at least until it completes a business combination. This may result in the
Company incurring a net operating loss which will increase continuously
until the Company completes a business combination with a profitable
business opportunity. There is no assurance that the Company will
successfully identify a business opportunity or complete a business
combination.
Speculative Nature of Company's Proposed Operations. The success of the
Company's proposed plan of operation will depend, to a great extent, on the
operations, financial condition, and management of the identified business
opportunity. Although management intends to seek business combinations with
entities having established operating histories, it cannot be assured that
the Company will successfully locate candidates meeting such criteria. In
the event the Company completes a business combination, the success of the
Company's operations may be dependent upon management of the successor firm
or venture partner firm together with numerous other factors beyond the
Company's control.
Scarcity of and Competition for Business Opportunities and Combinations. The
Company is, and will continue to be, an insignificant participant in the
business of seeking mergers and joint ventures with, and acquisitions of
small private entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of companies which may also be desirable target candidates for
the Company. Nearly all such entities have significantly greater financial
resources, technical expertise, and managerial capabilities than the
Company. The Company is, consequently, at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. Moreover, the Company will compete with numerous
other small public companies in seeking merger or acquisition candidates.
No Agreement for Business Combination or Other Transaction - No Standards
for Business Combination. The Company has no arrangement, agreement, or
understanding with respect to engaging in a business combination with any
private entity. There can be no assurance the Company will successfully
identify and evaluate suitable business opportunities or conclude a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluations. The Company has been
in the developmental stage since inception and has no operations to date.
Other than issuing shares to its original shareholder, the Company has not
commenced any operational activities. There is no assurance the Company
will be able to negotiate a business combination on terms favorable to the
Company. The Company has not established a specific length of operating
history or a specified level of earnings, assets, net worth or other
criteria which it will require a target business opportunity to have
achieved, and without which the Company would not consider a business
combination in any form with such business opportunity. Accordingly, the
Company may enter into a business combination with a business opportunity
having no significant operating history, losses, limited or no potential for
earnings, limited assets, negative net worth, or other negative
characteristics.
Continued Management Control, Limited Time Availability. While seeking a
business combination, management anticipates devoting from five to ten hours
per month to the business of the Company on an as-needed basis. The
Company's sole officer and director has not entered into a written
employment agreement with the Company and is not expected to do so in the
foreseeable future. The Company has not obtained key man life insurance on
its sole officer and director. Notwithstanding the combined limited
experience and time commitment of management, loss of the services of any of
this individual would adversely affect development of the Company's business
and its likelihood of continuing operations. See Item 5 - "Directors,
Executive Officers, Promoters and Control Persons".
Conflicts of Interest - General. The Company's sole and director
participates in other business ventures which compete directly with the
Company. Additional conflicts of interest and non arms-length transactions
may also arise in the event the Company's sole directors are involved in the
management of any firm with which the Company transacts business. The
Company's Board of Directors has adopted a resolution which prohibits the
Company from completing a combination with any entity in which management
may serve as officers, directors or partners, or in which they or their
family members own or hold any ownership interest. Management is not aware
of any circumstances under which this policy could be changed while current
management is in control of the Company. See Item 5 - "Directors, Executive
Officers, Promoters and Control Persons".
Reporting Requirements May Delay or Preclude Acquisition. Companies
subject to Section 13 of the Exchange Act must provide certain information
about significant acquisitions including, but not limited to, certified
financial statements for the company acquired covering up to two years. The
time and additional costs that may be incurred by some target entities to
prepare such statements may significantly delay or even preclude the Company
from completing an otherwise desirable acquisition. Acquisition prospects
that do not have or are unable to obtain the required audited statements may
not be appropriate for acquisition so long as the reporting requirements of
the 1934 Act are applicable.
Lack of Market Research or Marketing Organization. The Company has not
conducted or received results of market research indicating that a market
demand exists for the transactions contemplated by the Company. Moreover,
the Company does not have nor does it plan to establish a marketing
organization. If there is demand for a business combination as contemplated
by the Company, there is no assurance the Company will successfully complete
such transaction.
Lack of Diversification. In all likelihood, the Company's proposed
operations, even if successful, will result in a business combination with
only one entity. Consequently, the resulting activities will be limited to
that entity's business. The Company's inability to diversify its activities
into a number of areas may subject the Company to economic fluctuations
within a particular business or industry, thereby increasing the risks
associated with the Company's operations.
Government Regulations. Although the Company will be subject to regulation
under the Exchange Act, management believes the Company will not be subject
to regulation under the Investment Company Act of 1940(the "Investment
Company Act"), insofar as the Company will not be engaged in the business of
investing or trading in securities. In the event the Company engages in
business combinations which result in the Company holding passive investment
interests in a number of entities, the Company could become subject to
regulation under the Investment Company Act. In such event, the Company
would be required to register as an investment company and could be expected
to incur significant registration and compliance costs. The Company has
obtained no formal determination from the Securities and Exchange Commission
(the "Commission") as to the status of the Company under the Investment
Company Act and, consequently, any violation of such Act would subject the
Company to material adverse consequences.
Probable Change in Control And Management. A business combination involving
the issuance of the Company's common stock will, in all likelihood, result
in owners of a private business or entity obtaining a controlling interest
in the Company. Any such business combination may require management of the
Company to sell or transfer all or a portion of the Company's common stock
held by them, or resign as members of the Board of Directors of the Company.
The resulting change in control of the Company could result in removal
current officers and directors of the Company and a corresponding reduction
in or elimination of their participation in the future affairs of the Company.
Reduction of Percentage Share Ownership Following Business Combination. The
Company's primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in the Company
issuing securities to shareholders of such private business or entity.
Issuing previously authorized and unissued common stock of the Company will
reduce the percentage of shares owned by present and prospective
shareholders, and a change in the Company's control and/or management.
Disadvantages of Blank Check Offering. The Company may enter into a
business combination with an entity that desires to establish a public
trading market for its shares. A target company may attempt to avoid what
it deems to be adverse consequences of undertaking its own public offering
by seeking a business combination with the Company. The perceived adverse
consequences may include, but are not limited to, time delays of the
registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders, and the inability
or unwillingness to comply with various federal and state securities laws
enacted for the protection of investors. These securities laws primarily
relate to registering securities and full disclosure of the Company's
business, management, and financial statements.
Taxation. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may undertake.
Typically, these transactions may be structured to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so as
to minimize the federal and state tax consequences to both the Company and
the target entity. Management cannot assure that a business combination
will meet the statutory requirements for a tax-free reorganization, or that
the parties will obtain the intended tax-free treatment upon a transfer of
stock or assets. A non-qualifying reorganization could result in the
imposition of both federal and state taxes, which may have an adverse effect
on both parties to the transaction.
Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management believes that any potential target must provide
audited financial statements for review, and for the protection of all
parties to the business combination. One or more attractive business
opportunities may forego a business combination with the Company, rather
than incur the expenses associated with preparing audited financial statements.
Blue Sky Considerations. Because the securities registered hereunder have
not been registered for resale under the blue sky laws of any state and the
Company has no current plans to register or qualify its shares in any state,
holders of these shares and persons who desire to purchase them in any
trading market that might develop in the future, should be aware that there
may be significant state blue sky restrictions upon the ability of new
investors to purchase the securities. Some states may restrict the trading
or resale of blind-pool or blank-check securities. Accordingly, investors
should consider any potential secondary market for the Company's securities
to be a limited one.
ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
The following information should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in
Form 10-SB.
The Company is considered a development stage company with minimal or no
assets or capital and with no operations or income since its inception. The
costs and expenses associated with the preparation and filing of this
registration statement have been paid for by an advance from a shareholder
of the Company. It is anticipated that the Company will require only
nominal capital to maintain the corporate viability of the Company and
necessary funds will most likely be provided by the Company's officers and
directors in the immediate future. However, unless the Company is able to
facilitate an acquisition of or merger with an operating business or is able
to obtain significant outside financing, there is substantial doubt about
its ability to continue as a going concern.
Risk Factors and Cautionary Statements
This Registration Statement contains certain forward-looking statements.
The Company wishes to advise readers that actual results may differ
substantially from such forward-looking statements. Forward-looking
statements involve risks and uncertainties that could cause actual results
to differ materially from those expressed in or implied by the statements,
including, but not limited to, the following: the ability of the Company
search for appropriate business opportunities and subsequently acquire or
merge with such entity, to meet its cash and working capital needs, the
ability of the Company to maintain its existence as a viable entity, and
other risks detailed in the Company's periodic report filings with the
Commission.
Plan of Operation
The Company's plan is to seek, investigate, and if such investigation
warrants, acquire an interest in one or more business opportunities. At
this time, the Company has no plan, proposal, agreement, understanding, or
arrangement to acquire or merge with any specific business or entity, and
the Company has not identified any specific business or entity for
investigation and evaluation. No member of management or any promoter of the
Company, or an affiliate of either, has had any material discussions with
any other business or entity with respect to any acquisition of that
business or entity. The Company will not restrict its search to any
specific business, industry, or geographical location, and may participate
in business ventures of virtually any kind or nature. Discussion of the
proposed business under this caption and throughout this Registration
Statement is purposefully general and is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter into
potential business opportunities.
The Company's potential success is heavily dependant on the Company's
management, which will have virtually unlimited discretion in searching for
and entering into a business combination. The Company's sole officer and
director has not had any experience in the proposed business of the Company.
Management anticipates that it will only participate in one potential
business venture. This lack of diversification should be considered a
substantial risk in investing in the Company because it will not permit the
Company to offset potential losses from one venture against gains from another.
The Company may seek a business combination with a business that (i) only
recently commenced operations; (ii) is a developing company in need of
additional funds to expand into new products or markets; (iii) is seeking to
develop a new product or service; or (iv) is an established business which
may be experiencing financial or operating difficulties and needs additional
capital. In some instances, a business combination may involve acquiring or
merging with a corporation which does not need substantial additional cash
but which desires to establish a public trading market for its common stock.
