U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
FOR SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
NEMO ENTERPRISES, INC.
(Name of Small Business Issuer in its Charter)
Colorado 98 - 0219157
(State or other jurisdiction of (IRS Employer ID
incorporation or organization) Number)
404 Scott Point Drive, Salt Spring Island, BC V8K 2R2 Canada
(Address of Principal Executive Offices)(Zip Code)
Issuer's Telephone Number: (250) 537-5732
Securities to be Registered under Section 12(b) of the Act:
Title of each class Name of each exchange on
to be so registered. which Each class is to be registered
Not Applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of Class)
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
General
Nemo Enterprise was incorporated under the laws of the State of
Colorado on March 13, 1999, and is in the early developmental and
promotional stages. To date Nemo Enterprises, Inc. only
activities have been organizational ones, directed at developing
its business plan and raising its initial capital. The Company
has not commenced any commercial operations. The Company has no
full-time employees and owns no real estate.
The Company=s business plan is to seek, investigate, and, if
warranted, acquire one or more properties or businesses, and to
pursue other related activities intended to enhance shareholder
value. The acquisition of a business opportunity may be made by
purchase, merger, exchange of stock, or otherwise, and may
encompass assets or a business entity, such as a corporation,
joint venture, or partnership. The Company has very limited
capital, and it is unlikely that the Company will be able to take
advantage of more than one such business opportunity.
The Company intends to seek opportunities demonstrating the
potential of long-term growth as opposed to short-term earnings.
At the present time the Company has not identified any business
opportunity that it plans to pursue, nor has the Company reached
any agreement or definitive understanding with any person
concerning an acquisition.
Nemo Enterprises, Inc. officer and director has a number of
contacts within the field of corporate finance. As a result, she
has had preliminary contacts with representatives of numerous
companies concerning the general possibility of a merger or
acquisition by a public shell company. However, none of these
preliminary contacts or discussions involved the possibility of a
merger or acquisition transaction with the Company.
It is anticipated that Nemo Enterprises, Inc. officer and
director will contact broker/dealers and other persons with whom
she is acquainted who are involved in corporate finance matters
to advise them of Nemo Enterprises, Inc. existence and to
determine if any companies or businesses they represent have an
interest in considering a merger or acquisition with the Company.
No assurance can be given that the Company will be successful in
finding or acquiring a desirable business opportunity, given the
limited funds that are available for acquisitions, or that any
acquisition that occurs will be on terms that are favorable to
the Company or its stockholders.
Nemo Enterprises, Inc. search will be directed toward small and
medium-sized enterprises. These enterprises will have a desire
to become public corporations and which are able to satisfy
presently or in the near future, satisfy, the minimum asset
requirements in order to qualify shares for trading on the NASD
Bulletin Board quotation service, NASDAQ or a stock exchange (See
Investigation and Selection of Business Opportunities"). Nemo
Enterprises, Inc. anticipates that the business opportunities
presented to it will:
(i) be recently organized with no operating history or a
history of losses attributable to under-capitalization or
other factors;
(ii) be experiencing financial or operating difficulties;
(iii} be in need of funds to develop a new product or
service or to expand into a new market;
(iv) be relying upon an untested product or marketing
concept; or
(v) have a combination of the characteristics mentioned in
(i)through(iv).
The Company intends to concentrate its acquisition efforts on
properties or businesses that it believes to be undervalued.
Given the above factors, investors should expect that any
acquisition candidate may have a history of losses or low
profitability. Nemo Enterprises, Inc. does not propose to
restrict its search for investment opportunities to any
particular geographical area or industry, and may, therefore,
engage in essentially any business, to the extent of its
limited resources. This includes industries such as
service, finance, natural resources, manufacturing, high
technology, product development, medical, communications and
others. Nemo Enterprises, Inc. discretion in the selection of
business opportunities is unrestricted, subject to the
availability of such opportunities, economic conditions, and
other factors.
As a consequence of this registration of its securities, any
entity which has an interest in being acquired by, or merging
into Nemo Enterprises, Inc., is expected to be an entity that
desires to become a public company and establish a public
trading market for its securities. In connection with such a
merger or acquisition, it is highly likely that an amount of
stock constituting control of Nemo Enterprises, Inc. would be
issued by Nemo Enterprises, Inc. or purchased from the current
principal shareholders by the acquiring entity or its
affiliates. If stock is purchased from the current
shareholders, the transaction is very likely to result in
substantial gains to them relative to their purchase price for
such stock. In Nemo Enterprises, Inc.'s judgment, none of its
officers and directors would thereby become an "underwriter"
within the meaning of the Section 2(11) of the Securities Act of
1933.
The sale of a controlling interest by certain principal
shareholders of Nemo Enterprises, Inc. could occur at a time
when the other shareholders of Nemo Enterprises, Inc. remain
subject to restrictions on the transfer of their shares.
Depending upon the nature of the transaction, the current sole
officer and director of Nemo Enterprises, Inc. may resign her
management positions with Nemo Enterprises, Inc. in
connection with its acquisition of a business opportunity.
See "Form of Acquisition," below, and "Risk Factors@ - A Nemo
Enterprises, Inc. - lack of Continuity in Management." In the
event of such a resignation, current management would not have
any control over the conduct of business following Nemo
Enterprises, Inc.'s combination with a business opportunity.
It is anticipated that business opportunities will come to Nemo
Enterprises, Inc.'s attention from various sources, including its
officer and director, its other stockholders, professional
advisors such as attorneys and accountants, securities broker-
dealers, venture capitalists, members of the financial community,
and others who may present unsolicited proposals. Nemo
Enterprises, Inc. has no plans, understandings, agreements, or
commitments with any individual for such person to act as a
finder of opportunities for Nemo Enterprises, Inc.
Nemo Enterprises, Inc. does not foresee that it would enter into
a merger or acquisition transaction with any business with which
its sole officer or director is currently affiliated. Should
Nemo Enterprises, Inc. determine in the future, contrary to
foregoing expectations, that a transaction with an affiliate
would be in its best interests of its stockholders, Nemo
Enterprises, Inc. is in general permitted by Colorado law to
enter into such a transaction if:
1. The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed or
are known to the Board of Directors, and the Board in good faith
authorizes the contract or transaction by the affirmative vote of
a majority of the disinterested directors, even though the
disinterested directors constitute less than a quorum; or
2. The material facts as to the relationship or
interest of the affiliate and as to the contract or
transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract
or transaction is specifically approved in good faith
by vote of the stockholders; or
3. The contract or transaction is fair as to Nemo
Enterprises, Inc. as of the time it is authorized,
approved or ratified, by the Board of Directors or the
stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific
business opportunity may be made upon management's analysis of
the quality of the other company's management and personnel, the
anticipated acceptability of new products or marketing concepts,
the merit of technological changes, the perceived benefit Nemo
Enterprises, Inc. will derive from becoming a publicly held
entity. There are numerous other factors which are difficult, if
not impossible, to analyze through the application of any
objective criteria. In many instances, it is anticipated that
the historical operations of a specific business opportunity may
not necessarily be indicative of the potential for the future.
This is due to the possible need to shift marketing approaches
substantially, expand significantly, change product emphasis,
change or substantially augment management, or make other
changes. The Company will be dependent upon the owners of a
business opportunity to identify any such problems which may
exist and to implement, or be primarily responsible for the
implementation of required changes.
Nemo Enterprises, Inc. may participate in a business opportunity
with a newly organized firm or with a firm which is entering a
new phase of growth. We should emphasize that we will incur
further risks, because management in many instances will not have
proved its abilities or effectiveness. The eventual market for
such company's products or services will likely not be
established, and such company may not be profitable when
acquired.
It is anticipated that the Company will not be able to diversify,
but will essentially be limited to one such venture because of
Nemo Enterprises, Inc.'s limited financing. This lack of
diversification will not permit Nemo Enterprises, Inc. to offset
potential losses from one business opportunity against profits
from another, and should be considered an adverse factor
affecting any decision to purchase Nemo Enterprises, Inc.'s
securities. It is emphasized that management of Nemo
Enterprises, Inc. may effect transactions having a potentially
adverse impact upon Nemo Enterprises, Inc.'s shareholders
pursuant to the authority and discretion of Nemo Enterprises,
Inc.'s management to complete acquisitions without submitting any
proposal to the stockholders for their consideration.
Holders of Nemo Enterprises, Inc.'s securities should not
anticipate that Nemo Enterprises, Inc. necessarily will furnish
such holders, prior to any merger or acquisition, with financial
statements or any other documentation, concerning a target
company or its business. In some instances, however, the
proposed participation in a business opportunity may be submitted
to the stockholders for their consideration, either voluntarily
by such directors to seek the stockholders' advice and consent or
because state law so requires.
The analysis of business opportunities will be undertaken by or
under the supervision of Nemo Enterprises, Inc.'s President, who
is not a professional business analyst. See "Management".
Although there are no current plans to do so, Company management
might hire an outside consultant to assist in the investigation
and selection of business opportunities, and might pay a finder=s
fee.
Since Company management has no current plans to use any outside
consultants or advisors to assist in the investigation and
selection of business opportunities, no policies have been
adopted regarding use of such consultants or advisors, the
criteria to be used in selecting such consultants or advisors,
the services to be provided, the term of service, or regarding
the total amount of fees that may be paid. However, because of
our limited resources it is likely that any such fee we agree to
pay would be paid in stock and not in cash. Otherwise, Nemo
Enterprises, Inc. anticipates that it will consider, among other
things, the following factors:
1. Potential for growth and profitability, indicated by
new technology, anticipated market expansion, or new
products;
2. Nemo Enterprises, Inc.'s perception of how any
particular business opportunity will be received by the
investment community and by Nemo Enterprises, Inc.'s
stockholders;
3. Whether, following the business combination, the
financial condition of the business opportunity would
be or would have a significant prospect in the
foreseeable future of becoming sufficient to enable the
securities of Nemo Enterprises, Inc. to qualify for
listing on an exchange or on a national automated
securities quotation system, such as NASDAQ, so as to
permit the trading of such securities to be exempt from
the requirements of Rule l5c2-6 recently adopted by the
Securities and Exchange Commission. See "Risk Factors
- Regulation of Penny Stocks@;
4. Capital requirements and anticipated availability of
required funds to be provided by Nemo Enterprises, Inc.
or from operations, through the sale of additional
securities, through joint ventures or similar
arrangements, or from other sources;
5 The extent to which the business opportunity can be
advanced;
6. Competitive position as compared to other companies of
similar size and experience within the industry segment
as well as within the industry as a whole;
7. Strength and diversity of existing management, or
management prospects that are scheduled for
recruitment;
8. The cost of participation by Nemo Enterprises, Inc. as
compared to the perceived tangible and intangible
values and potential; and
9. The accessibility of required management expertise,
personnel, raw materials, services, professional
assistance, and other required items.
In regard to the possibility that the shares of Nemo Enterprises,
Inc. would qualify for listing on NASDAQ, the current standards
include the requirements that the issuer of the securities that
are sought to be listed have total assets of at least $4,000,000
and total capital and surplus of at least $2,000,000. Many, and
perhaps most, of the business opportunities that might be
potential candidates for a combination with Nemo Enterprises,
Inc. would not satisfy the NASDAQ listing criteria.
No one of the factors described above will be controlling in the
selection of a business opportunity, and management will attempt
to analyze all factors appropriate to each opportunity and make a
determination based upon reasonable investigative measures and
available data. 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. Potential investors must
recognize that, because of Nemo Enterprises, Inc.'s limited
capital available for investigation and management's limited
experience in business analysis, Nemo Enterprises, Inc. may not
discover or adequately evaluate adverse facts about the
opportunity to be acquired.
Nemo Enterprises, Inc. is unable to predict when it may
participate in a business opportunity. It expects, however. that
the analysis of specific proposals and the selection of a
business opportunity may take several months or more.
Prior to making a decision to participate in a business
opportunity, Nemo Enterprises, Inc. will generally request that
it be provided with written materials regarding the business
opportunity containing such items as:
1) a description of products, services and company history;
2) management resumes;
3) financial information;
4) available projections, with related assumptions upon which
they are based;
5) an explanation of proprietary products and services;
6) evidence of existing patents, trademarks, or services marks,
or rights thereto;
7) present and proposed forms of compensation to management;
1) 8) a description of transactions between such company and
its affiliates during relevant periods;
9) a description of present and required facilities;
10) an analysis of risks and competitive conditions;
11) a financial plan of operation and estimated capital
requirements;
12) audited financial statements, or if they are not available,
unaudited financial statements, together with reasonable
assurances that audited financial statements would be able to be
produced within a reasonable period of time not to exceed 60 days
following completion of a merger transaction; and
13) other information deemed relevant.
As part of Nemo Enterprises, Inc.'s investigation, the executive
officer and director may 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.
It is possible that the range of business opportunities that
might be available for consideration could be limited by the
impact of Securities and Exchange Commission regulations
regarding purchase and sale of "penny stocks". The regulations
would affect, and possibly impair, any market that might develop
in Nemo Enterprises, Inc.'s securities until such time as they
qualify for listing on NASDAQ or on another exchange which would
make them exempt from applicability of the "penny stock"
regulations. See "Risk Factors - Regulation of Penny Stocks".
Company management believes that various types of potential
merger or acquisition candidates might find a business
combination with Nemo Enterprises, Inc. to be attractive These
include acquisition candidates desiring to create a public market
for their shares in order to enhance liquidity for current
shareholders, acquisition candidates which have long-term plans
for raising capital through the public sale of securities and
believe that the possible prior existence of a public market for
their securities would be beneficial, and acquisition candidates
which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility
of development of a public market for their securities will be of
assistance in that process. Acquisition candidates which have a
need for an immediate cash infusion are not likely to find a
potential business combination with Nemo Enterprises, Inc. to be
an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which Nemo Enterprises,
Inc. may participate in a business opportunity. Specific business
opportunities will be reviewed as well as the respective needs
and desires of Nemo Enterprises, Inc. and the promoters of the
opportunity and, upon the basis of that review and the relative
negotiating strength of Nemo Enterprises, Inc. and such
promoters, the legal structure or method deemed by management to
be suitable will be selected. Such structure may include, but is
not limited to leases, purchase and sale agreements, licenses,
joint ventures and other contractual arrangements. Nemo
Enterprises, Inc. may act directly or indirectly through an
interest in a partnership, corporation or other form of
organization.
