U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
FOR SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
WISDOM HOLDINGS, INC.
(Name of Small Business Issuer in its Charter)
Delaware 98 - 0219157
(State or other jurisdiction of (IRS Employer ID Number)
incorporation or organization)
2 World Trade Center, Suite 1812, New York, NY 10048
(Address of Principal Executive Offices)(Zip Code)
Issuer's Telephone Number: (212) 775-9555
Securities to be Registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered. Each class is to be
registered
Not Applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of Class)
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
General
Wisdom Holdings, Inc. was incorporated under the laws of the
State of Delaware on August 10, 1999, and is in the early
developmental and promotional stages. To date Wisdom Holdings,
Inc. only activities have been organizational ones, directed at
developing its business plan and raising its initial capital.
The Company has not commenced any commercial operations. The
Company has no full-time employees and owns no real estate.
The Company's business plan is as follows:
a) to acquire an active Broker/Dealer in the United States;
b) to acquire a Corporate Membership on the Stock Exchange of
Hong Kong (the "Hang Seng");
c) to become registered and licensed with the Securities
and Futures Commission (SFC) of Hong Kong;
d) to form or acquire an online brokerage firm to operate
on the Hang Seng.
Other than its formation and the commencement of the development
of its proposed business, the Company has not conducted any
business nor generated any revenues or profits, and no assurance
can be given that it will be able to do so in the future. The
Company's ability to continue the development of its business is
dependent upon the receipt of the proceeds of this Offering.
The Company is of the belief that there exists an opportunity in
Asia generally and Hong Kong specifically, whereby the Company
can capitalize on the growing popularity of the online brokerage
industry, by forming or acquiring a Corporate Membership on the
Stock Exchange of Hong Kong and by developing and marketing an
online brokerage firm, targeted towards the Asian population
whereby customers can conveniently buy and sell, through secure
internet technology, securities listed in Hong Kong and the
United States.
To that end, the Company intends to:
(i) form or acquire a Corporate Membership on the Stock
Exchange of Hong Kong;
(ii) become registered and licensed with the Securities and
Futures Commission (SFC) of Hong Kong;
(iii) develop, design, market and operate an online
brokerage firm using the "Wisdom Securities" name and "Wizbroker.com"
as a trademark; and
(iv) attempt to develop "brand awareness" of such name or
such other names or marks as it may develop in the future.
There can be no assurance that the Company is correct in its
belief that such market exists or that the "Wisdom Securities"
brand name or franchise carries the cache necessary for the
Company's intended operations to be commercially well
received.
Although management has no experience owning or operating a
Corporate Member on the Stock Exchange of Hong Kong, nor does the
Company have any experience developing, designing, marketing or
operating an internet brokerage firm, it intends to hire
consultants and/or experienced personnel to assist it. Management
hopes that the Company will generate revenues and profits from
operations, although there can be no assurance that Management or
the Company will generate any revenues or profits.
The Company intends to provide financial services to individual
retail investors who manage their own investments and personal
finances and to fee-based independent investment advisors. The
Company intends that its customers will be able to access the
Company's website 24 hours per day, seven days per week through a
variety of delivery channels, most notably the Internet.
Management of Wisdom is of the belief that the discount brokerage
industry has grown rapidly over the past decade, with the largest
portion of that growth coming from the significant increase in
online brokerage activity.
The Company is further of the belief that an opportunity exists
in the financial services industry for an online brokerage firm
that is able to provide experienced investors with the cost-
savings created by:
(i) direct access to professional trade execution;
(ii) access to up-to-date market information and
(iii) the convenience of trading over the Internet.
The Company's strategy to attract a share of the online trading
segment of that growing market is to:
* target experienced investors and small to mid-sized
financial institutions who typically (i) execute more
transactions than other categories of investors, (ii)
require access to market information, and (iii) require
fast professional execution of their orders;
* create technologically innovative solutions to satisfy
client needs, including efficient order execution
directly over the Internet;
* Offer its customers a broad range of financial products
and services;
* provide a choice of diverse and integrated delivery
channels to its customers, including Internet, direct
dial-up and touch-tone telephone access;
* maintain a commitment to high-quality customer service;
* offer its customers highly competitive pricing;
* build brand awareness of the "Wisdom Securities"
trademark.
The Company's offices are currently located at 2 World Trade
Center, Suite 1812, New York, New York 10048. The Company's
telephone number is (212) 775-9555. It is expected that the
Company will open executive offices in Hong Kong upon a
successful completion of this Offering.
RISK FACTORS
An investment in the securities offered hereby involves a high
degree of risk. The following factors, in addition to those
discussed elsewhere in this Memorandum, should be considered
carefully in evaluating the Company and its proposed business.
An investment in the Securities is suitable only for those
investors who can bear the risk of loss of their entire
investment.
Development Stage Company; No Operating History; No Assurance of
Future Operations or Profitability.
The Company is a development stage company which was formed on
August 10, 1999. The Company has not to date engaged in any
commercial operations and has not as yet produced or developed
its internet brokerage site. As discussed below, the Company's
ability to commence the development of its business is dependent
upon receipt of the proceeds of this Offering. In the event that
the Company is able to raise sufficient funds in this Offering to
commence its proposed business operations, the Company's
operations will be dependent upon factors outlined herein which
are both within and without the control of the Company. Further,
the Company's proposed business operations will be subject to
numerous risks associated with start-up enterprises generally and
the online brokerage firm industry specifically.
Significant Capital Requirements, Dependence on Future
Financings.
The Company's capital requirements in connection with its
development, design, marketing and operating activities will be
significant. The Company is dependent upon the proceeds of future
sales of its securities to investors to fund its development and
marketing activities.
The Company's venture into the online brokerage industry will
require substantial capital. If this capital is not available in
the future, Wisdom is aware that it will not have sufficient
capital to launch its Internet trading site. In this situation
the Company may cease any and all current and future attempts to
develop its business.
In the event that costs are higher than expected, the Company
could be required to modify its operations or to seek additional
financing. The Company has no current arrangements with respect
to such additional financing and there can be no assurance that
such additional financing will be available at all or on terms
acceptable to the Company.
The Company's capital requirements will depend on many factors,
including cash flow from operations and the cost of developing
and producing an internet brokerage site.
Limited Marketing Experience and Capabilities; Uncertainty of
Market Acceptance.
The Company has not yet commenced its marketing activities
relating to product commercialization and currently lacks the
marketing experience and financial, personnel and other resources
to undertake marketing and advertising activities. Demand for
Wisdom's proposed Asian products will depend principally upon the
demand by the Company's target market for the Internet trading
site. As is typically the case with newly-introduced products,
the ultimate level of demand for the Company's products is
subject to a high degree of uncertainty.
Developing market acceptance for the Company's proposed products
will require substantial marketing efforts and the expenditure of
a significant amount of funds to inform the investing public of
the perceived advantages of the Company's products. There can be
no assurance that Wisdom will be able to penetrate existing
markets on a widespread basis or that the marketing efforts
undertaken by the Company will result in demand for, or market
acceptance of, the Company's proposed products. There can be no
assurance that the Company will be able to market the Company's
products successfully or that its efforts will result in any
significant revenues.
Uncertainty of Product and Technology Development; Technological
Factors.
The Company has not commenced development of its proposed
Internet trading site, which is still in the planning stages. The
Company's success will depend in part upon the ability of its
Internet trading site to meet targeted performance and cost
objectives, and will also depend upon its timely introduction
into the marketplace.
The Company will be required to commit considerable time, effort
and resources to complete development of its Internet trading
site. The development of the Company's Internet trading site and
technology will be subject to all of the risks inherent in the
development of Internet trading sites and technology (including
unanticipated delays, expenses, and difficulties, as well as the
possible insufficiency of funding or adequate personnel to
complete development). There can be no assurance as to when, or
whether, such development efforts will be successfully completed.
In addition, there can be no assurance that the Company's
Internet trading site will satisfactorily perform the functions
for which it is designed, that it will meet applicable price or
performance objectives or that unanticipated technical or other
problems will not occur which would result in increased costs or
material delays in its development. The Company will be required
to devote a substantial portion of the proceeds of this Offering
and its revenues, if any, to research and development efforts.
Even so, there can be no assurance that these efforts will be
successful.
Lack of Experience of Current Management in Operation of an
Online Brokerage Firm.
Management of the Company does not have any prior experience in
the design, development or operation of an online brokerage firm.
It will be largely dependent on employees and consultants to
render advice on developing, designing, marketing and operating
its online brokerage firm. The lack of experience in developing,
designing, marketing and operating an online brokerage firm could
adversely affect the Company.
If and when adequate financial resources are available the
Company intends to enter into agreements with a number of
internet industry professionals to handle the operational control
of the Company's online brokerage firm. No assurance can be
given that the Company will be able to engage suitable employees
and consultants and there can be no assurance that these
consultants will be able to successfully develop, design, market
and operate the Company's online brokerage site.
Competition; Technological Obsolescence.
All aspects of the Company's business are and will continue to be
highly competitive. Wisdom will be competing in a marketplace
that is well established and heavily capitalized. Most of the
entities with which the Company will compete have substantially
greater experience, personnel and financial resources than that
of the Company.
The Internet trading industry is extremely competitive. The
market for brokerage services is rapidly evolving and intensely
competitive. Wisdom is of the belief that competition will
continue to intensify in the future. The Company's primary
competitors include companies with substantially greater
financial, technological, marketing, personnel and research and
development resources. These competitors also may offer a wider
range of services and financial products than Wisdom and have
greater name recognition and more extensive client bases.
These competitors may be able to respond more quickly to new or
changing opportunities, technologies, and client requirements
than the Company and may be able to undertake more extensive
promotional activities, offer more attractive terms to clients,
and adopt more aggressive pricing policies. Moreover, current
and potential competitors have established or may establish
cooperative relationships among themselves or with third parties
or may consolidate to enhance their services and products. There
can be no assurance that the Company will be able to compete
effectively with current or future competitors or that the
competitive pressures faced by the Company will not harm the
Company's business.
Some of the Company's competitors have certain advantages over
the Company, including:
* longer operating histories and greater financial,
technical, marketing and other resources;
* a wider range of services and financial products;
* greater name recognition and larger customer bases;
* more extensive promotional activities, better terms and
lower prices available to customers; and
* cooperative relationships among themselves or with
third parties to enhance services and products.
Increased profit levels within the securities industry over the
past several years have strengthened existing competitors. Wisdom
is of the belief that such success will continue to attract new
competitors to the industry, such as banks, software development
companies, insurance companies, providers of online financial and
information services and others.
The Company believes its competition will consist of large and
small brokerage firms, utilizing the Internet to transact retail
brokerage business in both Hong Kong and the United States.
Among such competitors are Charles Schwab & Co., Inc., TD
Waterhouse Securities, Inc., and Boom Securities (H.K.) Limited.
The Company also faces competition for clients from full
commission brokerage firms, including Morgan Stanley Dean Witter
& Co., and Salomon Smith Barney, as well as financial
institutions and mutual funds.
Uncertainty of Attaining Profitability.
Wisdom expects to incur significant operating losses for the
foreseeable future as it begins to develop, design, produce,
market and operate its Internet trading site. There can be no
assurance that the Company will ever achieve profitability.
Risk of Market Volatility and Other Securities Industry Risks.
The Company's revenues are expected to derived primarily from
securities brokerage and related services. The Company, as well
as its competitors, will be directly affected by economic and
political conditions, broad trends in business and finance and
changes in the conditions of the securities markets, including
Hong Kong and the United States, all of which are beyond the
Company's control.
The securities business is also subject to various other risks,
including client default on commitments (such as margin
obligations), litigation, and employee's misconduct, errors and
omissions. Losses associated with these risks could harm the
Company's business. Several current trends are also affecting
the securities industry in Hong Kong and the United States,
including regulation at federal and state levels, the emergence
of numerous discount brokers, increased use of technology, and a
steady decrease in the commissions charged to clients of discount
brokerage services.