The Company may purchase assets and establish wholly-owned subsidiaries in
various businesses or purchase existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Because of
general economic conditions, rapid technological advances being made in some
industries, and shortages of available capital, management believes that
there are numerous firms seeking the benefits of a publicly-traded
corporation. Such perceived benefits of a publicly traded corporation may
include (i) facilitating or improving the terms on which additional equity
financing may be sought; (ii) providing liquidity for the principals of a
business; (iii) creating a means for providing incentive stock options or
similar benefits to key employees; and (iv) providing liquidity, subject to
restrictions of applicable statues, for all shareholders. Potentially
available business opportunities may occur in many different industries and
at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities
extremely difficult and complex.
Management believes that the Company may be able to benefit from the use of
leverage to acquire a target company. Leveraging a transaction involves
acquiring a business while incurring significant indebtedness for a large
percentage of the purchase price of that business. Through leveraged
transactions, the Company would be required to use less of its available
funds, if any funds are available, to acquire a target company. Therefore,
the Company could commit those funds to the operations of the business, to
combinations with other target companies, or to other activities. The
borrowing involved in a leveraged transaction will ordinarily be secured by
the assets of the acquired business. If that business is not able to
generate sufficient revenues to make payments on the debt incurred by the
Company to acquire that business, the lender would be able to exercise the
remedies provided by law or by contract. These leveraging techniques, while
reducing the amount of funds that the Company must commit to acquire a
business, may correspondingly increase the risk of loss to the Company. No
assurance can be given as to the terms or availability of financing for any
acquisition by the Company. During periods when interest rates are
relatively high, benefits of leveraging are not as great as during periods
of lower interest rates. This is because the investment in the business
held on a leveraged basis will only be profitable if it generates sufficient
revenues to cover the related debt and other costs of the financing.
Lenders from which the Company may obtain funds for purposes of a leveraged
buy-out may impose restrictions on the future borrowing, distribution, and
operating policies of the Company. It is not possible at this time to
predict the restrictions, if any, which lenders may impose, or the impact
thereof on the Company.
As part of any transactions, the acquired entity may require the Company's
management or other shareholders of the Company to sell all or a portion of
their shares to the acquired entity or the principles thereof. It is
anticipated that the sales price of such shares will be lower than the
current market price or anticipated market price of the Company's Common
Stock. The Company's funds are not expected to be used for any stock
purchase from insiders. The Company shareholders will not be provided the
opportunity to approve or consent to such sale. The opportunity to sell all
or a portion of their shares in connection with an acquisition may influence
management's decision to enter into a specific transaction. However,
management believes that since the anticipated sales price will be less than
the market value, the potential of a stock sale by management will be a
material factor in their decision to enter a specific transaction.
The above description of potential sales of management stock is not based
upon any corporate bylaw, shareholder or board resolution, or contract or
agreement. No other payment of cash or property ix expected to be received
by management in connection with any acquisition.
The Company has insufficient capital with which to provide the owners of
businesses significant cash or other assets. Management believes the
Company will offer owners of businesses the opportunity to acquire a
controlling ownership interest in the Company at substantially less cost
than is required to conduct an initial public offering. The owners of the
businesses will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion of their
shares for subsequent sale. The Company will also incur significant legal
and accounting costs in connection with the acquisition of a business
opportunity, including the costs of preparing post-effective amendments,
Forms 8-K, agreements, and related reports and documents. Nevertheless, the
officers and directors of the Company have not conducted market research and
are not aware of statistical data which would support the perceived benefits
of a merger or acquisition transaction for the owners of a business. The
Company does not intend to make any loans to any prospective merger or
acquisition candidates or to unaffiliated third parties.
The Company will not restrict its search for any specific kind of firms, but
may acquire a venture which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status of any business
in which the Company may become engaged, in that such business may need to
seek additional capital, may desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer. However,
the Company does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business opportunity
until such time as the Company has successfully consummated such a merger or
acquisition.
Sources of Opportunities
The Company anticipates that business for possible acquisition will be
referred by various sources, including its officers and directors,
professional advisors, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals.
The Company will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other business
and professional people. It is not presently anticipated that the Company
will engage professional firms specializing in business acquisitions or
reorganizations.
The officers and directors of the Company are currently employed in other
positions and, until such time as an acquisition has been determined to be
highly favorable, will devote only a portion of their time to the business
affairs of the Company. If a business opportunity is considered promising,
management will spend additional time, on an as-needed basis, to consummate
an acquisition. In addition, in the face of competing demands for their
time, the officers and directors may grant priority to their full-time
position rather than to the Company.
Management, while not particularly experienced in matters relating to the
new business of the Company, will rely upon their own efforts and, to a much
lesser extent, the efforts of the Company's shareholders, in accomplishing
the business purposes of the Company.
It is not anticipated that any outside consultants or advisors, other than
the Company's legal counsel and accountants, will be used by the Company to
effectuate its business purposes described herein. However, if the Company
does retain such an outside consultant or advisor, any cash fee earned by
such party will need to be paid by the prospective merger/acquisition
candidate, as the Company presently has no cash assets with which to pay
such obligation. There have been no discussions, understandings, contracts
or agreements with any outside consultants and none are anticipated in the
future. In the past, the Company's management has never used outside
consultants or advisors in connection with a merger or acquisition.
As is customary in the industry, the Company may pay a finders fee for
locating an acquisition prospect. If any such fee is paid, it will be
approved by the Company's Board of Directors and will be in accordance with
the industry standards. Such fees are customarily between 1% and 5% of the
size of the transaction, based upon a sliding scale of the amount involved.
Management has adopted a policy that such a finders fee or real estate
brokerage fee could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of the Company, if such person plays a
material role in bringing a transaction to the Company. Any such
prospective fee will be negotiated in connection with any potential
acquisition or merger. It is not possible at this time to estimate the
terms of any such arrangement.
Most likely the Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any products which
may be acquired. Accordingly, if it acquires the rights to a product,
rather than entering into a merger or acquisition, it most likely would need
to seek debt or equity financing or obtain funding from third parties, in
exchange for which the Company would probably be required to give up a
substantial portion of its interest in any acquired product. There is no
assurance that the Company will be able either to obtain additional
financing or to interest third parties in providing funding for the further
development, marketing and manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or under
the supervision of the Board of Directors (see Item 5 - "Directors,
Executive Officers, Promoters and Control Persons"). Management intends to
concentrate on identifying prospective business opportunities which may be
brought to its attention through their present associations and business
contacts. In analyzing prospective business opportunities, management will
consider, among other factors, such matters as:
1.Available technical, financial and managerial resources.
2.Working capital and other financial requirements.
3.History of operation, if any.
4.Prospects for the future.
5.Present and expected competition.
6.Quality and experience of management services which may be available and
the depth of that management.
7.Potential for further research, development or exploration.
8.Specific risk factors not now foreseeable, but which may be anticipated to
impact the proposed activities of the Company.
9.Potential for growth or expansion.
10.Potential for profit.
11.Perceived public recognition or acceptance of products, services or trades.
12.Name identification.
The Company's management will meet personally with management and key
personnel of the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, the Company intends to use written
reports and personal investigation to evaluate the above factors. The
Company will not acquire or merge with any business or entity for which
audited financial statements cannot be obtained.
It is likely that any opportunity in which the Company participates will
present certain risks. Many of these risks cannot be adequately identified
prior to selection of the specific opportunity, and the Company's
shareholders must, therefore, depend on the ability of management to
identify and evaluate such risk. In the case of some of the opportunities
available to the company, it may be anticipated that the promoters thereof
have been unable to develop a going concern or that such business is in its
development state in that it has not generated significant revenues from its
principal business activities prior to the Company's participation.
There is a risk as to whether, even after the Company becomes involved in an
opportunity, the combined enterprises will be able to become a going concern
or advance beyond the development stage. Many of the potential
opportunities may involve new and untested product, processes, or market
strategies which may not succeed. Such risks will be assumed by the Company
and, therefore, its shareholders.
The Company will not restrict its search for any specific kind of business,
but may acquire a venture which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its corporate
life. It is currently impossible to predict the status of any business in
which the Company may become engaged, in that such business may need
additional capital, may merely desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial
management time and attention and substantial costs for accountants,
attorneys and others. If a decision is made not to participate in a
specific business opportunity the cost therefore incurred in the related
investigation would, most likely, not be recoverable. Furthermore, even if
an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in the
loss of the Company of the related costs incurred. Opportunities in which
the Company participates will present certain risks, many of which cannot be
identified adequately prior to selecting a specific opportunity.
The Company's shareholders must, therefore, depend on management to identify
and evaluate such risks. Promoters of some opportunities may have been
unable to develop a going concern or may present a business in its
development stage, one that has not generated significant revenues from its
principal business activities prior to the Company's participation. Even
after the Company's participation, there is a risk that the combined
enterprise may not become a going concern or advance beyond the development
stage. Other opportunities may involve new and untested products,
processes, or market strategies which may not succeed. Such risks will be
assumed by the Company and, therefore, its shareholders.
There is the additional risk that the Company may not find a suitable
target. Management does not believe the Company will generate revenue
without finding and completing a transaction with a suitable target company.
If no such target is found, therefore, no return on an investment in the
Company will be realized, and there will not, most likely, be a market for
the Company's stock.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, franchise, or licensing agreement with the business or entity. It
may also purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that present management and
shareholders of the Company will not be in control of the Company. In
addition, a majority or all of the Company's officers and directors may, as
part of the terms of the transaction, resign and be replaced by new officers
and directors without a vote of the Company's shareholders.
It is anticipated that securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable Federal
and state securities laws. In some circumstances, however, as a negotiated
element of this transaction, the Company may agree to register such
securities either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of substantial
additional securities and their potential sale into any trading market which
may develop in the Company's Common Stock may have a depressive effect on
such market.
Although the actual terms of a future transaction cannot be predicted, it
may be expected that the parties to the transaction will find it desirable
to avoid the creation of a taxable event and, thereby, structure the
transaction as a so called tax free reorganization under Sections 368(a)(1)
or 351 of the Internal Revenue Code of 1986, as amended (the Code). In
order to obtain tax free treatment under the Code, it may be necessary for
the owners of the acquired business to own 80% or more of the voting stock
of the surviving entity. In such event, the shareholders of the Company,
including investors in this offering, would retain less than 20% of the
issued and outstanding shares of the surviving entity, which could result in
significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit
and inspect material facilities, obtain independent analysis or verification
of certain information provided, check references of management and key
personnel, and take other reasonable investigative measures, to the extent
of the Company's limited financial resources and management expertise.