Implementing such structure may require the merger, consolidation
or reorganization of Nemo Enterprises, Inc. with other
corporations or forms of business organization, and although it
is likely, there is no assurance that Nemo Enterprises, Inc.
would be the surviving entity. In addition, the present
management and stockholders of Nemo Enterprises, Inc. most likely
will not have control of a majority of the voting shares of Nemo
Enterprises, Inc. following a reorganization transaction. As
part of such a transaction, Nemo Enterprises, Inc.'s existing
directors may resign and new directors may be appointed without
any vote by stockholders.
It is likely that Nemo Enterprises, Inc. will acquire its
participation in a business opportunity through the issuance of
Common Stock or other securities of Nemo Enterprises, Inc.
Although the terms of any such transaction cannot be predicted,
it should be noted that in certain circumstances the criteria for
determining whether or not an acquisition is a so-called "tax
free reorganization@ under the Internal Revenue Code of 1936,
depends upon the issuance to the stockholders of the acquired
company of a controlling interest (i.e. 80% or more) of the
common stock of the combined entities immediately following the
reorganization. If a transaction were structured to take
advantage of these provisions rather than other "tax free"
provisions provided under the Internal Revenue Code, Nemo
Enterprises, Inc.'s current stockholders would retain in the
aggregate 20% or less of the total issued and outstanding shares.
This could result in substantial additional dilution in the
equity of those who were stockholders of Nemo Enterprises, Inc.
prior to such reorganization. Any such issuance of additional
shares might also be done simultaneously with a sale or transfer
of shares representing a controlling interest in Nemo
Enterprises, Inc. by the current officers, directors and
principal shareholders. (See "Description of Business General").
It is anticipated that any new securities issued in any
reorganization would be issued in reliance upon exemptions, if
any are available, from registration under applicable federal and
state securities laws. In some circumstances, however, as a
negotiated element of the transaction, Nemo Enterprises, Inc. may
agree to register such securities either at the time the
transaction is consummated, or under certain conditions or at
specified times thereafter. The issuance of substantial
additional securities and their potential sale into any trading
market that might develop in Nemo Enterprises, Inc.'s securities
may have a depressive effect upon such market. Nemo Enterprises,
Inc. will participate in a business opportunity only after the
negotiation and execution of a written agreement.
Although the terms of such agreement cannot be predicted,
generally such an agreement would require specific
representations and warranties by all of the parties thereto,
specify certain events of default, detail the terms of closing
and the conditions which must be satisfied by each of the parties
thereto prior to such closing, outline the manner of bearing
costs if the transaction is not closed, set forth remedies upon
default, and include miscellaneous other terms.
As a general matter, Nemo Enterprises, Inc. anticipates that it,
and/or its officer and principal shareholders will enter into a
letter of intent with the management, principals or owners of a
prospective business opportunity prior to signing a binding
agreement. Such a letter of intent will set forth the terms of
the proposed acquisition but will not bind any of the parties to
consummate the transaction. Execution of a letter of intent will
by no means indicate that consummation of an acquisition is
probable.
Neither Nemo Enterprises, Inc. nor any of the other parties to
the letter of intent will be bound to consummate the acquisition
unless and until a definitive agreement concerning the
acquisition as described in the preceding paragraph is executed.
Even after a definitive agreement is executed, it is possible
that the acquisition would not be consummated should any party
elect to exercise any right provided in the agreement to
terminate it on specified grounds.
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 costs incurred in the related investigation
would not be recoverable. Moreover, because many providers of
goods and services require compensation at the time or soon after
the goods and services are provided, the inability of Nemo
Enterprises, Inc. to pay until an indeterminate future time may
make it impossible to procure goods and services.
Investment Company Act and Other Regulation
Nemo Enterprises, Inc. may participate in a business opportunity
by purchasing, trading or selling the securities of such
business. The Company does not, however, intend to engage
primarily in such activities. Specifically, it intends to
conduct its activities so as to avoid being classified as an
"investment company" under the Investment Company Act of 1940
(the "Investment Act"), and therefore to avoid application of the
costly and restrictive registration and other provisions of the
Investment Act, and the regulations promulgated thereunder.
Section 3(a) of the Investment Act contains the definition of an
"investment company," and it excludes any entity that does not
engage primarily in the business of investing, reinvesting or
trading in securities, or that does not engage in the business of
investing, owning, holding or trading "investment securities"
(defined as "all securities other than government securities or
securities of majority-owned subsidiaries") the value of which
exceeds 40% of the value of its total assets (excluding
government securities, cash or cash items). Nemo Enterprises,
Inc. intends to implement its business plan in a manner which
will result in the availability of this exception from the
definition of "investment company." Consequently, Nemo
Enterprises, Inc.'s participation in a business or opportunity
through the purchase and sale of investment securities will be
limited.
Nemo Enterprises, Inc.'s plan of business may involve changes in
its capital structure, management, control and business,
especially if it consummates a reorganization as discussed above.
Each of these areas is regulated by the Investment Act, in order
to protect purchasers of investment company securities. Since
Nemo Enterprises, Inc. will not register as an investment
company, stockholders will not be afforded these protections.
Any securities which Nemo Enterprises, Inc. might acquire in
exchange for its Common Stock are expected to be "restricted
securities" within the meaning of the Securities Act of 1933, as
amended (the "Act"). If Nemo Enterprises, Inc. elects to resell
such securities, such sale cannot proceed unless a registration
statement has been declared effective by the Securities and
Exchange Commission or an exemption from registration is
available. Section 4(1) of the Act, which exempts sales of
securities not involving a distribution, would in all likelihood
be available to permit a private sale. Although the plan of
operation does not contemplate resale of securities acquired, if
such a sale were to be necessary, Nemo Enterprises, Inc. would be
required to comply with the provisions of the Act to effect such
resale.
An acquisition made by Nemo Enterprises, Inc. may be in an
industry which is regulated or licensed by federal, state or
local authorities. Compliance with such regulations can be
expected to be a time-consuming and expensive process.
Competition
Nemo Enterprises, Inc. expects to encounter substantial
competition in its efforts to locate attractive opportunities,
primarily from business development companies, venture capital
partnerships and corporations, venture capital affiliates of
large industrial and financial companies, small investment
companies, and wealthy individuals. Many of these entities will
have significantly greater experience, resources and managerial
capabilities than Nemo Enterprises, Inc. and will therefore be in
a better position than Nemo Enterprises, Inc. to obtain access to
attractive business opportunities. Nemo Enterprises, Inc. also
will experience competition from other public "blind pool"
companies, many of which may have more funds available than does
Nemo Enterprises, Inc.
Administrative Offices
Nemo Enterprises, Inc. currently maintains a mailing address at
404 Scott Point Drive, Salt Spring Island, BC V8K 2R2 Canada
which is the address of its officer and director. Nemo
Enterprises, Inc.'s telephone number is (250) 537-5732. Other
than this mailing address, Nemo Enterprises, Inc. does not
currently maintain any other office facilities, and does not
anticipate the need for maintaining office facilities at any time
in the foreseeable future. Nemo Enterprises, Inc. pays no rent
or other fees for the use of this mailing address.
Employees
Nemo Enterprises, Inc. is a development stage company and
currently has no employees. Management expects to use
consultants, attorneys and accountants as necessary, and does not
anticipate a need to engage any full-time employees so long as it
is seeking and evaluating business opportunities. The need for
employees and their availability will be addressed in connection
with the decision whether or not to acquire or participate in
specific business opportunities.
Although there is no current plan with respect to its nature or
amount, remuneration may be paid to or accrued for the benefit
of, Nemo Enterprises, Inc.'s sole officer prior to, or in
conjunction with, the completion of a business acquisition. Nemo
Enterprises, Inc.'s sole officer and director has received no
fees for organizing the corporation. See "Executive
Compensation" and "Certain Relationships and Related
Transactions".
Risk Factors
1. Conflicts of Interest.
Certain conflicts of interest exist between Nemo
Enterprises, Inc. and its sole officer and director.
She has other business interests to which she devotes
her attention, and she may be expected to continue to
do so although management time should be devoted to the
business of Nemo Enterprises, Inc.. As a result,
conflicts of interest may arise that can be resolved
only through her exercise of such judgment as is
consistent with her fiduciary duties to Nemo
Enterprises, Inc. See "Management" and "Conflicts of
Interest".
Nemo Enterprises, Inc.'s sole officer and director
may elect, in the future, to form one or more
additional public shell companies with a business plan
similar or identical to that of Nemo Enterprises, Inc..
Any such additional public shell companies would also
be in direct competition with Nemo Enterprises, Inc.
for available business opportunities. (See Item 5 -
Directors, Executive Officers, Promoters and Control
Persons - Conflicts of
Interest.")
It is anticipated that Company's sole officer and
director may actively negotiate or otherwise consent to
the purchase of a portion of her common stock as a
condition to, or in connection with, a proposed merger
or acquisition transaction. In this process, Nemo
Enterprises, Inc.'s President may consider her own
personal benefit rather than the best interests of
other Company shareholders, and the other Company
shareholders are not expected to be afforded the
opportunity to approve or consent to any particular
stock buy-out transaction. See "Conflicts of
Interest".
2. Possible Need For Additional Financing.
Nemo Enterprises, Inc. has very limited funds, and such
funds may not be adequate to take advantage of any
available business opportunities. Even if Nemo
Enterprises, Inc.'s funds prove to be sufficient to
acquire an interest in, or complete a transaction with,
a business opportunity, Nemo Enterprises, Inc. may not
have enough capital to exploit the opportunity. The
ultimate success of Nemo Enterprises, Inc. may depend
upon its ability to raise additional capital. Nemo
Enterprises, Inc. has not investigated the
availability, source, or terms that might govern the
acquisition of additional capital and will not do so
until it determines a need for additional financing.
If additional capital is needed, there is no assurance
that funds will be available from any source or, if
available, that they can be obtained on terms
acceptable to Nemo Enterprises, Inc.. If not
available, Nemo Enterprises, Inc.'s operations will be
limited to those that can be financed with its modest
capital.
3. Regulation of Penny Stocks.
Nemo Enterprises, Inc.'s securities, when available for
trading, will be subject to a Securities and Exchange
Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such
securities to persons other than established customers
or accredited investors. For purposes of the rule, the
phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5.000.000. or
individuals having a net worth in excess of $2,000,000
or having an annual income that exceeds $200,000 or
when combined with a spouse's income, exceeds $300,000.
For transactions covered by the rule, the broker-dealer
must make a special suitability determination for the
purchaser and receive the purchaser's written agreement
to the transaction prior to the sale. Consequently,
the rule may affect the ability of broker-dealers to
sell Nemo Enterprises, Inc.'s securities and also may
affect the ability of purchasers in this offering to
sell their securities in any market that might develop
therefor. In addition, the Securities and Exchange
Commission has adopted a number of rules to regulate
"Penny Stocks". Such rules include Rules 3aSl-l, l2g-l,
l2g-2, l2g-3, l2g-4, l2g-5, l2g-6, and l2g-7 under the
Securities Exchange Act of 1934. Because the securities
of Nemo Enterprises, Inc. may constitute "penny stocks"
within the meaning of the rules, the rules would apply
to Nemo Enterprises, Inc. and to its securities. The
rules may further affect the ability of owners of
shares to sell the securities of Nemo Enterprises, Inc.
in any market that might develop for them.
Shareholders should be aware that, according to
Securities and Exchange Commission Release No. 34-
29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such
patterns include:
(i) control of the market for the security by one or a
few broker-dealers that are often related to the
promoter or issuer;
(ii) manipulation of prices through prearranged
matching of purchases and sales and false and
misleading press releases;
(iii) "boiler room" practices involving high-pressure
sales tactics and unrealistic price projections by
inexperienced sales persons;
(iv) excessive and undisclosed bid-ask differentials
and markups by selling broker-dealers: and
(v) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been
manipulated to a desired level, along with the
resulting inevitable collapse of those prices and with
consequent investor losses. Nemo Enterprises, Inc.'s
management is aware of the abuses that have occurred
historically in the penny stock market. Although Nemo
Enterprises, Inc. does not expect to be in a position
to dictate the behavior of the market or of broker-
dealers who participate in the market, management will
strive within the confines of practical limitations to
prevent the described patterns from being established
with respect to Nemo Enterprises, Inc.'s securities.
4. No Operating History.
Nemo Enterprises, Inc. was formed in March, 1999, for
the purpose of registering its common stock under the
1934 Act and acquiring a business opportunity. Nemo
Enterprises, Inc. has no operating history, revenues
from operations, or assets other than cash from private
sales of stock. Nemo Enterprises, Inc. faces all of
the risks of a new business and the special risks
inherent in the investigation, acquisition or
involvement in a new business opportunity. Nemo
Enterprises, Inc. must be regarded as a new or "start-
up" venture with all of the unforeseen costs, expenses,
problems and difficulties to which such ventures are
subject.
5. No Assurance of Success or Profitability.
There is no assurance that Nemo Enterprises, Inc. will
acquire a favorable business opportunity. Even if Nemo
Enterprises, Inc. should become involved in a business
opportunity, there is no assurance that it will
generate revenues or profits, or that the market price
of Nemo Enterprises, Inc.'s Common Stock will be
increased thereby.
6. Possible Business - Not Identified and Highly
Risky.
Nemo Enterprises, Inc. has not identified and has no
commitments to enter into or acquire a specific
business opportunity and therefore can disclose the
risks and hazards of a business or opportunity that it
may enter into in only a general manner, and cannot
disclose the risks and hazards of any specific business
or opportunity that it may enter into. An investor can
expect a potential business opportunity to be quite
risky. Nemo Enterprises, Inc.'s acquisition of or
participation in a business opportunity will likely be
highly illiquid and could result in a total loss to
Nemo Enterprises, Inc. and its stockholders if the
business or opportunity proves to be unsuccessful. See
Item 1 - "Description of Business".
7. Type of Business Acquired.
The type of business to be acquired may be one that
desires to avoid effecting its own public offering and
the accompanying expense, delays, uncertainties, and
federal and state requirements which purport to protect
investors. Because of Nemo Enterprises, Inc.'s limited
capital, it is more likely than not that any
acquisition by Nemo Enterprises, Inc. will involve
other parties whose primary interest is the acquisition
of control of a publicly traded company. Moreover, any
business opportunity acquired may be currently
unprofitable or present other negative factors.
