U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
NEW RIVER INVESTMENTS, INC.
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(Name of Small Business Issuer)
Nevada 88-0477169
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(State or Other Jurisdiction of I.R.S. Employer Identification Number
Incorporation or Organization)
#280-815 West Hastings Street, Vancouver, BC V6C 1B4
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(Address of Principal Executive Offices including Zip Code)
(604) 608-1500
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(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act: Common Stock, Par
Value $0.001
(Title of Class)
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TABLE OF CONTENTS
PART I
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ITEM 1. BUSINESS 4
History and Organization 4
Proposed Business 4
Risk Factors 5
ITEM 2. PLAN OF OPERATION 10
General Business Plan 10
Structure of Acquisition 12
No Dividend 14
Employees 14
Competition 14
Liquidity and Capital Resources 14
ITEM 3. DESCRIPTION OF PROPERTY 14
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 14
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTER AND CONTROL PERSONS 15
ITEM 6. EXECUTIVE COMPENSATION 17
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 17
ITEM 8. DESCRIPTION OF SECURITIES 17
PART II
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ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 18
ITEM 2. LEGAL PROCEEDINGS 19
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND
FINANCIAL DISCLOSURE 19
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES 19
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS 20
PART F/S
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FINANCIAL STATEMENTS 21
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PART III
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ITEMS 1& 2 INDEX TO AND DESCRIPTION OF EXHIBITS 22
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
HISTORY AND ORGANIZATION
New River Investments, Inc. (the "Company"), was organized under the laws
of the State of Nevada on November 1, 2000 under the name New River Investments,
Inc.
The Company was organized for the purposes of creating a corporate vehicle
to locate and acquire an operating business entity which management believes is
a suitable acquisition candidate (a "target company"). The Company will not
restrict its search to any specific business, industry or geographical location.
The Company does not currently engage in any business activities that
provide any cash flow. The costs of identifying, investigating, and analyzing
business combinations will be paid with money in the Company's treasury or
loaned to the Company by management.
Although the Company was under no obligation to do so, it has voluntarily
filed this registration statement because it believes that it can better
facilitate its business goals if it were a "reporting issuer" under the
Securities Exchange Act of 1934 (the "Exchange Act").
PROPOSED BUSINESS
The Company will seek to locate and acquire a target company which, in the
opinion of the Company's management (sometimes referred to as the "Management"),
offers long term growth potential. The Company will not restrict its search to
any specific business, industry or geographical location. The Company may seek
to acquire a target company which has just commenced operations, or which works
to avail itself of the benefits of being a "reporting issuer" in order to
facilitate capital formation to expand into new products or markets.
There are certain perceived benefits to being a reporting company with a
class of publicly-traded securities. These are commonly thought to include the
following:
* the ability to use registered securities to make acquisitions of assets or
businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital market.
A target company, if any, which may be interested in a business combination
with the Company may include the following:
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* a company for which a primary purpose of becoming public is the use of its
securities for the acquisition of assets or businesses;
* a company which is unable to find an underwriter of its securities or is
unable to find an underwriter of securities on terms acceptable to it;
* a company which wishes to become public with less dilution of its common
stock than would occur upon an underwriting;
* a company which believes that it will be able obtain investment capital on
more favorable terms after it has become public;
* a foreign company which may wish an initial entry into the United States
securities market;
* a special situation company, such as a company seeking a public market to
satisfy redemption requirements under a qualified Employee Stock Option
Plan;
* a company seeking one or more of the other perceived benefits of becoming
a public company.
There is no assurance that the Company will be able to effect an
acquisition of a target company. In addition, at this time, no specifics as to
an acquisition or as to the nature of the target company can be provided.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
1. Anticipated Change in Control and Management. Upon the successful
completion of the acquisition of a target company, the Company
anticipates that it will have to issue to the target company or its
shareholders some authorized but unissued common stock which, when
issued, will comprise a majority of the Company's then issued and
outstanding shares of common stock. Therefore, the Company anticipates
that upon the closing of the acquisition of a target company, the
Company will no longer be controlled by the current shareholders. In
addition, existing management and directors may resign. The Company
cannot give any assurance that the experience or qualifications of new
management, as it relates to either the operation of the Company's
activities or the operation of the business, assets or property being
acquired, will be adequate for such purposes.
2. Conflict of Interest - Management's Fiduciary Duties. A conflict of
interest may arise between management's personal financial benefit and
management's fiduciary duty to shareholders.
The Company's directors and three officers are or may become officers,
directors, controlling shareholders and/or partners of other entities
engaged in a variety of businesses. Messers Richard Silas, Nicolas Awde
and Bruce Jamieson are engaged in other business activities.
Accordingly, the amount of time they will devote to the Company's
business will vary. There exist potential conflicts of interest
including allocation of time between the Company and its management's
other business interests.
3. Experience of Management; Consultants. Although Management has general
business experience, it has limited experience in effecting business
combinations and may not have any significant experience in acquiring or
operating certain business interests that the company might choose to
acquire. Management does not have, nor does it presently intend to enter
into, any contracts or agreements with any consultants or advisors with
respect to possible business activities. Consequently, Management has
not established the criteria that will be used to hire independent
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consultants regarding their experience, the services to be provided, the
term of service, etc., and no assurance can be made that the Company will
be able to obtain such assistance on acceptable terms.
4. Potential Future Rule 144 Sales. Of the 100,000,000 shares of the
Company's Common Stock authorized, there are presently issued and
outstanding 26,000 shares; of which all 26,000 shares are "restricted
securities" as that term is defined under the Securities Act of 1933 (the
"Securities Act"), and in the future may be sold in compliance with Rule
144 of the Act, or pursuant to a Registration Statement filed under the
Act. Rule 144 provides, in essence, that a person holding restricted
securities for a period of 1 year may sell those securities in
unsolicited brokerage transactions of in transactions with a market
maker, in an amount equal to 1% of the Company's outstanding common stock
every 3 months. Rule 144 also permits, under certain circumstances, the
sale of shares by a person who is not an affiliate of the Company and who
has satisfied a two (2) year holding period without any quantity
limitation, whether or not there is adequate current public information
available. Investors should be aware that sales under Rule 144, or
pursuant to a registration statement filed under the Securities Act, may
have a depressive effect on the market price of the Company's common
stock in any market that may develop for such shares.
5. Possible Issuance of Additional Shares. The Company's Board of Directors
has the power to issue any or all of such unissued but authorized shares
without stockholder approval for such consideration as it deems.
Management presently anticipates that it may choose to issue a
substantial amount of the Company's shares in connection with the
acquisition of a target business. Furthermore, the Company may engage in
a share split or may further increase its authorized capital in
connection with the acquisition of a target business.
6. Risks of Leverage. There are currently no limitations relating to the
Company's ability to borrow funds to increase the amount of capital
available to it to effect a business combination or otherwise finance the
operations of any acquired business. The amount and nature of any
borrowings by the Company will depend on numerous factors, including the
Company's capital requirements, the Company's perceived ability to meet
debt services on any such borrowings, and then-prevailing conditions in
the financial, if required or otherwise sought, will be available on
terms deemed to be commercially acceptable and in the best interest of
the Company's inability to borrow funds required to effect or facilitate
a business combination, or to provide funds for an additional infusion of
capital into an acquired business, may have a material adverse affect on
the Company's financial condition and future prospects.
Additionally, to the extent that debt financing ultimately proves to be
available, any borrowings may subject the Company to various risks
traditionally associated with incurring of indebtedness, including:
* if the Company's operating revenues after the acquisition were to be
insufficient to pay debt service, there would be a risk of default and
foreclosure on the Company's assets.
* if a loan agreement containing covenants is breached without a waiver
or renegotiation of the terms of that covenant, then the lender could
have the right to accelerate the payment of the indebtedness even if
the Company has made all principal and interest payments when due.
* if the interest rate on a loan fluctuated or the loan was payable on
demand, the Company would bear the risk of variations in the interest
rate or demand for payment.
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* if the terms of a loan did not provide for amortization prior to
maturity of the full amount borrowed and the "balloon" payment could
not be refinanced at maturity on acceptable terms, the Company might
be required to seek additional financing and, to the extent that
additional financing is not available on acceptable terms, to
liquidate the Company's assets.
7. Possible Need for Additional Financing. The Company cannot ascertain
with any degree of certainty the capital requirements for any particular
acquired business inasmuch as the Company has not yet identified any
acquisition candidates. If the target company requires additional
financing, such additional financing (which, among other forms, could be
derived from the public or private offering of securities or from the
acquisition of debt through conventional bank financing), may not be
available due to, among other things, the target company not having
sufficient:
* credit or operating history;
* income stream;
* profit level;
* asset base eligible to be collateralized; or
* market for its securities.
Since no specific business has been targeted for acquisition, it is not
possible to predict the specific reasons why conventional private or
public financing or conventional bank financing might not become
available. Although there are no agreements between the Company and any
of its officers and/or directors pursuant to which the Company may borrow
and such officers and/or directors are obligated to lend the Company
monies, there are no restrictions on the Company's right to borrow money
from officers and directors. No stockholder approval is required in
connection with any such loan.