The manner in which the Company participates with a target opportunity will
depend on (i) the nature of the opportunity; (ii) the respective needs and
desires of the Company and other parties; (iii) management of the
opportunity; and (iv) the relative negotiating strength of management of the
two entities.
With respect to any merger or acquisition, negotiations with target company
management will be expected to focus on the percentage of the Company which
the target company's shareholders would acquire in exchange for their
shareholdings in the target company. Depending upon, among other things,
the target company's assets and liabilities, the Company's shareholders
will, in all likelihood, hold a lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may
be subject to significant reduction in the event the Company acquires a
target company with substantial assets. Any merger or acquisition effected
by the Company can be expected to have a significant dilutive effect on the
percentage of shares held by the Company's then shareholders, including
purchasers in this offering.
Management has advanced, and will continue to advance, funds which shall be
used by the Company in identifying and pursuing agreements with target
companies. Management anticipates that these funds will be repaid from the
proceeds of any agreement with the target company, and that any such
agreement may, in fact, be contingent upon the repayment of those funds.
Rights of Shareholders
It is presently anticipated by management that prior to consummating a
possible acquisition or merger, the Company, if required by relevant state
laws and regulations, will seek to have the transaction ratified by
shareholders in the appropriate manner. However, under Utah law, certain
actions that would routinely be taken at a meeting of shareholders, may be
taken by written consent of shareholders having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting of shareholders. Thus, if shareholders holding a majority of the
Company's outstanding shares decide by written consent to consummate an
acquisition or a merger, minority shareholders would not be given the
opportunity to vote on the issue. The Board of Directors will have the
discretion to consummate an acquisition or merger by written consent if it
is determined to be in the best interest of the Company to do so.
Regardless of whether an action to acquire or merge is ratified by written
consent or by holding a shareholders' meeting, the Company will provide to
its shareholders complete disclosure documentation concerning a potential
target business opportunity including the appropriate audited financial
statements of the target. This information will be disseminated by proxy
statement in the event a shareholders' meeting is held, or by subsequent
report to the shareholders if the action is taken by written consent.
Competition
The Company is an insignificant participant among firms which engage in
business combinations with, or financing of development-stage enterprises.
There are many established management and financial consulting companies and
venture capital firms which have significantly greater financial and
personal resources, technical expertise and experience than the Company. In
view of the Company's limited financial resources and management
availability, the Company will continue to be at a significant competitive
disadvantage with its competitors.
Inflation
In the opinion of management, inflation has not and will not have a material
effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management
will evaluate the possible effects of inflation on the Company related to it
business and operations following a successful acquisition or merger.
Year 2000
Year 2000 issues may arise if computer programs have been written using two
digits (rather than four) to define the applicable year. In such case,
programs that have time-sensitive logic may recognize a date using "00" as
the year 1900 rather than the year 2000, which could result in
miscalculations or system failures.
Because the Company currently does not have any operations except for its
search for viable business opportunities, it does not own or use any
computer equipment. The Company does not anticipate doing a full assessment
of the potential Year 2000 issue until it has made an acquisition of or
merged with an operating entity. The Company does not believe that the cost
of addressing the issue will have a material adverse impact on its financial
position. Further, the Company believes that no third parties with whom it
may have a material relationships will be materially affected by the Year
2000 issues.
Regulation and Taxation
The Investment Company Act defines an investment company as an issuer which
is or holds itself out as being engaged primarily in the business of
investing, reinvesting or trading securities. Although the Company does not
intend to engage in such activities, the Company may, through business
combinations, obtain and hold a minority interest in a number of development
stage enterprises.
The Company could be expected to incur significant registration and
compliance costs if required to register under the Investment Company Act.
Accordingly, management will continue to review the Company's activities
from time to time with a view toward reducing the likelihood the Company
could be classified as an investment company.
The Company intends to structure any future merger or acquisition in such
manner as to minimize Federal and state tax consequences to the Company and
to any target company.
Employees
The Company's only employee at the present time is its sole officer and
director, who will devote as much time as the Board of Directors determine
is necessary to carry out the affairs of the Company.
Recent Accounting Pronouncements
The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standard ("SFAS") No. 128, "Earnings Per Share" and
Statement of Financial Accounting Standards No. 129 "Disclosures of
Information About an Entity's Capital Structure." SFAS No. 128 provides a
different method of calculating earnings per share than is currently used in
accordance with Accounting Principles Board Opinion No. 15, "Earnings Per
Share." SFAS No. 128 provides for the calculation of "Basic" and "Dilutive"
earnings per share. Basic earnings per share includes no dilution and is
computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities that could
share in the earnings of an entity, similar to fully diluted earnings per
share. SFAS No. 129 establishes standards for disclosing information about
an entity's capital structure. SFAS No. 128 and SFAS No. 129 are effective
for financial statements issued for periods ending after December 15, 1997.
Their implementation is not expected to have a material effect on the
financial statements.
The FASB has also issued SFAS No. 130, "Reporting Comprehensive Income" and
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 130 establishes standards for reporting and display
of comprehensive income, its components and accumulated balances.
Comprehensive income is defined to include all changes in equity except
those resulting from investments by owners and distributions to owners.
Among other disclosures, SFAS No. 130 requires that all items that are
required to be recognized under current accounting standards as components
of comprehensive income be reported in a financial statement that displays
with the same prominence as other financial statements. SFAS No. 131
supersedes SFAS No. 14 "Financial Reporting for Segments of a Business
Enterprise." SFAS No. 131 establishes standards on the way that public
companies report financial information about operating segments in annual
financial statements and requires reporting of selected information about
operating segments in interim financial statements issued to the public. It
also establishes standards for disclosure regarding products and services,
geographic areas and major customers. SFAS No. 131 defines operating
segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance.
SFAS 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997 and requires comparative information for
earlier years to be restated. Management believes the adoption of this
statement will have no material impact on the Company's financial statements.
The FASB has also issued SFAS No 132. "Employers' Disclosures about Pensions
and other Postretirement Benefits," which standardizes the disclosure
requirements for pensions and other Postretirement benefits and requires
additional information on changes in the benefit obligations and fair values
of plan assets that will facilitate financial analysis. SFAS No. 132 is
effective for years beginning after December 15, 1997 and requires
comparative information for earlier years to be restated, unless such
information is not readily available. Management believes the adoption of
this statement will have no material impact on the Company's financial
statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to record
derivatives as assets or liabilities, measured at fair market value. Gains
or losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it
qualifies for hedge accounting. The key criterion for hedge accounting is
that the hedging relationship must be highly effective in achieving
offsetting changes in fair value or cash flows. SFAS No. 133 is effective
for all fiscal quarters of fiscal years beginning after June 15, 1999.
Management believes the adoption of this statement will have no material
impact on the Company's financial statements.
ITEM 3.DESCRIPTION OF PROPERTY.
The Company at present has no interest in any real property. The Company
neither owns nor leases any real property. Office services are provided
without charge by a director. Such costs are immaterial to the financial
statements, and accordingly, have not been reflected therein.
ITEM 4.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth each person known to the Company, as of June
6, 1999, to be a beneficial owner of five percent (5%) or more of the
Company's common stock, by the Company's directors individually, and by all
of the Company's directors and executive officers as a group. Except as
noted, each person has sole voting and investment power with respect to the
shares shown. Presently, the only such beneficial holder is also an
executive officer and director. Therefore, only one table is included.
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Rita Thomas 1,000,000 100%
8 Corporate Park
Ste. 200
Irvine, CA 92606
ITEM 5.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS.
Members of the Company's Board of Directors of the Company serve until the
next annual meeting of the shareholders, or until their successors have been
elected. Executive officers serve at the pleasure of the Board of Directors.
There are no agreements for any officer or director to resign at the request
of any other person, and none of the officers or directors named below are
acting on behalf of, or at the direction of, any other person.
The Company's sole officer and director will devote time to the business on
an as-needed basis, which is expected to require five to ten hours per month.
Information as to the sole director and executive officer of the Company is
as follows:
Name/Address Age Position
Rita Thomas 56 President/Secretary/Director
8 Corporate Park., Ste. 200
Irvine, CA 92606
Rita Thomas, age 56, is president of Thomas & Associates, a paralegal
services firm in Orange, California. From 1990 to present Ms. Thomas has
provided legal support services including document and information research,
teaching and litigation staff support for various legal firms. From 1985 to
April, 1990, Ms. Thomas owned and operated Select Care Products, Inc., a
company offering individual distributorship programs for pet care products.
Ms. Thomas has been a financial consultant and an independent Life and
Health Insurance Agent and Broker between 1986 and present. Between 1961
and 1989, Ms. Thomas has taught in public school and private school from
kindergarten through university level in Louisiana, Virginia, Texas,
Pennsylvania, Colorado, and California. Ms. Thomas was Director of
Paralegal Studies, Orange Coast College, California from 1989 to 1991 where
she was involved in administration of student and teacher activities and
counseling of legal studies and teaching in legal and computer classes.
Between 1965 and 1967, Ms. Thomas received her degrees in BA Education and
MEd. from McNeese State University, Lake Charles, Louisiana where she was
Director of the Childcare Development Center. Ms. Thomas received her juris
doctorate degree in 1985 from Western State University, Fullerton, California.
Blank Check Experience
Ms. Thomas is President, Director, and sole shareholder of the Company and
is President, Director, and sole shareholder of Regency Capital West, Inc.,
also a blank check company. It is possible that Ms. Thomas may establish
additional blind pool or blank check companies in the future. See
"Conflicts of Interest."
Conflicts of Interest
Insofar as the sole officer and director is engaged in other business
activities, management anticipates it will devote only a minor amount of
time to the Company's affairs. The sole officer and director of the Company
may in the future become a shareholder, officer or director of other
companies which may be formed for the purpose of engaging in business
activities similar to those conducted by the Company. The Company does not
currently have a right of first refusal pertaining to opportunities that
come to management's attention insofar as such opportunities may relate to
the Company's proposed business operations.