Historically, when the stock market suffers large declines (i.e.
a "bear market") the level of individual investor activity
declines. A general decrease in trading activity in these
markets could adversely affect the level of trading by the
Company's clients. There can be no assurance that the Company
will not be adversely affected by a bear market.
Over the past several years the securities markets in Hong Kong,
Asia and the United States (which the Company anticipates are the
principal trading markets for most of its customers) have
fluctuated considerably. A downturn in either of these markets
would adversely affect the Company's operating results.
Recently, the markets for technology and Internet
related stocks have been especially volatile, and a significant
downturn would have an even greater effect on the Company because
Wisdom believes that a substantial portion of its anticipated
customer base will invest in these types of stocks.
In previous major stock market declines, many firms in the
securities industry suffered financial losses, and the level of
individual investor trading activity decreased after these
events. When trading volume is low, the Company's profitability
would likely be adversely affected because a significant portion
of the Company's costs will not vary with revenue. For these
reasons, severe market fluctuations could have a material adverse
effect on the Company's business, financial condition and
operating results. Some of the Company's competitors with more
diversified business lines might withstand such a downturn in the
securities industry better than the Company.
Reliance on Computers; Risks Inherent in Computer Failure.
Wisdom anticipates that it will receive and process trade orders
through electronic means such as the Internet, dial-up links to
the Company's computer networks and touch tone telephones. Thus,
the Company will depend heavily on the capacity and reliability
of the electronic systems supporting this type of trading. Heavy
use of the Company's systems during peak trading times or at
times of unusual market volatility could cause the Company's
systems to operate slowly or even to fail for periods of time.
Additionally, any significant degradation or failures of the
computer systems used in the trading process (e.g., online
service providers, record keeping and data processing functions
performed by third parties and third party software such as
Internet browsers) could cause the Company's clients to suffer
delays in trading.
These occurrences are dissatisfying to public customers, some of
whom may file formal complaints with the Company or industry
regulatory organizations, initiate regulatory inquiries or
proceedings, file lawsuits against the Company, switch brokerage
firms or cease online trading altogether.
Wisdom's electronic systems will also be vulnerable to damage or
interruption from human error, natural disasters, power loss,
sabotage, computer viruses and similar events or the loss of
support services from third parties.
As the Company's business expands, the Company also will face
risks relating to the need to expand and upgrade the Company's
transaction processing systems, network infrastructure and other
aspects of the Company's technology. While the Company intends
that its systems will be designed to accommodate additional
growth without redesign or replacement, Wisdom may nevertheless
need to make significant investments in additional hardware and
software to accommodate growth. In addition, there can be no
assurance that the Company will be able to predict accurately the
timing or rate of such growth, or expand and upgrade its systems
and infrastructure on a timely basis.
Additionally, the Company could lose customers and revenue if any
of its software contained defects and was inoperable.
Risks Inherent in Employee Misconduct.
There have been a number of highly publicized cases involving
fraud or other misconduct by employees in the financial services
industry in recent years, and the Company runs the risk that
employee misconduct could occur. Misconduct by employees could
include: binding the Company to transactions that exceed
authorized limits or present unacceptable risks or hiding from
the Company unauthorized or unsuccessful activities. In either
case, this type of misconduct could result in unknown risks or
losses. Employee misconduct could also involve the improper use
of confidential information, which could result in regulatory
sanctions and serious damage to Wisdom's reputation. It is not
always possible to deter employee misconduct, and the precautions
the Company intends to take to prevent and detect this activity
may not be effective in all cases.
Securities Regulations; Compliance.
The securities industry in Hong Kong and other jurisdictions in
which Wisdom intends to operate are subject to extensive
regulation covering all aspects of the securities business,
including:
* registration of offices and personnel;
* sales methods;
* acceptance and execution of customer orders;
* handling of customer funds and securities;
* trading practices;
* capital structure;
* record keeping;
* conduct of directors, officers and employees; and
* supervision.
The various governmental authorities and industry self-regulatory
organizations that will supervise and regulate the Company's
operations generally have broad enforcement powers to censure,
fine, issue cease desist orders or suspend or expel Wisdom or any
of its officers or employees who violate applicable laws or
regulations. The Company's ability to comply with all applicable
laws and rules will be largely dependent on the Company's
establishment and maintenance of compliance and reporting
systems, as well as the ability to attract and retain qualified
compliance personnel. The Company could be subject to
disciplinary or other regulatory or legal actions in the future
due to noncompliance.
Recently, various regulatory and enforcement agencies have been
reviewing systems capacity, customer access, best execution
practices, and other service issues as they relate to the
discount and online brokerage industry. These could result in
enforcement actions, new regulations, or the retroactive
application of existing regulations, any of which could have a
material adverse effect on the Company's business, financial
condition and operating results.
In addition, Wisdom intends to use the Internet as a major
distribution channel to provide products and services to its
customers. Due to the increasing popularity of the Internet, it
is possible that new laws and regulations may be adopted dealing
with such issues as user privacy, content and pricing. Such laws
and regulations might increase the Company's cost of using, or
limit the Company's ability to use, the Internet as a
distribution channel, which in turn could have a material adverse
effect on the Company's business, financial condition and
operating results.
Dependence on the Internet.
The Internet has experienced, and is expected to continue to
experience, significant growth in the number of users and amount
of traffic. Wisdom's future success will depend upon the
development and maintenance of the Internet's infrastructure to
cope with this increased traffic. This will require a reliable
network backbone with the necessary speed, data capacity and
security, and the timely development of complementary products,
such as high speed modems, for providing reliable Internet access
and services.
Many Internet service providers, which will provide the Wisdom's
customers with access to the Internet, and other suppliers of
Internet systems and components have experienced a variety of
outages and other delays as a result of damage to portions of
their infrastructure and other technical problems and could face
similar outages and delays in the future. Such outages and delays
are likely to affect the level of Internet usage and the
processing of transactions on the Company's Internet trading site
and are not within the Wisdom's control. In addition, the
Internet could lose its viability due to delays in the
development or adoption of new standards to handle increased
levels of activity or due to increased government regulation.
The adoption of new standards or government regulation may
require Wisdom to incur substantial data processing development
and compliance costs.
Margin; Risk of Default by Customers.
Upon completion of this Offering and upon the commencement of
operations, the Company intends to permit it customers to
transact business on a "margin" basis. As such, the Company will
be subject to the risks inherent in extending credit to the
extent that the Company permits its clients to purchase
securities on a "margin" basis. Wisdom anticipates that a
portion of its clients' securities activities will be transacted
on a margin basis, pursuant to which credit will be extended to
the client and secured by cash and securities in the client's
account. These risks could be exacerbated during periods of
volatile markets in which the value of the collateral held by the
Company could fall below the amount borrowed by the client. If
margin requirements are not sufficient to cover losses, Wisdom
could be required to sell or buy securities at prevailing market
prices and incur losses to satisfy client obligations.
Rapidly Changing Technology.
The Company's success will depend in large part on the Company's
ability to develop and enhance its services and products. The
Company intends operate in a very competitive industry in which
the ability to develop and deliver advanced services through the
Internet and other channels is a key competitive factor. There
are significant technical risks in the development of new or
enhanced services and products, including the risk that the
Company will be unable to:
* effectively use new technologies;
* adapt its services and products to emerging industry
standards; or
* develop, introduce and market enhanced or new services
and products.
If Wisdom is unable to develop and introduce enhanced or new
services and products quickly enough to respond to market or
customer requirements or to comply with emerging industry
standards, or if these services and products do not achieve
market acceptance, the Company's business, financial condition
and operating results could be materially adversely affected.
Customer Accounts; Security.
A significant barrier to Internet commerce is the secure
transmission of confidential information over public networks.
The Company will rely upon third party encryption and
authentication technology to facilitate secure transmission of
confidential information. There can be no assurance that
advances in computer and cryptography capabilities or other
developments will not result in a compromise of the algorithms
Wisdom will use to protect customer transaction data.
Securities Litigation.
Many aspects of the securities brokerage business, including
online trading services, involve substantial risks of liability.
In recent years, there has been an increasing incidence of
litigation involving the securities brokerage industry, including
class action and other suits that generally seek substantial
damages, including in some cases punitive damages. The Company
is not presently party to any securities related litigation.
However, any such litigation brought in the future against the
Company could have a material adverse effect on the Company's
business, financial condition and operating results.
Dependence on the Success of "WisdomSecurities.com".
The Company will be dependent on the success of its Internet
trading site, which will in turn be dependent upon unpredictable
and volatile factors both within and without the Company's
control, such as consumer preferences and competing vendors. The
failure of Wisdom to attract a significant client base for the
Internet trading site over a long period of time would have a
material adverse effect on the Company's proposed business
endeavors. There is no assurance that the internet trading site
will be successful or that, if successful initially, that
revenues will be maintained.
Proprietary Trading.
Although the Company does not presently intend to actively engage
in proprietary trading, the Company may from time to time
maintain an inventory of equity securities on both a long and
short basis. To the extent the Company has any long positions
(i.e. own assets), a downturn in these markets could result in a
decline in the value of the Company's positions resulting in
losses and reduced asset values. Conversely, to the extent the
Company has short positions (i.e. have sold assets the Company
does not own), an upturn in those markets could expose the
Company to unlimited losses as the Company attempts to cover its
short position by acquiring assets in a rising market.
Intellectual Property; Trademarks.
The Company's ability to compete is dependent, to a significant
degree, on the Company's proprietary technologies, ideas, know-
how and other proprietary information. The Company has no
patents, no trademarks and no registered copyrights.
Notwithstanding the precautions Wisdom intends to take to protect
its intellectual property rights, third parties may copy or
otherwise obtain and use its proprietary technology without
authorization or otherwise infringe upon the Company's
proprietary technology. In addition, third parties may
independently develop technologies and ideas similar to those of
Wisdom. Policing unauthorized use of the Company's intellectual
property rights and ideas may be difficult.
In addition, the laws of the countries in which Wisdom proposes
to do business may afford inadequate protection of intellectual
property rights. There can be no assurance that the Company's
business operations will not be adversely affected if the Company
is unable to protect its intellectual property rights.
The Company has no registered trademarks. The Company intends to
file trademark applications with the United States Patent &
Trademark Office for the name of its Internet trading site
"WisdomSecurities.com" as well as for the Company's logo. The
Company further intends to apply for trademarks for an additional
logo. The Company is aware that the use or registration of
trademarks entails the risk of claims of infringement or
opposition from third parties. Although there are no pending
lawsuits against the Company regarding claims of trademark
infringement, there can be no assurance that third parties will
not initiate such litigation against the Company or that any such
litigation will be resolved in favor of the Company.
Dependence on Management; Conflicts of Interest.
The Company is dependent upon the personal efforts and abilities
of Vincent Au, Chief Executive Officer, President and Director
and Timothy Wong, Treasurer. The loss of the services of Mr. Au
or Mr. Wong would adversely affect the business of the Company.
The Company does not have any key-man insurance on the life of
any officer or director.
It may be expected that Mr. Au and Mr. Wong will act in concert
with respect to protection of the intellectual property rights of
Wisdom. The lack of independence of Messrs. Au and Wong may have
an adverse affect on stockholders.
Conflicts of Interest; Vincent Au; Avalon Partners, Inc.
Vincent Au, the Company's majority stockholder, CEO, president
and director is currently employed in the same capacities by
Avalon Partners, Inc. ("Avalon") an NASD Member securities
broker/dealer. Additionally, Mr. Au is a shareholder of Avalon.