8. Impracticability of Exhaustive Investigation.
Nemo Enterprises, Inc.'s limited funds and the lack of
full-time management will likely make it impracticable
to conduct a complete and exhaustive investigation and
analysis of a business opportunity before Nemo
Enterprises, Inc. commits its capital or other
resources thereto. Management decisions, therefore,
will likely be made without detailed feasibility
studies, independent analysis, market surveys and the
like which, if Nemo Enterprises, Inc. had more funds
available to it, would be desirable.
Nemo Enterprises, Inc. will be particularly dependent
in making decisions upon information provided by the
promoter, owner, sponsor, or others associated with the
business opportunity seeking Nemo Enterprises, Inc.'s
participation. A significant portion of Nemo
Enterprises, Inc.'s available funds may be expended for
investigative expenses and other expenses related to
preliminary aspects of completing an acquisition
transaction, whether or not any business opportunity
investigated is eventually acquired.
9. Lack of Diversification. Because of the limited
financial resources that Nemo Enterprises, Inc. has, it
is unlikely that Nemo Enterprises, Inc. will be able to
diversify its acquisitions or operations. Nemo
Enterprises, Inc.'s probable inability to diversify its
activities into more than one area will subject Nemo
Enterprises, Inc. to economic fluctuations within a
particular business or industry and therefore increase
the risks associated with Nemo Enterprises, Inc.'s
operations.
10. Possible Reliance upon Unaudited Financial
Statements.
Nemo Enterprises, Inc. generally will require audited
financial statements from companies that it proposes to
acquire. No assurance can be given, however, that
audited financials will be available to Nemo
Enterprises, Inc.. In cases where audited financials
are unavailable, Nemo Enterprises, Inc. will have to
rely upon unaudited information received from target
companies' management that has not been verified by
outside auditors. The lack of the type of independent
verification which audited financial statements would
provide, increases the risk that Nemo Enterprises,
Inc., in evaluating an acquisition with such a target
company. It will not have the benefit of full and
accurate information about the financial condition and
operating history of the target company. This risk
increases the prospect that the acquisition of such a
company might prove to be an unfavorable one for Nemo
Enterprises, Inc. or the holders of its securities.
Moreover, Nemo Enterprises, Inc. will be subject
to the reporting provisions of the Securities Exchange
Act of 1934 (the "Exchange Act"), and thus will be
required to furnish certain information about
significant acquisitions, including audited financial
statements for any business that it acquires.
Consequently, acquisition prospects that do not have,
or are unable to provide reasonable assurances that
they will be able to obtain, the required audited
statements would not be considered by Nemo Enterprises,
Inc. to be appropriate for acquisition so long as the
reporting requirements of the Exchange Act are
applicable.
Should the Company, during the time it remains subject
to the reporting provisions of the Exchange Act,
complete an acquisition of an entity for which audited
financial statements prove to be unobtainable, Nemo
Enterprises, Inc. would be exposed to enforcement
actions by the Securities and Exchange Commission (the
"Commission") and to corresponding administrative
sanctions, including permanent injunctions against Nemo
Enterprises, Inc. and its management. The legal and
other costs of defending a Commission enforcement
action would have material, adverse consequences for
Nemo Enterprises, Inc. and its business. The
imposition of administrative sanctions would subject
Nemo Enterprises, Inc. to further adverse consequences.
In addition, the lack of audited financial statements
would prevent the securities of Nemo Enterprises, Inc.
from becoming eligible for listing on NASDAQ, or on any
existing stock exchange. Moreover, the lack of such
financial statements is likely to discourage
broker/dealers from becoming or continuing to serve as
market makers in the securities of Nemo Enterprises,
Inc. Without audited financial statements, Nemo
Enterprises, Inc. would almost certainly be unable to
offer securities under a registration statement
pursuant to the Securities Act of 1933, and the ability
of Nemo Enterprises, Inc. to raise capital would be
significantly limited until such financial statements
were to become available.
11. Other Regulation.
An acquisition made by Nemo Enterprises, Inc. may be of
a business that is subject to regulation or licensing
by federal, state, or local authorities. Compliance
with such regulations and licensing can be expected to
be a time-consuming, expensive process and may limit
other investment opportunities of Nemo Enterprises,
Inc.
12. Dependence upon Management. Limited Participation
of Management.
Nemo Enterprises, Inc. currently has a single
individual who is serving as its sole officer and
director. Nemo Enterprises, Inc. will be heavily
dependent upon her skills, talents, and abilities to
implement its business plan, and may, from time to
time, find that the inability of the sole officer and
director to devote her full time attention to the
business of Nemo Enterprises, Inc. results in a delay
in progress toward implementing its business plan.
Furthermore, since one individual is serving as the
sole officer and director of Nemo Enterprises, Inc., it
will be entirely dependent upon her experience in
seeking, investigating, and acquiring a business and in
making decisions regarding Nemo Enterprises, Inc.'s
operations. See "Management." Because investors will
not be able to evaluate the merits of possible business
acquisitions by Nemo Enterprises, Inc., they should
critically assess the information concerning Nemo
Enterprises, Inc.'s sole officer and director.
13. Lack of Continuity in Management.
Nemo Enterprises, Inc. does not have an employment
agreement with its sole officer and director, and as a
result, there is no assurance that she will continue to
manage Nemo Enterprises, Inc. in the future. In
connection with acquisition of a business opportunity,
it is likely the current officer and director will
resign. A decision to resign will be based upon the
identity of the business opportunity and the nature of
the transaction, and is likely to occur without the
vote or consent of the stockholders of Nemo
Enterprises, Inc.
14. Indemnification of Officers and Directors.
Nemo Enterprises, Inc.'s Articles of Incorporation
provide for the indemnification of its directors,
officers, employees, and agents, under certain
circumstances, against attorney's fees and other
expenses incurred by them in any litigation to which
they become a party arising from their association with
or activities on behalf of Nemo Enterprises, Inc. Nemo
Enterprises, Inc. will also bear the expenses of such
litigation for any of its directors, officers,
employees, or agents. upon such person's promise to
repay Nemo Enterprises, Inc. Therefor if it is
ultimately determined that any such person shall not
have been entitled to indemnification. This
indemnification policy could result in substantial
expenditures by Nemo Enterprises, Inc. which it will be
unable to recoup.
15. Director's Liability Limited.
Nemo Enterprises, Inc.'s Articles of Incorporation
exclude personal liability of its directors to the
Company and its stockholders for monetary damages for
breach of fiduciary duty except in certain specified
circumstances. Accordingly, Nemo Enterprises, Inc.
will have a much more limited right of action against
its directors than otherwise would be the case. This
provision does not affect the liability of any director
under federal or applicable state securities laws.
16. Dependence upon outside Advisors.
To supplement the business experience of its sole
officer and director, Nemo Enterprises, Inc. may be
required to employ accountants, technical experts,
appraisers, attorneys, or other consultants or
advisors. The selection of any such advisors will be
made by the President without any input from
stockholders. Furthermore, it is anticipated that such
persons may be engaged on an "as needed" basis without
a continuing fiduciary or other obligation to Nemo
Enterprises, Inc.. In the event the President of Nemo
Enterprises, Inc. considers it necessary to hire
outside advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required
services.
17. Leveraged Transactions.
There is a possibility that any acquisition of a
business opportunity by Nemo Enterprises, Inc. may be
leveraged, i.e., Nemo Enterprises, Inc. may finance the
acquisition of the business opportunity by borrowing
against the assets of the business opportunity to be
acquired, or against the projected future revenues or
profits of the business opportunity. This could
increase Nemo Enterprises, Inc.'s exposure to larger
losses. A business opportunity acquired through a
leveraged transaction is profitable only if it
generates enough revenues to cover the related debt and
expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could
result in the loss of a portion or all of the assets
acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction
will generate sufficient revenues to cover the related
debt and expenses.
18. Competition.
The search for potentially profitable business
opportunities is intensely competitive. Nemo
Enterprises, Inc. expects to be at a disadvantage when
competing with many firms that have substantially
greater financial and management resources and
capabilities than Nemo Enterprises, Inc. These
competitive conditions will exist in any industry in
which Nemo Enterprises, Inc. may become interested.
19. No Foreseeable Dividends.
Nemo Enterprises, Inc. has not paid dividends on its
Common Stock and does not anticipate paying such
dividends in the foreseeable future.
20. Loss of Control by Present Management and
Stockholders.
Nemo Enterprises, Inc. may consider an acquisition in
which it would issue as consideration for the business
opportunity to be acquired an amount of Nemo
Enterprises, Inc.'s authorized but unissued Common
Stock that would, upon issuance, represent the great
majority of the voting power and equity of Nemo
Enterprises, Inc.. The result of such an acquisition
would be that the acquired company's stockholders and
management would control Nemo Enterprises, Inc., and
the Company's management could be replaced by persons
unknown at this time. Such a merger would result in a
greatly reduced percentage of ownership of Nemo
Enterprises, Inc. by its current shareholders. In
addition, the Company's President could sell her
control block of stock at a premium price to the
acquired company's stockholders. The result of any of
the above would be a new group taking over full control
of the Comapny.
21. No Public Market Exists.
There is no public market for Nemo Enterprises, Inc.'s
common stock, and no assurance can be given that a
market will develop or that a shareholder ever will be
able to liquidate his investment without considerable
delay, if at all. If a market should develop, the
price may be highly volatile. Factors such as those
discussed in this "Risk Factors" section may have a
significant impact upon the market price of the
securities offered. Owing to the low price of the
securities, many brokerage firms may not be willing to
effect transactions in the securities. Even if a
purchaser finds a broker/dealer willing to effect a
transaction in these securities, the combination of
brokerage commissions, state transfer taxes, lf any,
and any other selling costs may exceed the selling
price. Further, many lending institutions will not
permit the use of such securities as collateral for any
loans.
22. Rule 144 Sales
All of the outstanding shares of Common Stock held by
present stockholders are "restricted securities" within
the meaning of Rule 144 under the Securities Act of
1933. As restricted shares, these shares may be resold
only pursuant to an effective registration statement or
under the requirements of Rule 144 or other applicable
exemptions from registration under the Act and as
required under applicable state securities laws.
Rule 144 provides in essence that a person who has held
restricted securities for a prescribed period may,
under certain conditions, sell every three months, in
brokerage transactions, a number of shares that does
not exceed the greater of 1% of a company's outstanding
Common Stock or the average weekly trading volume
during the four calendar weeks prior to the sale.
There is no limit on the amount of restricted
securities that may be sold by a non-affiliate after
the restricted securities have been held by the owner
for a period of two years. A sale under Rule 144 or
under any other exemption from the Act, if available,
or pursuant to subsequent registrations of shares of
Common Stock of present stockholders, may have a
depressive effect upon the price of the Common Stock in
any market that may develop.
Of the total 1,350,000 shares of common stock held by
present stockholders of Nemo Enterprises, Inc. 350,000
shares will become available for resale under Rule 144
ninety (90) days after Nemo Enterprises, Inc. registers
its common stock under Section 12(g) of the Securities
and Exchange Commission, all of which will be subject
to applicable volume restrictions under the Rule.
500,000 shares held by the Company=s Officer and
Director could become eligible for sale under Rule 144
three months after she ceases to be an affiliate of the
Company. The remaining 500,000 shares could become
available for resale starting in May, 2001.
23. Blue Sky Considerations. Because the securities
registered hereunder have not been registered for
resale under the blue sky laws of any state, the
holders of such shares and persons who desire to
purchase them in any trading market that might develop
in the future, should be aware that there may be
significant state blue-sky law restrictions upon the
ability of investors to sell the securities and of
purchasers to purchase the securities. Some
jurisdictions may not under any circumstances allow the
trading or resale of blind-pool or "blank-check"
securities. Accordingly, investors should consider the
secondary market for the Company's securities to be a
limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS.
Liquidity and Capital Resources
Nemo Enterprises, Inc. remains in the development stage and,
since inception, has experienced no significant change in
liquidity or capital resources or stockholder's equity other than
the receipt of net cash proceeds in the amount of $ 2,700, from
its inside capitalization funds. Consequently, Nemo Enterprises,
Inc.'s balance sheet for the period of March 13, 1999 (inception)
through May 20, 2000, reflects current assets of $ 2,026 in the
form of cash, and total assets of $.2,026.
Nemo Enterprises, Inc. will carry out its plan of business as
discussed above. Nemo Enterprises, Inc. cannot predict to what
extent its liquidity and capital resources will be diminished
prior to the consummation of a business combination or whether
its capital will be further depleted by the operating losses (if
any) of the business entity which Nemo Enterprises, Inc. may
eventually acquire.
Results of Operations
During the period from March 13, 1999 (inception) through May 15,
2000, Nemo Enterprises, Inc. has engaged in no significant
operations other than organizational activities, acquisition of
capital and preparation for registration of its securities under
the Securities Exchange Act of 1934. No revenues were received
by Nemo Enterprises, Inc. during this period. For the current
fiscal year, Nemo Enterprises, Inc. anticipates incurring a loss
as a result of organizational expenses, expenses associated with
registration under the Securities Exchange Act of 1934, and
expenses associated with locating and evaluating acquisition
candidates. The Company anticipates that until a business
combination is completed with an acquisition candidate, it will
not generate revenues other than interest income, and may
continue to operate at a loss after completing a business
combination, depending upon the performance of the acquired
business.
Need for Additional Financing
Nemo Enterprises, Inc. believes that its existing capital will be
sufficient to meet its cash needs, including the costs of
compliance with the continuing reporting requirements of the
Securities Exchange Act for a period of approximately one year.
Accordingly, in the event Nemo Enterprises, Inc. is able to
complete a business combination during this period, it
anticipates that its existing capital will be sufficient to allow
it to accomplish the goal of completing a business combination.
There is no assurance, however, that the available funds will
ultimately prove to be adequate to allow it to complete a
business combination, and once a business combination is
completed, the Company's needs for additional financing are
likely to increase substantially.
No commitments to provide additional funds have been made by
management or other stockholders. Accordingly, there can be no
assurance that any additional funds will be available to Nemo
Enterprises, Inc. to allow it to cover its expenses.
Irrespective of whether Nemo Enterprises, Inc.'s cash assets
prove to be inadequate to meet operational needs, the Company
might seek to compensate providers of services by issuances of
stock in lieu of cash. For information as to the policy in
regard to payment for consulting services. See "Certain
Relationships and Transactions."