8. Penny Stock Rules. Under Rule 15g-9, a broker or dealer may not sell a
"penny stock" (as defined in Rule 3a51-1) to effect the purchase of a
penny stock by any person unless:
(1) such sale or purchase is exempt from Rule 15g-9; or
(2) prior to the transaction the broker or dealer has (a) approved the
person's account for transaction in penny stocks in accordance with
Rule 15g-9 and (b) received from the person a written agreement to
the transaction setting forth the identity and quantity of the penny
stock to be purchased.
The United States Securities and Exchange Commission (the "Commission")
has adopted regulations that generally define a penny stock to be any
equity security other than a security excluded from such definition by
Rule 3a51-1. Such exemptions include, but are not limited to (a) an
equity security issued by an issuer that has (i) net tangible assets of
at least $2,000,000, if such issuer has been in continuous operations for
at least three years; (ii) net tangible assets of at least $5,000,000, if
such issuer has been in continuous operation for less than three years;
or (iii) average revenue of at least $6,000,000 for the preceding three
years; (b) except for purposes of Section 7(b) of the Exchange Act and
Rule 419, any security that has a price of $5.00 or more; (c) and a
security that is authorized or approved for authorization upon notice of
issuance for quotation on the National Association of Securities ("NASD")
Dealers Automated Quotation System ("NASDAQ").
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It is likely that the Company's common stock will be subject to the
regulations on penny stocks; consequently, the market liquidity for the
Company's common stock may be adversely affected by such regulations.
This, in turn, may affect shareholder's ability to sell their shares
following the completion of an acquisition.
There is no current trading market for the Company's common stock (the
"Shares") and there can be no assurance that a trading market will
develop, or, if such a trading market does develop, that it will be
sustained. The Shares, to the extent that a market develops for the
Shares at all, will likely appear in what is customarily known as the
"pink sheets" or on the NASD over-the-counter Bulletin Board (the
"OTCBB"), which may limit the marketability and liquidity of the Shares.
To date, neither the Company nor anyone acting on behalf of the Company
has taken any affirmative steps to request or encourage any broker/dealer
to act as a market maker for the Company's common stock. The Company has
had no discussions or understandings with any "market makers" regarding
the participation of any such market maker in the future trading market,
if any, in the Company's common stock. Management expects that
discussions in this area will ultimately be initiated by the management
in office after completion of the acquisition of a target company, if
ever or at all.
9. Risks Associated with Operations in Foreign Countries. The Company's
business plan is to seek to acquire a target company. Management's
discretion is unrestricted, and the Company may participate in any
business whatsoever that may in the opinion of Management meet the
Company's business objectives. The Company may acquire a business
outside the United States. The Company has not limited the scope of its
search to a particular region or country. Accordingly, if the Company
acquires a business located, or operating in a foreign jurisdiction, the
Company's operations may be adversely affected to the extent of the
existence of unstable economic, social and/or political conditions in
such foreign regions and countries.
10. No Operating History or Revenue and Minimal Assets. The Company has had
no operating history nor any revenues or earnings from operations. The
Company has no significant assets or financial resources. The Company
will, in all likelihood, sustain operating expenses without corresponding
revenues, at least until the consummation of a business combination.
This may result in the Company incurring a net operating loss which will
increase continuously until the Company can consummate a business
combination with a target company. There is no assurance that the
Company can identify such a target company and consummate such a business
combination.
11. Speculative Nature of the Company's Proposed Operations. The success of
the Company's proposed plan of operation will depend to a great extent on
the operations, financial condition and management of the identified
target company. While present management will prefer business
combinations with entities having established operating histories, there
can be no assurance that the Company will be successful in locating
businesses meeting such criteria. In the event the Company completes a
business combination, of which there can be no assurance, the success of
the Company's operations will be dependent upon management of the target
company and numerous other factors beyond the Company's control.
12. Scarcity of and Competition for Business Opportunities and Combinations.
The Company is and will continue to be an insignificant participant in
the business of seeking mergers with and acquisitions of business
entities. A large number of established and well-financed entities,
including venture capital firms, are active in mergers and acquisitions
of companies which may be merger or acquisition target candidates for the
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Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the
Company and, consequently, the Company will be at a competitive
disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, the Company
will also compete with numerous other small public companies in seeking
merger or acquisition candidates.
13. No Agreement for Acquisition of a Target Company Combination. The
Company has no current arrangement, agreement or understanding with
respect to engaging in a merger with or acquisition of a specific
business entity. There can be no assurance that the Company will be
successful in identifying and evaluating suitable business opportunities
or in concluding a business combination. Management has not identified
any particular industry or specific business within an industry for
evaluation by the Company. There is no assurance that the Company will
be able to negotiate a business combination on terms favorable to the
Company. The Company has not established a specific length of operating
history or a specified level of earnings, assets, net worth or other
criteria which it will require a target company to have achieved, or
without which the Company would not consider a business combination with
such business entity. Accordingly, the Company may enter into a business
combination with a business entity having no significant operating
history, losses, limited or no potential for immediate earnings, limited
assets, negative net worth or other negative characteristics.
14. Reporting Requirements May Delay or Preclude Acquisition. Section 13 of
the Securities Exchange Act of 1934 (the "Exchange Act") requires
companies subject thereto to provide certain information about
significant acquisitions including certified financial statements for the
company acquired covering one or two years, depending on the relative
size of the acquisition. The time and additional costs that may be
incurred by some target companies to prepare such financial statements
may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by the Company. Acquisition prospects
that do not have, or are unable to obtain, the required audited
statements may not be appropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable.
15. Lack of Market Research or Marketing Organization. The Company has
neither conducted, nor have others made available to it, market research
indicating that demand exists for the transactions contemplated by the
Company. Even in the event demand exists for a merger or acquisition of
the type contemplated by the Company, there is no assurance the Company
will be successful in completing any such business combination.
16. Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a
business combination with only one business entity. Consequently, the
Company's activities will be limited to those engaged in by the business
entity which the Company merges with or acquires. The Company's
inability to diversify its activities into a number of areas may subject
the Company to economic fluctuations within a particular business or
industry and therefore increase the risks associated with the Company's
operations.
17. Regulation under Investment Company Act. Although the Company will be
subject to regulation under the Exchange Act, management believes the
Company will not be subject to regulation under the Investment Company
Act of 1940, insofar as the Company will not be engaged in the business
of investing or trading in securities. In the event the Company engages
in business combinations which result in the Company holding passive
investment interests in a number of entities, the Company could be
subject to regulation under the Investment Company Act of 1940. In such
event, the Company would be required to register as an investment company
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and could be expected to incur significant registration and compliance
costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under
the Investment Company Act of 1940 and, consequently, any violation of
such Act could subject the Company to material adverse consequences.
18. Probable Change In Control and Management. A business combination
involving the issuance of the Company's common stock will, in all
likelihood, result in shareholders of a target company obtaining a
controlling interest in the Company. Any such business combination may
require shareholders of the Company to sell or transfer all or a portion
of the Company's common stock held by them. The resulting change in
control of the Company will likely result in removal of the present
officers and directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the Company.
19. Taxation. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may
undertake. Currently, such transactions may be structured so as to
result in tax-free treatment to both companies, pursuant to various
federal and state tax provisions. The Company intends to structure any
business combination so as to minimize the federal and state tax
consequences to both the Company and the target company and their
respective holders; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal and state
taxes which may have an adverse effect on both parties to the transaction
and their shareholders.
ITEM 2. MANAGEMENT'S DISCUSSION, ANALYSIS OR PLAN OF OPERATION
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire a target company which desires to seek the perceived
advantages of a corporation which has a class of securities registered under the
Exchange Act.
Management anticipates seeking out a target company through solicitation.
Such solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Management may engage in such solicitation
directly or may employ one or more other entities to conduct or assist in such
solicitation. Management and its affiliates pay referral fees to consultants
and others who refer target businesses for mergers into public companies in
which management and its affiliates have an interest. Payments are made if a
business combination occurs, and may consist of cash or a portion of the stock
in the Company retained by management and its affiliates, or both.
The Company will not restrict its search to any specific business,
industry, or geographical location and the Company may participate in a business
venture of virtually any kind or nature. Management anticipates that it will be
able to participate in only one potential business venture because the Company
has nominal assets and limited financial resources. Please refer to "ITEM F/S.
FINANCIAL STATEMENTS." This lack of diversification should be considered a
substantial risk to the shareholders of the Company because it will not permit
the Company to offset potential losses from one venture against gains from
another.
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The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business entities
seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, providing liquidity for shareholders and
other factors. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
difficult and complex.
The Company has, and may continue to have, no capital with which to
provide the owners of business entities with any cash or other assets.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company and in some cases,
shareholders of the Company whose background makes them capable of assessing
such business opportunities, these persons are not professional business
analysts. In analyzing prospective business opportunities, management may
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors.