Avalon is currently attempting to aggressively grow business in
Europe and the US. If this growth is significant, Wisdom
believes that Mr. Au could not cope with running both concerns,
especially considering the geography. There can be no assurance
that a competent replacement can be found for Mr. Au to
administer Avalon and implement its aggressive expansion plan.
Although no specific measures to resolve conflicts of interest
have been formulated, the officers and directors of Wisdom have a
fiduciary obligation to deal fairly and in good faith with the
Company. The directors are required to exercise reasonable
judgment and take such steps, as they deem necessary under all of
the circumstances in resolving any specific conflict of interest
which may occur. There can be no assurance that the Company will
employ any such measures or that conflicts of interest will be
resolved in the best interest of the stockholder of the Company.
Mr. Au has advised the Company that until adequate capital is in
place he intends to maintain his position with Avalon and until
such time as he has found and engaged a suitable replacement for
himself with that firm. Coincidentally, Mr. Au will oversee
raising of funds and implementation of Wisdom's business plan as
a member of the board of directors and President and Chief
Executive Officer of Wisdom.
Web Site; Developing Technology.
One element of the Company's proposed on-line business strategy
is to generate a high volume of traffic on, and use of, its Web
Site. Therefore, the satisfactory performance, reliability and
availability of the Company's Web Site, transaction processing
systems and network infrastructure will be critical to the
Company's reputation and its ability to attract and retain
customers and maintain adequate customer service levels. The
Company has not yet developed any transaction processing systems
and will attempt to develop or purchase same with the proceeds of
this Offering. Any substantial increase in the volume of traffic
on the Company's Web Site or the number or orders placed by
customers may require Wisdom to further expand and upgrade its
technology, transaction-processing system and network
infrastructure. There can be no assurance that the Company will
be able to accurately project the rate or timing of increases in
the use of its Web Site, or timely expand and upgrade its systems
and infrastructure to accommodate such increase.
The Company intends to enter the on-line market through the
introduction of its Web Site,
HYPERLINK "http://www.WisdomSecurities.com"
http://www.WisdomSecurities.com
and Wizbroker.com, in 2001. While the Company anticipates
future development of this area of its business as a vehicle for
sales and marketing of its products, the Company is currently
inexperienced and is competing with larger and better-capitalized
companies able to devote significantly greater resources to the
development of their on-line services. There can be no assurance
that the Company will raise a sufficient amount of capital to
further develop and enhance its on-line business or that if such
enhancements are made, that it will result in increased sales.
Dilution; Possible Future Dilution.
The Company's present stockholders acquired their shares of
Common Stock at $.0001 per share, which is substantially below
the price at which investors will pay in the future for the
shares of Common Stock if and when Wisdom either attracts private
capital or conducts a public offering of its securities.
Investors purchasing these securities will, therefore, incur an
immediate and substantial dilution of their investment insofar as
it relates to the resulting net tangible book value of the
Company's Common Stock. The Company may additionally sell equity
securities or issue options to management in the future, which
could further dilute the interest of potential investors.
No Dividends.
To date, the Company has not paid any cash dividend on its Common
Stock and does not expect to declare or pay any cash or other
dividends in the foreseeable future. The Company anticipates that
profits from its operations, if any, will be reinvested in its
business.
No Present Market for the Securities of the Company.
There is presently no public market for Wisdom's securities nor
can there be any assurance that a public market will develop.
Anti-Takeover Provisions.
The Company's Articles of Incorporation permit its Directors to
designate the terms of and issue shares of Preferred Stock.
These provisions, might render it more difficult, and therefore
discourage, an unsolicited takeover proposal such as a proxy
contest or the removal of incumbent management, even if such
actions would be in the best interests of the Company's
stockholders.
Risks Relating to Doing Business in Hong Kong
Dependence on Acquisition of Corporate Membership; Dealing
Director.
In order to transact business on the Stock Exchange of Hong Kong
(the "Hang Seng" or the "Exchange"), it is necessary for Wisdom
to apply for and receive a Corporate Membership with the Hang
Seng. In order to acquire a Corporate Membership or "seat" on
the exchange, an applicant must contract directly with an
outgoing Member for the transfer of Membership and obtain the
nomination of the outgoing Member to acquire their "A" shares.
Next the applicant must apply to the Securities and Futures
Commission (SFC) for registration under the Securities Ordinance.
If approved, the applicant must apply directly to the Hang Seng
for a Corporate Membership, pay the application fees and
interview with the Membership Committee. If approved, the Hang
Seng Council, the highest decision-making body in the Hang Seng,
will register and admit the applicant as a Member.
Although the Company is of the belief that there exists an
adequate number of Memberships available for transfer, there can
be no assurance that the Company is correct in such belief.
There can be no assurance that the Company will be successful in
its application to become a Corporate Member of the Stock
Exchange of Hong Kong or that the Company will ever acquire a
seat on that exchange. Wisdom's inability to acquire a Corporate
Membership will render it incapable of commencing its proposed
operations.
Every Corporate Member must have at least one of its directors
appointed as Dealing Director, who in turn, must be registered
with the Exchange as a Dealing Director. The Dealing Director is
a director of a corporation who, either alone or with others,
actively participates in, or is directly responsible for the
supervision of, the corporation's business of dealing in
securities. The Dealing Director may not resign from his
directorship of a Corporate Member without obtaining the prior
written approval of the Exchange. The Dealing Director must
complete the Automatic Order Matching and Execution System (AMS)
training program organized by the Exchange prior to the Corporate
Member utilizing same. The Dealing Director may not be an
Authorized Clerk or Sales Representative of the Corporate Member.
The Dealing Director must (i) be no less than twenty-one years of
age; (ii) have a minimum of five years experience in dealing in
securities or have a minimum of three years experience in dealing
in securities and have passed the Securities Brokers Examination
or an examination approved by the Exchange unless he (a) has an
appropriate post secondary qualification set out in the Fit and
Proper Criteria of the Securities and Futures Commission and a
minimum of three years experience in dealing in securities; or
(b) has completed an appropriate recognized industry based course
or has passed an examination set out in the Fit and proper
Criteria of the Securities and Future Commission and a minimum of
three years experience in dealing in securities or (c) has
previously been an Individual Member or a Dealing Director
registered with the Exchange; (iii) be a Dealer of the Corporate
Member registered under the Securities Ordinance; (iv) be a
director of the Corporate Member; and (v) be of good character
and integrity. The Company's inability to duly register one of
its directors as a Dealing Director will materially adversely
affect the Company's proposed operations.
Risks Associated with International Sales.
The Company intends to initially market its Internet trading site
in Hong Kong and throughout Asia. The Company will be subject to
the risks inherent in international business activities,
including unexpected changes in regulatory requirements and the
burdens of complying with a wide variety of laws and regulations.
Moreover, if for any reason exchange or price controls or other
restrictions on the conversion of foreign currencies are imposed,
the Company's business could be materially adversely affected. In
addition, since the Company's financial statements are stated in
dollars and not all the Company's expenses are incurred in
dollars, the Company is exposed to some risk due to fluctuations
in currency exchange rates. The Company's operations could be
adversely affected if it is unable to guard against currency
fluctuations in the future.
There are certain risks inherent in doing business in
international markets, particularly in the regulated brokerage
industry, which could include for any particular market:
* less developed technological infrastructures, resulting
in lower customer acceptance of, or access to,
electronic channels;
* less developed automation in exchanges, depositories
and national clearing systems;
* unexpected changes in regulatory requirements, tariffs
and other trade barriers;
* difficulties in staffing and managing foreign
operations;
* fluctuations in currency exchange rates;
* reduced protection for intellectual property rights;
* seasonal reductions in business activity during the
summer months; and
* potentially adverse tax consequences.
Any of the factors described above could have a material adverse
effect on the Company's operations and consequently on the
Company's business, financial condition and operating results.
The Company will be required to comply with the laws and
regulations of each country in which it conducts business. Any
failure to develop effective compliance and reporting systems
could result in regulatory penalties in the applicable
jurisdiction, which could have a material adverse effect on the
Company's business, financial condition and operating results.
The growth of the Internet as a means of conducting international
business has raised many legal issues regarding, among other
things, the circumstances in which countries or other
jurisdictions have the right to regulate Internet services that
may be available to their citizens from service providers located
elsewhere. In many cases, there are no laws, regulations,
judicial decisions or governmental interpretations that clearly
resolve these issues. This uncertainty may adversely affect the
Company's ability to use the Internet to expand its international
operations, and creates the risk that the Company could be
subject to disciplinary sanctions or other penalties for failure
to comply with applicable laws or regulations.
Operations in Hong Kong.
Substantially all of Wisdom's operations will be conducted in
Hong Kong, a Special Administrative Region ("HKSAR") of the
People's Republic of China ("PRC"). Accordingly, the Company
will be subject to special considerations and significant risks
not typically associated with companies operating in North
American and Western Europe. These include the risks associated
with the political, economic and legal environments and foreign
currency exchange, among others. The Company's results may be
affected by, among other things, changes in the political and
social conditions in HKSAR and the PRC and changes in government
policies with respect to laws and regulations, anti-inflation
measures, currency conversion and remittance abroad and rates and
method of taxation. The HKSAR and the PRC governments have
implemented economic reform policies in recent years, and these
reforms may be refined or changed by the government at any time.
It is possible that a change in the HKSAR and the PRC leadership
could lead to changes in economic policy. In addition, it is
anticipated that a substantial portion of the Company's revenues
will be denominated in Hong Kong dollars, which are convertible
into other currencies.
Insurance.
Currently, there is no insurance similar to that provided by the
Securities Investor Protection Corporation ("SIPC") in the United
States and the Company's customers will not be entitled to claim
against the compensation fund of the Stock Exchange of Hong Kong
for their funds.
Service of Process and Enforcement of Judgments.
The Company is incorporated in the State of Delaware. However,
Service of process upon Mr. Vincent Au, the Company's President
and Chief Executive Officer and Director, Mr. Timothy Wong,
Wisdom's Treasurer and Director and Mr. Bradley A. Schuber, as
well as certain future directors and officers of the Company may
be difficult to obtain within the United States inasmuch as those
three executives, as well as certain future directors and
officers may reside in Hong Kong where the Company intends its
offices to be located.
As a result, you may not be able to effect service of process
upon us or these persons within the United States, or enforce
against us or these persons in United States courts, judgments
obtained in United States courts, including judgments relating to
the federal securities laws of the United States.
The Company will appoint a United States person to act as our
agent to receive service of process with respect to any action
brought against us in a court of proper jurisdiction in the
United States.
The Company has not engaged Hong Kong counsel to render an
opinion on the ability to enforce civil liabilities under the
Securities Act of 1933, and the Securities Exchange Act of 1934
(the "Exchange Act") in original actions instituted in Hong Kong.
There can be no assurance that investors in this Offering will be
able to successfully seek legal recourse against Wisdom, or its
directors and officers residing in Hong Kong. As such, it may be
difficult for investors to seek and enforce civil judgments
against the Company, its directors and officers residing abroad.
Hong Kong Counsel will be retained sometime in the future to
determine whether Chinese courts will enforce judgments of United
States courts based only upon the civil liability provisions of
the federal securities laws of the United States or the
securities laws of any state of the United States.
Reliance on Entering Favorable Clearing Firm Agreement.
Upon completion of this Offering, Wisdom intends to enter into an
arrangement with a Clearing Firm in Hong Kong. In general,
Clearing Firms, on a fee basis, process all securities
transactions for a brokerage firm and the accounts of the
brokerage firm's clients. Services of the Clearing Firm include
billing and credit extension, control and receipt, custody and
delivery of securities, for which the Company will pay a
transaction charge. Wisdom will be dependent on the operational
capacity and the ability of the Clearing Firm for the orderly
processing of transactions. Moreover, as a condition of the
clearing arrangement, the Company may have to indemnify and hold
the Clearing Firm harmless from certain liabilities or claims,
including claims arising from the transactions of the Company's
clients. Whereas the Company is of the belief that there are an
adequate number of potential vendors to provide this service and
fulfill the Company's clearing requirements at competitive
prices. Should the Company not able to enter into a clearing
agreement, the Company's operations could be materially adversely
affected.