Directors and executive officers of the Company will be subject to the
doctrine of corporate opportunities only insofar as it applies to business
opportunities in which the Company has indicated an interest, either through
its proposed business plan or by way of an express statement of interest
contained in the Company's minutes. Any opportunity contemplated by the
Company which may come to the attention of an officer or director, either in
the performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company. A breach of this
requirement will be a breach of the fiduciary duties of the officer or
director. If a director is presented with business opportunities that may
conflict with business interests identified by the Company, such
opportunities must be promptly disclosed to the Board of Directors and made
available to the Company. In the event the Board shall reject an
opportunity so presented and only in that event, any of the Company's
officers and directors may avail themselves of such an opportunity. Every
effort will be made to resolve any conflicts that may arise in favor of the
Company. There can be no assurance, however, that these efforts will be
successful.
Subject to the next paragraph, if a situation arises in which more than one
company desires to merge with or acquire a target opportunity, and the
principals of the proposed target have no preference as to which company
will merge or acquire such target, the company of which the President first
became an officer and director will be entitled to proceed with the
transaction. Except as set forth above, the Company has not adopted any
other conflict of interest policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the Securities Act
of 1933, as amended ("Securities Act"), and the Exchange Act, management
believes the Company will not be subject to regulation under the Investment
Company Act of 1940 insofar as the Company will not be engaged in the
business of investing or trading in securities. In the event the Company
engages in business combinations which result in the Company holding passive
investment interests in a number of entities, the Company could be subject
to regulation under the Investment Company Act. In such event, the Company
would be required to register as an investment company and could be expected
to incur significant registration and compliance costs. The Company has
obtained no formal determination from the Commission as to the status of the
Company under the Investment Company Act and, consequently, any violation of
such Act would subject the Company to material adverse consequences.
ITEM 6.EXECUTIVE COMPENSATION.
The Company's sole director does not receive any compensation for his
services rendered to the Company, nor has he received such compensation in
the past. He has agreed to act without compensation until authorized by the
Board of Directors, which is not expected to occur until the Company has
generated revenues from operations after consummating a merger or
acquisition. As of the date of this registration statement, the Company has
no funds available to pay directors. Further, the sole director is not
accruing any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy
whereby the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision to
undertake any proposed transaction. Management has agreed to disclose to
the Company's Board of Directors any discussions concerning possible
compensation to be by any entity which proposes to undertake a transaction
with the Company and further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of the Company's Board of
Directors is offered compensation in any form from any prospective merger or
acquisition candidate, the proposed transaction will not be approved by the
Company's Board of Directors as a result of the inability of the Board to
affirmatively approve such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for
their referral in the form of a finder's fee. It is anticipated that this
fee will be either in the form of restricted common stock issued by the
Company as part of the terms of the proposed transaction, or will be in the
form of cash consideration. However, if such compensation is in the form of
cash, such payment will be tendered by the acquisition or merger candidate,
because the Company has insufficient cash available. The amount of such
finders fee cannot be determined as of the date of this registration
statement, but is expected to be comparable to consideration normally paid
in like transactions. No member of management of the Company will receive
any finder's fee, either directly or indirectly, as a result of their
respective efforts to implement the Company's business plan outlined herein.
Persons associated with management is meant to refer to persons with whom
management may have had other business dealings, but who are not affiliated
with or relatives of management.
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit
of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a policy that
the Company will not seek an acquisition or merger with any entity in which
any of the Company's Officers, Directors, principal shareholders or their
affiliates or associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under which this
policy may be changed through their own initiative.
The proposed business activities described herein classify the Company as a
blank check company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of blank check companies in
their respective jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in the Company's securities until such
time as the Company has successfully implemented its business plan described
herein.
ITEM 8. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorized the issuance of
140,000,000 shares consisting of 100,000,000 shares of common stock, $0.001
par value, and 40,000,000 shares of preferred stock, $0.001 par value, of
which 1,000,000 shares of common stock were issued and are now outstanding.
All shares are non-assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled to one vote
for each share on all matters to be voted on by shareholders. Also, common
shareholders are entitled to share ratably in dividends, if any, as may be
declared by the Company from time-to-time, from funds legally available. In
the event of a liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-rata basis
all assets remaining after payment in full of all liabilities.
Management is not aware of any circumstances in which additional shares of
any class or series of the Company's stock would be issued to management or
promoters, or affiliates or associates of either.
Preferred Stock
The Company's Articles of Incorporation authorizes the issuance of
40,000,000 shares of preferred stock, $0.001 par value, none of which have
been issued. The Company currently has no plans to issue any preferred
stock. The Company's Board of Directors has the authority, without action
by the shareholders, to issue all or any portion of the authorized but
unissued preferred stock in one or more series and to determine the voting
rights, preferences as to dividends and liquidation, conversion rights, and
other rights of such series. The preferred stock, if and when issued, may
carry rights superior to those of common stock; however no preferred stock
may be issued with rights equal or senior to the preferred stock without the
consent of a majority of the holders of then-outstanding preferred stock.
The Company considers it desirable to have preferred stock available to
provide increased flexibility in structuring possible future acquisitions
and financings, and in meeting corporate needs which may arise. If
opportunities arise that would make the issuance of preferred stock
desirable, either through public offering or private placements, the
provisions for preferred stock in the Company's Certificate of Incorporation
would avoid the possible delay and expense of a shareholders meeting, except
as may be required by law or regulatory authorities. Issuance of the
preferred stock could result, however, in a series of securities outstanding
that will have certain preferences with respect to dividends and liquidation
over the common stock. This could result in dilution of the income per
share and net book value of the common stock.
Issuance of additional common stock pursuant to any conversion right which
may be attached to the terms of any series of preferred stock may also
result in dilution of the net income per share and the net book value of the
common stock. The specific terms of any series of preferred stock will
depend primarily on market conditions, terms of a proposed acquisition or
financing, and other factor existing at the time of issuance. Therefore it
is not possible at this time to determine in what respect a particular
series of preferred stock will be superior to the Company's common stock or
any other series of preferred stock which the Company may issue. The Board
of Directors does not have any specific plan for the issuance of preferred
stock at the present time, and does not intend to issue any preferred stock
at any time except on terms which it deems to be in the best interest of the
Company and its shareholders.
The issuance of preferred stock could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. Further, certain provisions of Utah law could delay or
make more difficult a merger, tender offer, or proxy contest involving the
Company. Although such provisions are intended to enable the Board of
Directors to maximize shareholder value, they may have the effect of
discouraging takeovers which could be in the best interests of certain
shareholders. There is no assurance that such provisions will not have an
adverse effect on the market value of the Company's stock in the future.
PART II
ITEM 1.MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS.
The Company's common stock is not quoted on the over-the-counter market or
on any other recognized market or exchange. Management has not undertaken
any discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the after-market for
the Company's securities and management does not intend to initiate any such
discussions until such time as the Company has consummated a merger or
acquisition. There is no assurance that a trading market will ever develop
or, if such a market does develop, that it will continue.
After a business combination, merger or acquisition has been completed, the
Company's sole director will most likely be the person to contact
prospective market makers. It is also possible that persons associated with
the entity that merges with or is acquired by the Company will contact
prospective market makers. The Company does not intend to use consultants
to contact market makers.
Market Price
The ability of an individual shareholder to trade their shares in a
particular state may be subject to various rules and regulations of that
state. A number of states require that an issuer's securities be registered
in their state or appropriately exempted from registration before the
securities are permitted to trade in that state. Presently, the Company has
no plans to register its securities in any particular state.
Although there is presently no market for the Company's shares of common
stock, if a marked does develop it is likely that the shares will be subject
to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act,
commonly referred to as the "penny stock" rule. Section 15(g) sets forth
certain requirements for transactions in penny stocks and Rule 15g-9(d)(1)
incorporates the definition of penny stock as that used in Rule 3a51-1 of
the Exchange Act.
The Commission generally defines penny stock to be any equity security that
has a market price less than $5.00 per share, subject to certain exceptions.
Rule 3a51-1 provides that any equity security is considered to be a penny
stock unless that security is: registered and traded on a national
securities exchange meeting specified criteria set by the Commission;
authorized for quotation on The NASDAQ Stock Market; issued by a registered
investment company; excluded from the definition on the basis of price (at
least $5.00 per share) or the issuer's net tangible assets; or exempted from
the definition by the Commission. If the Company's shares are deemed to be
a penny stock, trading in the shares will be subject to additional sales
practice requirements on broker-dealers who sell penny stocks to persons
other than established customers and accredited investors, generally persons
with assets in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a special
suitability determination for the purchase of such securities and must have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, and current quotations for
the securities. Finally, monthly statements must be sent disclosing recent
price information for the penny stocks held in the account and information
on the limited market in penny stocks. Consequently, these rules may
restrict the ability of broker-dealers to trade and/or maintain a market in
the Company's common stock and may affect the ability of shareholders to
sell their shares.
The National Association of Securities Dealers, Inc. ("NASD"), which
administers The Nasdaq Stock Market, has recently made changes in the
criteria for initial listing on The Nasdaq Small Cap Market and for
continued listing. For initial listing, a company must have net tangible
assets of $4 million, market capitalization of $50 million or net income of
$750,000 in the most recently completed fiscal year or in two of the last
three fiscal years. For initial listing, the common stock must also have a
minimum bid price of $4.00 per share. In order to continue to be included on
The Nasdaq Stock Market, a company must maintain $2,000,000 in net tangible
assets and a $1,000,000 market value of its publicly-traded securities. In
addition, continued inclusion requires two market-makers and a minimum bid
price of $1.00 per share.
Management intends to strongly consider undertaking a transaction with any
merger or acquisition candidate which will allow the Company's securities to
be traded without the aforesaid limitations. However, there can be no
assurances that, upon a successful merger or acquisition, the Company will
qualify its securities for listing on The Nasdaq Stock Market or some other
national exchange, or be able to maintain the maintenance criteria necessary
to insure continued listing. The failure of the Company to qualify its
securities or to meet the relevant maintenance criteria after such
qualification in the future may result in the discontinuance of the
inclusion of the Company's securities on a national exchange. In such
events, trading, if any, in the Company's securities may then continue in
the over-the-counter market. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
As of the date hereof, the Company has issued and outstanding 1,000,000
shares of common stock, all of which are deemed "restricted securities" as
defined by the Securities Act. These shares are held by one person, an
officer and director of the Company.
Presently, no outstanding shares are eligible for sale pursuant to Rule 144.