This discussion of the proposed criteria is not meant to be restrictive of
the Company's virtually unlimited discretion to search for and enter into
potential business opportunities.
The Exchange Act requires that any merger or acquisition candidate comply
with certain reporting requirements, which include providing audited financial
statements to be included in the reporting filings made under the Exchange Act.
The Company will not acquire or merge with any company for which audited
financial statements cannot be obtained at or within a reasonable period of time
after closing of the proposed transaction.
The Company may enter into a business combination with a business entity
that desires to establish a public trading market for its shares. A target
company may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with the
Company. Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders or the inability to
obtain an underwriter or to obtain an underwriter on satisfactory terms.
The Company will not restrict its search for any specific kind of business
entities, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
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business life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional capital, may desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer.
Management of the Company, which in all likelihood will not be experienced
in matters relating to the business of a target company, will rely upon its own
efforts in accomplishing the business purposes of the Company. Outside
consultants or advisors may be utilized by the Company to assist in the search
for qualified target companies. If the Company does retain such an outside
consultant or advisor, any cash fee earned by such person will need to be
assumed by the target company, as the Company has limited cash assets with which
to pay such obligation. No such consultant or advisor has been retained.
Following a business combination the Company may benefit from the services
of others in regard to accounting, legal services, underwriting and corporate
public relations. If requested by a target company, management may recommend
one or more underwriters, financial advisors, accountants, public relations
firms or other consultants to provide such services.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to
the Company only on the condition that the services of a consultant or advisor
be continued after a merger or acquisition. Such preexisting agreements of
target companies for the continuation of the services of attorneys, accountants,
advisors or consultants could be a factor in the selection of a target company.
STRUCTURE OF ACQUISITION
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with a target company. It may also acquire
stock or assets of a target company. Upon consummation of an acquisition, it is
likely that the present management and shareholders of the Company will no
longer be in control of the Company. In addition, it is likely that the
Company's officers and director will, as part of the terms of the acquisition
transaction, resign and be replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has entered into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a blank check
company. The issuance of additional securities and their potential sale into
any trading market which may develop in the Company's securities may depress the
market value of the Company's securities in the future if such a market
develops, of which there is no assurance.
While the terms of a business transaction to which the Company may be a
party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition in a "tax-free" reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended (the "Code").
With respect to any merger or acquisition negotiations with a target
company, management expects to focus on the percentage of the Company which
target company shareholders would acquire in exchange for their shareholdings in
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the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger with or acquisition of a target company. The percentage of ownership may
be subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's shareholders at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing and will
include miscellaneous other terms.
The Company will not acquire or merge with any entity which cannot provide
audited financial statements at or within a reasonable period of time after
closing of the proposed transaction. The Company is subject to all of the
reporting requirements included in the Exchange Act. Included in these
requirements is the duty of the Company to file audited financial statements as
part of or within 60 days following its Form 8-K to be filed with the Securities
and Exchange Commission upon consummation of a merger or acquisition, as well as
the Company's audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial statements are not
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the representations made
by the target company, the closing documents may provide that the proposed
transaction will be voidable at the discretion of the present management of the
Company.
NO DIVIDENDS
The Company has not paid any dividends on its common stock; nor does the
Company intend to declare and pay dividends prior to the consummation of an
acquisition. The payment of dividends after any acquisition will be within the
discretion of the Company's then Board of Directors.
EMPLOYEES
The Company presently has no employees. The Company has three officers and
two directors. Mr. Richard Silas is the President and a Director of the
Company, Mr. Nicolas Awde is the Secretary and a Director of the Company and Mr.
Bruce Jamieson is the Treasurer of the Company. Messrs. Silas, Awde and
Jamieson are all engaged in other business activities, and the amount of time
they will both devote to the Company's business will vary. Upon completion of
the public offering, it is anticipated that management will devote such time to
the Company's affairs each month as may be necessary to carry on the Company's
business plans.
COMPETITION
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
<PAGE>
Page 14
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
LIQUIDITY AND CAPITAL RESOURCES
The Company has limited working capital and a deficit. The ability of the
Company to continue as a going concern is dependent upon its ability to obtain
adequate financing to reach profitably levels of operation. It is not possible
to predict whether financing efforts will be successful or if the Company will
attain profitable levels of operations.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to acquire
any properties. The Company is presently using as a mailing address, at no
cost, the office of its Corporate Counsel, Heenan Blaikie, 2200-1055 West
Hastings Street, Vancouver, B.C., Canada. See "Item 4. Security Ownership of
Certain Beneficial Owners and Management."
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth each person known by the Company to be the
beneficial owner of five percent or more of the Company's Common Stock, all
directors individually and all directors and officers of the Company as a group.
Unless otherwise noted, each person has sole voting and investment power with
respect to the shares shown.
================================================================================
NAME AND ADDRESS OF SHARES OF ATTRIBUTED APPROXIMATE
BENEFICIAL OWNER COMMON STOCK BENEFICIAL PERCENTAGE
BENEFICIALLY OWNERSHIP OWNED
--------------------------------------------------------------------------------
Richard Silas 2,000 N/A 0.00002%
#1202-1516 Davie Street
Vancouver, BC V6G 1V6
--------------------------------------------------------------------------------
Pacific Empire Venture Ltd. 2,200 N/A 0.000022%
#702-1489 Marine Drive
West Vancouver, BC V7T 1B8
Beneficial Owner: Nicolas Awde
--------------------------------------------------------------------------------
Bruce Jamieson 2,450 N/A 0.0000245%
3582 Rockview Place
West Vancouver, BC V7V 3H3
--------------------------------------------------------------------------------
Officers and Directors as
a Group (3 people) 6,650 N/A 0.0000665%
================================================================================
<PAGE>
Page 15
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Set forth below is the name of each of the directors and officers of the
Company, all positions and offices with the Company held, the period during
which such person has never served as such, and the business experience during
at least the last five years:
Name Age Positions and Offices Held
---- --- --------------------------
Richard Silas 29 President and Director (since inception)
Nicolas Awde 27 Secretary and Director (since inception)
Bruce Jamieson 54 Treasurer (since inception)
There are no agreements or understandings for the officers or directors to
resign at the request of another person and the above-named officers and
directors are not acting on behalf of nor will act at the direction of any other
person.
Mr. Richard Silas - Mr. Silas has served as an Officer and Director with private
and public trading companies. Over the last 5 years he has assisted in securing
financing up to CDN$5,000,000 He has worked in a variety of capacities such as
management, corporate communications, and marketing for a variety of industries
such as mining, oil and gas, and the Hi-tech sector.
Mr. Nicolas Awde - President of Pacific Empire Ventures Ltd., a Internet
Consulting group out of Vancouver, BC, Canada. Mr. Awde brings more than 2 years
of private company experience providing capital funding, investor relations,
corporate development & corporate communications in various business sectors.
Mr. Bruce Jamieson - Mr. Jamieson has been a Certified General Accountant since
1978. Until November 1998 Mr. Jamieson was the principal of Bruce F. Jamieson
Inc., CGA (a public accounting firm in Vancouver) with the majority of his
practice focussing on assisting public companies in all aspects of business
including audits and filing of regulatory documents. For the last 6 years,
Bruce Jamieson has been a voluntary director and chair of the finance committee
for a large healthcare organization in the Vancouver area. He also holds a
Bachelor's degree with honors in mathematics.
Conflicts of Interest.
The Company's officers and directors may organize other companies of a
similar nature and with a similar purpose as the Company. Consequently, there
are potential inherent conflicts of interest in acting as an officer and
director of the Company. Insofar as the officers and the sole director are
engaged in other business activities, he will devote only a minor amount of time
to the Company's affairs. The Company does not have a right of first refusal
pertaining to opportunities that come to management's attention insofar as such
opportunities may relate to the Company's proposed business operations.
A conflict may arise in the event that another blank check and/or blind
pool company (a "blind pool company") with which management is affiliated is
formed and actively seeks a target company. It is anticipated that target
companies will be located for the Company and other blind pool companies in
chronological order of the date of formation of such blind pool companies or by
lot. However, any blank check companies that may be formed may differ from the
Company in certain items such as place of incorporation, number of shares and
shareholders, working capital, types of authorized securities, or other items.
It may be that a target company may be more suitable for or may prefer a certain
blind pool company formed after the Company. In such case, a business
combination might be negotiated on behalf of the more suitable or preferred
<PAGE>
Page 16
blind pool company regardless of date of formation or choice by lot. The
directors will be responsible for seeking, evaluating, negotiating and
consummating a business combination with a target company which may result in
terms providing benefits to the directors.
The Company may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target company to the Company where that
reference results in a business combination. No finder's fee of any kind will
be paid by the Company to management or promoters of the Company or to their
affiliates. No loans of any type have, or will be, made by the Company to
management or promoters of the Company or to any of their associates or
affiliates.