Net Capital Compliance.
The Stock Exchange of Hong Kong, as well as the securities
exchanges and other industry self
regulatory organizations that regulate Wisdom's business have
stringent rules with respect to the maintenance of specific
levels of net capital by its members. Net capital is the net
worth (assets minus liabilities) of a broker or dealer, less
deductions for certain types of assets. Currently, under Chapter
4 of the Rules of the Stock Exchange of Hong Kong, a Corporate
Member shall provide and at all times maintain in its business as
a dealer registered under the Securities Ordinance a liquid
capital of not less than the higher of: (i) $3,000,000 or (ii) an
amount which is equal to 5% of its total liabilities. If the
brokerage operations fail to maintain the required net capital,
Wisdom may be subject to suspension or revocation of its licenses
and/or memberships, which could ultimately lead to it being
liquidated. If such net capital rules are changed or expanded,
or if there is an unusually large charge against net capital,
Wisdom might be required to limit or discontinue those portions
of its business that require the intensive use of capital. A
large operating loss or charge against net capital could
adversely affect the Company's ability to expand or even maintain
the Company's intended levels of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS.
Liquidity and Capital Resources
Wisdom Holdings, Inc. remains in the development stage and, since
inception, has experienced no significant change in liquidity or
capital resources or stockholder's equity other than the receipt
of net cash proceeds in the amount of $ , from its inside
capitalization funds. Consequently, Wisdom Holdings, Inc.'s
balance sheet for the period of August 10, 1999 (inception)
through September 30, 2000, reflects current assets of $ in the
form of cash, and total assets of $
The Company.
Wisdom Holdings, Inc. (the "Company"), was incorporated in the
State of Delaware on August10, 1999. The Company is a development
stage company which was recently organized to acquire; to acquire
a Corporate Membership on the Stock Exchange of Hong Kong (the
"Hang Seng" or "Exchange"); become registered and licensed with
the Securities and Futures Commission (SFC) of Hong Kong and to
form or acquire an online brokerage firm to operate on the Hang
Seng.
To date, Wisdom has not conducted any business nor generated any
revenues or profits, and no assurance can be given that it will
be able to do so in the future. The Company's ability to
commence the development of its business is dependent upon the
receipt of the proceeds of this Offering. The Company hopes to
launch its online brokerage firm in January 2001, although there
can be no assurance that the Company will be successful in
meeting its January 2001 launch date. Furthermore, there can be
no assurance that Wisdom will be successful in its application
for a Corporate Membership on the Exchange or that it will ever
launch its online brokerage firm.
Wisdom is of the belief that there exists an opportunity in Asia
generally and Hong Kong specifically, whereby the Company can
capitalize on the growing popularity of the online brokerage
industry, by forming or acquiring a Corporate Membership on the
Exchange and by developing and marketing an online brokerage
firm, targeted towards the Asian population. To that end, the
Company intends to acquire a Corporate Membership on the
Exchange, become registered and licensed with the Securities and
Futures Commission (SFC) of Hong Kong and develop, design, market
and operate an online brokerage firm using the "Wisdom
Securities" name as a trademark.
Management hopes that the Company will generate revenues and
profits from operations, although there can be no assurance that
Management or the Company will generate any revenues or profits.
Industry Overview.
The securities industry has recently experienced a series of
changes, led by electronic and online commerce, which has created
market opportunities for the Company and other similarly situated
brokerage firms. These favorable market trends include:
- The Emergence of Electronic and Online Commerce.
- Internet and online services have provided organizations and
individuals with innovative ways of conducting business. With
the emergence of the Internet as a globally accessible, fully
interactive and individually addressable communication and
computing medium, companies that have traditionally conducted
business in person, through the mail or over the telephone are
increasingly utilizing electronic commerce. Increased use of
credit cards, automated teller machines, the incidence of
electronic funds transfers and online banking and bill paying has
automated, simplified and reduced the costs of financial
transactions for consumers, businesses and financial
institutions.
Consumers have shown a growing preference for transacting certain
types of business electronically, such as paying bills, buying
insurance, booking airline tickets and trading securities, rather
than in person or over the telephone. These transactions are
being streamlined through online commerce and can now be
performed directly by individuals virtually anywhere at any time.
Consumers have accepted and even welcome self-directed online
transactions because such transactions can be faster, less
expensive and more convenient than transactions conducted through
a human intermediary.
The Development of Online Brokerage Services.
In the past, individual investors could access the financial
markets only through a full-commission broker, who would offer
investment advice and place trades. With the deregulation of the
brokerage commissions in 1975 and the resulting unbundling of
brokerage services, investors began to realize that they could
separate financial advisory services from securities trading.
This brought about the advent of discount brokerage firms, which
provide an alternative investment approach by completing trades
at reduced costs.
With the emergence of electronic brokerage services, investors
are being given the ability to further un-bundle the costs
associated with the human interaction required by full-commission
and traditional discount brokerage firms. By requiring personnel
to handle each transaction, most traditional brokerage firms
restrict their client's access to trading and information to the
availability of the person processing the transaction. In
addition, although full-commission and discount brokerage firms
are able to offer electronic trading services, their continued
reliance on personnel, branch offices and the associated
infrastructure for a major part of their business prevents them
from reducing their cost structure to the lower price points
achievable through electronic trading.
At the same time, the use of the Internet as a tool for obtaining
information, communicating and effecting commerce is also
changing the financial services industry. The Internet provides
investors with a wealth of information about investing, including
stock picks, technical charts, analysis and financial corporate
news. As a result, investors are more self-reliant and value
conscious, are managing their own money and are increasingly
reluctant to pay high fees to full-service retail brokers. This
has led to significant growth in online investing and the entry
into the market of electronic or online trading which has
experienced phenomenal growth since the Internet "e-brokerages"
were introduced in 1994.
The Growing Market for Active Traders, Active Investors and
Online Brokerage Services
The Company believes that the current regulatory environment in
Hong Kong and the increased availability of information to
individual investors on a real-time basis, together with advances
in Internet networking and communications technologies, has
created investing opportunities for active traders and active
investors and market opportunities for online brokerage services.
Online trading is the fastest growing segment of the brokerage
industry and is expected to grow significantly. Forrester
Research, Inc. projects that the online trading industry in the
United States grew from approximately 1.5 million accounts at the
end of 1996 to approximately 5 million accounts at the end of
1998, and that the market will grow to 8.4 million accounts at
the end of 1999 and 14.4 million accounts in 2002. Another
industry report indicates that the volume of securities trades
placed over the Internet increased by 34% during the fourth
calendar quarter of 1998, compared to the third quarter of 1998,
and that the number of online trades accounts for 25% to 30% of
all individual investor stock transactions and 14% of all equity
transactions. Industry experts also project that retail
commissions generated by online trading will grow from
approximately $268 million, or 15% of the commissions generated
by discount brokerages in 1996, to as much as $2.2 billion, or
60% of the total discount brokerage commissions by 2001.
Wisdom believes that the rapid growth experienced in the United
States in the online trading industry is a strong indication that
a great opportunity exists in Asia, generally and Hong Kong
specifically, to develop and grow the market for online trading
in those markets. There can be no assurance that the Company is
correct in such belief.
WisdomSecurities.com - The Company's Proposed Internet Trading
Site.
The Company is currently in the process of contracting the
construction of its site on the Worldwide Web with the intent of
developing an Internet trading site WisdomSecurities.com, for the
purpose of advertising the Company's business and having its
potential clients trade equity securities online. Through the
proposed WisdomSecurities.com Internet trading site, the Company
intends to provide real-time online financial brokerage services
and comprehensive information about the global securities
markets. The Company plans to design its WisdomSecurities.com
website for use by self-directed active traders, as well as
casual online investors. The Company plans to its
WisdomSecurities.com website to deliver and automatically update
a continuous, dynamic stream of live market data to the client's
screen.
The proposed WisdomSecurities.com website will provide clients
with comprehensive information on stocks, markets, indices,
mutual funds, news and options in a totally live format for a
fee, or a free partially time delayed format. It is intended
that clients will be able to place trades, obtain quotes, order
research and check account balances and portfolio valuations
online or through an automated touch-tone phone system, twenty-
four (24) hours a day.
In addition to Internet access, Wisdom intends to offer its
customers access to the Company's products and services through
the following other electronic channels:
* Direct Dial-up Access. Customers can use their
personal computers to access their brokerage accounts
online by using free proprietary software provided by
Wisdom to dial directly into the Company's private
computer networks for real-time online brokerage
services and market information.
* Touch-tone Telephone. Wisdom's interactive investing
systems will provide customers with a convenient way to
obtain quotes, place orders and review certain account
information using a touch-tone telephone.
Wisdom intends to provide direct dial-up access and touch-tone
telephone services in Chinese, (Mandarin and Cantonese) and
English.
Strategy
Wisdom believes that it must create a high level of service by
using technology to provide experienced clients direct access,
through various electronic media, to a trading desk which goes
directly to the source and avoids the middleman to obtain the
best possible execution price (i.e. a "Wall Street style trading
desk"). The Company's strategy is designed to ensure that the
client obtains the best possible execution price and access to
relevant market information.
Wisdom believes that opportunities exist in the Asian financial
services industry for a company that is able to provide
experienced investors with the overall cost-savings created by:
(1) direct access to professional trade executions,
(2) access to up-to-date market information, and
(3) the convenience of trading over the Internet.
The Company's basic philosophy will be to provide its clients the
best execution prices along with the most relevant market
information and investment research. The Company is determined
to offer its clients, regardless of the communication medium
used, the simplest, most direct form of stock execution.
The Company's goal is to become the market leader in Hong Kong in
the financial services industry and build market share by
capitalizing on the changes occurring in the financial services
industry and providing the Company's clients with specialized
services for competitive, fully disclosed commission rates. The
Company intends to achieve its goal by:
* Targeting experienced investors and small to
mid-sized financial institutions who typically (1)
execute more trades per year than other categories of
investors,
(2) require access to market information, and
(3) require fast execution of their orders;
* Creating technologically innovative solutions to
satisfy client needs, including efficient trading
directly over the Internet; and
* Offer its customers a broad range of financial products
and services;
* Providing a choice of diverse and integrated delivery
channels to its customers, including Internet, direct
dial-up and touch-tone telephone access;
* Maintaining a commitment to high-quality customer
service;
* Offering its customers highly competitive pricing;
* Building brand awareness of the "WisdomSecurities"
trademark.
Competition
All aspects of the Company's business are and will continue to
be highly competitive. The Company will compete in a
marketplace, which is well established and heavily
capitalized. Most of the entities with which the Company will
compete have substantially greater experience, personnel and
financial resources than that of the Company.
The market for electronic brokerage services is intensely
competitive, rapidly changing and has few barriers to entry.
Wisdom believes that it will be able to compete on the basis
of speed and accuracy of order execution, processing and
confirmation, quality of client service, ease of use, amount
and timeliness of information provided, price and reliability
of the Company's trading system. There can be no assurance
that the Company is correct in such belief.
Wisdom believes its competition will consist of large and
small brokerage firms, utilizing the Internet to transact
retail brokerage business in Hong Kong and the United States.
Among such competitors are Charles Schwab & Co., Inc., TD
Waterhouse Securities, Inc. and Boom Securities (H.K.)
Limited. The Company also faces competition for clients from
full commission brokerage firms, including Morgan Stanley Dean
Witter & Co. and Salomon Smith Barney, as well as financial
institutions and mutual funds, some of which provide
electronic brokerage services.