However, restricted shares that have been beneficially owned for more than
one year may be eligible for sale under Rule 144, subject to the volume and
other limitations set forth by such Rule. In general, under Rule 144 as
currently in effect, a person (or persons whose shares are aggregated) who
has beneficially owned restricted shares of the Company for at least one
year, including any person who may be deemed to be an "affiliate" of the
Company (as the term "affiliate" is defined under the Act), is entitled to
sell, within any three-month period, an amount of shares that does not
exceed the greater of (i) the average weekly trading volume in the Company's
common stock, as reported through the automated quotation system of a
registered securities association, during the four calendar weeks preceding
such sale or (ii) 1% of the shares then outstanding. A person who is not
deemed to be an "affiliate" of the Company and has not been an affiliate for
the most recent three months, and who has held restricted shares for at
least two years would be entitled to sell such shares without regard to the
resale limitations of Rule 144.
Dividend Policy
The Company has not declared or paid cash dividends or made distributions in
the past, and the Company does not anticipate that it will pay cash
dividends or make distributions in the foreseeable future. The Company
currently intends to retain and invest future earnings to finance its
operations.
ITEM 2.LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal proceedings and, to
the best of its knowledge, no such action by or against the Company has been
threatened.
ITEM 3.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
This Item is not applicable to the Company.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
All shares of the Company's common stock presently outstanding were issued
to the founder of the Company on June 22, 1999. These shares were issued in
a private transaction in accordance with the exemption from registration
afforded by Section 4(2) of the Securities Act. No transfers of stock have
occurred since June 22, 1999. No advertising or general solicitation was
employed in offering the shares. The securities were offered for investment
only and not for the purpose of resale or distribution, and the transfer
thereof was appropriately restricted.
ITEM 5.INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the provisions of the Utah Revised Business Corporation Act
(the "Utah Act"), the Company has the power to indemnify an individual made
a party to a proceeding because they are or were a director, against
liability incurred in the proceeding, if such individual acted in good faith
and in a manner reasonably believed to be in, or not opposed to, the best
interest of the Company and, in a criminal proceeding, they had no
reasonable cause to believe their conduct was unlawful. Indemnification
under this provision is limited to reasonable expenses incurred in
connection with the proceeding. The Company must indemnify a director or
officer who is successful, on the merits of otherwise, in the defense of any
proceeding or in defense of any claim, issue, or matter in the proceeding,
to which they are a party to because they are or were a director of officer
of the Company, against reasonable expenses incurred by them in connection
with the proceeding or claim with respect to which they have been
successful. Pursuant to the Utah Act, the Company's Board of Directors may
indemnify its officers, directors, agents, or employees against any loss or
damage sustained when acting in good faith in the performance of their
corporate duties.
The Company may pay for or reimburse reasonable expenses incurred by a
director, officer employee, fiduciary or agent of the Company who is a party
to a proceeding in advance of final disposition of the proceeding provided
the individual furnishes the Company with a written affirmation that their
conduct was in good faith and in a manner reasonably believed to be in, or
not opposed to, the best interest of the Company, and undertake to repay the
advance if it is ultimately determined that they did not meet such standard
of conduct.
Also pursuant to the Utah Act, a corporation may set forth in its articles
of incorporation, by-laws or by resolution, a provision eliminating or
limiting in certain circumstances, liability of a director to the
corporation or its shareholders for monetary damages for any action taken or
any failure to take action as a director. This provision does not eliminate
or limit the liability of a director (i) for the amount of a financial
benefit received by a director to which they are not entitled; (ii) an
intentional infliction of harm on the corporation or its shareholders; (iii)
for liability for a violation of Section 16-10a-842 of the Utah Act
(relating to the distributions made in violation of the Utah Act); and (iv)
an intentional violation of criminal law. To date, the Company has not
adopted such a provision in its Articles of Incorporation, By-Laws, or by
resolution. A corporation may not eliminate or limit the liability of a
director for any act or omission occurring prior to the date when such
provision becomes effective. The Utah Act also permits a corporation to
purchase and maintain liability insurance on behalf of its directors,
officers, employees, fiduciaries or agents.
Transfer Agent
The Company is presently acting as its own transfer agent. It is likely
that following a business combination, merger or acquisition, the Company
will engage a transfer agent.
PART F/S
The Company's financial statements for the period from inception on June 3,
1999 through March 31, 2000 have been examined to the extent indicated in
their reports by Kurt D. Saliger, independent certified public accountant,
and have been prepared in accordance with generally accepted accounting
principles and pursuant to Regulation S-B as promulgated by the Commission
and are included herein in response to Item 15 of this Form 10-SB.
INDEPENDENT AUDITORS' REPORT
Board of Directors
Mill Creek Research, Inc.
(a Development Stage company)
I have audited the accompanying balance sheet of Mill Creek Research, Inc.
(a development stage company), as of March 31, 2000 and December 31, 1999,
and the related statements of operations, stockholders' equity and cash
flows for the period from January 1, 2000 to March 31, 2000 and June 3, 1999
(inception) to December 31, 1999. These financial statements are the
responsibility of the company's management. My responsibility is to express
an opinion on these financial statements based on my audit in accordance
with standards established by the American Institute of Certified Public
Accountants.
I conducted the audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mill Creek Research, Inc.
as of March 31, 2000 and December 31, 1999 and the results of its operations
and its cash flows for the period from January 1, 2000 to March 31, 2000 and
June 3, 1999 (inception) to December 31, 1999 in conformity with generally
accepted accounting principles.
Kurt D. Saliger, C.P.A. (Nevada State License No. 2335)
Las Vegas, Nevada
June 5, 2000
[CAPTION]
<TABLE>
MILL CREEK RESEARCH, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
<S> <C> <C>
Three Months June
3, 1999
Ended
(Inception) to
March 31, 2000
December 31, 1999
CURRENT ASSETS
Cash $ - $
-
Total Current Assets -
-
TOTAL ASSETS $ - $
-
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable - related party $ 100
$ 100
Total Liabilities $ 100
$ 100
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: $0.001 par value,
authorized 100,000,000 shares;
1,000,000 shares issued and outstanding 1,000
1,000
Preferred stock: $0.001 par value,
authorized 40,000,000 shares;
-0- shares issued and outstanding $ -
$ -
Subscription receivable (900)
(900)
Additional paid-in capital $ -
$ -
Deficit accumulated during
the development stage (200)
(200)
Total Stockholders' Equity (Deficit) (100)
(100)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
$ -
$ -
</TABLE>
[CAPTION]
<TABLE>
MILL CREEK RESEARCH, INC.
(A Development Stage Company)
Statement of Operations
<S> <C> <C>
<C>
From
From
June 3, 1999
June 3, 1999
Three Months Ended (Inception) to
(Inception) to
March 31, 2000 December 31, 1999
March 31, 2000
-------------- -----------------
--------------
REVENUES $ - $ -
$ -
OPERATING COSTS
General and administrative 0 200
200
Total Operating Costs 0 200
200
LOSS FROM OPERATIONS 0 (200)
(200)
NET LOSS $ 0 $ (200)
$ (200)
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
$ (0.00)
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 1,000,000 1,000,000
1,000,000
</TABLE>
[CAPTION]
<TABLE>
MILL CREEK RESEARCH, INC.
(A Development Stage Company)
Statement of Cash Flows
<S> <C> <C>
<C>
From
From
June 3, 1999
June 3, 1999
Three Months Ended (Inception) to
(Inception) to
March 31, 2000 December 31, 1999
March 31, 2000
-------------- -----------------
--------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ 0 $ (200)
$ (200)
Changes in operating assets and liabilities:
Common stock issued for stock receivable 900
900
Decrease (increase) in subscription receivable (900)
(900)
Increase (decrease) in accounts payable 100
100
Net Cash (Used) by Operating Activities $ 0 (100)
(100)
CASH FLOWS FROM INVESTING ACTIVITIES - -
-
CASH FLOWS FROM FINANCING ACTIVITIES -
Common stock issued for cash $ 0 100
100
Net Cash Provided by Financing Activities - 100
100
INCREASE IN CASH AND CASH EQUIVALENTS $ 0 -
-
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD $ 0 -
-
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 0 -
-
Cash paid for:
Interest $ 0 -
-
Income taxes $ 0 -
-
</TABLE>
[CAPTION]
MILL CREEK RESEARCH, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
<TABLE>
Deficit
Accumulated
Additional During the
Common Stock Paid-in
Subscription Development
Shares Amount Capital Receivable
Stage
<S> <C> <C> <C> <C>
<C>
Balance, June 3, 1999
(Inception) 1,000,000 $1,000 $ - $ (900)
$ -
Net loss for the period
from inception on
June 3, 1999 through
December 31, 1999 1,000,000 - - $ (900)
(200)
Net loss for the period
Jan 1, 2000 through
March 31, 2000 - - - -
0
Balance March 31, 2000 1,000,000 $1,000 $ - $ (900)
$ (200)
</TABLE>
[CAPTION]
MILL CREEK RESEARCH, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The Company was organized under the laws of the State of Utah on June 3,
1999. The purpose of the corporation is to engage in any lawful activity.
Currently, the Company is seeking new business opportunities believed to
hold a potential profit or to merge with an existing company.
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has adopted a June 30 year end.
c. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
weighted average number of shares issued and outstanding at the date of the
financial statements.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
f. Provision for Taxes
At March 31, 2000, the Company had net operating loss carryforwards of
approximately $200 that may be offset against future taxable income through
2014. No tax benefit has been reported in the financial statements, because
the potential tax benefits of the net operating loss carryforwards are
offset by a valuation allowance of the same amounts.
NOTE 2 -GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern. It is the intent of the Company to seek a merger with an
existing, operating company. In the interim, shareholders of the Company
have committed to meeting its minimal operating expenses.
PART III
ITEM 1.Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
3.1Articles of Incorporation
3.2 By-Laws
4. See Exhibit No. 3.1, Articles of Incorporation, Article Fifth
23.Consent of Accountant
27.Financial Data Schedule
________________
ITEM 2. Description of Exhibits
See Item 1 above.
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly organized.
MILL CREEK RESEARCH, INC.
(Registrant)
Date: June 13, 2000By: RITA THOMAS
Rita Thomas, President
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
MILL CREEK RESEARCH, INC.