Management has not adopted policies involving possible conflicts of
interest.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by Management to resolve conflicts of interest
in favor of the Company could result in liability of Management to the Company.
However, any attempt by shareholders to enforce a liability of Management to the
Company would most likely be prohibitively expensive and time consuming.
Investment Company Act of 1940.
Although the Company will be subject to regulation under the Securities Act
of 1933 (the "Securities Act") and the Exchange Act, management believes the
Company will not be subject to regulation under the Investment Company Act of
1940 insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business
combinations which result in the Company holding passive investment interests in
a number of entities the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. The Company has not obtained a formal
determination from the Commission as to the status of the Company under the
Investment Company Act of 1940. Any violation of such Investment Company Act
would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's officers and directors do not receive any compensation for
their services rendered to the Company, have not received such compensation in
the past, and are not accruing any compensation pursuant to any agreement with
the Company.
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has no properties and at this time no agreements to acquire any
properties. The Company is presently using the office of it's Corporate Counsel,
Heenan Blaikie, located at 2200-1055 West Hastings Street, Vancouver, B.C.
Canada, at no cost as the Company's office and mailing address. Such arrangement
is expected to continue until completion of the acquisition of a target company.
<PAGE>
Page 17
ITEM 8. DESCRIPTION OF SECURITIES.
The Company is currently authorized to issue one hundred million
(100,000,000) shares of common stock at a par value of one thousandth of one
cent ($0.001) per share of which 26,000 shares were issued and outstanding as of
the date of this Registration Statement. Each outstanding share of common stock
entitles the holder to one vote, either in person or by proxy, on all matters
that may be voted upon by the owners thereof at meetings of the stockholders.
The holders of common stock (i) have equal rights to dividends from funds
legally available therefor, when, as and if declared by the Board of Directors
of the Company; (ii) are entitled to share ratably in all of the assets of the
Company available for distribution to holders of common stock upon liquidation,
dissolution or winding up of the affairs of the Company; (iii) do not have
preemptive, subscription or conversion rights, and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may vote at
all meetings of stockholders.
Reports to Stockholders.
The Company intends to furnish its stockholders with annual reports
containing audited financial statements as soon as practicable after the end of
each fiscal year. The Company's fiscal year ends on December 31 of each year.
In addition, the Company intends to issue unaudited interim reports and
financial statements on a quarterly basis.
Dividends.
The Company has not declared any dividends since inception, and has no
present intention of paying any cash dividends on its common stock in the
foreseeable future. The payment by the Company of dividends, if any, in the
future, rests within the discretion of its Board of Directors and will depend,
among other things, upon its earnings, capital requirements and financial
condition, as well as other relevant factors.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is no trading market for the Company's Common Stock at present and
there has been no trading market to date. There is no assurance that a trading
market will ever develop or, if such a market does develop, that it will
continue.
The National Securities Market Improvement Act of 1996 limited the
authority of states to impose restrictions upon sales of securities made
pursuant to Sections 4(1) and 4(3) of the Securities Act of 1933, as amended
(the "Securities Act") and of companies which file reports under Sections 13 or
15(d) of the Securities Exchange Act. The Company intends to file such reports.
As a result, sales of the Company's common stock in the secondary trading market
by the holders thereof may be made pursuant to Section 4(1)of the Securities Act
(sales other than by an issuer, underwriter or broker).
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (I) that a broker or dealer approve a person's account for
transactions in penny stocks and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
<PAGE>
Page 18
account for transactions in penny stocks, the broker or dealer must (I) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (I)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
If, after a merger or acquisition, the Company does not meet the
qualifications for listing on the NASDAQ Stock Market Inc.'s SmallCap Market
("NASDAQ-SCM"), the Company's securities may be traded on the OTCBB. The OTCBB
market differs from national and regional stock exchanges in that it (1) is not
sited in a single location but operates through communication of bids, offers
and confirmations between broker-dealers and (2) securities admitted to
quotation are offered by one or more broker-dealers rather than the "specialist"
common to stock exchanges. The Company may seek to have its securities quoted
on the OTCBB or may offer its securities in what are commonly referred to as the
"pink sheets" of the National Quotation Bureau, Inc.
In order to qualify for listing on the NASDAQ-SCM, a company must have at
least (i) net tangible assets of $4,000,000 or market capitalization of
$50,000,000 or net income for two of the last three years of $750,000; (ii)
public float of 1,000,000 shares with a market value of $5,000,000; (iii) a bid
price of $4.00; (iv) three market makers; (v) 300 shareholders and (vi) an
operating history of one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the Nasdaq SmallCap Market, a company
must have at least (i) net tangible assets of $2,000,000 or market
capitalization of $35,000,000 or net income for two of the last three years of
$500,000; (ii) a public float of 500,000 shares with a market value of
$1,000,000; (iii) a bid price of $1.00; (iv) two market makers; and (v) 300
shareholders.
If the Company is unable initially to satisfy the requirements for
quotation on the NASDAQ-SCM or becomes unable to satisfy the requirements for
continued quotation thereon, and trading, if any, is conducted in the OTCBB, a
shareholder may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's securities.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Other than to its founding shareholders, the Company has not sold any
securities.
<PAGE>
Page 19
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Nevada Revised Statutes Chapter 78, Private Corporations, section 78.140,
provides that a Nevada corporation has the power, under specified circumstances,
to indemnify its directors, officers, employees and agents, against judgements,
penalties, fines, settlements, and reasonable expenses incurred in any action,
suit or proceeding: but if the person is found liable to the company or is found
liable on the basis that personal benefit was improperly received by the person,
the indemnification is limited to reasonable expenses actually incurred by the
person and shall not be made in respect of any proceeding in which the person
shall have been found liable for willful or intentional misconduct in the
performance of his duty to the company. The Articles of the Company may
restrict the circumstances under which a company is required or permitted to
indemnify a person.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION
OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
<PAGE>
Page 20
PART F/S
FINANCIAL STATEMENTS
Index
Auditors Report dated December 14, 2000
Audited Balance Sheets as of November 30, 2000
Audited Statement of Operations for the period from November 1, 2000
(inception) to November 30, 2000
Audited Statement of Stockholders' Equity (Deficit) for the period
from November 1, 2000 (inception) to November 30, 2000
Statement of Cash Flows for the period from November 1, 2000 (inception)
to November 30, 2000
Notes to Financial Statements
<PAGE>
NEW RIVER INVESTMENTS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
NOVEMBER 30, 2000
<PAGE>
NEW RIVER INVESTMENTS, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
NOVEMBER 30, 2000
AUDITOR'S REPORT - Comments by Auditors for
U.S. Readers on Canada - United States Reporting Difference
BALANCE SHEET
STATEMENT OF OPERATIONS
STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIENCY)
STATEMENT OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
<PAGE>
Page F-2
AUDITORS' REPORT
--------------------------------------------------------------------------------
To the Board of Directors of New River Investments, Inc.
We have audited the balance sheet of New River Investments, Inc. (A Development
Stage Company) as at November 30, 2000 and the statements of operations,
changes in stockholders' equity (deficiency) and cash flows for the period from
November 1, 2000, date of incorporation, to November 30, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at November 30, 2000 and the
results of its operations and the changes in stockholders' equity and cash flows
for the period from November 1, 2000, date of incorporation, to November 30,
2000 in accordance with generally accepted accounting principles in the Canada.
/s/Jones, Richards & Company"
CHARTERED ACCOUNTANTS
December 14, 2000
Vancouver, B.C.
COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-UNITED STATES REPORTING
--------------------------------------------------------------------------------
DIFFERENCES
-----------
In the United States, reporting standards for auditors' would require the
addition of an explanatory paragraph following the opinion paragraph when the
financial statements are affected by a significant uncertainty such as referred
to in Note 1 regarding the Company's ability to continue as a going concern.
Our report to the directors dated December 14, 2000 is expressed in accordance
with Canadian reporting standards which do not permit a reference to such
uncertainties in the auditors' report when the uncertainties are adequately
disclosed in the financial statements.
/s/Jones, Richards & Company"
CHARTERED ACCOUNTANTS
December 14, 2000
Vancouver, B.C.
<PAGE>
Page F-3
NEW RIVER INVESTMENTS, INC.