The Company believes that it will compete vigorously with
other discount brokerage firms and online-only financial
services providers with respect to commission charges.
Full-commission brokerage firms also offer discounted
commissions to selected retail brokerage customers. In
addition, some of the Company's competitors in both the
full-commission and discount brokerage industries have
substantially increased their spending on advertising and
direct solicitation of customers.
Competition in the online trading business has become
similarly intense as recent expansion and customer acceptance
of conducting financial transactions online has attracted new
brokerage firms to the market. Price competition continues to
intensify in online investing as traditional brokerage firms
have entered the market and existing competitors have
aggressively sought to gain market share.
All of the Company's competitors have significantly greater
financial, technical, marketing and other resources. Wisdom's
competitors may also offer a wider range of services and
financial products and have greater name recognition and more
extensive client bases.
There can be no assurance that Wisdom will be able to compete
effectively with current or future competitors or that the
Company's business prospects may be materially, adversely
affected.
Intellectual Property Rights.
The Company intends to file for trademark registration with
the United States Patent and Trademark Office for the Wisdom
Securities name. Although the Company is not aware of any
challenges to its right to use this trademark, the Company
cannot give assurance that a trademark registration will be
granted or, if granted, that the use of this mark would be
upheld if challenged.
Sales and Marketing.
Upon completion of this Offering, Wisdom will commence
marketing efforts to increase its presence and name brand
recognition to attract new clients. Most of the Company's
marketing efforts will be effected on-line and will be
directed at internet users in Hong Kong and throughout Asia.
The Company also hopes to develop and expand its market share
through advertising on the Company's web site and other web
sites and establishing a public relations program. From time
to time, the Company may choose to increase spending on
advertising to target specific groups of investors or to
decrease advertising expenditures in response to market
conditions.
Web Site.
In 2001, Wisdom intends to introduce its internet web site
(http://www.WisdomSecurities.com) for the purpose of launching
its Internet trading site, and increasing awareness to the
investing public. Wisdom intends to further develop its Web
Site to include updates on the global financial markets as
well as other information, which would be of interest to
potential clients and advertisers. The Company anticipates
the development of additional or linked Web Sites geared
towards areas of interest of the Company's client base.
The Web Site exposes Wisdom to individual consumers through
the convenience of on-line browsing 24 hours per day. It
intends to take advantage of this potential consumer base
through the enhancement of its search and retrieval interface
and improved displays. The potential for growth via
marketing, sales and distribution on the Internet is great and
Wisdom may be in a position to fully realize the benefits of
on-line marketing and sales.
Legal Proceedings.
The Company is not presently a party to any legal proceeding,
nor to the knowledge of management, is any litigation
threatened against the Company, which may materially affect
the Company.
ITEM 3. DESCRIPTION OF PROPERTY.
Wisdom Holdings, Inc. does not currently maintain an office
or any other facilities. It does currently maintain a mailing
address at 2 World Trade Center, suite 1812, New York, NY
10048 the address of its President. Wisdom Holdings, Inc.
pays no rent for the use of this mailing address. The
telephone number is (212) 775-9555. It pays no rent and owns
no real estate.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
The following table sets forth, as of the date of this
registration statement, the number of shares of Common Stock
owned of record and beneficially by executive officers,
directors and persons who hold 5.0% or more of the outstanding
common stock of Wisdom Holdings, Inc.. Also included are the
shares held by all executive officers and directors as a
group.
Number of Percentage of
Name and Address Shares Owned Class Owned
Vincent Au 10,000,000 91.31
Timothy Wong (3) 500,000 4.57
Leonard J. Corwin 150,000 1.37
All officers and 10,650,000 97.25
Directors as a group
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
The names, ages and positions of the Company's executive
officers and directors are as follows:
Name Age Position with the Company
Vincent Au 30 Chief Executive Officer,
Chairman of the Board of Directors,
President and Director
Timothy K. Wong 32 Secretary/Treasurer
Director
Leonard J.
Corwin, M.D. 74 Director
Vincent Au, has been the President, Chairman of the Board of
Directors, Chief Executive Officer and Director of the Company
since its inception in August, 1999. He has been a registered
representative in the Securities industry since October, 1989.
He is currently Managing Director of Avalon Partners, Inc.,
with offices in New York and Germany and holds his principals
license in that capacity. Mr. Au was associated with D.H.
Blair & Co., New York, NY where he participated in Raising
over 100 million dollars in Initial Public Offerings (IPOs).
He served as Vice-President of both Gruntal & Co. and
Josephthal, Lyon and Ross, both of New York City. As an
associate at D. Blech & CO. he assisted investment bankers in
raising some 300 million dollars for emerging biotechnology
and pharmaceutical companies through private placements and
Initial Public Offerings. Mr. Au graduated with a BA degree
from New York University. He was born in Hong Kong and spent
a large part of his formative years there. He is fluent in
Cantonese Chinese.
Timothy Wong, has been the Chief Financial Officer, Secretary
and Treasurer and a Director of the Company since inception in
August, 1999. From April 1999 to present, Mr. Wong has been
Tax Attorney at Internatinal Business Machine Corp.(IBM).
From September 1995 to April 1999, Mr. Wong was a Senior Tax
Consultant for Deloitte & Touche. Mr. Wong is a New York
State Certified Public Accountant. Mr. Wong is admitted to
practice law before the state bars in New York and New Jersey.
Mr. Wong received his B.S. in Accounting from Bernard M.
Baruch College in 1990. He received his Juris Doctor degree
from St. John's University School of Law in 1995. Mr. Wong
spent much of his youth living in Hong Kong and is familiar
with the cultural nuances essential for doing business there,
as well as throughout Asia. He is fluent in Cantonese
Chinese.
Leonard J. Corwin, M.D. Graduated with a BS degree in Biology
from Rutgers University, New Brunswick, NJ in 1947, where he
was Phi Beta Kappa and elected to Beta Iota Lamda Honorary
Biologic Society. He also received the Cooper Prize in Logic.
Dr. Corwin graduated from George Washington University,
Washington, DC with the degree of Doctor of Medicine. While
there he was elected to the Kane-King Society (Honorary
Obstetrical Society) and Smith-Reed-Russell (Honorary Medical
Society). He then went on to study obstetrics, serving his
residency at the University of Chicago, Chicago Lying-In
Hospital and Albert Einstein College of Medicine, Bronx
Municipal Hospital, New York, NY and United States Naval
Hospital, St. Albans, NY.
Dr. Corwin spent five years in the US Naval Reserve and
attained the rank of Lieutenant Commander.
He is a fellow of the American College of Obstetrics and
Gynecologists. Dr. Corwin served as the Vice-Chairman,
Department of Obstetrics and Gynecology, Overlook Hospital,
Summit, NJ from 1982 to 1984 and served as Chairman of that
department from 1984 through 1986. He is the author and co-
author of many medical publications and has served for many
years as a Consultant, Medical Expert Advisory Panel, Board of
Medical Examiners, State of New Jersey.
The Board is currently comprised of five Directors. All
directors of the Company hold office until the next annual
meeting of stockholders and the election and qualification of
their successors. Directors of the Company will receive no
cash compensation for serving on the Board of Directors.
Officers are elected annually by the Board of Directors and
serve at the discretion of the Board.
The directors named above will serve until the first annual
meeting of Wisdom Holdings, Inc.'s stockholders. Thereafter,
directors will be elected for one-year terms at the annual
stockholders' meeting. Officers will hold their positions at
the pleasure of the Board of Directors, absent any employment
agreement, of which none currently exists or is contemplated.
There is no arrangement or understanding between the directors
and officers of Wisdom Holdings, Inc. and any other person
pursuant to which any director or officer was or is to be
selected as a director or officer.
Indemnification of Officers and Directors.
As permitted by Delaware law, Wisdom Holdings, Inc.'s Articles
of Incorporation provide that Wisdom Holdings, Inc. will
indemnify its directors and officers against expenses and
liabilities they incur to defend, settle, or satisfy any civil
or criminal action brought against them on account of their
being or having been Company directors or officers unless, in
any such action, they are adjudged to have acted with gross
negligence or willful misconduct. Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers or persons controlling
Wisdom Holdings, Inc.
Pursuant to the foregoing provisions, Wisdom Holdings, Inc.
has been informed that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public
policy as expressed in that Act and is, therefore,
unenforceable.
Exclusion of Liability.
Pursuant to the Delaware Business Corporation Act, Wisdom
Holdings, Inc.'s Articles of Incorporation exclude personal
liability for its directors for monetary damages based upon
any violation of their fiduciary duties as directors, except
as to liability for any breach of the duty of loyalty, acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts in violation of
Section 7-106-401 of the Delaware Business Corporation Act, or
any transaction from which a director receives an improper
personal benefit. This exclusion of liability does not limit
any right that a director may have to be indemnified and does
not affect any director's liability under federal or
applicable state securities laws.
Conflicts of Interest.
The officers and directors of Wisdom Holdings, Inc. will not
devote more than a portion of their time to the affairs of the
Company. There will be occasions when the time requirements of
Wisdom Holdings, Inc.'s business conflict with the demands of
their other business and investment activities. Such
conflicts may require that Wisdom Holdings, Inc. attempt to
employ additional personnel. There is no assurance that the
services of such persons will be available or that they can be
obtained upon terms favorable to Wisdom Holdings, Inc.
There is no procedure in place that would allow the directors
and officers to resolve potential conflicts in an arms-length
fashion. Accordingly, they will be required to use their
discretion to resolve them in a manner that they consider
appropriate.
ITEM 6. EXECUTIVE COMPENSATION.
At inception of Wisdom Holdings, Inc., Vincent Au received
10,000,000 shares of Common Stock valued at 0.0001 per share
in consideration of pre-incorporation services rendered and
monies expended to Wisdom Holdings, Inc. These services
related to investigating and developing Wisdom Holdings,
Inc.'s business plan and capital structure, the capital outlay
concerned with the completion of the incorporation and
organization.
No officer or director has received any other remuneration.
Although there is no current plan in existence, it is possible
that Wisdom Holdings, Inc. will adopt a plan to pay or accrue
compensation to its sole officer and director for services
related to seeking business opportunities and completing a
merger or acquisition transaction. See "Certain Relationships
and Related Transactions." Wisdom Holdings, Inc. has no stock
option, retirement, pension, or profit-sharing programs for
the benefit of directors, officers or other employees, but the
Board of Directors may recommend adoption of one or more such
programs in the future.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Prior to the date of this registration statement, Wisdom
Holdings, Inc. issued to its Officers and Directors, and to
other shareholders, a total of 10,950,000 shares of Common
Stock for a total of $10,950 in cash and services.
Certificates evidencing the Common Stock issued by Wisdom
Holdings, Inc. to these persons have all been stamped with a
restrictive legend, and are subject to stop transfer orders.
For additional information concerning restrictions that are
imposed upon the securities held by current stockholders, and
the responsibilities of such stockholders to comply with
federal securities laws in the disposition of such common
stock.
No officer, director, promoter, or affiliate of Wisdom
Holdings, Inc. has or proposes to have any direct or indirect
material interest in any asset proposed to be acquired by
Wisdom Holdings, Inc. through security holdings, contracts,
options, or otherwise.
Wisdom Holdings, Inc. has adopted a policy under which any
consulting or finder's fee that may be paid to a third party
for consulting services to assist management in evaluating a
prospective business opportunity would be paid in stock or in
cash. Any such issuance of stock would be made on an ad hoc
basis. Accordingly, Wisdom Holdings, Inc. is unable to
predict whether or in what amount such a stock issuance might
be made.
Although there is no current plan in existence, it is possible
that Wisdom Holdings, Inc. will adopt a plan to pay or accrue
compensation to its sole Officer and Director for services
related to seeking business opportunities and completing a
merger or acquisition transaction.