The undersigned, a natural person at least eighteen years old, does
hereby act as incorporator in adopting the following Articles of
Incorporation for the purpose of organizing the business corporation
hereinafter named MILL CREEK RESEARCH, INC., pursuant to the provisions of
the Utah Revised Business Corporation Act.
FIRST: The name of the corporation is MILL CREEK RESEARCH, INC. (the
"Corporation").
SECOND: The principal office of the Corporation in the State of Utah is
located at 935 E. 7220 South, Ste. D-103, Midvale, Utah 84047. The name and
address of the registered agent of the Corporation is Mr. James Barber, 935
E. 7220 South, Ste. D-103, Midvale, Utah 84047. The registered office of the
Corporation is 935 E. 7220 South, Ste. D-103, Midvale, Utah 84047. The name
and address of the first Director and Incorporator is Mr. James Barber, 935
E. 7220 South, Ste. D-103, Midvale, Utah 84047. The signature of the said
registered agent is set forth in the last Article of these Articles of
Incorporation.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the Utah Revised
Business Corporation Act and the duration of the Corporation shall be
perpetual.
FOURTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and
of its directors and stockholders:
A. The governing board of this Corporation shall be known as the
board of directors (the "Board of Directors" or the "Board") and its members
all be known as directors, and the number of directors may from time to time
be increased or decreased by resolution of the Board of Directors, provided
that the number of directors shall not be reduced to less than one (1). The
Board of Directors shall be divided into three classes, as nearly equal in
number as possible, and the term of office for each respective class of
directors shall be so arranged that the term of office of directors of one
class shall expire at each successive annual meeting of stockholders, and in
all cases as to each director until their successor shall be elected and
shall qualify, or until his earlier resignation, removal from office, death
or incapacity. At each annual meeting of stockholders after the first annual
meeting, the number of directors equal to the number of directors of the
class whose term expires at the time of such meeting (or such greater or
lesser number as would be required by an increase or decrease in the size of
the Board of Directors) shall be elected to hold office until the third
succeeding annual meeting of stockholders after their election. This Article
FOURTH may not be amended or repealed without the affirmative vote of at
least sixty-six and two-thirds percent (66-2/3%) of the voting power of the
shares entitled to vote thereon.
B. Special meetings of stockholders of the Corporation may be
called only by the Chairman of the Board or the President or by the Board of
Directors acting pursuant to a resolution adopted by a majority of the Whole
Board. For purposes of these Articles of Corporation, the term "Whole Board"
shall mean the total number of authorized directors whether or not there
exists any vacancies in previously authorized directorships.
FIFTH: A. The total number of shares of all classes of stock which
the Corporation shall have authority to issue is One Hundred Forty Million
(140,000,000), consisting of One Hundred million (100,000,000) shares of
common stock, par value one-tenth of one cent ($0.001) per share (the
"Common Stock") and Forty million (40,000,000) shares of preferred stock,
par value one-tenth of one cent ($0.001) per share (the "Preferred Stock").
B. COMMON STOCK. The shares of Common Stock shall have no
pre-emptive or preferential rights of subscription concerning further
issuance or authorization of any securities of the Corporation. Each share
of Common Stock shall entitle the holder thereof to one vote, in person or
by proxy. The holders of the Common Stock shall be entitled to receive
dividends if, as and when declared by the Board of Directors.
The Common Stock may be issued from time to time in one or more
series and shall have such other relative, participant, optional or special
rights, qualifications, limitations or restrictions thereof as shall be
stated and expressed in the resolution or resolutions providing for the
issuance of such Common Stock from time to time adopted by the Board of
Directors pursuant to authority so to adopt which is hereby vested in the
Board of Directors.
C. PREFERRED STOCK. The Preferred Stock may be issued from time
to time in one or more series and (a) may have such voting powers, full or
limited, or may be without voting powers; (b) may be subject to redemption
at such time or times and at such prices; (c) may be entitled to receive
dividends (which may be cumulative or non-cumulative) at such rate or rates,
on such conditions, and at such times, and payable in preference to, or in
such relation to, the dividends payable on any other class or classes or
series of stock; (d) may have such rights upon the dissolution of, or upon
any distribution of the assets of, the Corporation; (e) may be made
convertible into, or exchangeable for, shares of any other class or classes
or of any other series of the same or any other class or classes of stock of
the Corporation, at such price or prices or at such rates of exchange, and
with such adjustments and (f) shall have such other relative, participating,
optional or special rights, qualifications, limitations or restrictions
thereof as shall hereafter be stated and expressed in the resolution or
resolutions providing for the issuance of such Preferred Stock from time to
time adopted by the Board of Directors pursuant to authority so to do which
is hereby vested in the Board of Directors.
At any time from time to time when authorized by resolution of
the Board of Directors and without any action by its shareholders, the
Corporation may issue or sell any shares of its stock of any Class or
series, whether out of the unissued shares thereof authorized by these
Articles of Incorporation, as amended, or out of shares of its stock
acquired by it after the issue thereof, and whether or not the shares
thereof so issued or sold shall confer upon the holders thereof the right to
exchange or convert such shares for or into other shares of stock of the
Corporation of any class or classes or any series thereof. When similarly
authorized, but without any action by its shareholders, the Corporation may
issue or grant rights, warrants or options, in bearer or registered or such
other form as the Board of Directors may determine, for the purchase of
shares of the stock of any class or series of the Corporation within such
period of time, or without limit as to time, of such aggregate number of
shares, and at such price per share, as the Board of Directors may
determine. Such rights, warrants or options may be issued or granted
separately or in connection with the issue of any bonds, debentures, notes,
obligations or other evidences of indebtedness or shares of the stock of any
class or series of the Corporation and for such consideration and on such
terms and conditions as the Board of Directors, in its sole discretion, may
determine. In each case, the consideration to be received by the Corporation
for any such shares so issued or sold shall be such as shall be fixed from
time to time by the Board of Directors.
D. The capital stock, after the amount of the subscription price, or par
value, has been paid in, shall not be subject to assessment.
E. No holder of shares of stock of the Corporation shall be
entitled as of right to purchase or subscribe for any part of any unissued
stock of this Corporation or of any new or additional authorized stock of
the Corporation of any class whatsoever, or of any issue of securities of
the Corporation convertible into stock, whether such stock or securities be
issued for money or for a consideration other than money or by way of
dividend, but any such unissued stock or such new or additional authorized
stock or such securities convertible into stock may be issued and disposed
of to such persons, firms, corporations and associations, and upon such
terms as may be deemed advisable by the Board of Directors without offering
to stockholders of record or any class of stockholders upon the same terms
or upon any terms.
SIXTH: A. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specified circumstances,
the number of directors shall be fixed from time to time exclusively by the
Board of Directors pursuant to a resolution adopted by a majority of the
Whole Board. The first Director shall be the undersigned incorporator.
B. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, newly created directorships resulting from
any increase in the authorized number of directors or any vacancies in the
Board of Directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause shall, unless otherwise
provided by law or by resolution of the Board of Directors, be filled only
by a majority vote of the directors then in office, though less than a
quorum, and directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office of the class to
which they have been chosen expires. No decrease in the authorized number of
directors shall shorten the term of any incumbent director.
C. Advance notice of stockholder nominations for the
election of directors and of business to be brought by stockholders before
any meeting of the stockholders of the Corporation shall be given in the
manner provided in the by-laws of the Corporation.
D. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any directors, or the entire Board of
Directors, may be removed from office at any time, but only for cause and
only by the affirmative vote of the holders at least fifty percent (50%) of
the voting power of all of the then-outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of directors,
voting together as a single class.
SEVENTH: The Board of Directors is expressly empowered to adopt, amend
or repeal by-laws of the Corporation. Any adoption, amendment or repeal of
the by-laws of the Corporation by the Board of Directors shall require the
approval of a majority of the Whole Board. The stockholders shall also have
power to adopt, amend or repeal the by-laws of the Corporation; provided,
however, that, in addition to any vote of the holders of any class or series
of stock of the Corporation required by law or by these Articles of
Corporation, the affirmative vote of the holders of at least fifty percent
(50%) of the voting power of all of the then-outstanding shares of the
capital stock of the Corporation entitled to vote generally in the election
of directors, voting together as a single class, shall be required to adopt,
amend or repeal any provision of the by-laws of the Corporation.
EIGHTH: The Corporation reserves the right to amend or repeal any
provision contained in these Articles of Incorporation in the manner
prescribed by the laws of the State of Utah and all rights conferred upon
stockholders are granted subject to this reservation; provided, however,
that, notwithstanding any other provision of these Articles of Incorporation
or any provision of law that might otherwise permit a lesser vote or no
vote, but in addition to any vote of the holders of any class or series of
the stock of this Corporation required by law or by these Articles of
Incorporation, the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the voting power of all the then-outstanding
shares of the capital stock of the Corporation entitled to vote generally in
the election of Directors, voting together as a single class, shall be
required to amend or repeal this Article EIGHTH, Article SIXTH, Article
SEVENTH, or Article NINTH.
NINTH: The Board of Directors of the Corporation, when evaluating any
offer of another party to (a) make a tender or exchange offer for any equity
security of the Corporation, (b) merge or consolidate the Corporation with
another corporation or (c) purchase or otherwise acquire all or
substantially all of the properties and assets of the Corporation, may, in
connection with the exercise of its judgment in determining what is in the
best interests of the Corporation and its stockholders, give due
consideration to (i) all relevant factors, including without limitation the
social, legal, environmental and economic effects on the employees,
customers, suppliers and other affected persons, firms and corporations, and
on the communities and geographical areas in which the Corporation and its
subsidiaries operate or are located and on any of the businesses and
properties of the Corporation or any of its subsidiaries, as well as such
other factors as the directors deem relevant, (ii) not only the financial
consideration being offered in relation to the then current market price for
the Corporation's outstanding shares of capital stock, but also in relation
to the then current value of the Corporation in a freely negotiated
transaction and in relation to the Board of Directors' estimate of the
future value of the Corporation (including the unrealized value of its
properties and assets) as an independent going concern, and (iii) the
obligations of the Corporation, and any of its subsidiaries, to provide
stable, reliable services on a continuing or long term basis.