ITEM 3. DESCRIPTION OF PROPERTY.
Nemo Enterprises, Inc. does not currently maintain an office or
any other facilities. It does currently maintain a mailing
address at 404 Scott Point Drive, Salt Spring Island, BC V8K 2R2
Canada which is the address of its sole Officer and Director.
Nemo Enterprises, Inc. pays no rent for the use of this mailing
address. The telephone number is (250) 537- 5732. Nemo
Enterprises, Inc. does not believe that it will need to maintain
an office at any time in the
foreseeable future in order to carry out its plan.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
The following table sets forth, as of the date of this
Registration Statement, the number of shares of Common Stock
owned of record and beneficially by executive officers, directors
and persons who hold 5.0% or more of the outstanding Common
Stock of Nemo Enterprises, Inc.. Also included are the shares
held by all executive officers and directors as a group.
Percentage
Number of of
Name and Address Shares Owned Class Owned Shares
Owned
Inge l.E. Kerster
404 Scott Point Drive
Salt Spring Island, BC
V8K 2R2 Canada 500,000* Common 37.04
Sandringham Investments Limited
500,000* Common 37.04
All directors and executive
officers as a group (1 person)
500,000 Common 74.08
The person listed is the sole officer and director of Nemo
Enterprises, Inc.
* Inge Kerster received 500,000 shares for services rendered to
the registrant. On May 18, 2000 Sandringham Investments,
Limited, a company controlled by Ms Kerster and of which she is
the President, purchased an additional 500,000 shares for cash.
These shares should be considered beneficially owned by Inge L.E.
Kerster.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
The directors and executive officers currently serving Nemo
Enterprises, Inc. are as follows:
Name AGE Positions Held and Tenure
Inge L. E. Kerster 53 Director and
President
since March, 1999
The director named above will serve until the first annual
meeting of Nemo Enterprises, Inc.'s stockholders. Thereafter,
directors will be elected for one-year terms at the annual
stockholders' meeting. Officers will hold their positions at the
pleasure of the Board of Directors, absent any employment
agreement, of which none currently exists or is contemplated.
There is no arrangement or understanding between the sole
director and officer of Nemo Enterprises, Inc. and any other
person pursuant to which any director or officer was or is to be
selected as a director or officer.
The sole director and officer of Nemo Enterprises, Inc. will
devote her time to Nemo Enterprises, Inc.'s affairs on an Aas
needed" basis. As a result, the actual amount of time which she
will devote to Nemo Enterprises, Inc.'s affairs is unknown and is
likely to vary substantially from month to month.
Biographical Information
Inge L.E. Kerster who is Nemo Enterprises, Inc.'s President, has
served as the sole officer and director of Nemo Enterprises, Inc.
since its inception.
Ms. Kerster is currently President and majority shareholder of
Sandringham Investments, Limited, a British Columbia corporation
engaged in providing consulting services relating to mergers and
acquisitions and assisting Canadian companies seeking publicly
trading status in the United States.
Indemnification of Officers and Directors
As permitted by Colorado law, Nemo Enterprises, Inc.'s Articles
of Incorporation provide that Nemo Enterprises, Inc. will
indemnify its directors and officers against expenses and
liabilities they incur to defend, settle, or satisfy any civil or
criminal action brought against them on account of their being or
having been Company directors
or officers unless, in any such action, they are adjudged to have
acted with gross negligence or willful misconduct. Insofar as
indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons
controlling Nemo Enterprises, Inc.
Pursuant to the foregoing provisions, Nemo Enterprises, Inc. has
been informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable.
Exclusion of Liability
Pursuant to the Colorado Business Corporation Act, Nemo
Enterprises, Inc.'s Articles of Incorporation exclude personal
liability for its directors for monetary damages based upon any
violation of their fiduciary duties as directors, except as to
liability for any breach of the duty of loyalty, acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts in violation of
Section 7-106-401 of the Colorado Business Corporation Act, or
any transaction from which a director receives an improper
personal benefit. This exclusion of liability does not limit any
right which a director may have to be indemnified and does not
affect any director's liability under federal or applicable state
securities laws.
Conflicts of Interest
The sole officer and director of Nemo Enterprises, Inc. will not
devote more than a portion of her time to the affairs of Nemo
Enterprises, Inc.. There will be occasions when the time
requirements of Nemo Enterprises, Inc.'s business conflict with
the demands of her other business and investment activities.
Such conflicts may require that Nemo Enterprises, Inc. attempt to
employ additional personnel. There is no assurance that the
services of such
persons will be available or that they can be obtained upon terms
favorable to Nemo Enterprises, Inc.
Nemo Enterprises, Inc.'s President may elect, in the future, to
form one or more additional blind pools or blank check companies
with a business plan similar or identical to that of Nemo
Enterprises, Inc.. Any such additional blind pool or blank check
companies would also be in direct competition with Nemo
Enterprises, Inc. for available business opportunities.
There is no procedure in place which would allow Ms. Kerster to
resolve potential conflicts in an arms-length fashion.
Accordingly, she will be required to use her discretion to
resolve them in a manner which she considers appropriate. Nemo
Enterprises, Inc.'s sole officer and director may actively
negotiate or otherwise consent to the purchase of a portion of
her common stock as a condition to, or in connection with, a
proposed merger or acquisition transaction. It is anticipated
that a substantial premium over the initial cost of such shares
may be paid by the purchaser in conjunction with any sale of
shares by Nemo Enterprises, Inc.'s officer and director which is
made as a condition to, or in connection with, a proposed merger
or acquisition transaction. The fact that a substantial premium
may be paid to Nemo Enterprises, Inc.'s sole officer and director
to acquire her shares creates a potential conflict of interest
for her in satisfying her fiduciary duties to Nemo Enterprises,
Inc. and its other shareholders. Even though such a sale could
result in a substantial profit to her, she would be legally
required to make the decision based upon the best interests of
Nemo Enterprises, Inc. and Nemo Enterprises, Inc.'s other
shareholders, rather than her own personal pecuniary benefit.
ITEM 6. EXECUTIVE COMPENSATION.
At inception of Nemo Enterprises, Inc., its sole Director, Inge
Kerster received 500,000 shares of Common Stock valued at 0.004
per share in consideration of pre-incorporation services rendered
to Nemo Enterprises, Inc. related to investigating and developing
Nemo Enterprises, Inc.'s proposed business plan and capital
structure, and completion of the incorporation and organization.
On May 18, 2000, Ms. Kerster's company, Sandringham Investments
Limited purchased 500,000 common shares at a price of .004 or
$2,000.
No officer or director has received any other remuneration.
Although there is no current plan in existence, it is possible
that Nemo Enterprises, Inc. will adopt a plan to pay or accrue
compensation to its sole officer and director for services
related to seeking business opportunities and completing a merger
or acquisition transaction. See "Certain Relationships and
Related Transactions." Nemo Enterprises, Inc. has no stock
option, retirement, pension, or profit-sharing programs for the
benefit of directors, officers or other employees, but the Board
of Directors may
recommend adoption of one or more such programs in the future.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Prior to the date of this Registration Statement, Nemo
Enterprises, Inc. issued to its Officer and Director, and to
other shareholders, a total of 1,350,000 shares of Common Stock
for a total of $2,700.00 in cash and $ 2,000 in services.
Certificates evidencing the Common Stock issued by Nemo
Enterprises, Inc. to these persons have all been stamped with a
restrictive legend, and are subject to stop transfer orders by
Nemo Enterprises, Inc.. For additional information concerning
restrictions that are imposed upon the securities held by current
stockholders, and the responsibilities of such stockholders to
comply with federal securities laws in the disposition of such
common stock. See "Risk Factors -Rule 144 Sales".
No officer, director, promoter, or affiliate of Nemo Enterprises,
Inc. has or proposes to have any direct or indirect material
interest in any asset proposed to be acquired by Nemo
Enterprises, Inc. through security holdings, contracts, options,
or otherwise.
Nemo Enterprises, Inc. has adopted a policy under which any
consulting or finder's fee that may be paid to a third party for
consulting services to assist management in evaluating a
prospective business opportunity would be paid in stock or in
cash. Any such issuance of stock would be made on an ad hoc
basis. Accordingly, Nemo Enterprises, Inc. is unable to predict
whether or in what amount such a stock issuance might be made.
Although there is no current plan in existence, it is possible
that Nemo Enterprises, Inc. will adopt a plan to pay or accrue
compensation to its sole Officer and Director for services
related to seeking business opportunities and completing a merger
or acquisition transaction.
Nemo Enterprises, Inc. maintains a mailing address at the office
of its President, but otherwise does not maintain an office. As
a result, it pays no rent and incurs no expenses for maintenance
of an office and does not anticipate paying rent or incurring
office expenses in the future. It is likely that Nemo
Enterprises, Inc. will establish and maintain an office after
completion of a business combination.
Although management has no current plans to cause Nemo
Enterprises, Inc. to do so, it is possible that Nemo Enterprises,
Inc. may enter into an agreement with an acquisition candidate
requiring the sale of all or a portion of the Common Stock held
by Nemo Enterprises, Inc.'s current stockholders to the
acquisition candidate or its principals or to other individuals
or business entities, or requiring some other form of payment to
Nemo Enterprises, Inc.'s current stockholders, or requiring the
future employment of specified officers and payment of salaries
to them. It is more likely than not that any sale of securities
by Nemo Enterprises, Inc.'s current stockholders to an
acquisition candidate would be at a price substantially higher
than that originally paid by such stockholders. Any payment to
current stockholders in the context of an acquisition involving
Nemo Enterprises, Inc. would be determined entirely by the
largely unforeseeable terms of a future agreement with an
unidentified business entity.
ITEM 8. DESCRIPTION OF SECURITIES.
Common Stock
Nemo Enterprises, Inc.'s Articles of Incorporation authorize the
issuance of 100,000,000 shares of Common Stock. Each record
holder of Common Stock is entitled to one vote for each share
held on all matters properly submitted to the stockholders for
their vote. Cumulative voting for the election of directors is
not permitted by the Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled to
such dividends as may be declared from time to time by the Board
of Directors out of legally available funds: and, in the event of
liquidation, dissolution or winding up of
the affairs of Nemo Enterprises, Inc., holders are entitled to
receive, ratably, the net assets of Nemo Enterprises, Inc.
available to stockholders after distribution is made to the
preferred stockholders, if any, who are given preferred rights
upon liquidation. Holders of outstanding shares of Common Stock
have no preemptive, conversion or
redemptive rights. All of the issued and outstanding shares of
Common Stock are, and all unissued shares when offered and sold
will be, duly authorized, validly issued, fully paid, and non-
assessable. To the extent that additional shares of Nemo
Enterprises, Inc.'s Common Stock are issued, the relative
interests of then existing stockholders may be diluted.
Preferred Stock
Nemo Enterprises, Inc.'s Articles of Incorporation authorize the
issuance of 10,000,000 shares of preferred stock. The Board of
Directors of Nemo Enterprises, Inc. is authorized to issue the
preferred stock from time to time in series and is further
authorized to establish such series, to fix and determine the
variations in the relative rights
and preferences as between series, to fix voting rights, if any,
for each series, and to allow for the conversion of preferred
stock into Common Stock. No preferred stock has been issued by
Nemo Enterprises, Inc.. Nemo Enterprises, Inc. anticipates that
preferred stock may be utilized in making acquisitions.
Transfer Agent
Nemo Enterprises, Inc. is currently serving as its own transfer
agent, and plans to continue to serve in that capacity until such
time as management believes it is necessary or appropriate to
employ an independent transfer agent in order to facilitate the
creation of a public trading market for Nemo Enterprises, Inc.'s
securities. Since Nemo Enterprises, Inc. does not currently
expect any public market to develop for its securities until
after it has completed a business combination, it does not
currently anticipate that it will seek to employ an independent
transfer agent until it has completed such a transaction.
Reports to Stockholders
Nemo Enterprises, Inc. plans to furnish its stockholders with an
annual report for each fiscal year containing financial
statements audited by its independent certified public
accountants. In the event Nemo Enterprises, Inc. enters into a
business combination with another company, it is the present
intention of management to continue furnishing annual reports to
stockholders. Additionally, Nemo Enterprises, Inc. may, in its
sole discretion, issue unaudited quarterly or other interim
reports to its stockholders when it deems appropriate. Nemo
Enterprises, Inc. intends to comply with the periodic reporting
requirements of the Securities Exchange Act of 1934 for so long
as it is subject to those requirements.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND OTHER SHAREHOLDER MATTERS.
No public trading market exists for Nemo Enterprises, Inc.'s
securities and all of its outstanding securities are restricted
securities as defined in Rule 144. There were nine (9) holders
of record of Nemo Enterprises, Inc.'s common stock on May 31,
2000. No dividends have been paid to date and Nemo Enterprises,
Inc.'s Board of Directors does not anticipate paying dividends in
the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS.
Nemo Enterprises, Inc. is not a party to any pending legal
proceedings, and no such proceedings are known to be
contemplated.
No director, officer or affiliate of Nemo Enterprises, Inc., and
no owner of record or beneficial owner of more than 5.0% of the
securities of Nemo Enterprises, Inc., or any associate of any
such director, officer or security holder is a party adverse to
Nemo Enterprises, Inc. or has a material interest adverse to Nemo
Enterprises, Inc. in reference to pending litigation.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Since March 13, 1999 (the date of Nemo Enterprises, Inc.'s
formation, Nemo Enterprises, Inc. has sold its Common Stock to
the persons listed in the table below in transactions summarized
as follows:
Name Date of Sale Shares Price per Share Aggregate
Purchase
Inge L. E. Kerster* 3/13/99 500,000 $0.004 $ 2,000
Sandringham Investments**
Limited 5/18/00 500,000 $0.004 $2,000
Leo S. Sawchuk 3/14/99 50,000 $0.002 $100
Leo Franken 3/14/99 50,000 $0.002 $100
Todd Larsen 3/15/99 50,000 $0.002 $100
Ken Larsen 3/15/99 50,000 $0.002 $100
Anthony V. Feimann 3/14/99 50,000 $0.002 $100
Leigh Anne Elliot 3/16/99 50,000 $0.002 $100
Ronald Chan 3/18/99 50,000 $0.002 $100
* Consideration consisted of pre-incorporation consulting
services rendered to the Registrant related to investigating and
developing the Registrant's proposed business plan and capital
structure and completing the organization and incorporation of
the Registrant.