Wisdom Holdings, Inc. maintains a mailing address at the
office of its President, but otherwise does not maintain an
office. As a result, it pays no rent and incurs no expenses
for maintenance of an office and does not anticipate paying
rent or incurring office expenses in the future. It is likely
that Wisdom Holdings, Inc. will establish and maintain an
office after completion of a business combination.
Although management has no current plans to cause Wisdom
Holdings, Inc. to do so, it is possible that Wisdom Holdings,
Inc. may enter into an agreement with an acquisition candidate
requiring the sale of all or a portion of the Common Stock
held by Wisdom Holdings, Inc.'s current stockholders to the
acquisition candidate or its principals or to other
individuals or business entities, or requiring some other form
of payment to Wisdom Holdings, Inc.'s current stockholders, or
requiring the future employment of specified officers and
payment of salaries to them. It is more likely than not that
any sale of securities by Wisdom Holdings, Inc.'s current
stockholders to an acquisition candidate would be at a price
substantially higher than that originally paid by such
stockholders. Any payment to current stockholders in the
context of an acquisition involving Wisdom Holdings, Inc.
would be determined entirely by the largely unforeseeable
terms of a future agreement with an unidentified business
entity.
ITEM 8. DESCRIPTION OF SECURITIES.
Common Stock
Wisdom Holdings, Inc.'s Articles of Incorporation authorize
the issuance of 37,500,000 shares of Common Stock with a par
value of $.0001. Each record holder of Common Stock is
entitled to one vote for each share held on all matters
properly submitted to the stockholders for their vote.
Cumulative voting for the election of directors is not
permitted by the Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled to
such dividends as may be declared from time to time by the
Board of Directors out of legally available funds: and, in the
event of liquidation, dissolution or winding up of the affairs
of Wisdom Holdings, Inc. In the event that any of the
aforementioned situations occur holders of common stock are
entitled to receive, ratably, the net assets of Wisdom
Holdings, Inc. available to stockholders after distribution is
made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding
shares of Common Stock have no preemptive, conversion or
redemptive rights. All of the issued and outstanding shares
of Common Stock are, and all unissued shares when offered and
sold will be duly authorized, validly issued, fully paid, and
non-assessable. To the extent that additional shares of
Wisdom Holdings, Inc.'s Common Stock are issued, the relative
interests of then existing stockholders may be diluted.
Preferred Stock
Wisdom Holdings, Inc.'s Articles of Incorporation authorize
the issuance of 10,000,000 shares of preferred stock. The
Board of Directors of Wisdom Holdings, Inc. is authorized to
issue the preferred stock from time to time in series and is
further authorized to establish such series, to fix and
determine the variations in the relative rights and
preferences as between series, to fix voting rights, if any,
for each series, and to allow for the conversion of preferred
stock into Common Stock. No preferred stock has been issued
by Wisdom Holdings, Inc. Wisdom Holdings, Inc. anticipates
that preferred stock may be utilized in making acquisitions.
Transfer Agent
Wisdom Holdings, Inc. is currently serving as its own transfer
agent, and plans to continue to serve in that capacity until
such time as management believes it is necessary or
appropriate to employ an independent transfer agent in order
to facilitate the creation of a public trading market for
Wisdom Holdings, Inc.'s securities. Since Wisdom Holdings,
Inc. does not currently expect any public market to develop
for its securities until after it has completed a business
combination, it does not currently anticipate that it will
seek to employ an independent transfer agent until it has
completed such a transaction.
Reports to Stockholders
Wisdom Holdings, Inc. plans to furnish its stockholders with
an annual report for each fiscal year containing financial
statements audited by its independent certified public
accountants. In the event Wisdom Holdings, Inc. enters into a
business combination with another company, it is the present
intention of management to continue furnishing annual reports
to stockholders. Additionally, Wisdom Holdings, Inc. may, in
its sole discretion, issue unaudited quarterly or other
interim reports to its stockholders when it deems appropriate.
Wisdom Holdings, Inc. intends to comply with the periodic
reporting requirements of the Securities Exchange Act of 1934
for so long as it is subject to those requirements.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND OTHER SHAREHOLDER MATTERS.
No public trading market exists for Wisdom Holdings, Inc.'s
securities and all of its outstanding securities are
restricted securities as defined in Rule 144. There were 5
shareholders of record of Wisdom Holdings, Inc.'s common stock
on September 30, 2000. No dividends have been paid to date
and Wisdom Holdings, Inc.'s Board of Directors does not
anticipate paying dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS.
Wisdom Holdings, Inc. is not a party to any pending legal
proceedings, and no such proceedings are known to be
contemplated.
No director, officer or affiliate of Wisdom Holdings, Inc. and
no owner of record or beneficial owner of more than 5.0% of
the securities of Wisdom Holdings, Inc., or any associate of
any such director, officer or security holder is a party
adverse to Wisdom Holdings, Inc. or has a material interest
adverse to Wisdom Holdings, Inc. in reference to pending
litigation.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Since August 11, 1999 (inception) Wisdom Holdings, Inc. has
sold its Common Stock to the persons listed in the table below
in transactions summarized as follows:
Aggregate
Name Date of Sale Shares Price per Share Purchase
Vincent Au 08/11/99 10,000,000 .0001 1,000
Tim Wong 08/11/99 500,000 .0001 50
Leonard J.
Corwin 08/11/99 150,000 .0001 15
Michael
Ferrence 08/11/99 100,000 .0001 10
Sandringham Investments
Limited 08/11/99 200,000 .0001 20
* Consideration consisted of pre-incorporation consulting
services rendered to the Registrant related to investigating
and developing the Registrant's proposed business plan and
capital structure and completing the organization and
incorporation of the Registrant, including the costs of
incorporation.
Each of the sales listed above was made for cash or services.
All of the listed sales were made in reliance upon the
exemption from registration offered by Section 4(2) of the
Securities Act of 1933. Based upon Purchaser Subscription
forms completed by each of the subscribers and the pre-
existing relationships between the subscribers and Wisdom
Holdings, Inc.'s officers and directors. Wisdom Holdings, Inc.
had reasonable grounds to believe immediately prior to making
an offer to the private investors, and did in fact believe,
when such subscriptions were accepted, that such purchasers:
(1) were purchasing for investment and not with a view to
distribution, and
(2) had such knowledge and experience in financial and
business matters that they were capable of evaluating the
merits and risks of their investment and were able to bear
those risks. The purchasers had access to pertinent
information enabling them to ask informed questions.
The shares were issued without the benefit of registration.
An appropriate restrictive legend is imprinted upon each of
the certificates representing such shares, and stop-transfer
instructions have been entered in Wisdom Holdings, Inc.'s
transfer records. All such sales were effected without the
aid of underwriters, and no sales commissions were paid.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and the Bylaws of Wisdom
Holdings, Inc., filed as Exhibits 3.1 and 3.2, respectively,
provide that Wisdom Holdings, Inc. will indemnify its officers
and directors for costs and expenses incurred in connection
with the defense of actions, suits, or proceedings where the
officer or director acted in good faith and in a manner he
reasonably believed to be in Wisdom Holdings, Inc.'s best
interest and is a party by reason of her status as an officer
or director, absent a finding of negligence or misconduct in
the performance of duty.
FINANCIAL STATEMENTS
Audited Financial Statements, including a report of an
Independent auditor, follow.
WISDOM HOLDINGS, INC.
(A Development Stage Company)
FINANCIAL REPORT
For the Period January 1, 2000 to September 30, 2000
WISDOM HOLDINGS, INC.
(A Development Stage Company)
FINANCIAL REPORT
CONTENTS PAGE
Independent Accountant's report 39
Balance sheet as of September 30, 2000 40
Statement of operations and retained
earnings for the period
January 1, 2000 to September 30, 2000 41
Statement of cash flows for the period
January 1, 2000 to September 30, 2000 42
Notes to financial statements 43
REPORT OF INDEPENDENT ACCOUNTANT
The Board of Directors
Wisdom Holdings, Inc.
We have audited the accompanying balance sheet of Wisdom
Holdings, Inc. as of September 30, 2000 and the related
statements of operations and retained earnings, stockholders'
equity and cash flows for the period January 1, 2000 to
September 30, 2000. These financial statements are the
responsibility of the Corporation's management. Our
responsibility is to express an opinion on these financial
statements based upon our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Wisdom Holdings, Inc. as of September 30, 2000 and
the results of its operations and cash flows for the period
January 1, 2000 to September 30, 2000 in conformity with
generally accepted accounting principles.
Melville, New York
November 8, 2000
WISDOM HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF SEPTEMBER 30, 2000
ASSETS
Total assets $0
LIABILITIES AND STOCKHOLDERS'
EQUITY
LIABILITIES:
State and local corporation and
franchise tax payable 455
Loans payable - stockholders 13,802
Total liabilities 14,257
STOCKHOLDERS' EQUITY:
Common stock, par value $.0001 per
share; Authorized, 37,500,000
shares
Issued and outstanding, 1,095
10,952,000 shares
Capital in excess of par value
1,015
Retained earnings (deficit) (16,367)
Total stockholders' equity (14,257)
Total liabilities and
stockholders' equity 0
See accompanying notes to financial statements
WISDOM HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
FOR THE PERIOD JANUARY 1, 2000 TO SEPTEMBER 30, 2000
Revenue $0
Operating expenses:
Professional fees $13,750
Outside services
1,029
Filing fees
50
Bank fees
159
State and Local corporation
and franchise taxes 455
Total operating expenses
15,443
Net loss $(15,443)
Retained earnings(deficit),
beginning (924)
Retained earnings(deficit),
ending $(16,367)
See accompanying notes to financial statements
WISDOM HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD JANUARY 1, 2000 TO SEPTEMBER 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(15,443)
Adjustments to reconcile net income (loss) to
net cash used
in operating activities:
(Decrease) in deferred offering costs
13,000
NET CASH USED IN OPERATING ACTIVITIES
(2,443)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in stockholder loans
2,312
Net cash from financing activities
2,312
Decrease in cash (131)
Cash, beginning of period
131
Cash, end of period $ 0
See accompanying notes to financial statements
WISDOM HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD AUGUST 10, 1999 (DATE OF INCEPTION) to August 18, 1999
Note 1- NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING
POLICIES:
Organization:
The Company was incorporated in the State of
Delaware on August 10, 1999. It has not yet
conducted any business operations.
Purpose:
The Company intends to engage in the Internet
discount brokerage business and operate in Hong
Kong. The Company is of the belief that there
exists an opportunity in Hong Kong whereby the
Company can capitalize on the growing popularity of
online trading. To date the Company has not
conducted any business nor opened an office in Hong
Kong.
Note 2- OFFERING OF SHARES:
In August 1999, the Company offered for sale to the
public in a private offering memorandum, a minimum
of 12 units, and a maximum of 140 units, each unit
consisting of (i) 50,000 shares of common stock; and
(ii) 25,000 common stock purchase warrants, at a
price of$250,000 per unit. During the offering
period, none of the units were sold.
Had the offering been successful, the Company
planned to use the proceeds to commence its planned
operating activities.
Note 3- VALUATION OF SHARES ISSUED:
On August 10, 1999, the Company issued 10,000,000
shares to the Company's founder for a consideration
of $2,110.
PART III
Item 1 - Index to Exhibits
Exhibit # Exhibit Description Page
3.1 Articles of Incorporation 44
3.2 Bylaws 47
27 Financial Data Shedule
Signatures
In accordance with Section 12 of the Securities and Exchange
Act of 1934, the registrant caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly
authorized.
Wisdom Holdings, Inc.
(Registrant)
Date: December 15, 2000
By: /S/ Timothy K. Wong
Timothy K. Wong, President, Secretary and Treasurer.
EXHIBIT 3.1
ARTICLES OF INCORPORATION
AMENDED
ARTICLES OF INCORPORATION
OF
WISDOM HOLDINGS, INC.