(A Development Stage Company)
BALANCE SHEET
NOVEMBER 30, 2000
================================================================================
ASSETS
------
CURRENT ASSETS
Cash $ 22
================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ 1,716
--------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY)
-----------------------------------------
Capital stock
Authorized: 100,000,000 shares with
a par value of $0.001 per share
Issued: 26,000 common shares 26
Deficit accumulated during development stage (1,720)
--------------------------------------------------------------------------------
(1,694)
--------------------------------------------------------------------------------
$ 22
================================================================================
Approved on Behalf of the Board:
/s/Richard Silas /s/Nicolas Awde
---------------------------------- ----------------------------------
Director Director
The accompanying notes are an integral part of these financial statements
<PAGE>
Page F-4
NEW RIVER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE PERIOD NOVEMBER 1, 2000, DATE OF INCORPORATION, TO
NOVEMBER 30, 2000
GENERAL AND ADMINISTRATIVE EXPENSES
Office and general $ 1,720
--------------------------------------------------------------------------------
NET LOSS FOR THE PERIOD $ (1,720)
================================================================================
BASIC NET LOSS PER SHARE $ (0.07)
================================================================================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 26,000
================================================================================
The accompanying notes are an integral part of these financial statements
<PAGE>
Page F-5
NEW RIVER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD NOVEMBER 1, 2000, DATE OF INCORPORATION, TO
NOVEMBER 30, 2000
Deficit
Accumulated
Common Stock During
Number of shares Amount Development
Stage Total
================================================================================
Common stock issued for cash
November 1, 2000 2,000 $ 2 $ - $ 2
November 2, 2000 24,000 24 - 24
Net loss for the period November
1, 2000, date of incorporation,
to November 30, 2000 - - (1,720) (1,720)
--------------------------------------------------------------------------------
Balance, November 30, 2000 26,000 $ 26 $ (1,720) $(1,696)
================================================================================
The accompanying notes are an integral part of these financial statements
<PAGE>
Page F-6
NEW RIVER INVESTMENTS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD NOVEMBER 1, 2000, DATE OF INCORPORATION, TO
NOVEMBER 30, 2000
STATEMENTS OF CASH FLOWS
Cash Generated By:
Operating Activities
Net loss for the period $ (1,720)
Change in non-cash working capital items 1,716
--------------------------------------------------------------------------------
(4)
--------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds on sale of common stock 26
--------------------------------------------------------------------------------
Investing Activities: -
--------------------------------------------------------------------------------
Increase In Cash 22
Cash, Beginning Of Period -
--------------------------------------------------------------------------------
Cash, End Of Period $ 22
================================================================================
The accompanying notes are an integral part of these financial statements
<PAGE>
Page F-7
NEW RIVER INVESTMENTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2000
--------------------------------------------------------------------------------
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
--------------------------------------------------------------------------------
The Company was incorporated on November 1, 2000 in the State of Nevada. To date
the Company has had no business operations and was organized for the purpose of
creating a corporate vehicle to locate and acquire an operating business. The
ability of the Company to continue as a going concern is dependent on raising
capital to acquire a business venture and to fund future operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Company's management to make estimates and
assumptions that affect the amounts reported in the financial statements and
related noted to financial statements. Actual results may differ from those
estimates.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance
with Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation", foreign denominated monetary assets and liabilities are translated
to their United States dollar equivalents using foreign exchange rates which
prevailed at the balance sheet date. Revenue and expenses are translated at
average rates of exchange during the year. Related translation adjustments are
reported as a separate component of stockholders' equity, whereas gains or
losses resulting from foreign currency transactions are included in results of
operations.
Fair Value of Financial Instruments
In accordance with the requirements of SFAS No. 107, the Company has determined
the estimated fair value of financial instruments using available market
information and appropriate valuation methodologies. The fair value of
financial instruments classified as current assets or liabilities approximate
carrying value due to the short-term maturity of the instruments.
<PAGE>
Page F-8
Net Loss per Common Share
Basic earnings (loss) per share includes no dilution and is computed by dividing
income available to common stockholders by the weighted average number of common
shares outstanding for the period. Dilutive earnings per share reflects the
potential dilution of securities that could share in the earnings of the
Company. Because the Company does not have any potentially dilutive securities,
the accompanying presentation is only of basic loss per share.
NOTE 3 - INCORPORATION
--------------------------------------------------------------------------------
The Company was incorporated under the laws of the State of Nevada, United
States, on November 1, 2000.
<PAGE>
PART III
--------
ITEMS 1 & 2 INDEX TO AND DESCRIPTION OF EXHIBITS
------------------------------------------------
Exhibit
-------
(1) Certificate of Incorporation
--- ----------------------------
(2) Articles
--- --------
(3) By-Laws
--- -------
<PAGE>
Exhibit 1
SECRETARY OF STATE
[GRAPHIC OMITTED]
C/S
THE GREAT SEAL OF THE STATE OF NEVADA
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that NEW RIVER INVESTMENTS, INC. did on November 1, 2000 file in
this office the original Articles of Incorporation; that said Articles are now
on file and of record in the office of the Secretary of State of the State of
Nevada, and further, that said Articles contain all the provisions required by
the law of the State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand
and affixed the Great Seal of State, at my office, in
Carson City, Nevada, on November 16, 2000.
/s/ Dean Heller
Secretary of State
By /s/ Denise A. Bates
Certification Clerk
C/S
<PAGE>
Exhibit 2
FILED# C29248-00
---------
ARTICLES OF INCORPORATION NOV 01 2000
of IN THE OFFICE OF
New River Investments, Inc. /s/ Dean Heller
A Nevada Corporation DEAN HELLER, SECRETARY OF STATE
I, the undersigned, being the original incorporator herein named, for the
purpose of forming a corporation under and pursuant to Chapter 78 of the Nevada
Revised Statutes the general corporation laws of the State of Nevada, to do
business both within and without the State of Nevada, do make and file these
Articles of Incorporation hereby declaring and certifying that the facts herein
stated are true:
ARTICLE I
NAME
The name of the corporation is New River Investment, Inc.
ARTICLE II
PRINCIPAL OFFICE
Section 2.01 Resident Agent. The name and address of its resident agent for
--------------
service process is Resident Agents of Nevada, Inc. 711 S. Carson Suite 4 Carson
City, Nevada 89701.
Section 2.02 Other Offices. The corporation may also maintain offices for
-------------
the transaction of any business at such other places within or without the State
of Nevada as it may from time to time determine. Corporate business of every
kind and nature may be conducted, and meetings of directors and shareholders
held outside the State of Nevada with the same effect as if in the State of
Nevada.
ARTICLE III
PURPOSE
The corporation is organized for the purpose of engaging in any lawful
activity, within or without the State of Nevada.
<PAGE>
ARTICLE IV
SHARES OF STOCK
Section 4.01 Number and Class. The amount of the total authorized capital stock
----------------
of this corporation is One Hundred Million (100,000,000) shares with a par value
of $0.001 designated as Common Stock. The Common Stock may be issued from time
to time without action by the stockholders. The Common Stock may be issued for
such consideration as may be fixed from time to time by the Board of Directors.
The Board of Directors may issue such shares of common stock in one of more
series, with such voting powers, designations, preferences and rights or
qualifications, limitations or restrictions thereof as shall be stated in the
resolution or resolutions adopted by them.
Section 4.02 No Preemptive Rights. Holders of the Common Stock of the
--------------------
corporation shall not have any preference, preemptive right, or right of
subscription to acquire any shares of the corporation authorized, issued or
sold, or to be authorized, issued or sold, or to any obligations or shares
authorized or issued or to be authorized or issued, and convertible into shares
of the corporation, nor to any right of subscription thereto, other than the
extent if any, the Board of Directors in its discretion, may determine from time
to time.
Section 4.03 Assessment of Shares. The Common Stock of the corporation,
---------------------
after the amount of the subscription price has been paid, in money, property or
services, as the directors shall determine, shall not be subject to assessment
to pay the debts of the corporation, nor for any other purpose, and no stock
issued as fully paid shall ever be assessable or assessed, and the Articles of
Incorporation shall not be amended in this particular.
ARTICLE V
DIRECTORS
Section 5.01 Governing Board. The members of the board of the corporation
---------------
shall be styled directors.
Page 2 of 7
<PAGE>
Section 5.02 Initial Board of Directors. The Board of Directors shall
--------------------------
consist of at least one (1) but no more than five (5) members. The name(s) and
address(s) of the initial members of the Board of Directors are as follows:
NAME ADDRESS
---- -------
Dwight Alan Teegardin of 711 S. Carson Suite 4 Carson City, Nevada 89701
These individuals shall serve as Directors until the first annual meeting
of the shareholders or until the successors shall have been elected and
qualified.
Section 5.03 Change in the Number of Directors. The number of directors may
----------------------------------
be increased or decreased by duly adopted amendment to the Bylaws of the
corporation.
ARTICLE VI
INCORPORATORS
The name and address of the sole incorporator is Sandra L. Miller 711 S.
Carson, Carson City, Nevada 89701
ARTICLE VII
PERIOD OF DURATION
This corporation is to have A PERPETUAL existence.
ARTICLE VIII
DIRECTORS, AND OFFICERS' LIABILITY
A director or officer of the corporation shall not be personally liable to
this corporation or its stockholders for damages for breach of fiduciary duty as
a director or officer, but the article 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 unlawful
payment of dividends. Any repeal or modification of this Article by the
stockholders of the corporation shall be prospective only, and shall not
Page 3 of 7
<PAGE>
adversely affect any limitation on the personal liability of a director or
officer of the corporation for acts and omissions prior to such repeal or
modification.