**Sandringham Investments, Limited is majority owned by Inge
Kerster, the Registrant=s officer and director.
Each of the sales listed above was made for cash or services. All
of the listed sales were made in reliance upon the exemption from
registration offered by Section 4(2) of the Securities Act of
1933. Based upon Purchaser Subscription forms completed by each
of the subscribers and the pre-existing relationship between the
subscribers of Nemo Enterprises, Inc.'s sole officer and
director, Nemo Enterprises, Inc. had reasonable grounds to
believe immediately prior to making an offer to the private
investors, and did in fact believe, when such subscriptions were
accepted, that such purchasers:
(1) were purchasing for investment and not with a view to
distribution, and
(2) had such knowledge and experience in financial and
business matters that they were capable of evaluating
the merits and risks of their investment and were able to
bear those risks. The purchasers had access to pertinent
information enabling them to ask informed questions.
The shares were issued without the benefit of registration. An
appropriate restrictive legend is imprinted upon each of the
certificates representing such shares, and stop-transfer
instructions have been entered in Nemo Enterprises, Inc.'s
transfer records. All such sales were effected without the aid
of underwriters, and no sales commissions were paid.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and the Bylaws of Nemo Enterprises,
Inc., filed as Exhibits 3.1 and 3.2, respectively, provide that
Nemo Enterprises, Inc. will indemnify its officers and directors
for costs and expenses incurred in connection with the defense of
actions, suits, or proceedings where the officer or director
acted in good faith and in a manner he reasonably believed to be
in Nemo Enterprises, Inc.'s best interest and is a party by
reason of her status as an officer or director, absent a finding
of negligence or misconduct in the performance of duty.
FINANCIAL STATEMENTS
Audited Financial Statements, including a report of an
Independent auditor, follows.
NEMO ENTERPRISES, INC.
(A Development Stage Enterprise)
AUDIT REPORT
MAY 31, 2000
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Belaire, Suite 500
Denver, Colorado 80222
NEMO ENTERPRISES, INC.
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Report of Certified Public Accountant 1
Balance Sheet, May 31, 2000 2
Statement of Operations, for the period March 13, 1999
(Inception) through May 31, 2000 3
Statement of Stockholders' Equity (Deficit)for the period
March 13, 1999 (Inception) through May 31, 2000 4
Statement of Cash Flows for the period from
March 13, 1999 (Inception) through May 31, 2000 5
Notes to Financial Statements 6 &7
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Belaire, Suite 500
Denver, Colorado 80210
(303) 782-0878
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Nemo Enterprises, Inc.
404 Scott Point Drive
Salt Spring Island, BC V8K 2R2
Canada
I have audited the accompanying Balance Sheet of Nemo
Enterprises, Inc. (A Development Stage Enterprise) as of May 31,
2000 and the Statements of Operations, Stockholders' Equity, and
Cash Flows for the period March 13, 1999 (Inception) through May
31, 2000. These financial statements are the responsibility of
the Company's management. My responsibility is to express an
opinion on these financial statements based on my audits.
My examination was made in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audits to obtain reasonable assurance as to 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 our
audit provides a reasonable basis for our opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Nemo
Enterprises, Inc.(a development stage enterprise) as of May 31,
2000, and the results of its operations and changes in its cash
flows for the period from March 13, 1999 (Inception) through May
31, 2000, in conformity with generally accepted accounting
principles.
Janet Loss, C.P.A., P.C.
JUNE 26, 2000
NEMO ENTERPRISES, INC.
(A Development Stage Enterprise)
BALANCE SHEET
As at May 31, 2000
ASSETS
CURRENT ASSETS:
Cash $ 2,026
TOTAL CURRENT ASSETS 2,026
TOTAL ASSETS 2,026
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
TOTAL CURRENT LIABILITIES 0
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value;
100,000,000 shares Authorized, and
1,350,000 shares Issued and outstanding 1350
Preferred Stock 10,000,000
shares authorized, none issued
and outstanding 0
Additional Paid-In Capital 3350
Deficit accumulated during the development
stage (2,674)
TOTAL STOCKHOLDERS' EQUITY 2026
TOTAL LIABILITY AND STOCKHOLDERS' EQUITY $2,026
The accompanying notes are an integral part of the financial
statements.
NEMO ENTERPRISES, INC.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the Period March 13, 1999 (Inception)
Through May 31, 2000
REVENUES: $0
OPERATING EXPENSES:
Fees 165
Taxes and Licenses 320
Office Expenses 189
Consulting Fees 2,000
TOTAL OPERATING EXPENSES 2,674
NET (LOSS) FOR THE PERIOD $(2,674)
NET (LOSS) PER SHARE $(0.0000)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,350,000
The accompanying notes are an integral part of the financial
statements.
NEMO ENTERPRISES, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period from March l3, 1999 (Inception)
Through May 31, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated
Number Number Common Preferred Additional During the Total
of Shares of Shares Stock Stock Paid-in Development Stockholders'
Common Preferred Amount Amount Capital Stage Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Common Stock
Issued March,
1999 For
Services 500,000 0 500 0 1500 0 2,000
Common Stock
Issued March,
1999 For Cash 350,000 0 350 0 350 0 700
Common Stock
Issued May,
2000 For Cash 500000 0 500 0 1500 0 2,000
Net (Loss) for
The Period 0 0 0 0 0 (2,764) (2,764)
Balances
May 31, 2000 1350000 0 1,350 0 3350 (2,674) 2,026
</TABLE>
The accompanying notes are an integral art of these financial statements
NEMO ENTERPRISES, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the Period March 13, 1999 (Inception)
Through May 31, 2000
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
NET LOSS FOR THE PERIOD $ (2,674)
CASH FLOWS FROM FINANCING ACTIVITIES:
ISSUANCE OF COMMON STOCK 4,700
CASH FLOWS FROM INVESTING ACTIVITIES: 0
NET INCREASE IN CASH FOR THE PERIOD: 2,026
CASH, BEGINNING OF THE PERIOD 0
CASH, END OF THE PERIOD 2,026
The accompanying notes are an integral part of the financial
statements.
NEMO ENTERPRISES, INC.
(a Development Stage Enterprise
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
NOTE I - ORGANIZATION AND HISTORY
The Company is a Colorado Corporation and the Company has been in
the development stage since its formation on March 13, 1999.
The Company's only activities have been organizational, directed
at raising its initial capital and developing its business plan.
On March 13, 1999, Nemo Enterprises, Inc. issued 500,000 shares
of common stock to its sole officer and director as founders'
shares in return for the time, effort and expenses to organize
and form the corporation. On March 18, 1999 the Company issued
350,000 shares of common stock from seven individuals for cash.
On May 18, 2000 the Company issued 500,000 shares of common stock
to Sandringham Investments, Limited in return for $2,000 in cash.
NOTE II - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEVELOPMENT STAGE ACTIVITIES
The Company has been in the development stage since inception.
ACCOUNTING METHOD
The Company records income and expenses on the accrual method.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, cash on deposit,
and highly liquid investments with maturities generally of three
months or less. At May 31, 2000, there was $2,026 in cash
equivalents.
YEAR END
The Company has elected to have a fiscal year ended September 30.
USE OF ESTIMATES
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts
of assets and liabilities at the date of financial statements, as
well as revenues and expenses reported for the periods presented.
The Company regularly assesses these estimates and, while actual
results may differ management believes that the estimates are
reasonable.
NOTE III - RELATED PARTY TRANSACTIONS
Inge Kerster, the Company's sole officer and director is the
majority owner of Sandringham Investments Limited and as such may
be considered to own 500,000 shares of common stock beneficially
and 500,000 shares of common stock directly.
PART III
Item 1. Index to Exhibits
The exhibits listed below are filed as part of this Registration
Statement.
Exhibit Number Document
3 (i) Subscription Agreement
3 (ii) Articles of Incorporation
3 (iii) Bylaws
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934 the Registrant caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized.
NEMO ENTERPRISES, INC.
/s/ Inge l. E. Kerster
Inge L. E. Kerster
(Principal Executive Officer)
Date: June 26, 2000
EXHIBIT 3 (i)
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT
NEMO ENTERPRISES, INC.
404 Scott Point Drive
Salt Spring Island, BC V8K 2R2
The undersigned does hereby subscribe for_____________common
shares of the capital stock of NEMO ENTERPRISES, INC. at a price
of $ US 0.002 per share for a total of _________________ United
States dollars.
The shares subscribed for will be full paid, non-assessable.
A share certificate will be mailed to the address indicated below
within fourteen days of the date of this subscription.
The share certificate should be made out and entered into the
corporate records, as follows:
Name:
________________________________________________
Address:
Telephone: ___________________
The purchaser warrants that the shares purchased herein are for
investment purposes only and not for re-sale or distribution.
The purchaser acknowledges that he or she has been informed
specifically that after this initial funding has been completed,
the Company will remain inactive for a minimum period of one
year.
A copy of this Subscription Agreement executed by an officer of
the Company shall constitute a receipt for funds received.
Signed, on this the ___ day of _______, 1999. Purchaser:
___________________________
Received from , the sum of United
States dollars, being payment in full for______common shares of
the capital stock of NEMO
ENTERPRISES, INC.
Inge L. E. Kerster, President
EXHIBIT 3 (ii)
ARTICLES OF INCORPORATION
RESTATED ARTICLES OF INCORPORATION
OF
NEMO ENTERPRISE, INC.
**************************************************************
The undersigned, acting as incorporator, pursuant to the
provisions of the laws of the State of
Colorado relating to private corporations, hereby adopts the
following Articles of Incorporation:
ARTICLE ONE. (NAME)
The name of the corporation is: NEMO ENTERPRISES, INC.
The address of the corporation is: 404 Scott Point Drive, Salt
Spring Island, BC V8K 2R2 Canada
ARTICLE TWO. (RESIDENT AGENT) The initial agent
for service of process is Brian J. O'Shaughnessy, 518 17th
Street, Suite 566, Denver, State of Colorado 80202
ARTICLE THREE. (PURPOSES) The purposes for which
the corporation is organized are to engage in any activity or
business not in conflict with the laws of the State of Colorado
or of the United States of America, and without limiting the
generality of the foregoing, specifically:
(OMNIBUS). To have to exercise all the powers
now or hereafter conferred by the laws of the
State of Colorado upon corporations organized
pursuant to the laws under which the
corporation is organized and any and all acts
amendatory thereof and supplemental thereto.
II. (CARRYING ON BUSINESS OUTSIDE STATE). To
conduct and carry on its business or any
branch thereof in any state or territory of
the United States or in any foreign country
in conformity with the laws of such state,
territory, or foreign country, and to have
and maintain in any state, territory, or
foreign country a business office, plant,
store or other facility.
III. (PURPOSES TO BE CONSTRUED AS POWERS).
The purposes specified herein shall be
construed both as purposes and powers and
shall be in no wise limited or restricted by
reference to, or inference from, the terms of
any other clause in this or any other
article, but the purposes and powers
specified in each of the clauses herein shall
be regarded as independent purposes and
powers, and the enumeration of specific
purposes and powers shall not be construed to
limit or restrict in any manner the meaning
of general terms or of the general powers of
the corporation; nor shall the expression of
one thing be deemed to exclude another,
although it be of like nature not expressed.
ARTICLE FOUR. (CAPITAL STOCK) The corporation
shall have authority to issue an aggregate of ONE HUNDRED
AND TEN MILLION (110,000,000) shares of stock, par value ONE
MILL ($0.001) per share divided into two (2) classes of
stock as follows for a total capitalization of ONE HUNDRED
AND TEN THOUSAND DOLLARS ($110,000).
(20) NON-ASSESSABLE COMMON STOCK: ONE HUNDRED MILLION
(100,000,000) shares of Common stock, Par Value ONE MILL ($0.001)
per share, and
(21) PREFERRED STOCK: TEN MILLION (10,000,000) shares of
Preferred stock, Par Value ONE MILL ($0.001) per share.
All capital stock when issued shall be fully paid and non-
assessable. No holder of shares of capital stock of the
corporation shall be entitled as such to any pre-emptive or
preferential rights to subscribe to any unissued stock, or any
other securities, which the corporation may now or hereafter be
authorized to issue.
The corporation's capital stock may be issued and sold from
time to time for such consideration as may be fixed by the Board
of Directors, provided that the consideration so fixed is not
less than par value.
Holders of the corporation's Common Stock shall not possess
cumulative voting rights at any shareholders meetings called for
the purpose of electing a Board of Directors or on other matters
brought
before stockholders meetings, whether they be annual or special.
ARTICLE FIVE. (DIRECTORS). The affairs of the
corporation shall be governed by a Board of Directors of not more
than fifteen (15) nor less than one (1) person. The name and
address of the first Board of Directors is:
NAME ADDRESS
Inge L. E. Kerster 404 Scott Point Drive
Salt Spring Island, BC V8K 2R2
Canada
ARTICLE SIX. (ASSESSMENT OF STOCK). The capital
stock of the corporation, after the amount of the subscription
price or par value has been paid in, shall not be subject to pay
debts of the corporation, and no paid up stock and no stock
issued as fully paid up shall ever be assessable or assessed.
ARTICLE SEVEN. (INCORPORATOR). The name and address
of the incorporator of the corporation is as follows:
NAME ADDRESS
Rebecca M.E. Kerster 404 Scott Point Drive
Salt Spring Island, BC V8K 2R2
Canada
ARTICLE EIGHT. (PERIOD OF EXISTENCE). The period of
existence of the Corporation shall be perpetual.
ARTICLE NINE. (BY-LAWS) Its Board of Directors shall
adopt the initial By-laws of the corporation. The power to
alter, amend, or repeal the By-laws, or to adopt new By-laws,
shall be vested in the Board of Directors, except as otherwise
may be specifically provided in the By-laws.
ARTICLE TEN. (STOCKHOLDERS' MEETINGS). Meetings of
stockholders shall be held at such place within or without the
State of Colorado as may be provided by the By-laws of the
corporation. The President or any other executive officer of the
corporation, the Board of Directors, or any member may call
special meetings of the stockholders thereof, or by the record
holder or holders of at least ten percent (10%) of all shares
entitled to vote at the meeting. Any action otherwise required
to be taken at a meeting of the stockholders, except election of
directors, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
stockholders having at least a majority of the voting power.