TENTH: A director or officer of the Corporation shall have no personal
liability to the Corporation or its stockholders for damages for breach of
fiduciary duty as a director or officer, except for (a) acts or omissions
which involve intentional misconduct, fraud or a knowing violation of law;
or (b) the payment of dividends in violation of the applicable statutes of
Utah. If the Utah Revised Business Corporation Act is amended after approval
by the stockholders of this Article TENTH to authorize corporate action
further eliminating or limiting the personal liability of directors or
officers, the liability of a director or officer of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Utah General
Corporation Law, as so amended from time to time. No repeal or modification
of this Article TENTH by the stockholders shall adversely affect any right
or protection of a director or officer of the Corporation existing by virtue
of this Article TENTH at the time of such repeal or modification.
ELEVENTH: A. The Corporation shall indemnify and hold harmless any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or
she is or was or has agreed to become a director or officer of the
Corporation or is serving at the request of the Corporation as a director or
officer of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise or by reason of actions alleged to have
been taken or omitted in such capacity or in any other capacity while
serving as a director or officer. The indemnification of directors and
officers by the Corporation shall be to the fullest extent authorized or
permitted by applicable law, as such law exists or may hereafter be amended
(but only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than permitted prior to the
amendment). The indemnification of directors and officers shall be against
all loss, liability and expense (including attorneys fees, costs, damages,
judgments, fines, amounts paid in settlement and ERISA excise taxes or
penalties) actually and reasonably incurred by or on behalf of a director or
officer in connection with such action, suit or proceeding, including any
appeal; provided, however, that with respect to any action, suit or
proceeding initiated by a director or officer, the Corporation shall
indemnify such director or officer only if the action, suit or proceeding
was authorized by the Board of Directors of the Corporation, except with
respect to a suit for the enforcement of rights to indemnification or
advancement of expenses in accordance with Section C below.
B. The expenses of directors and officers incurred as a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative shall be paid by the Corporation
as they are incurred and in advance of the final disposition of the action,
suit or proceeding; provided, however, that if applicable law so requires,
the advance payment of expenses shall be made only upon receipt by the
Corporation of an undertaking by or on behalf of the director or officer to
repay ail amounts so advanced in the event that it is ultimately determined
by a final decision, order or decree of a court of competent jurisdiction
that the director or officer is not entitled to be indemnified for such
expenses under this Article ELEVENTH.
C. Any director or officer may enforce his or her rights to
indemnification or advance payments for expenses in a suit brought against
the Corporation if his or her request for indemnification or advance
payments for expenses is wholly or partially refused by the Corporation or
if there is no determination with respect to such request within 60 days
from receipt by the Corporation of a written notice from the director or
officer for such a determination. If a director or officer is successful in
establishing in a suit his or her entitlement to receive or recover an
advancement of expenses or a right to indemnification, in whole or in part,
he or she shall also be indemnified by the Corporation for costs and
expenses incurred in such suit. It shall be a defense to any such suit
(other than a suit brought to enforce a claim for the advancement of
expenses under Section B of this Article ELEVENTH where the required
undertaking, if any, has been received by the Corporation) that the claimant
has not met the standard of conduct set forth in the Utah Revised Business
Corporation Act. Neither the failure of the Corporation to have made a
determination prior to the commencement of such suit that indemnification of
the director or officer is proper in the circumstances because the director
or officer has met the applicable standard of conduct nor a determination by
the Corporation that the director or officer has not met such applicable
standard of conduct shall be a defense to the suit or create a presumption
that the director or officer has not met the applicable standard of conduct.
In a suit brought by a director or officer to enforce a right under this
Section C or by the Corporation to recover and advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that a
director or officer is not entitled to be indemnified or is not entitled to
an advancement of expenses under this Section C or otherwise, shall be on
the Corporation.
D. The right to indemnification and to the payment of
expenses as they are incurred and in advance of the final disposition of the
action, suit or proceeding shall not be exclusive of any other right to
which a person may be entitled under these Articles of Incorporation or any
by-law, agreement, statute, vote of stockholders or disinterested directors
or otherwise. The right to indemnification under Section A above shall
continue for a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, next of kin, executors,
administrators and legal representatives.
E. The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any loss, liability or expense, whether or not the
Corporation would have the power to indemnify such person against such loss,
liability or expense under the Utah General Corporation Law.
F. The Corporation shall not be obligated to reimburse the
amount of any settlement unless it has agreed to such settlement. If any
person shall unreasonably fail to enter into a settlement of any action,
suit or proceeding within the scope of Section A above, offered or assented
to by the opposing party or parties and which is acceptable to the
Corporation, then, notwithstanding any other provision of this Article
ELEVENTH, the indemnification obligation of the Corporation in connection
with such action, suit or proceeding shall be limited to the total of the
amount at which settlement could have been made and the expenses incurred by
such person prior to the time the settlement could reasonably have been
effected.
G. The Corporation may, to the extent authorized from time
to time by the Board of Directors, grant rights to indemnification and to
the advancement of expenses to any employee or agent of the Corporation or
to any director, officer, employee or agent of any of its subsidiaries to
the fullest extent of the provisions of this Article ELEVENTH subject to the
imposition of any conditions or limitations as the Board of Directors of the
Corporation may deem necessary or appropriate.
TWELFTH: In the event of a conflict between the terms of these
Articles of Incorporation and the By-Laws of the Corporation, the terms and
provisions of these Articles of Incorporation shall govern.
THIRTEENTH: The signature of the aforesaid registered agent of the
corporation is as follows:
___________________________
JAMES BARBER
935 E. 7220 South, Ste. D-103, Midvale, Utah 84047
THE UNDERSIGNED, being the incorporator of this Corporation, for the purpose
of adopting these Articles of Incorporation under the laws of the State of
Utah do make, file and record these Articles of Incorporation, do certify
that the facts herein stated are true, and, accordingly, have hereto set my
hand and seal this ____ day of June, 1999.
_________________________________
JAMES BARBER, Incorporator, Director
935 E. 7220 South, Ste. D-103, Midvale, Utah 84047
[CAPTION]
EXHIBIT 3.2
BY-LAWS OF
MILL CREEK RESEARCH, INC.
ARTICLE I
OFFICES
Section 1. The registered office shall be located in Salt Lake
City, Utah.
Section 2. The corporation may also have offices at such other
places both within and without the state of Utah as the board of directors
may from time to time determine or the business of the corporation may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of
directors shall be held in the state of California at such place as may be
fixed from time to time by the board of directors.
Section 2. Annual meetings of shareholders shall be held on the
fourth Friday in the month of March if not a legal holiday, and if the
fourth Friday is a legal holiday, then on the following Friday, at 10:00
A.M., at which the shareholders shall elect by a plurality vote a board of
directors, and transact such other business as may be properly brought
before the meeting.
Section 3. Written or printed notice of the annual meeting stating
the place, day and hour of the meeting shall be delivered not less than ten
nor more than fifty days before the date of the meeting, either personally
or by mail, by or at the direction of the president, the secretary, or the
officer or persons calling the meeting, to each shareholder of record
entitled to vote at such meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any purpose other
than the election of directors may be held at such time and place within or
without the state of Utah as shall be stated in the notice of meeting or in
a duly executed waiver of notice thereof.
Section 2. Special meetings of he shareholders, for any purpose
or purposes may be called by the chairman of the board or the president and
shall be called by the president or secretary at the request in writing of a
majority of the board of directors, or at the request in writing of
shareholders owning one-tenth of all the outstanding shares of the
corporation. Such request shall state the purpose or purposes of the
proposed meeting. Business transacted at any special meeting of shareholders
shall be limited to the purposes stated in the notice.
Section 3. Written or printed notice of a special meeting stating
the place, day and hour of the meeting and the purpose of purposes for which
the meeting is called, shall be delivered not less than ten nor more than
fifty days before the date of the meeting, either personally or by mail, by
or at the direction of the president, the secretary, or the officer or
persons calling the meeting, to each shareholder or record entitled to vote
at such meeting,
Section 4. The business transacted at any special meeting of
shareholders shall be limited to the purposes stated in the notice.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. The holders of a majority of the shares of stock
issued and outstanding and entitled to vote, represented in person or by
proxy, shall constitute a quorum at all meetings of the shareholders for the
transaction of business except as otherwise provided by statute or by the
articles of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the shareholders, the shareholders present in
person or represented by proxy shall have the power to adjourn the meeting
from time to time, without notice other than announcement at the meeting,
until a quorum shall be present or represented. At such adjourned meeting
at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 2. If a quorum is present the affirmative vote of a
majority of the shares of stock represented at the meeting shall be the act
of the shareholders unless the vote of a greater number of shares of stock
is required by law or the articles of incorporation.
Section 3. Each outstanding share of stock, having voting power
shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders. A shareholder may vote either in person or by
proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact.
Section 4. Any action required to be taken at a meeting of the
shareholders may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof.
ARTICLE V
DIRECTORS
Section 1. The number of directors shall be not less than one nor
more than 5. Directors need not be residents of the state of Utah nor
shareholders of the corporation. The directors, other than the first board
of directors, shall be elected at the annual meeting of the shareholders,
and each director elected shall serve until the next succeeding annual
meeting and until his successor shall have been elected and qualified.
Section 2. Vacancies and newly created directorships resulting
from any increase in the number of directors may be filled by a majority of
the directors then in office, though less than a quorum, and the directors
so chosen shall hold office until the next annual election and until their
successors are duly elected and shall qualify.
Section 3. The business affairs of the corporation shall be
managed by its 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 by-laws directed or required to
be exercised or done by the shareholders.
Section 4. The directors may keep the books of the corporation,
except such as are required by law to be kept within one state, outside the
state of Utah, at such place or places as they may from time to time determine.
Section 5. The board of directors, by the affirmative vote of a
majority of the directors then in office, and irrespective of any personal
interest of any of its members, shall have the authority to establish
reasonable compensation of all directors for services to the corporation as
directors, officers or otherwise.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or
special, may be held either within or without the state of Utah. Both
Regular and Special meetings of the board of directors may be held
telephonically.
Section 2. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by the vote
of the shareholders at the annual meeting and no notice of such meeting
shall be necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present, or it may
convene at such place and time as shall be fixed by the consent in writing
of all the directors.
Section 3. Regular meetings of the board of directors may be held
upon such notice, or without notice, and at such time and at such place as
shall from time to time be determined by the board.