ARTICLE IX
INDEMNITY
Every person who was or is a party to, or is threatened to be made a party
to, or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he, or a person of
whom he is the legal representative, is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless to the fullest extent legally permissible under the laws of the
State of Nevada from time to time against all expenses, liability and loss
(including attorneys' fees, judgments, fines and amounts paid or to be paid in
settlement) reasonably incurred or suffered by him in connections therewith.
Such right of indemnification shall be a contract right which may be enforced in
any manner desired by such person. The expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. Such right of indemnification shall not be
exclusive of any other right which such directors, officers or representatives
may have or hereafter acquire, and, without limiting the generality of such
statement, they shall be entitled to their respective rights of indemnification
under any bylaw, agreement, vote of stockholders, provision of law, or
otherwise, as well as their rights under this Article.
Without limiting the application of the foregoing, the Board of Directors
may adopt Bylaws from time to time with respect to indemnification, to provide
at all times the fullest indemnification permitted by the laws of the State of
Page 4 of 7
<PAGE>
Nevada, and may cause the corporation to purchase and maintain insurance on
behalf of any person who is or was a director or officer of the corporation, or
is or was serving at the request of the corporation as director or officer of
another corporation, or as is representative in a partnership, joint venture,
trust or other enterprises against any liability asserted against such person
and incurred in any such capacity or arising out of such status, whether or not
the corporation would have the power to indemnify such person.
The indemnification provided in this Article shall continue as to a person
who has ceased to be a director, officer, employee or agent, and shall inure to
the benefit of the heirs, executors and administrators of such person.
ARTICLE X
AMENDMENTS
Subject at all times to the express provisions of Section 4.03 which cannot
be amended, this corporation reserves the right to amend, alter, change, or
repeal any provision contained in these Articles of Incorporation or its Bylaws,
in the manner now or hereafter prescribed by statute or by these Articles of
Incorporation or said Bylaws, and all rights conferred upon the shareholders are
granted subject to this reservation.
ARTICLE X1
POWERS OF DIRECTORS
In futherance, and not in limitation of the powers conferred by statue, the
Board of Directors is expressly authorized:
(1) Subject to the Bylaws, if any, adopted by the shareholders,
to make, alter or repeal the Bylaws of the corporation;
(2) To authorize and cause to be executed mortgages and liens,
with or without limit as to amount, upon the real and personal property of
the corporation;
Page 5 of 7
<PAGE>
(3) To authorize the guaranty by the corporation of securities, evidences
of indebtedness and obligations of other persons, corporation and business
entities;
(4) To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any
such reserve; and
(5) By resolution adopted by a majority of the whole board, to designate
one or more committees, each committee to consist of one or more of the
directors of the corporation, which, to the extent provided in the
resolution or in the By-laws of the Directors in the management of the
business and affairs of the corporation, any may authorize the seal of the
corporation to be affixed to all papers which may require it Such committee
or committees shall have such name or names as may be stated in the Bylaws
of the corporation or as may be determined from time to time by resolution
adopted by the Board of Directors
All corporate powers of the corporation shall be exercised by the Board of
Directors except as otherwise provided herein or by law.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of November,
2000 hereby declaring and certifying that the facts stated herein above are
true.
/s/ Sandra L. Miller
--------------------------------
Sandra L. Miller
Sole Incorporator
Page 6 of 7
<PAGE>
ACKNOWLEDGMENT
--------------
STATE OF NEVADA )
: ss
CITY OF CARSON )
On this 1st day of November, 2000 Sandra L. Miller personally appeared be for
me, a Notary Public, and acknowledged to me that she executed the foregoing
instrument for the purposes therein set forth.
/s/ Alan Teegardin
--------------------------------
NOTARY PUBLIC
[GRAPHIC OMITTED]
Alan Teegardin
Notary Public - Nevada
Appt. Recorded in DOUGLAS CO.
My Appt. Exp. Feb. 27, 2002
No. 98-0750-3
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
----------------------------------------------------------
IN THE MATTER OF: New River Investments, Inc.
Resident Agents of Nevada, Inc., Resident Agent # 83364, with address at
711 S. Carson, Carson City, Nevada 89701, hereby accepts the appointment as
Resident Agent of the above-entitled corporation in accordance with NRS 78.090.
Furthermore, that the mailing address for the above registered office is as
set forth above
IN WITNESS WHEREOF, I hereunto set my hand this 1st day of November 2000.
By /s/ Sandra L. Miller
--------------------------------
Sandra L. Miller
Resident Agents of Nevada, Inc.,
Resident Agent # 83364
Resident Agents
Page 7 of 7
<PAGE>
Exhibit 3
TABLE OF CONTENTS
BY-LAWS
ARTICLE ONE - OFFICES
1.1 Registered Office
1.2 Other Offices
ARTICLE TWO - MEETINGS OF STOCKHOLDERS
2.1 Place
2.2 Annual Meetings
2.3 Special Meetings
2.4 Notices of Meetings
2.5 Purpose of Meetings
2.6 Quorum
2.7 Voting
2.8 Share Voting
2.9 Proxy
2.10 Written Consent in Lieu of Meeting
ARTICLE THREE - DIRECTORS
3.1 Powers
3.2 Number of Directors
3.3 Vacancies
ARTICLE FOUR - MEETINGS OF THE BOARD OF DIRECTORS
4.1 Place
4.2 First Meeting
4.3 Regular Meetings
4.4 Special Meetings
4.5 Notice
4.6 Waiver
4.7 Quorum
4.8 Adjournment
ARTICLE FIVE - COMMITTEES OF DIRECTORS
5.1 Power to Designate
5.2 Regular Minutes
5.3 Written Consent
<PAGE>
Page 2
ARTICLE SIX - COMPENSATION OF DIRECTORS
6.1 Compensation
ARTICLE SEVEN - NOTICES
7.1 Notice
7.2 Consent
7.3 Waiver of Notice
ARTICLE EIGHT - OFFICERS
8.1 Appointment of Officers
8.2 Time of Appointment
8.3 Additional Officers
8.4 Salaries
8.5 Vacancies
8.6 Chairman of the Board
8.7 Vice-Chairman
8.8 President
8.9 Vice-President
8.10 Secretary
8.11 Assistant Secretaries
8.12 Treasurer
8.13 Surety
8.14 Assistant Treasurer
ARTICLE NINE - CERTIFICATES OF STOCK
9.1 Share Certificates
9.2 Transfer Agents
9.3 Lost or Stolen Certificates
9.4 Share Transfers
9.5 Voting Shareholder
9.6 Shareholders Record
ARTICLE TEN - GENERAL PROVISIONS
10.1 Dividends
10.2 Reserves
10.3 Cheques
10.4 Fiscal Year
10.5 Corporate Seal
<PAGE>
Page 3
ARTICLE ELEVEN - INDEMNIFICATION
ARTICLE TWELVE - AMENDMENTS
12.1 By Shareholder
12.2 By Board of Directors
<PAGE>
Page 4
BY-LAWS
OF
NEW RIVER INVESTMENTS, INC.
A NEVADA CORPORATION
ARTICLE ONE
-----------
OFFICES
-------
Section 1.1 Registered Office - The registered office of this corporation shall
-----------------
be in the County of Las Vegas, State of Nevada.
Section 1.2 Other Offices - The corporation may also have offices at such other
-------------
places both within and without the State of Nevada as the Board of Directors may
from time to time determine or the business of the corporation may require.
ARTICLE TWO
-----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 2.1 Place - All annual meetings of the stockholders shall be held at
-----
the registered office of the corporation or at such other place within or
without the State of Nevada as the directors shall determine. Special meetings
of the stockholders may be held at such time and place within or without the
State of Nevada as shall be stated in the notice of the meeting, or in a duly
executed waiver of notice thereof.
Section 2.2 Annual Meetings - Annual meetings of the stockholders, commencing
---------------
with the year 2000, shall be held five months after the fiscal year, or at such
other time as may be set by the Board of Directors from time to time, at which
the stockholders shall elect by vote a Board of Directors and transact such
other business as may properly be brought before the meeting.
Section 2.3 Special Meetings - Special meetings of the stockholders, for any
----------------
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation, may be called by the President or the Secretary by resolution
of the Board of Directors or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose of the
proposed meeting.
Section 2.4 Notices of Meetings - Notices of meetings shall be in writing and
-------------------
signed by the President or a Vice-President or the Secretary or an Assistant
<PAGE>
Page 5
Secretary or by such other person or persons as the directors shall designate.
Such notice shall state the purpose or purposes for which the meeting is called
and the time and the place, which may be within or without this State, where it
is to be held. A copy of such notice shall be either delivered personally to or
shall be mailed, postage prepaid, to each stockholder of record entitled to vote
at such meeting not less than ten nor more than sixty days before such meeting.