ARTICLE ELEVEN. (CONTRACTS OF CORPORATION) No
contract or other transaction between the corporation and any
other corporation, whether or not a majority of the shares of the
capital stock of such other corporation is owned by this
corporation, and no act of this corporation shall be any way be
affected or invalidated by the fact that any of the directors of
this corporation are pecuniarily or otherwise interested in, or
are directors or officers of such other corporation. Any
director of this corporation, individually, or any firm of which
such director may be a member, may be a party to, or may be
pecuniarily or otherwise interested in any contract or
transaction of the corporation; provided, however, that the fact
that he or such firm is so interested shall be disclosed or shall
have been known to the Board of Directors of this corporation, or
a majority thereof; and any director of this corporation who is
also a director or officer of such other corporation, or who is
so interested, may e counted in determining the existence of a
quorum at any meeting of the Board of Directors of this
corporation that shall authorize such contract or transaction,
and may vote thereat to authorize such contract or transaction,
with like force and effect as if he were no such director or
officer of such other corporation or not so interested.
ARTICLE TWELVE. (LIABILITY OF DIRECTORS AND OFFICERS)
No director or officer shall have any personal liability to the
corporation or its stockholders for damages for breach of
fiduciary duty as a director or officer, except that this Article
Twelve shall not eliminate or limit the liability of a director
or officer for (I) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law, or (ii) the
payment of dividends in violation of the Colorado Revised
Statutes.
IN WITNESS WHEREOF. The undersigned incorporator has
hereunto affixed his/her signature at Denver, Colorado, this 29th
day of February, 2000.
______________________________
INGE L. E. KERSTER
EXHIBIT 10 (iii)
BYLAWS
RESTATED ARTICLES OF INCORPORATION
OF
NEMO ENTERPRISE, INC.
**************************************************************
The undersigned, acting as incorporator, pursuant to the
provisions of the laws of the State of
Colorado relating to private corporations, hereby adopts the
following Articles of Incorporation:
ARTICLE ONE. (NAME)
The name of the corporation is: NEMO ENTERPRISES, INC.
The address of the corporation is: 404 Scott Point Drive, Salt
Spring Island, BC V8K 2R2 Canada
ARTICLE TWO. (RESIDENT AGENT) The initial agent for
service of process is Brian J. O'Shaughnessy, 518 17th Street,
Suite 566, Denver, State of Colorado 80202
ARTICLE THREE. (PURPOSES) The purposes for which the
corporation is organized are to engage in any activity or
business not in conflict with the laws of the State of Colorado
or of the United States of America, and without limiting the
generality of the foregoing, specifically:
(OMNIBUS). To have to exercise all the powers
now or hereafter conferred by the laws of the
State of Colorado upon corporations organized
pursuant to the laws under which the
corporation is organized and any and all acts
amendatory thereof and supplemental thereto.
II. (CARRYING ON BUSINESS OUTSIDE STATE). To
conduct and carry on its business or any
branch thereof in any state or territory of
the United States or in any foreign country
in conformity with the laws of such state,
territory, or foreign country, and to have
and maintain in any state, territory, or
foreign country a business office, plant,
store or other facility.
III. (PURPOSES TO BE CONSTRUED AS POWERS).
The purposes specified herein shall be
construed both as purposes and powers and
shall be in no wise limited or restricted by
reference to, or inference from, the terms of
any other clause in this or any other
article, but the purposes and powers
specified in each of the clauses herein shall
be regarded as independent purposes and
powers, and the enumeration of specific
purposes and powers shall not be construed to
limit or restrict in any manner the meaning
of general terms or of the general powers of
the corporation; nor shall the expression of
one thing be deemed to exclude another,
although it be of like nature not expressed.
ARTICLE FOUR. (CAPITAL STOCK) The corporation
shall have authority to issue an aggregate of ONE HUNDRED
AND TEN MILLION (110,000,000) shares of stock, par value ONE
MILL ($0.001) per share divided into two (2) classes of
stock as follows for a total capitalization of ONE HUNDRED
AND TEN THOUSAND DOLLARS ($110,000).
(22) NON-ASSESSABLE COMMON STOCK: ONE HUNDRED MILLION
(100,000,000) shares of Common stock, Par Value ONE MILL ($0.001)
per share, and
(23) PREFERRED STOCK: TEN MILLION (10,000,000) shares of
Preferred stock, Par Value ONE MILL ($0.001) per share.
All capital stock when issued shall be fully paid and non-
assessable. No holder of shares of capital stock of the
corporation shall be entitled as such to any pre-emptive or
preferential rights to subscribe to any unissued stock, or any
other securities, which the corporation may now or hereafter be
authorized to issue.
The corporation's capital stock may be issued and sold from
time to time for such consideration as may be fixed by the Board
of Directors, provided that the consideration so fixed is not
less than par value.
Holders of the corporation's Common Stock shall not possess
cumulative voting rights at any shareholders meetings called for
the purpose of electing a Board of Directors or on other matters
brought
before stockholders meetings, whether they be annual or special.
ARTICLE FIVE. (DIRECTORS). The affairs of the
corporation shall be governed by a Board of Directors of not more
than fifteen (15) nor less than one (1) person. The name and
address of the first Board of Directors is:
NAME ADDRESS
Inge L. E. Kerster 404 Scott Point Drive
Salt Spring Island, BC V8K 2R2
Canada
ARTICLE SIX. (ASSESSMENT OF STOCK). The capital
stock of the corporation, after the amount of the subscription
price or par value has been paid in, shall not be subject to pay
debts of the corporation, and no paid up stock and no stock
issued as fully paid up shall ever be assessable or assessed.
ARTICLE SEVEN. (INCORPORATOR). The name and address
of the incorporator of the corporation is as follows:
NAME ADDRESS
Rebecca M.E. Kerster 404 Scott Point Drive
Salt Spring Island, BC V8K 2R2
Canada
ARTICLE EIGHT. (PERIOD OF EXISTENCE). The period of
existence of the Corporation shall be perpetual.
ARTICLE NINE. (BY-LAWS) Its Board of Directors shall
adopt the initial By-laws of the corporation. The power to
alter, amend, or repeal the By-laws, or to adopt new By-laws,
shall be vested in the Board of Directors, except as otherwise
may be specifically provided in the By-laws.
ARTICLE TEN. (STOCKHOLDERS' MEETINGS). Meetings of
stockholders shall be held at such place within or without the
State of Colorado as may be provided by the By-laws of the
corporation. The President or any other executive officer of the
corporation, the Board of Directors, or any member may call
special meetings of the stockholders thereof, or by the record
holder or holders of at least ten percent (10%) of all shares
entitled to vote at the meeting. Any action otherwise required
to be taken at a meeting of the stockholders, except election of
directors, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
stockholders having at least a majority of the voting power.
ARTICLE ELEVEN. (CONTRACTS OF CORPORATION) No
contract or other transaction between the corporation and any
other corporation, whether or not a majority of the shares of the
capital stock of such other corporation is owned by this
corporation, and no act of this corporation shall be any way be
affected or invalidated by the fact that any of the directors of
this corporation are pecuniarily or otherwise interested in, or
are directors or officers of such other corporation. Any
director of this corporation, individually, or any firm of which
such director may be a member, may be a party to, or may be
pecuniarily or otherwise interested in any contract or
transaction of the corporation; provided, however, that the fact
that he or such firm is so interested shall be disclosed or shall
have been known to the Board of Directors of this corporation, or
a majority thereof; and any director of this corporation who is
also a director or officer of such other corporation, or who is
so interested, may e counted in determining the existence of a
quorum at any meeting of the Board of Directors of this
corporation that shall authorize such contract or transaction,
and may vote thereat to authorize such contract or transaction,
with like force and effect as if he were no such director or
officer of such other corporation or not so interested.
ARTICLE TWELVE. (LIABILITY OF DIRECTORS AND OFFICERS)
No director or officer shall have any personal liability to the
corporation or its stockholders for damages for breach of
fiduciary duty as a director or officer, except that this Article
Twelve shall not eliminate or limit the liability of a director
or officer for (I) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law, or (ii) the
payment of dividends in violation of the Colorado Revised
Statutes.
IN WITNESS WHEREOF. The undersigned incorporator has
hereunto affixed his/her signature at Denver, Colorado, this 29th
day of February, 2000.
______________________________
INGE L. E. KERSTER
BYLAWS OF
NEMO ENTERPRISES, INC.
CONTENTS OF INITIAL BYLAWS
ARTICLE PAGE
1.00 CORPORATE CHARTER AND BYLAWS
1.01 Corporate Charter Provisions 4
1.02 Registered Agent or Office Requirement
of Filing Changes with Secretary of State 4
1.03 Initial Business Office 4
1.04 Amendment of Bylaws 4
2.00 DIRECTORS AND DIRECTORS MEETINGS
2.01 Action Without Meeting 5
2.02 Telephone Meetings 5
2.03 Place of Meetings 5
2.04 Regular Meetings 5
2.05 Call of Special Meeting 5
2.06 Quorum 6
2.07 Adjournment Notice of Adjourned Meetings 6
2.08 Conduct of Meetings 6
2.09 Powers of the Board of Directors 6
2.10 Board Committees Authority to Appoint 7
2.11 Transactions with Interested Directors 7
2.12 Number of Directors 7
2.13 Term of Office 7
2.14 Removal of Directors 8
2.15 Vacancies 8
2.15(a)Declaration of Vacancy 8
2.15(b)Filling Vacancies by Directors 8
2.15(c)Filling Vacancies by Shareholders 8
2.16 Compensation 9
2.17 Indemnification of Directors and Officers 9
2.18 Insuring Directors, Officers,
and Employees 9
3.00 SHAREHOLDERS> MEETINGS
3.01 Action Without Meeting 9
3.02 Telephone Meetings 10
3.03 Place of Meetings 10
3.04 Notice of Meetings 10
3.04 Voting List 10
3.05 Votes per Share 11
3.07 Cumulative Voting 11
3.08 Proxies 11
3.09 Quorum 12
3.09(a)Quorum of Shareholders 12
3.09(b)Adjourn for Lack or Loss of Quorum 12
3.10 Voting by Voice or Ballot 12
3.11 Conduct of Meetings 12
3.12 Annual Meetings 12
3.13 Failure to Hold Annual Meeting 13
3.14 Special Meetings 13
4.00 OFFICERS
4.01 Title and Appointment 13
4.01(a)Chairman 13
4.01(b)President 14
4.01(c)Vice President 14
4.01(d)Secretary 14
4.01(e)Treasurer 15
4.01(f)Assistant Secretary or
Assistant Treasurer 15
4.02 Removal and Resignation 15
4.03 Vacancies 16
4.04 Compensation 16
5.00 AUTHORITY TO EXECUTE INSTRUMENTS
5.01 No Authority Absent Specific Authorization 16
5.02 Execution of Certain Instruments 16
6.00 ISSUANCE AND TRANSFER OF SHARES
6.01 Classes and Series of Shares 17
6.02 Certificates for Fully Paid Shares 17
6.03 Consideration for Shares 17
6.04 Replacement of Certificates 17
6.05 Signing Certificates Facsimile Signatures 18
6.06 Transfer Agents and Registrars 18
6.07 Conditions of Transfer 18
6.08 Reasonable Doubts as to Right to Transfer 18
7.00 CORPORATE RECORDS AND ADMINISTRATION
7.01 Minutes of Corporate Meetings 18
7.02 Share Register 19
7.03 Corporate Seal 19
7.04 Books of Account 19
7.05 Inspection of Corporate Records 20
7.06 Fiscal Year 20
7.07 Waiver of Notice 20
8.00 ADOPTION OF INITIAL BYLAWS 20
ARTICLE ONE CORPORATE CHARTER AND BYLAWS
1.01 CORPORATE CHARTER PROVISIONS
The Corporations Charter authorizes one hundred million
(100,000,000) shares to be issued. The officers and transfer
agents issuing shares of the Corporation shall ensure that the
total number of shares outstanding at any given time does not
exceed this number. Such officers and agents shall advise the
Board at least annually of the authorized shares remaining
available to be issued. No shares shall be issued for less than
the par value stated in the Charter. Each Charter provision shall
be observed until amended by Restated Articles or Articles of
Amendment duly filed with the Secretary of State.
1.02 REGISTERED AGENT AND OFFICE REQUIREMENT OF FILING CHANGES
WITH SECRETARY OF STATE
The address of the Registered Office provided in the Articles of
Incorporation, as duly filed with the Secretary of State for the
State of Colorado, is:516 17th Street, Suite 566, Denver, CO
80202.
The name of the Registered Agent of the Corporation at such
address, as set forth in its Articles of Incorporation, is:
Jerald L. Woods.
The Registered Agent or Office may be changed by filing a
Statement of Change of Registered Agent or Office or both with
the Secretary of State, and not otherwise. Such filing shall be
made promptly with each change. Arrangements for each change in
Registered Agent or Office shall ensure that the Corporation is
not exposed to the possibility of a default judgment. Each
successive Registered Agent shall be of reliable character and
Ill informed of the necessity of immediately furnishing the
papers of any lawsuit against the Corporation to its attorneys.
1.03 INITIAL BUSINESS OFFICE
The address of the initial principal business office of the
Corporation is hereby established as: 404 Scott Point Drive, Salt
Spring Island, BC V8K 2R2 Canada. The Corporation may have
additional business offices within the State of Colorado and
where it may be duly qualified to do business outside of
Colorado, as the Board of Directors may from time to time
designate or the business of the Corporation may require.
1.04 AMENDMENT OF BYLAWS
The Shareholders or Board of Directors, subject to any limits
imposed by the Shareholders, may amend or repeal these Bylaws and
adopt new Bylaws. All amendments shall be upon advice of counsel
as to legality, except in emergency. Bylaw changes shall take
effect upon adoption unless otherwise specified. Notice of Bylaws
changes shall be given in or before notice given of the first
Shareholders' meeting following their adoption.
ARTICLE TWO DIRECTORS AND DIRECTORS' MEETINGS
2.01 ACTION BY CONSENT OF BOARD WITHOUT MEETING
Any action required or permitted to be taken by the Board of
Directors may be taken without a meeting, and shall have the same
force and effect as a unanimous vote of Directors, if all members
of the Board consent in writing to the action. Such consent may
be given individually or collectively.