**************************************************************
The undersigned, acting as Secretary, pursuant to the
provisions of the laws of the State of
Delaware relating to private corporations, hereby adopts the
following Amended Articles of Incorporation:
ARTICLE ONE. (NAME)
The name of the corporation is: WISDOM HOLDINGS, INC.
ARTICLE TWO. (RESIDENT AGENT) The initial agent
for service of process is Agents for Delaware Corporations,
Inc., Loockerman Street, Dover, County of Kent, 19904.
ARTICLE THREE. (PURPOSES) The purposes for
which the corporation is organized are to engage in any
activity or business not in conflict with the laws of the
State of Delaware or of the United States of America, and
without limiting the generality of the foregoing,
specifically:-
I. (OMNIBUS). To have to exercise all the
powers now or hereafter conferred by the
laws of the State of Delaware upon
corporations organized pursuant to the
laws under which the corporation is
organized and any and all acts amendatory
thereof and supplemental thereto.
II. (CARRYING ON BUSINESS OUTSIDE STATE).
To conduct and carry on its business or
any branch thereof in any state or
territory of the United States or in any
foreign country in conformity with the
laws of such state, territory, or foreign
country, and to have and maintain in any
state, territory, or foreign country a
business office, plant, store or other
facility.
III. (PURPOSES TO BE CONSTRUED AS POWERS).
The purposes `specified herein shall be
construed both as purposes and powers and
shall be in no wise limited or restricted
by reference to, or inference from, the
terms of any other clause in this or any
other article, but the purposes and powers
specified in each of the clauses herein
shall be regarded as independent purposes
and powers, and the enumeration of
specific purposes and powers shall not be
construed to limit or restrict in any
manner the meaning of general terms or of
the general powers of the corporation; nor
shall the expression of one thing be
deemed to exclude another, although it be
of like nature not expressed.
ARTICLE FOUR. (CAPITAL STOCK) The corporation
shall have authority to issue THIRTY-SEVEN MILLION, FIVE
HUNDRED THOUSAND (37,500,000) shares of stock, par value
$0.0001 per share for a total capitalization of THREE
THOUSAND, SEVEN HUNDRED AND FIFTY DOLLARS ($3,750).
All capital stock when issued shall be fully paid and non-
assessable. No holder of shares of capital stock of the
corporation shall be entitled as such to any pre-emptive or
preferential rights to subscribe to any un-issued stock, or
any other securities that the corporation may now or hereafter
be authorized to issue.
The corporation's capital stock may be issued and sold
from time to time for such consideration as may be fixed by
the Board of Directors, provided that the consideration so
fixed is not less than par value.
Holders of the corporation's Common Stock shall not
possess cumulative voting rights at any shareholders meetings
called for the purpose of electing a Board of Directors or on
other matters brought
before stockholders meetings, whether they be annual or
special.
ARTICLE FIVE. (DIRECTORS). The affairs of the
corporation shall be governed by a Board of Directors of not
more than fifteen (15) nor less than one (1) person. The name
and address of the Board of Directors is:
NAME ADDRESS
Vincent Au 2 World Trade Center #1812
NY,NY 10048
Timothy Wong 66-15 52nd Ave.
Maspeth, NY 11378
Leonard J. Corwin 90 Milburn Ave.
Milburn, NJ 07041
ARTICLE SIX. (ASSESSMENT OF STOCK). The
capital stock of the corporation, after the amount of the
subscription price or par value has been paid in, shall not be
subject to pay debts of the corporation, and no paid up stock
and no stock issued as fully paid up shall ever be assessable
or assessed.
ARTICLE SEVEN. (INCORPORATOR). The name and
address of the incorporator of the corporation is as follows:
NAME ADDRESS
Bruce B. Hubbard 15 Lookerman Street
Dover, Delaware 19904
ARTICLE EIGHT. (PERIOD OF EXISTENCE). The
period of existence of the Corporation shall be perpetual.
ARTICLE NINE. (BY-LAWS) The initial By-laws of
the corporation shall be adopted by its Board of Directors.
The power to alter, amend, or repeal the By-laws, or to adopt
new By-laws, shall be vested in the Board of Directors, except
as otherwise may be specifically provided in the By-laws.
ARTICLE TEN. (STOCKHOLDERS' MEETINGS).
Meetings of stockholders shall be held at such place within or
without the State of Delaware as may be provided by the By-
laws of the corporation. Special meetings of the stockholders
may be called by the President or any other executive officer
of the corporation, the Board of Directors, or any member
thereof, or by the record holder or holders of at least ten
percent (10%) of all shares entitled to vote at the meeting.
Any action otherwise required to be taken at a meeting of the
stockholders, except election of directors, may be taken
without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by stockholders having at
least a majority of the voting power.
ARTICLE ELEVEN. (CONTRACTS OF CORPORATION) No
contract or other transaction between the corporation and any
other corporation, whether or not a majority of the shares of
the capital stock of such other corporation is owned by this
corporation, and no act of this corporation shall be any way
be affected or invalidated by the fact that any of the
directors of this corporation are pecuniarily or otherwise
interested in, or are directors or officers of such other
corporation. Any director of this corporation, individually,
or any firm of which such director may be a member, may be a
party to, or may be pecuniarily or otherwise interested in any
contract or transaction of the corporation; provided, however,
that the fact that he or such firm is so interested shall be
disclosed or shall have been known to the Board of Directors
of this corporation, or a majority thereof; and any director
of this corporation who is also a director or officer of such
other corporation, or who is so interested, may e counted in
determining the existence of a quorum at any meeting of the
Board of Directors of this corporation that shall authorize
such contract or transaction, and may vote thereat to
authorize such contract or transaction, with like force and
effect as if he were no such director or officer of such other
corporation or not so interested.
ARTICLE TWELVE. (LIABILITY OF DIRECTORS AND
OFFICERS) No director or officer shall have any personal
liability to the corporation or its stockholders for damages
for breach of fiduciary duty as a director or officer, except
that this Article Twelve shall not eliminate or limit the
liability of a director or officer for (I) acts or omissions
which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the payment of dividends in
violation of the Delaware Revised Statutes.
IN WITNESS WHEREOF. The undersigned
incorporator has hereunto affixed his/her signature at Reno,
Delaware this 13th day of December, 2000.
s/s Bruce B. Hubbard
Bruce B. Hubbard
EXHIBIT 3.2
BYLAWS
OF
WISDOM HOLDINGS, INC.
BYLAWS
OF
WISDOM HOLDINGS, INC.
CONTENTS OF INITIAL BYLAWS
ARTICLE PAGE
1.00 CORPORATE CHARTER AND BYLAWS
1.01 Corporate Charter Provisions 4
1.02 Registered Agent or Office Requirement
of Filing Changes with Secretary of State 4
1.03 Initial Business Office 4
1.04 Amendment of Bylaws 4
2.00 DIRECTORS AND DIRECTORS MEETINGS
2.01 Action Without Meeting 5
2.02 Telephone Meetings 5
2.03 Place of Meetings 5
2.04 Regular Meetings 5
2.05 Call of Special Meeting 5
2.06 Quorum 6
2.07 Adjournment Notice of Adjourned Meetings 6
2.08 Conduct of Meetings 6
2.09 Powers of the Board of Directors 6
2.10 Board Committees Authority to Appoint 7
2.11 Transactions with Interested Directors 7
2.12 Number of Directors 7
2.13 Term of Office 7
2.14 Removal of Directors 8
2.15 Vacancies 8
2.15(a)Declaration of Vacancy 8
2.15(b)Filling Vacancies by Directors 8
2.15(c)Filling Vacancies by Shareholders 8
2.16 Compensation 9
2.17 Indemnification of Directors and Officers 9
2.18 Insuring Directors, Officers,
and Employees 9
3.00 SHAREHOLDERS> MEETINGS
3.01 Action Without Meeting 9
3.02 Telephone Meetings 10
3.03 Place of Meetings 10
3.04 Notice of Meetings 10
3.04 Voting List 10
3.05 Votes per Share 11
3.07 Cumulative Voting 11
3.08 Proxies 11
3.09 Quorum 12
3.09(a)Quorum of Shareholders 12
3.09(b)Adjourn for Lack or Loss of Quorum 12
3.10 Voting by Voice or Ballot 12
3.11 Conduct of Meetings 12
3.12 Annual Meetings 12
3.13 Failure to Hold Annual Meeting 13
3.14 Special Meetings 13
4.00 OFFICERS
4.01 Title and Appointment 13
4.01(a)Chairman 13
4.01(b)President 14
4.01(c)Vice President 14
4.01(d)Secretary 14
4.01(e)Treasurer 15
4.01(f)Assistant Secretary or
Assistant Treasurer 15
4.02 Removal and Resignation 15
4.03 Vacancies 16
4.04 Compensation 16
5.00 AUTHORITY TO EXECUTE INSTRUMENTS
5.01 No Authority Absent Specific Authorization 16
5.02 Execution of Certain Instruments 16
6.00 ISSUANCE AND TRANSFER OF SHARES
6.01 Classes and Series of Shares 17
6.02 Certificates for Fully Paid Shares 17
6.03 Consideration for Shares 17
6.04 Replacement of Certificates 17
6.05 Signing Certificates Facsimile Signatures 18
6.06 Transfer Agents and Registrars 18
6.07 Conditions of Transfer 18
6.08 Reasonable Doubts as to Right to Transfer 18
7.00 CORPORATE RECORDS AND ADMINISTRATION
7.01 Minutes of Corporate Meetings 18
7.02 Share Register 19
7.03 Corporate Seal 19
7.04 Books of Account 19
7.05 Inspection of Corporate Records 20
7.06 Fiscal Year 20
7.07 Waiver of Notice 20
8.00 ADOPTION OF INITIAL BYLAWS 20
ARTICLE ONE-CORPORATE CHARTER AND BYLAWS
1.01 CORPORATE CHARTER PROVISIONS
The Corporation's Charter authorizes thirty-seven
million, five hundred thousand (37,500,000) shares of common
stock (par value $ .0001) to be issued. The officers and
transfer agents issuing shares of the Corporation shall ensure
that the total number of shares outstanding at any given time
does not exceed this number. Such officers and agents shall
advise the Board at least annually of the authorized shares
remaining available to be issued. No shares shall be issued
for less than the par value stated in the Charter. Each
Charter provision shall be observed until amended by Restated
Articles or Articles of Amendment duly filed with the
Secretary of State.
1.02 REGISTERED AGENT AND OFFICE-REQUIREMENT OF FILING CHANGES
WITH SECRETARY OF STATE
The address of the Registered Office provided in the
Articles of Incorporation, as duly filed with the Secretary of
State for the State of Delaware, is: 15 Lookerman Street,
Dover, Delaware 19904.
The name of the Registered Agent of the Corporation at
such address, as set forth in its Articles of Incorporation,
is: Agents for Delaware Corporations, Inc.
The Registered Agent or Office may be changed by filing a
Statement of Change of Registered Agent or Office or Both with
the Secretary of State, and not otherwise. Such filing shall
be made promptly with each change. Arrangements for each
change in Registered Agent or Office shall ensure that the
Corporation is not exposed to the possibility of a default
judgment. Each successive Registered Agent shall be of
reliable character and well informed of the necessity of
immediately furnishing the papers of any lawsuit against the
Corporation to its attorneys.
1.03 INITIAL BUSINESS OFFICE
The address of the initial principal business office of
the Corporation is hereby established as: 404 Scott Point
Drive, Salt Spring Island, BC V8K 2R2 Canada.
The Corporation may have additional business offices
within the State of Colorado and where it may be duly
qualified to do business outside of Colorado, as the Board of
Directors may from time to time designate or the business of
the Corporation may require.