If mailed, it shall be directed to a stockholder at his address as it appears
upon the records of the corporation and upon such mailing of any such notice,
the service thereof shall be complete and the time of the notice shall begin to
run from the date upon which such notice is deposited in the mail for
transmission to such stockholder. Personal delivery of any such notice to any
officer of a corporation or association or to any member of a partnership shall
constitute delivery of such notice to such corporation, association or
partnership. In the event of the transfer of stock after delivery of such
notice of and prior to the holding of the meeting it shall not be necessary to
deliver or mail notice of the meeting to the transferee.
Section 2.5 Purposes of Meetings - Business transacted at any special meeting
--------------------
of stockholders shall be limited to the purposes stated in the notice.
Section 2.6 Quorum - The holders of a majority of the stock issued and
------
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Articles of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 2.7 Voting - When a quorum is present or represented at any meeting,
------
the vote of the holders of a majority of the stock having voting power present
in person or represented by proxy shall be sufficient to elect directors or to
decide any questions brought before such meeting, unless the question is one
upon which by express provision of the statutes or of the Articles of
Incorporation, a different vote is required in which case such express provision
shall govern and control the decision of such question.
Section 2.8 Share Voting - Each stockholder of record of the corporation shall
------------
be entitled at each meeting of stockholders to one vote for each share of stock
standing in his name on the books of the corporation. Upon the demand of any
stockholder, the vote for directors and the vote upon any question before the
meeting shall be by ballot.
Section 2.9 Proxy - At any meeting of the stockholders any stockholder may be
-----
represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event that any such instruments in writing shall designate two
or more persons to act as proxies, a majority of such persons present at the
meeting, or, if only one shall be present, then that one shall have and may
exercise all of the posers conferred by such written instrument upon all of the
persons so designated unless the instrument shall otherwise provide. No proxy
<PAGE>
Page 6
or power of attorney to vote shall be used to vote at a meeting of the
stockholders unless it shall have been filed with the secretary of the meeting
when required by the inspectors of election. All questions regarding the
qualification of voters, the validity of proxies and the acceptance or rejection
of votes shall be decided by the inspectors of election who shall be appointed
by the Board of Directors, or if not so appointed, then by the presiding officer
of the meeting.
Section 2.10 Written Consent in Lieu of Meeting - Any action which may be taken
----------------------------------
by the vote of the stockholders at a meeting may be taken without a meeting if
authorized by the written consent of stockholders holding at least a majority of
the voting power, unless the provisions of the statues or of the Articles of
Incorporation require a greater proportion of voting power to authorize such
action in which case such greater proportion of written consents shall be
required.
ARTICLE THREE
-------------
DIRECTORS
---------
Section 3.1 Powers - The business of the corporation shall be managed by its
------
Board of Directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the Articles of
Incorporation or by these Bylaws directed or required to be exercised or done by
the stockholders.
Section 3.2 Number of Directors - The number of directors which shall
-------------------
constitute the whole board shall be three (3). The number of directors may from
time to time be increased or decreased to not less than one nor more than
fifteen by action of the Board of Directors. The directors shall be elected at
the annual meeting of the stockholders and except as provided in Section 2 of
this Article, each director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.
Section 3.3 Vacancies - Vacancies in the Board of Directors including those
---------
caused by an increase in the number of directors, may be filled by a majority of
the remaining directors, though less than a quorum, or by a sole remaining
director, and each director so elected shall hold office until his successor is
elected at an annual or a special meeting of the stockholders. The holders of a
two-thirds of the outstanding shares of stock entitled to vote may at any time
peremptorily terminate the term of office of all or any of the directors by vote
at a meeting called for such purpose or by a written statement file with the
secretary or, in his absence, with any other officer. Such removal shall be
effective immediately, even if successors are not elected simultaneously and the
vacancies on the Board of Directors resulting therefrom shall be filled only by
the stockholders.
A vacancy or vacancies in the Board of Directors shall be deemed to exist
in case of the death, resignation or removal of any directors, or if the
authorized number of directors be increased, or if the stockholders fail at any
annual or special meeting of stockholders at which any director or directors are
elected to elect the full authorized number of directors to be voted for at that
meeting.
<PAGE>
Page 7
The stockholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors. If the Board of Directors
accepts the resignation of a director tendered to take effect at a future time,
the Board or the stockholders shall have power to elect a successor to take
office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of his term of office.
ARTICLE FOUR
------------
MEETINGS OF THE BOARD OF DIRECTORS
----------------------------------
Section 4.1 Place - Regular meetings of the Board of Directors shall be
-----
held at any place within or without the State which has been designated from
time to time by resolution of the Board or by written consent of all members of
the Board. In the absence of such designation regular meetings shall be held at
the registered office of the corporation. Special meetings of the Board may be
held either at a place so designated or at the registered office.
Section 4.2 First Meeting - The first meeting of each newly elected Board
-------------
of Directors shall be held immediately following the adjournment of the meeting
of stockholders and at the place thereof. No notice of such meeting shall be
necessary to the directors in order legally to constitute the meeting, provided
a quorum be present. In the event such meeting is not so held, the meeting may
be held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors.
Section 4.3 Regular Meetings - Regular meetings of the Board of Directors
----------------
may be held without call or notice at such time and at such place as shall from
time to time be fixed and determined by the Board of Directors.
Section 4.4 Special Meetings - Special Meetings of the Board of Directors
----------------
may be called by the Chairman or the President or by any Vice-President or by
any two directors.
Written notice of the time and place of special meetings shall be delivered
personally to each director, or sent to each director by mail or by other form
of written communication, charges prepaid, addressed to him at his address as is
shown upon the records or is not readily ascertainable, at the place in which
the meetings of the directors are regularly held. Incase such notice is mailed
or telegraphed, it shall be deposited in the United States mail or delivered
through the telegraph company at least forty-eight (48) hours prior to the time
of the holding of the meeting. In case such notice is delivered as above
provided, it shall be so delivered at least twenty-four (24) hours prior to the
time of the holding of the meeting. Such mailing, telegraphing or delivery as
above provided shall be due, legal and personal notice to such director.
<PAGE>
Page 8
Section 4.5 Notice - Notice of the time and place of holding an adjourned
------
meeting need not be given to the absent directors if the time and place be fixed
at the meeting adjourned.
Section 4.6 Waiver - The transactions of any meeting of the Board of
------
Directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if a quorum be
present, and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice, or a consent to holding such meeting,
or an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
Section 4.7 Quorum - A majority of the authorized number of directors
------
shall be necessary to constitute a quorum for the transaction of business,
except to adjourn as hereinafter provided. Every act or decision done or made by
a majority of the directors present at a meeting duly held at which a quorum is
present shall be regarded as the act of the Board of Directors, unless a greater
number be required by law or by the Articles of Incorporation. Any action of a
majority, although not at a regularly called meeting, and the record thereof, if
assented to in writing by all of the other members of the Board shall be as
valid and effective in all respects as if passed by the Board in regular
meeting.
Section 4.8 Adjournment - A quorum of the directors may adjourn any
-----------
directors meeting to meet again at a stated day and hour; provided, however,
that in the absence of a quorum, a majority of the directors present at any
directors meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the Board.
ARTICLE FIVE
------------
COMMITTEES OF DIRECTORS
-----------------------
Section 5.1 Power to Designate - The Board of Directors may, by resolution
------------------
adopted by a majority of the whole Board, designate one or more committees of
the corporation which, to the extent provided in the resolution, shall have and
may exercise the power of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorize the seal
of the corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be determined from
time to time by the Board of Directors. The members of any such committee
present at any meeting and not disqualified from voting may, whether or not they
constitute a quorum, unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any absent or disqualified
member. At meetings of such committees, a majority of the members or alternate
members shall constitute a quorum for the transaction of business, and the act
of a majority of the members or alternate members at any meeting at which there
is a quorum shall be the act of the committee.
Section 5.2 Regular Minutes - The committees shall keep regular minutes of
---------------
their proceedings and report the same to the Board of Directors.
<PAGE>
Page 9
Section 5.3 Written Consent - Any action required or permitted to be taken
---------------
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if a written consent thereto is signed by all members
of the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
ARTICLE SIX
-----------
COMPENSATION OF DIRECTORS
-------------------------
Section 6.1 Compensation - The directors may be paid their expenses of
------------
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like reimbursement and
compensation for attending committee meetings.
ARTICLE SEVEN
-------------
NOTICES
-------
Section 7.1 Notice - Notices to directors and stockholders shall be in
------
writing and delivered personally or mailed to the directors or stockholders at
their addresses appearing on the books of the corporation. Notice by mail shall
be deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram.
Section 7.2 Consent - Whenever all parties entitled to vote at any
-------
meeting, whether of directors or stockholders, consent, either by a writing on
the records of the meeting or filed with the secretary, or by presence at such
meeting and oral consent entered on the minutes, or by taking part in the
deliberations at such meeting without objection, the doings of such meetings
shall be as valid as if had at a meeting regularly called and noticed, and at
such meeting any business may be transacted which is not excepted from the
written consent or to the consideration of which no objection for want of notice
is made at the time, and if any meeting be irregular for want of notice or of
such consent, provided a quorum was present at such meeting, the proceedings of
said meeting may be ratified and approve and rendered likewise valid and the
irregularity or defect therein waived by a writing signed by all parties having
the right to vote at such meeting; and such consent or approval of stockholders
may be proxy or attorney, but all such proxies and powers of attorney must be in
writing.