2.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws and by
the Business Corporation Act, Directors may participate in and
hold a meeting by means of conference call or similar
communication by which all persons participating can hear each
other. Participation in such a meeting shall constitute presence
in person at such meeting, except participation for the express
purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
2.03 PLACE OF MEETINGS
Meetings of the Board of Directors shall be held at the business
office of the Corporation or at such other place within or
without the State of Colorado as may be designated by the Board.
2.04 REGULAR MEETINGS
Regular meetings of the Board of Directors shall be held, without
call or notice, immediately following each annual Shareholders'
meeting, and at such other regularly repeating times as the
Directors may determine.
2.05 CALL OF SPECIAL MEETING
Special meetings of the Board of Directors for any purpose may be
called at any time by the President or, if the President is
absent or unable or refuses to act, by any Vice President or any
two Directors. Written notices of the special meetings, stating
the time and place of the meeting, shall be mailed ten days
before, or telegraphed or personally delivered so as to be
received by each Director not later than two days before, the day
appointed for the meeting. Notice of meetings need not indicate
an agenda. Generally, a tentative agenda will be included, but
the meeting shall not be confined to any agenda included with the
notice.
Meetings provided for in these Bylaws shall not be invalid for
lack of notice if all persons entitled to notice consent to the
meeting in writing or are present at the meeting and do not
object to the notice given. Consent may be given either before or
after the meeting.
Upon providing notice, the Secretary or other officer sending
notice shall sign and file in the Corporate Record Book a
statement of the details of the notice given to each Director.
If such statement should later not be found in the Corporate
Record Book, due notice shall be presumed.
2.06 QUORUM
The presence throughout any Directors' meeting, or adjournment
thereof, of a majority of the authorized number of Directors
shall be necessary to constitute a quorum to transact any
business, except to adjourn. If a quorum is present, every act
done or resolution passed by a majority of the Directors present
and voting shall be the act of the Board of Directors.
2.07 ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS
A quorum of the Directors may adjourn any Directors' meeting to
meet again at a stated hour on a stated day. Notice of the time
and place where an adjourned meeting will be held need not be
given to absent Directors if the time and place is fixed at the
adjourned meeting. In the absence of a quorum, a majority of the
Directors present may adjourn to a set time and place if notice
is duly given to the absent members, or until the time of the
next regular meeting of the Board.
2.08 CONDUCT OF MEETINGS
At every meeting of the Board of Directors, the Chairman of the
Board, if there is such an officer, and if not, the President, or
in the President's absence, a Vice President designated by the
President, or in the absence of such designation, a Chairman
chosen by a majority of the Directors present, shall preside. The
Secretary of the Corporation shall act as Secretary of the Board
of Directors' meetings. When the Secretary is absent from any
meeting, the Chairman may appoint any person to act as Secretary
of that meeting.
2.09 POWERS OF THE BOARD OF DIRECTORS
The business and affairs of the Corporation and all corporate
poIrs shall be exercised by or under authority of the Board of
Directors, subject to limitations imposed by law, the Articles of
Incorporation, any applicable Shareholders' agreement, and these
Bylaws.
2.10 BOARD COMMITTEES AUTHORITY TO APPOINT
The Board of Directors may designate an executive committee and
one or more other committees to conduct the business and affairs
of the Corporation to the extent authorized. The Board shall have
the poIr at any time to change the poIrs and membership of, fill
vacancies in, and dissolve any committee. Members of any
committee shall receive such compensation as the Board of
Directors may from time to time provide. The designation of any
committee and the delegation of authority thereto shall not
operate to relieve the Board of Directors, or any member thereof,
of any responsibility imposed by law.
2.11 TRANSACTIONS WITH INTERESTED DIRECTORS
Any contract or other transaction between the Corporation and any
of its Directors (or any corporation or firm in which any of its
Directors are directly or indirectly interested) shall be valid
for all purposes notwithstanding the presence of that Director at
the meeting during which the contract or transaction was
authorized, and notwithstanding the Directors' participation in
that meeting. This section shall apply only if the contract or
transaction is just and reasonable to the Corporation at the time
it is authorized and ratified, the interest of each Director is
known or disclosed to the Board of Directors, and the Board
nevertheless authorizes or ratifies the contract or transaction
by a majority of the disinterested Directors present. Each
interested Director is to be counted in determining whether a
quorum is present, but shall not vote and shall not be counted in
calculating the majority necessary to carry the vote. This
section shall not be construed to invalidate contracts or
transactions that would be valid in its absence.
2.12 NUMBER OF DIRECTORS
The number of Directors of this Corporation shall be no more than
fifteen (15) or less than one (1). No Director need be a resident
of Colorado or a Shareholder. The number of Directors may be
increased or decreased from time to time by amendment to these
Bylaws. Any decrease in the number of Directors shall not have
the effect of shortening the tenure, which any incumbent Director
would otherwise enjoy.
2.13 TERM OF OFFICE
Directors shall be entitled to hold office until their successors
are elected and qualified. Election for all Director positions,
vacant or not vacant, shall occur at each annual meeting of the
Shareholders and may be held at any special meeting of
Shareholders called specifically for that purpose.
2.14 REMOVAL OF DIRECTORS
The entire Board of Directors or any individual Director may be
removed from office by a vote of Shareholders holding a majority
of the outstanding shares entitled to vote at an election of
Directors. However, if less than the entire Board is to be
removed, no one of the Directors may be removed if the votes cast
against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire Board of
Directors. No director may be so removed except at an election of
the class of Directors of which he is a part. If any or all
Directors are so removed, new Directors may be elected at the
same meeting. Whenever a class or series of shares is entitled to
elect one or more Directors under authority granted by the
Articles of Incorporation, the provisions of this Paragraph apply
to the vote of that class or series and not to the vote of the
outstanding shares as a whole.
2.15 VACANCIES
Vacancies on the Board of Directors shall exist upon the
occurrence of any of the following events: (a) the death,
resignation, or removal of any Director; (b) an increase in the
authorized number of Directors; or (c) the failure of the
Shareholders to elect the full authorized number of Directors to
be voted for at any annual, regular, or special Shareholders'
meeting at which any Director is to be elected.
2.15(a) DECLARATION OF VACANCY
A majority of the Board of Directors may declare vacant the
office of a Director if the Director: (a) is adjudged incompetent
by a court order; (b) is convicted of a crime involving moral
turpitude; (c) or fails to accept the office of Director, in
writing or by attending a meeting of the Board of Directors,
within thirty (30) days of notice of election.
2.15(b) FILLING VACANCIES BY DIRECTORS
Vacancies other than those caused by an increase in the number of
Directors may be filled temporarily by majority vote of the
remaining Directors, though less than a quorum, or by a sole
remaining Director. Each Director so elected shall hold office
until a qualified successor is elected at a Shareholders'
meeting.
2.15(c) FILLING VACANCIES BY SHAREHOLDERS
Any vacancy on the Board of Directors, including those caused by
an increase in the number of Directors shall be filled by the
Shareholders at the next annual meeting or at a special meeting
called for that purpose. Upon the resignation of a Director
tendered to take effect at a future time, the Board or the
Shareholders may elect a successor to take office when the
resignation becomes effective.
2.16 COMPENSATION
Directors shall receive such compensation for their services as
Directors as shall be determined from time to time by resolution
of the Board. Any Director may serve the Corporation in any other
capacity as an officer, agent, employee, or otherwise, and
receive compensation therefor.
2.17 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Board of Directors shall authorize the Corporation to pay or
reimburse any present or former Director or officer of the
Corporation any costs or expenses actually and necessarily
incurred by that officer in any action, suit, or proceeding to
which the officer is made a party by reason of holding that
position, provided, hoIver, that no officer shall receive such
indemnification if finally adjudicated therein to be liable for
negligence or misconduct in office. This indemnification shall
extend to good-faith expenditures incurred in anticipation of
threatened or proposed litigation. The Board of Directors may in
proper cases, extend the indemnification to cover the good-faith
settlement of any such action, suit, or proceeding, whether
formally instituted or not.
2.18 INSURING DIRECTORS, OFFICERS, AND EMPLOYEES
The Corporation may purchase and maintain insurance on behalf of
any Director, officer, employee, or agent of the Corporation, or
on behalf of any person serving at the request of the Corporation
as a Director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other
enterprise, against any liability asserted against that person
and incurred by that person in any such corporation, whether or
not the Corporation has the poIr to indemnify that person against
liability for any of those acts.
ARTICLE THREE SHAREHOLDERS' MEETINGS
3.01 ACTION WITHOUT MEETING
Any action that may be taken at a meeting of the Shareholders
under any provision of the Colorado Business Corporation Act may
be taken without a meeting if authorized by a consent or waiver
filed with the Secretary of the Corporation and signed by all
persons who would be entitled to vote on that action at a
Shareholders' meeting. Each such signed consent or waiver, or a
true copy thereof, shall be placed in the Corporate Record Book.
3.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws and by
the Business Corporation Act, Shareholders may participate in and
hold a meeting by means of conference call or similar
communication by which all persons participating can hear each
other. Participation in such a meeting shall constitute presence
in person at such meeting, except participation for the express
purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
3.03 PLACE OF MEETINGS
Shareholders' meetings shall be held at the business office of
the Corporation, or at such other place within or without the
State of Colorado as may be designated by the Board of Directors
or the Shareholders.
3.04 NOTICE OF MEETINGS
The President, the Secretary, or the officer or persons calling a
Shareholders' Meeting. shall give notice, or cause it to be
given, in writing to each Director and to each Shareholder
entitled to vote at the meeting at least ten (10) but not more
than sixty (60) days before the date of the meeting. Such notice
shall state the place, day, and hour of the meeting, and, in case
of a special meeting, the purpose or purposes for which the
meeting is called. Such written notice may be given personally,
by mail, or by other means. Such notice shall be addressed to
each recipient at such address as appears on the Books of the
Corporation or as the recipient has given to the Corporation for
the purpose of notice. Meetings provided for in these Bylaws
shall not be invalid for lack of notice if all persons entitled
to notice consent to the meeting in writing or are present at the
meeting in person or by proxy and do not object to the notice
given, Consent may be given either before or after the meeting.
Notice of the reconvening of an adjourned meeting is not
necessary unless the meeting is adjourned more than thirty days
past the date stated in the notice, in which case notice of the
adjourned meeting shall be given as in the case of any special
meeting. Notice may be waived by written waivers signed either
before or after the meeting by all persons entitled to the
notice.
3.05 VOTING LIST
At least ten (10), but not more than sixty (60), days before each
Shareholders' meeting, the officer or agent having charge of the
Corporation's share transfer books shall make a complete list of
the Shareholders entitled to vote at that meeting or any
adjournment thereof, arranged in alphabetical order, with the
address and the number of shares held by each. The list shall be
kept on file at the Registered Office of the Corporation for at
least ten (10) days prior to the meeting, and shall be subject to
inspection by any Director, officer, or 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, during the whole time of the meeting, to the inspection
of any Shareholder. The original share transfer books shall be
prima facie evidence as to the Shareholders entitled to examine
such list or transfer books or to vote at any meeting of
Shareholders. HoIver, failure to prepare and to make the list
available in the manner provided above shall not affect the
validity of any action taken at the meeting.
3.06 VOTES PER SHARE
Each outstanding share, regardless of class, shall be entitled to
one (1) vote on each matter submitted to a vote at a meeting of
Shareholders, except to the extent that the voting rights of the
shares of any class or classes are limited or denied pursuant to
the Articles of Incorporation. A Shareholder may vote in person
or by proxy executed in writing by the Shareholder, or by the
Shareholder's duly authorized attorney-in-fact.
3.07 CUMULATIVE VOTING
Cumulative voting is expressly forbidden
3.08 PROXIES
A Shareholder may vote either in person or by proxy executed in
writing by the Shareholder or his or her duly authorized attorney
in fact. Unless otherwise provided in the proxy or by law, each
proxy shall be revocable and shall not be valid after eleven (11)
months from the date of its execution,
3.09 QUORUM
3.09(a) QUORUM OF SHAREHOLDERS
As to each item of business to be voted on, the presence (in
person or by proxy) of the persons who are entitled to vote a
majority of the outstanding voting shares on that matter shall
constitute the quorum necessary for the consideration of the
matter at a Shareholders' meeting. The vote of the holders of a
majority of the shares entitled to vote on the matter and
represented at a meeting at which a quorum is present shall be
the act of the Shareholders' meeting.
3.09(b) ADJOURNMENT FOR LACK OR LOSS OF QUORUM
No business may be transacted in the absence of a quorum, or upon
the withdrawal of enough Shareholders to leave less than a
quorum; other than to adjourn the meeting from time to time by
the vote of a majority of the shares represented at the meeting.
3.10 VOTING BY VOICE OR BALLOT
Elections for Directors need not be by ballot unless a
Shareholder demands election by ballot before the voting begins.
3.11 CONDUCT OF MEETINGS
Meetings of the Shareholders shall be chaired by the President,
or, in the President's absence, a Vice President designated by
the President, or, in the absence of such designation, any other
person chosen by a majority of the Shareholders of the
Corporation present in person or by proxy and entitled to vote.
The Secretary of the Corporation, or, in the Secretary's absence,
an Assistant Secretary, shall act as Secretary of all meetings of
the Shareholders. In the absence of the Secretary or Assistant
Secretary, the Chairman shall appoint another person to act as
Secretary of the meeting.
3.12 ANNUAL MEETINGS
The time, place, and date of the annual meeting of the
Shareholders of the Corporation, for the purpose of electing
Directors and for the transaction of any other business as may
come before the meeting, shall be set from time to time by a
majority vote of the Board of Directors. If the day fixed for the
annual meeting shall be on a legal holiday in the State of
Colorado, such meeting shall be held on the next succeeding
business day. If the election of Directors is not held on the day
thus designated for any annual meeting, or at any adjournment
thereof, the Board of Directors shall cause the election to be
held at a special meeting of the Shareholders as soon thereafter
as possible.
3.13 FAILURE TO HOLD ANNUAL MEETING
If, within any 13-month period, an annual Shareholders' Meeting
is not held, any Shareholder may apply to a court of competent
jurisdiction in the county in which the principal office of the
Corporation is located for a summary order that an annual meeting
be held.