Section 4. Special meetings of the board of directors may be
called by the president on five days notice to each director, either
personally or by mail or by telegram; special meetings shall be called by
the president or secretary in like manner and on like notice on the written
request of two directors.
Section 5. Attendance of a director at any 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 because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
board of directors need be specified in the notice or waiver of notice of
such meeting.
Section 6. A majority of the directors shall constitute a quorum
for the transaction of business unless a greater number is required by law
or by the articles of incorporation. 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, unless the act of a greater number is required by
statute or by the articles of incorporation. If a quorum shall not be
present at any meeting of directors, the directors present may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 7. Any action required or permitted to be taken at a
meeting of the directors may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
directors entitled to vote with respect to the subject matter thereof.
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution adopted by a majority of
the number of directors fixed by the by-laws or otherwise, may designate two
or more directors to constitute an executive committee which, to the extent
provided in such resolution, shall have and exercise all of the authority of
the board of directors in the management of the corporation, except as
otherwise required by law. Vacancies in the membership of the committee
shall be filled by the board of directors, The executive committee shall
keep regular minutes of its proceedings and report the same to the board
when required.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
articles of incorporation or of these bylaws, notice is required to be given
to any director or shareholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or shareholder, at his or her address as it appears on the records
of the corporation, with postage thereon prepaid, and such notice shall be
deemed to be given at the time when the same shall be deposited in the
United States mail. Notice to directors may also be given by telegram.
Section 2. Whenever any notice whatever is required to be given
under the provisions of the statutes or under the provisions of the articles
of incorporation or these by-laws, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
board of directors and shall be a president, a vice president, a secretary,
and a treasurer. The board of directors may also choose additional
vice-presidents, and one or more assistant secretaries and assistant
treasurers.
Section 2. The board of directors at its first meeting after each
annual meeting of shareholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer, none of whom need be a member
of the board.
Section 3. The board of directors may appoint such other officers
and agents as it shall deem necessary who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined form time to time by the board of directors.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed
by the board of directors may be removed at any time by the affirmative vote
of a majority of the board of directors. Any vacancy occurring in any
office of the corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive
officer of the corporation, shall preside at all meetings of shareholders
and the board of directors, shall have general and active management of the
business of the corporation and shall see that all orders and resolutions of
the board of directors are carried into effect,
Section 7. The president shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more than one,
the vice-presidents in the order determined by the board of directors, shall
in the absence or disability of the president, perform the duties and
exercise the powers of the president and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the
proceedings of the meetings of the corporation and of the board of directors
in a book to be kept for that purpose and shall perform like duties for the
standing committees when required. The secretary shall give, or cause to be
given, notice of all meetings of the shareholders and special meetings of
the board of directors, and shall perform such other duties as may be
prescribed by the board of directors or president, under whose supervision
he or she shall be. The secretary shall have custody of the corporate seal
and he or she, or an assistant secretary, shall have the authority to affix
the same to any instrument requiring it and when so affixed, it may be
attested by his or her signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing of
his or her signature.
Section 10. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors,
shall in the absence or disability of the secretary perform the duties and
exercise the powers of the secretary and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
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,
Section 12. The treasurer shall disburse the funds of the corporation as
may be ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors,
at its regular meetings, or when the board of directors so requires, an
account of all his or her transactions as treasurer and of the financial
condition of the corporation.
Section 13. If required by the board of directors, the treasurer
shall give the corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the board of directors for the faithful
performance of the duties of his or her office and for the restoration to
the corporation, in case of death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his or her possession or under his or her control belonging to the
corporation.
Section 14. The assistant treasurer or, it there shall be more than one,
the assistant treasurers in the order 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 and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
ARTICLE X
CERTIFICATES AND SHARES
Section 1. The shares of the corporation shall be represented by
certificates signed by the president or a vice-president and the secretary
or an assistant secretary of the corporation, and may be sealed with the
seal of the corporation or a facsimile thereof.
When the corporation is authorized to issue shares of more than one
class there shall be set forth upon the face or back of the certificate, or
the certificate shall have a statement that the corporation will furnish to
any shareholder upon request and without charge, a full statement of the
designation, preferences, limitations, and relative rights of the shares of
each class authorized to be issued and, if the corporation is authorized to
issue any preferred or special class in series, the variations in the
relative rights and preferences between 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 rel at ive rights and
preferences of subsequent series.
Section 2. The signatures of the officers of the corporation upon
a certificate may be facsimiles if the certificate is countersigned by a
transfer agent, or registered by a registrar, other than the corporation
itself or an employee of the corporation. In case any officer who has
signed or whose facsimile signature has been placed upon such certificate
shall have ceased to be such officer before such certificate is issued, it
may be issued by the corporation with the same effect as if he were such
officer at the date of its issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate to
be issued in place of any certificate previously issued by the corporation
alleged to have been lost or destroyed. When authorizing such issue of a
new certificate, the board of directors in its discretion and as a condition
precedent to the issuance thereof, may prescribe such terms and conditions
as it deems expedient, and may require such indemnities as it deems
adequate, to protect the corporation from any claim that may be made against
it with respect to any such certificate alleged to have been lost or destroyed.
TRANSFER OF SHARES
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate representing shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, a new certificate shall be issued to the person entitled thereto,
and the old certificate cancelled and the transaction recorded upon the
books of the corporation.
CLOSING OF TRANSFER BOOKS
Section 5. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders, or any adjournment
thereof or entitled to receive payment of any dividend, or in order to make
a determination of shareholders for any other proper purpose, the board of
directors may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten days immediately preceding such meeting. In
lieu of closing the stock transfer books, the board of directors may fix in
advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than fifty days and, in
case of a meeting of shareholders, not less than ten days prior to the date
on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not closed
and no record date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the board of
directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a determination
of shareholders entitled to vote at any meeting of shareholders has been
made as provided in this section, such determination shall apply to any
adjournment thereof.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares
to receive dividends, and to vote as such owner, and to hold liable for
calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether
or not its shall have express or other notice thereof, except as otherwise
provided by the laws of Utah.
LIST OF SHAREHOLDERS
Section 7, The officer or agent having charge of the transfer
books for shares shall make, 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, with the address of each and the
number of shares held by each, which 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 at any
time during usual business hours. The list shall also be produced and kept
open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting. The
original share ledger or transfer book, or a duplicate of thereof, shall be
prima facie evidence as to who are the shareholders entitled to examine such
list or share ledger or transfer book or to vote at any meeting of the
shareholders.
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the Articles of
Incorporation relating thereto, if any, dividends may be declared by the
board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in shares of the capital
stock, subject to any provisions of the articles of incorporation.
Section 2, Before payment of any dividend, there may be set aside
out of any funds of the corporation available for dividends such sum or sums
as the directors from time to time, in their absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing dividends,
or for repairing or maintaining any property of the corporation, or for such
other purpose as the directors shall think conducive to the interests of the
corporation, and the directors may modify or abolish any reserve in the
manner it was created.
CHECKS
Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons
as the board or directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon, the
name of the corporation, the year of its organization and the words
"Corporate Seal, Utah". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or in any manner reproduced.
ARTICLE XII
AMENDMENTS
Section 1. These by-laws may be altered, amended, or repealed or
new by-laws may be adopted by the affirmative vote of a majority of the
board of directors at any regular or special meeting of board.
No by-law shall be adopted by the directors which shall require more
than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action
by the shareholders, except where higher percentages are required by law or
by the articles of incorporation. The shareholders shall have the right to
change or repeal any by-laws adopted by the directors.
Section 2. These by-laws may be altered, amended or repealed or
new by-laws may be adopted at any regular or special meeting of shareholders
at which a quorum is present or represented, by the affirmative vote of a
majority of the stock entitled to vote, provided notice of the proposed
alteration, amendment or repeal be contained in the notice of such meeting.
[CAPTION]
CONSENT OF ACCOUNTANT (REGISTRANT)
Kurt D. Saliger
Certified Public Accountant
5000 West Oakey Boulevard, Suite A-4
Las Vegas, Nevada 89146
June 12, 2000
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Regency Capital West, Inc. - Form 10SB-12(g)
Dear Sir/Madame:
The firm of Kurt D. Saliger, Certified Public Accountant, consents to the
inclusion of my report of June 5, 2000 on the financial statements of
Regency Capital West, Inc. for the period ended March 31, 2000, and December
31, 1999, and to all references to my firm, in the Form 10SB-12(g)
Registration Statement of. Regency Capital West, Inc.
Sincerely,
Kurt D. Saliger
______________________
Kurt D. Saliger, C.P.A.
FINANCIAL DATA SCHEDULES (REGISTRANT)
[CAPTION]
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S AUDITED AND INTERIM UNAUDITED FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[MULTIPLIER]1
[S] [C] [C]
PERIOD-TYPE> 7-MOS 3-MOS
[FISCAL-YEAR-END] DEC-31-1999 DEC-31-1999
[PERIOD-START] JUN-03-1999 JAN-01-2000
[PERIOD-END] DEC-31-1999 MAR-31-2000
[CASH] 0 0
<SECURITIES 0 0
[RECEIVABLES] 0 0
[ALLOWANCES] 0 0
[INVENTORY] 0 0
[CURRENT-ASSETS] 0 0
[PP&E] 0 0
[DEPRECIATION] 0 0
[TOTAL-ASSETS] 0 0
[CURRENT-LIABILITIES] 100 100
[BONDS] 0 0
[PREFERRED-MANDATORY] 0 0
[PREFERRED] 0 0
COMMON> 1,000 1,000
OTHER-SE> (900) (900)
[TOTAL-LIABILITY-AND-EQUITY]00
[SALES] 0 0
[TOTAL-REVENUES] 0 0
[CGS] 0 0
[TOTAL-COSTS] 0 0
[OTHER-EXPENSES] 200 200
[LOSS-PROVISION] 0 0
[INTEREST-EXPENSE] 0 0
[INCOME-PRETAX] (20) (200)
[INCOME-TAX] 0 0
[INCOME-CONTINUING] (200) (200)
[DISCONTINUED] 0 0
[EXTRAORDINARY] 0 0
[CHANGES] 0 0
[NET-INCOME] (200) (200)
[EPS-BASIC] (.00) (.00)
[EPS-DILUTED] (.00) (.00)