Section 7.3 Waiver of Notice - Whenever any notice whatever is required to
----------------
be given under the provisions of the statutes, of the Articles of Incorporation
or of these Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE EIGHT
-------------
<PAGE>
Page 10
OFFICERS
--------
Section 8.1 Appointment of Officers - The officers of the corporation
-----------------------
shall be chosen by the Board of Directors and shall be a President, a Secretary
and a Treasurer. Any person may hold two or more offices.
Section 8.2 Time of Appointment - The Board of Directors at its first
-------------------
meeting after each annual meeting of stockholders shall choose a Chairman of the
Board who shall be a director, and shall choose a President, a Secretary and a
Treasurer, none of whom need be directors.
Section 8.3 Additional Officers - The Board of Directors may appoint a
-------------------
Vice-Chairman of the Board, Vice-Presidents and one or more Assistant
Secretaries and Assistant Treasurers and such other officers and agents as it
shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
Section 8.4 Salaries - The salaries and compensation of all officers of
--------
the corporation shall be fixed by the Board of Directors.
Section 8.5 Vacancies - The officers of the corporation shall hold office
---------
at the pleasure of the Board of Directors. Any officer elected or appointed by
the Board of Directors may be removed at any time by the Board of Directors.
Any vacancy occurring in any office of the corporation by death, resignation,
removal or otherwise shall be filled by the Board of Directors.
Section 8.6 Chairman of the Board - The Chairman of the Board shall
--------------------- ---------------------
preside at meetings of the stockholders and the Board of Directors, and shall
see that all orders and resolutions of the Board of Directors are carried into
effect.
Section 8.7 Vice-Chairman - The Vice-Chairman shall, in the absence or
------------- -------------
disability of the Chairman of the Board, perform the duties and exercise the
powers of the Chairman of the Board and shall perform such other duties as the
Board of Directors may from time to time prescribe.
Section 8.8 President - The President shall be the chief executive
--------- ---------
officer of the corporation and shall have active management of the business of
the corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution thereof
shall be expressly designated by the Board of Directors to some other officer or
agent of the corporation.
Section 8.9 Vice-President - The Vice-President shall act under the
-------------- --------------
direction of the President and in the absence or disability of the President
shall perform the duties and exercise the powers of the President. They shall
perform such other duties and have such other powers as the President or the
Board of Directors may from time to time prescribe. The Board of Directors may
<PAGE>
Page 11
designate one or more Executive Vice-Presidents or may otherwise specify the
order of seniority of the Vice-Presidents. The duties and powers of the
President shall descend to the Vice-Presidents in such specified order of
seniority.
Section 8.10 Secretary - The Secretary shall act under the direction of
--------- ---------
the President. Subject to the direction of the President he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors, and
shall perform such other duties as may be prescribed by the President or the
Board of Directors.
Section 8.11 Assistant Secretaries - The Assistant Secretaries shall act
--------------------- ---------------------
under the direction of the President. In order of their seniority, unless
otherwise determined by the President or the Board of Directors, they shall, in
the absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
Section 8.12 Treasurer - The Treasurer shall act under the direction of
--------- ---------
the President. Subject to the direction of the President he shall have custody
of the corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the President or the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
corporation.
Section 8.13 Surety - If required by the Board of Directors, he shall give
------
the corporation a bond in such sum and with such sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from the office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 8.14 Assistant Treasurer - The Assistant Treasurer in the order of
------------------- -------------------
their seniority, unless otherwise determined by the President or the Board of
Directors, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer. They shall perform such other
duties and have such other powers as the President or the Board of Directors may
from time to time prescribe.
ARTICLE NINE
------------
<PAGE>
Page 12
CERTIFICATES OF STOCK
---------------------
Section 9.1 Share Certificates - Every stockholder shall be entitled to
------------------
have a certificate signed by the President, Vice-President, Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary of the corporation, certifying the
number of shares owned by him in the corporation. If the corporation shall be
authorized to issued more than one class of stock or more than one series of any
class, the designations, preferences and relative, participating, optional or
other special rights of the various classes of stock or series thereof and the
qualifications, limitations or restrictions of such rights, shall be set forth
in full or summarized on the face or back of the certificate which the
corporation shall issued to represent such stock.
Section 9.2 Transfer Agents - If a certificate is signed (a) by a transfer
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agent other than the corporation or its employees or (b) by a registrar other
than the corporation or its employees, the signatures of the officers of the
corporation may be facsimiles. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall cease to be such
officer before such certificate is issued, such certificate may be issued with
the same effect as though the person had not ceased to be such officer. The
seal of the corporation, or a facsimile thereof, may, but need not be, affixed
to certificates of stock.
Section 9.3 Lost or Stolen Certificates - The Board of Directors may
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direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost or destroyed upon the making of an affidavit to that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost or destroyed.
Section 9.4 Share Transfers - Upon surrender to the corporation or the
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transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation, if it is satisfied that all
provisions of the laws and regulations applicable to the corporation regarding
transfer and ownership of shares have been complied with, to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 9.5 Voting Shareholder - The Board of Directors may fix in advance
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a date not exceeding sixty (60) days nor less than ten (10) days preceding the
date of any meeting of stockholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining the consent of entitled to notice of and to vote at
any such meeting, and any adjournment thereof, or entitle to receive payment of
any such dividend, or to give such consent, and in such case, such stockholders,
and only such stockholders as shall be stockholders of record on the date so
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Page 13
fixed, shall be entitled to notice of and to vote at such meeting, or any
adjournment thereof, or to receive payment of such dividend, or to receive such
allotment of rights, or to exercise such rights, or to five such consent, as the
case may be, notwithstanding any transfer of any stock on the books of the
corporation after any such record dated fixed as aforesaid.
Section 9.6 Shareholders Record - The corporation shall be entitled to
-------------------
recognize the person registered on its books as the owner of shares to be the
exclusive owner for all purposes including voting and dividends, and the
corporation shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Nevada.
ARTICLE TEN
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GENERAL PROVISIONS
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Section 10.1 Dividends - Dividends upon the capital stock of the
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corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in case, in property or in shares of the
capital stock, subject to the provisions of the Articles of Incorporation.
Section 10.2 Reserves - Before payment of any dividend, there may be set
--------
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends or for repairing or maintaining any property of the corporation or for
such other purpose as the directors shall think conductive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 10.3 Cheques - All cheques or demands for money and notes of the
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corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 10.4 Fiscal Year - The fiscal year of the corporation shall be
-----------
fixed by resolution of the Board of Directors.
Section 10.5 Corporate Seal - The corporation may or may not have a
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corporate seal, as may from time to time be determined by resolution of the
Board of Directors. If a corporate seal is adopted, it shall have inscribed
thereon the name of the Corporation and the words Corporate Seals and Nevada.
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or in any manner reproduced.
ARTICLE ELEVEN
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INDEMNIFICATION
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Every person who was or is a party or is threatened to be made a party to
or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or a person of
whom he is the legal representative is or was a director or officer of the
corporation or is or was serving at the request of the corporation or for its
benefit as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest extent legally permissible under
the General Corporation Law of the State of Nevada from time to time against all
expenses, liability and loss (including attorney s fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall be a contract right which may
be enforced in any manner desired by such person. Such right of indemnification
shall not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any bylaw, agreement, vote of stockholders, provision
of law or otherwise, as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
The Board of Directors may from time to time adopt further Bylaws with
respect to indemnification and may amend these and such Bylaws to provide at all
times the fullest indemnification permitted by the General Corporation Law of
the State of Nevada.
ARTICLE TWELVE
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AMENDMENTS
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Section 12.1 By Shareholder - The Bylaws may be amended by a majority vote
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of all the stock issued and outstanding and entitled to vote at any annual
or special meeting of the stockholders, provided notice of intention to amend
shall have been contained in the notice of the meeting.
Section 12.2 By Board of Directors - The Board of Directors by a majority
---------------------
vote of the whole Board at any meeting may amend these Bylaws, including Bylaws
adopted by stockholders, but the stockholders may from time to time specify
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Page 15
particular provisions of the Bylaws which shall not be amended by the Board of
Directors.
APPROVED AND ADOPTED this 1st day of November, 2000
--------------------------------
Secretary
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SIGNATURE
---------
Pursuant to the requirements of the Securities Act of 1934, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form 10SB and has duly caused this
Registration Statement to be signed on its behalf by the undersigned hereunto
duly authorized in the City of Vancouver, on the 20th day of December, 2000.
NEW RIVER INVESTMENTS, INC.
(Registrant)
By: /s/ Richard Silas
Richard Silas, President and Director
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