3.14 SPECIAL MEETINGS
A special Shareholders' meeting may be called at any time by. (a)
the President; (b) the Board of Directors; or (c) one or more
Shareholders holding in the aggregate one-tenth or more of all
the shares entitled to vote at the meeting. Such meeting may be
called for any purpose. The party calling the meeting may do so
only by written request sent by registered mail or delivered in
person to the President or Secretary. The officer receiving the
written request shall within ten (10) days from the date of its
receipt cause notice of the meeting to be sent to all the
Shareholders entitled to vote at such a meeting. If the officer
does not give notice of the meeting within ten (10) days after
the date of receipt of the written request, the person or persons
calling the meeting may fix the time of the meeting and give the
notice. The notice shall be sent pursuant to Section 3.04 of
these Bylaws. The notice of a special Shareholders' meeting must
state the purpose or purposes of the meeting and, absent consent
of every Shareholder to the specific action taken, shall be
limited to purposes plainly stated in the notice, notwithstanding
other provisions herein.
ARTICLE FOUR OFFICERS
4.01 TITLE AND APPOINTMENT
The officers of the Corporation shall be a President and a
Secretary, as required by law. The Corporation may also have, at
the discretion of the Board of Directors, a Chairman of the
Board, one or more Vice Presidents, a Treasurer, one or more
Assistant Secretaries, and one or more Assistant Treasurers. One
person may hold any two or more offices, including President and
Secretary. All officers shall be elected by and hold office at
the pleasure of the Board of Directors, which shall fix the
compensation and tenure of all officers.
4.01(a) CHAIRMAN OF THE BOARD
The Chairman, if there shall be such an officer, shall, if
present, preside at the meetings of the Board of Directors and
exercise and perform such other powers and duties as may from
time to time be assigned to the Chairman by the Board of
Directors or prescribed by these Bylaws.
4.01(b) PRESIDENT
Subject to such supervisory powers, if any, as may be given to
the Chairman, if there is one, by the Board of Directors, the
President shall be the chief executive officer of the Corporation
and shall, subject to the control of the Board of Directors, have
general supervision, direction, and control of the business and
officers of the Corporation. The President shall have the general
powers and duties of management usually vested in the office of
President of a corporation; shall have such other powers and
duties as may be prescribed by the Board of Directors or the
Bylaws; and shall be ex officio a member of all standing
committees, including the executive committee, if any. In
addition, the President shall preside at all meetings of the
Shareholders and in the absence of the Chairman, or if there is
no Chairman, at all meetings of the Board of Directors.
4.01(c) VICE PRESIDENT
Any Vice President shall have such powers and perform such duties
as from time to time may be prescribed by these Bylaws, by the
Board of Directors, or by the President. In the absence or
disability of the President, the senior or duly appointed Vice
President, if any, shall perform all the duties of the President,
pending action by the Board of Directors when so acting, such
Vice President shall have all the powers of, and be subject to
all the restrictions on, the President.
4.01(d) SECRETARY
The Secretary shall:
A. See that all notices are duly given in accordance with the
provisions of these Bylaws and as required by law. In case of the
absence or disability of the Secretary. or the Secretary's
refusal or neglect to act, notice may be given and served by an
Assistant Secretary or by the Chairman, the President, any Vice
President, or by the Board of Directors.
B. Keep the minutes of corporate meetings, and the Corporate
Record Book, as set out in Section 7.01 hereof.
C. Maintain, in the Corporate Record Book, a record of all
share certificates issued or canceled and all shares of the
Corporation canceled or transferred.
D. Be custodian of the Corporation's records and of any seal,
which the Corporation may from time to time adopt. when the
Corporation exercises its right to use a seal, the Secretary
shall see that the seal is embossed on all share
certificates prior to their issuance and on all documents
authorized to be executed under seal in accordance with the
provisions of these Bylaws.
E. In general, perform all duties incident to the office of
Secretary, and such other duties as from time to time may be
required by Sections 7.01, 7.02, and 7.03 of these Bylaws,
by these Bylaws generally, by the Board of Directors, or by
the President.
4.01(e) TREASURER
The Treasurer shall:
F. Have charge and custody of, and be responsible for, all
funds and securities of the Corporation, and deposit all
funds in the name of the Corporation in those banks, trust
companies, or other depositories that shall be selected by
the Board of Directors.
G. Receive, and give receipt for, monies due and payable to the
Corporation.
H. Disburse or cause to be disbursed the funds of the
Corporation as may be directed by the Board of Directors,
taking proper vouchers for those disbursements.
I. If required by the Board of Directors or the President, give
to the Corporation a bond to assure the faithful performance
of the duties of the Treasurer's office and the restoration
to the Corporation of all corporate books, papers, vouchers,
money, and other property of whatever kind in the
Treasurer's possession or control, in case of the
Treasurer's death, resignation, retirement, or removal from
office. Any such bond shall be in a sum satisfactory to the
Board of Directors, with one or more sureties or a surety
company satisfactory to the Board of Directors.
J. In general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be
assigned to the Treasurer by Sections 7.O4 and 7.05 of these
Bylaws, by these Bylaws generally, by the Board of
Directors, or by the President.
4.01(f) ASSISTANT SECRETARY AND ASSISTANT TREASURER
The Assistant Secretary or Assistant Treasurer shall have such
powers and perform such duties as the Secretary or Treasurer,
respectively, or as the Board of Directors or President may
prescribe. In case of the absence of the Secretary or Treasurer,
the senior Assistant Secretary or Assistant Treasurer,
respectively, may perform all of the functions of the Secretary
or Treasurer.
4.02 REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by vote
of a majority of the Directors at any regular or special meeting
of the Board, or, except in case of an officer chosen by the
Board of Directors, by any committee or officer upon whom that
power of removal may be conferred by the Board of Directors. Such
removal shall be without prejudice to the contract rights, if
any, of the person removed. Any officer may resign at any time by
giving written notice to the Board of Directors, the President,
or the Secretary of the Corporation. Any resignation shall take
effect on the date of the receipt of that notice or at any later
time specified therein, and, unless otherwise specified therein,
the acceptance of that resignation shall not be necessary to make
it effective.
4.03 VACANCIES
Upon the occasion of any vacancy occurring in any office of the
Corporation, by reason of death, resignation, removal, or
otherwise, the Board of Directors may elect an acting successor
to hold office for the unexpired term or until a permanent
successor is elected.
4.04 COMPENSATION
The compensation of the officers shall be fixed from time to time
by the Board of Directors, and no officer shall be prevented from
receiving a salary by reason of the fact that the officer is also
a Shareholder or a Director of the Corporation, or both.
ARTICLE FIVE - AUTHORITY TO EXECUTE INSTRUMENTS
5.01 NO AUTHORITY ABSENT SPECIFIC AUTHORIZATION
These Bylaws provide certain authority for the execution of
instruments. The Board of Directors, except as otherwise provided
in these Bylaws, may additionally authorize any officer or
officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to
specific instances. Unless expressly authorized by these Bylaws
or the Board of Directors, no officer, agent, or employee shall
have any power or authority to bind the Corporation by any
contract or engagement nor to pledge its credit nor to render it
peculiarly liable for any purpose or in any amount.
5.02 EXECUTION OF CERTAIN INSTRUMENTS
Formal contracts of the Corporation, promissory notes, deeds,
deeds of trust, mortgages, pledges, and other evidences of
indebtedness of the Corporation, other corporate documents, and
certificates of ownership of liquid assets held by the
Corporation shall be signed or endorsed by the President or any
Vice President and by the Secretary or the Treasurer, unless
otherwise specifically determined by the Board of Directors or
otherwise required by law.
ARTICLE SIX - ISSUANCE AND TRANSFER OF SHARES
6.01 CLASSES AND SERIES OF SHARES
The Corporation may issue one or more classes or series of
shares, or both. Any of these classes or series may have full,
limited, or no voting rights, and may have such other
preferences, rights, privileges, and restrictions as are stated
or authorized in the Articles of Incorporation. All shares of any
one class shall have the same voting, conversion, redemption, and
other rights, preferences, privileges, and restrictions, unless
the class is divided into series, If a class is divided into
series, all the shares of any one series shall have the same
voting, conversion, redemption, and other. rights, preferences,
privileges, and restrictions. There shall always be a class or
series of shares outstanding that has complete voting rights
except as limited or restricted by voting rights conferred on
some other class or series of outstanding shares.
6.02 CERTIFICATES FOR FULLY PAID SHARES
Neither shares nor certificates representing shares may be issued
by the Corporation until the full amount of the consideration has
been received when the consideration has been paid to the
Corporation, the shares shall be deemed to have been issued and
the certificate representing the shares shall be issued to the
shareholder.
6.03 CONSIDERATION FOR SHARES
Shares may be issued for such consideration as may be fixed from
time to time by the Board of Directors, but not less than the par
value stated in the Articles of Incorporation. The consideration
paid for the issuance of shares shall consist of money paid,
labor done, or property actually received, and neither promissory
notes nor the promise of future services shall constitute payment
nor partial payment for shares of the Corporation.
6.04 REPLACEMENT OF CERTIFICATES
No replacement share certificate shall be issued until the former
certificate for the shares represented thereby shall have been
surrendered and canceled, except that replacements for lost or
destroyed certificates may be issued, upon such terms,
conditions, and guarantees as the Board may see fit to impose,
including the filing of sufficient indemnity.
6.05 SIGNING CERTIFICATES-FACSIMILE SIGNATURES
All share certificates shall be signed by the officer(s)
designated by the Board of Directors. The signatures of the
foregoing officers may be facsimiles. If the officer who has
signed or whose facsimile signature has been placed on the
certificate has ceased to be such officer before the certificate
issued, the certificate may be issued by the Corporation with the
same effect as if he or she Ire such officer on the date of its
issuance.
6.06 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, at such times and
places as the requirements of the Corporation may necessitate and
the Board of Directors may designate. Each registrar appointed,
if any, shall be an incorporated bank or trust company, either
domestic or foreign.
6.07 CONDITIONS OF TRANSFER
The party in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof as regards the
Corporation, provided that whenever any transfer of shares shall
be made for collateral security, and not absolutely, and prior
written notice thereof shall be given to the Secretary of the
Corporation, or to its transfer agent, if any, such fact shall be
stated in the entry of the transfer.
6.08 REASONABLE DOUBTS AS TO RIGHT TO TRANSFER
When a transfer of shares is requested and there is reasonable
doubt as to the right of the person seeking the transfer, the
Corporation or its transfer agent, before recording the transfer
of the shares on its books or issuing any certificate therefor,
may require from the person seeking the transfer reasonable proof
of that person's right to the transfer. If there remains a
reasonable doubt of the right to the transfer, the Corporation
may refuse a transfer unless the person gives adequate security
or a bond of indemnity executed by a corporate surety or by two
individual sureties satisfactory to the Corporation as to form,
amount, and responsibility of sureties. The bond shall be
conditioned to protect the Corporation, its officers, transfer
agents, and registrars, or any of them, against any loss, damage,
expense, or other liability for the transfer or the issuance of a
new certificate for shares.
ARTICLE SEVEN - CORPORATE RECORDS AND ADMINISTRATION
7.01 MINUTES OF CORPORATE MEETINGS
The Corporation shall keep at the principal office, or such other
place as the Board of Directors may order, a book recording the
minutes of all meetings of its Shareholders and Directors, with
the time and place of each meeting, whether such meeting was
regular or special, a copy of the notice given of such meeting,
or of the written waiver thereof, and, if it is a special
meeting, how the meeting was authorized. The record book shall
further show the number of shares present or represented at
Shareholders' meetings, and the names of those present and the
proceedings of all meetings.
7.02 SHARE REGISTER
The Corporation shall keep at the principal office, or at the
office of the transfer agent, a share register showing the names
of the Shareholders, their addresses, the number and class of
shares issued to each, the number and date of issuance of each
certificate issued for such shares, and the number and date of
cancellation of every certificate surrendered for cancellation.
The above information may be kept on an information storage
device such as a computer, provided that the device is capable of
reproducing the information in clearly legible form. If the
Corporation is taxed under Internal Revenue Code Section 1244 or
Subchapter S, the Officer issuing shares shall maintain the
appropriate requirements regarding issuance.
7.03 CORPORATE SEAL
The Board of Directors may at any time adopt, prescribe the use
of, or discontinue the use of, such corporate seal as it deems
desirable, and the appropriate officers shall cause such seal to
be affixed to such certificates and documents as the Board of
Directors may direct.
7.04 BOOKS OF ACCOUNT
The Corporation shall maintain correct and adequate accounts of
its properties and business transactions, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses,
capital, surplus, and shares. The corporate bookkeeping
procedures shall conform to accepted accounting practices for the
Corporation's business or businesses. subject to the foregoing,
The chart of financial accounts shall be taken from, and designed
to facilitate preparation of, current corporate tax returns. Any
surplus, including earned surplus, paid-in surplus, and surplus
arising from a reduction of stated capital, shall be classed by
source and shown in a separate account. If the Corporation is
taxed under Internal Revenue Code Section 1244 or Subchapter S,
the officers and agents maintaining the books of account shall
maintain the appropriate requirements.
7.05 INSPECTION OF CORPORATE RECORDS
A Director or Shareholder demanding to examine the Corporation's
books or records may be required to first sign an affidavit that
the demanding party will not directly or indirectly participate
in reselling the information and will keep it confidential other
than in use for proper purposes reasonably related to the
Director's or Shareholder's role. A Director who insists on
examining the records while refusing to sign this affidavit
thereby resigns as a Director.
7.06 FISCAL YEAR
The fiscal year of the Corporation shall be as determined by the
Board of Directors and approved by the Internal Revenue Service.
The Treasurer shall forthwith arrange a consultation with the
Corporation's tax advisers to determine whether the Corporation
is to have a fiscal year other than the calendar year. If so, the
Treasurer shall file an election with the Internal Revenue
Service as early as possible, and all correspondence with the
IRS, including the application for the Corporation's Employer
Identification Number, shall reflect such non-calendar year
election.
7.07 WAIVER OF NOTICE
Any notice required by law or by these Bylaws may be waived by
execution of a written waiver of notice executed by the person
entitled to the notice. The waiver may be signed before or after
the meeting.
ARTICLE EIGHT - ADOPTION OF INITIAL BYLAWS
The Board of Directors adopted the foregoing bylaws on March 13,
1999.
/S/ Inge L. E. Kerster Director
Atttested to, and certified by:
/S/ Inge L. E. Kerster,
Secretary