1.04 AMENDMENT OF BYLAWS
The Shareholders or Board of Directors, subject to any
limits imposed by the Shareholders, may amend or repeal these
Bylaws and adopt new Bylaws. All amendments shall be upon
advice of counsel as to legality, except in emergency. Bylaw
changes shall take effect upon adoption unless otherwise
specified. Notice of Bylaws changes shall be given in or
before notice given of the first Shareholders' meeting
following their adoption.
ARTICLE TWO-DIRECTORS AND DIRECTORS' MEETINGS
2.01 ACTION BY CONSENT OF BOARD WITHOUT MEETING
Any action required or permitted to be taken by the Board
of Directors may be taken without a meeting, and shall have
the same force and effect as a unanimous vote of Directors, if
all members of the Board consent in writing to the action.
Such consent may be given individually or collectively.
2.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws
and by the Business Corporation Act, Directors may participate
in and hold a meeting by means of conference call or similar
communication by which all persons participating can hear each
other. Participation in such a meeting shall constitute
presence in person at such meeting, except participation for
the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called
or convened.
2.03 PLACE OF MEETINGS
Meetings of the Board of Directors shall be held at the
business office of the Corporation or at such other place
within or without the State of Nevada as may be designated by
the Board.
2.04 REGULAR MEETINGS
Regular meetings of the Board of Directors shall be held,
without call or notice, immediately following each annual
Shareholders' meeting, and at such other regularly repeating
times as the Directors may determine.
2.05 CALL OF SPECIAL MEETING
Special meetings of the Board of Directors for any
purpose may be called at any time by the President or, if the
President is absent or unable or refuses to act, by any Vice
President or any two Directors. Written notices of the special
meetings, stating the time and place of the meeting, shall be
mailed ten days before, or telegraphed or personally delivered
so as to be received by each Director not later than two days
before, the day appointed for the meeting. Notice of meetings
need not indicate an agenda. Generally, a tentative agenda
will be included, but the meeting shall not be confined to any
agenda included with the notice.
Meetings provided for in these Bylaws shall not be
invalid for lack of notice if all persons entitled to notice
consent to the meeting in writing or are present at the
meeting and do not object to the notice given. Consent may be
given either before or after the meeting.
Upon providing notice, the Secretary or other officer
sending notice shall sign and file in the Corporate Record
Book a statement of the details of the notice given to each
Director. If such statement should later not be found in the
Corporate Record Book, due notice shall be presumed.
2.06 QUORUM
The presence throughout any Directors' meeting, or
adjournment thereof, of a majority of the authorized number of
Directors shall be necessary to constitute a quorum to
transact any business, except to adjourn. If a quorum is
present, every act done or resolution passed by a majority of
the Directors present and voting shall be the act of the Board
of Directors.
2.07 ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS
A quorum of the Directors may adjourn any Directors'
meeting to meet again at a stated hour on a stated day. Notice
of the time and place where an adjourned meeting will be held
need not be given to absent Directors if the time and place is
fixed at the adjourned meeting. In the absence of a quorum, a
majority of the Directors present may adjourn to a set time
and place if notice is duly given to the absent members, or
until the time of the next regular meeting of the Board.
2.08 CONDUCT OF MEETINGS
At every meeting of the Board of Directors, the Chairman
of the Board, if there is such an officer, and if not, the
President, or in the President's absence, a Vice President
designated by the President, or in the absence of such
designation, a Chairman chosen by a majority of the Directors
present, shall preside. The Secretary of the Corporation shall
act as Secretary of the Board of Directors' meetings. When the
Secretary is absent from any meeting, the Chairman may appoint
any person to act as Secretary of that meeting.
2.09 POWERS OF THE BOARD OF DIRECTORS
The business and affairs of the Corporation and all
corporate powers shall be exercised by or under authority of
the Board of Directors, subject to limitations imposed by law,
the Articles of Incorporation, any applicable Shareholders'
agreement, and these Bylaws.
2.10 BOARD COMMITTEES-AUTHORITY TO APPOINT
The Board of Directors may designate an executive
committee and one or more other committees to conduct the
business and affairs of the Corporation to the extent
authorized. The Board shall have the power at any time to
change the powers and membership of, fill vacancies in, and
dissolve any committee. Members of any committee shall receive
such compensation as the Board of Directors may from time to
time provide. The designation of any committee and the
delegation of authority thereto shall not operate to relieve
the Board of Directors, or any member thereof, of any
responsibility imposed by law.
2.11 TRANSACTIONS WITH INTERESTED DIRECTORS
Any contract or other transaction between the Corporation
and any of its Directors (or any corporation or firm in which
any of its Directors are directly or indirectly interested)
shall be valid for all purposes notwithstanding the presence
of that Director at the meeting during which the contract or
transaction was authorized, and notwithstanding the Directors'
participation in that meeting. This section shall apply only
if the contract or transaction is just and reasonable to the
Corporation at the time it is authorized and ratified, the
interest of each Director is known or disclosed to the Board
of Directors, and the Board nevertheless authorizes or
ratifies the contract or transaction by a majority of the
disinterested Directors present. Each interested Director is
to be counted in determining whether a quorum is present, but
shall not vote and shall not be counted in calculating the
majority necessary to carry the vote. This section shall not
be construed to invalidate contracts or transactions that
would be valid in its absence.
2.12 NUMBER OF DIRECTORS
The number of Directors of this Corporation shall be not
less than one or more than fifteen. No Director need be a
resident of Nevada or a Shareholder. The number of Directors
may be increased or decreased from time to time by amendment
to these Bylaws. Any decrease in the number of Directors shall
not have the effect of shortening the tenure which any
incumbent Director would otherwise enjoy.
2.13 TERM OF OFFICE
Directors shall be entitled to hold office until their
successors are elected and qualified. Election for all
Director positions, vacant or not vacant, shall occur at each
annual meeting of the Shareholders and may be held at any
special meeting of Shareholders called specifically for that
purpose.
2.14 REMOVAL OF DIRECTORS
The entire Board of Directors or any individual Director
may be removed from office by a vote of Shareholders holding a
majority of the outstanding shares entitled to vote at an
election of Directors. However, if less than the entire Board
is to be removed, no one of the Directors may be removed if
the votes cast against his removal would be sufficient to
elect him if then cumulatively voted at an election of the
entire Board of Directors. No director may be so removed
except at an election of the class of Directors of which he is
a part. If any or all Directors are so removed, new Directors
may be elected at the same meeting. Whenever a class or series
of shares is entitled to elect one or more Directors under
authority granted by the Articles of Incorporation, the
provisions of this Paragraph apply to the vote of that class
or series and not to the vote of the outstanding shares as a
whole.
2.15 VACANCIES
Vacancies on the Board of Directors shall exist upon the
occurrence of any of the following events: (a) the death,
resignation, or removal of any Director; (b) an increase in
the authorized number of Directors; or (c) the failure of the
Shareholders to elect the full authorized number of Directors
to be voted for at any annual, regular, or special
Shareholders' meeting at which any Director is to be elected.
2.15(a) DECLARATION OF VACANCY
A majority of the Board of Directors may declare vacant
the office of a Director if the Director: (a) is adjudged
incompetent by a court order; (b) is convicted of a crime
involving moral turpitude; (c) or fails to accept the office
of Director, in writing or by attending a meeting of the Board
of Directors, within thirty (30) days of notice of election.
2.15(b) FILLING VACANCIES BY DIRECTORS
Vacancies other than those caused by an increase in the
number of Directors may be filled temporarily by majority vote
of the remaining Directors, though less than a quorum, or by a
sole remaining Director. Each Director so elected shall hold
office until a qualified successor is elected at a
Shareholders' meeting.
2.15(c) FILLING VACANCIES BY SHAREHOLDERS
Any vacancy on the Board of Directors, including those
caused by an increase in the number of Directors shall be
filled by the Shareholders at the next annual meeting or at a
special meeting called for that purpose. Upon the resignation
of a Director tendered to take effect at a future time, the
Board or the Shareholders may elect a successor to take office
when the resignation becomes effective.
2.16 COMPENSATION
Directors shall receive such compensation for their
services as Directors as shall be determined from time to time
by resolution of the Board. Any Director may serve the
Corporation in any other capacity as an officer, agent,
employee, or otherwise, and receive compensation therefor.
2.17 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Board of Directors shall authorize the Corporation to
pay or reimburse any present or former Director or officer of
the Corporation any costs or expenses actually and necessarily
incurred by that officer in any action, suit, or proceeding to
which the officer is made a party by reason of holding that
position, provided, however, that no officer shall receive
such indemnification if finally adjudicated therein to be
liable for negligence or misconduct in office. This
indemnification shall extend to good-faith expenditures
incurred in anticipation of threatened or proposed litigation.
The Board of Directors may in proper cases, extend the
indemnification to cover the good-faith settlement of any such
action, suit, or proceeding, whether formally instituted or
not.
2.18 INSURING DIRECTORS, OFFICERS, AND EMPLOYEES
The Corporation may purchase and maintain insurance on
behalf of any Director, officer, employee, or agent of the
Corporation, or on behalf of any person serving at the request
of the Corporation as a Director, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or
other enterprise, against any liability asserted against that
person and incurred by that person in any such corporation,
whether or not the Corporation has the power to indemnify that
person against liability for any of those acts.
ARTICLE THREE-SHAREHOLDERS' MEETINGS
3.01 ACTION WITHOUT MEETING
Any action that may be taken at a meeting of the
Shareholders under any provision of the Nevada Business
Corporation Act may be taken without a meeting if authorized
by a consent or waiver filed with the Secretary of the
Corporation and signed by all persons who would be entitled to
vote on that action at a Shareholders' meeting. Each such
signed consent or waiver, or a true copy thereof, shall be
placed in the Corporate Record Book.
3.02 TELEPHONE MEETINGS
Subject to the notice provisions required by these Bylaws
and by the Business Corporation Act, Shareholders may
participate in and hold a meeting by means of conference call
or similar communication by which all persons participating
can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting, except
participation for the express purpose of objecting to the
transaction of any business on the ground that the meeting is
not lawfully called or convened.
3.03 PLACE OF MEETINGS
Shareholders' meetings shall be held at the business
office of the Corporation, or at such other place within or
without the State of Nevada as may be designated by the Board
of Directors or the Shareholders.
3.04 NOTICE OF MEETINGS
The President, the Secretary, or the officer or persons
calling a Shareholders' Meeting. shall give notice, or cause
it to be given, in writing to each Director and to each
Shareholder entitled to vote at the meeting at least ten (10)
but not more than sixty (60) days before the date of the
meeting. Such notice shall state the place, day, and hour of
the meeting, and, in case of a special meeting, the purpose or
purposes for which the meeting is called. Such written notice
may be given personally, by mail, or by other means. Such
notice shall be addressed to each recipient at such address as
appears on the Books of the Corporation or as the recipient
has given to the Corporation for the purpose of notice.
Meetings provided for in these Bylaws shall not be invalid for
lack of notice if all persons entitled to notice consent to
the meeting in writing or are present at the meeting in person
or by proxy and do not object to the notice given, Consent may
be given either before or after the meeting. Notice of the
reconvening of an adjourned meeting is not necessary unless
the meeting is adjourned more than thirty days past the date
stated in the notice, in which case notice of the adjourned
meeting shall be given as in the case of any special meeting.
Notice may be waived by written waivers signed either before
or after the meeting by all persons entitled to the notice.
3.05 VOTING LIST
At least ten (10), but not more than sixty (60), days
before each Shareholders' meeting, the officer or agent
having charge of the Corporation's share transfer books shall
make a complete list of the Shareholders entitled to vote at
that meeting or any adjournment thereof, arranged in
alphabetical order, with the address and the number of shares
held by each. The list shall be kept on file at the Registered
Office of the Corporation for at least ten (10) days prior to
the meeting, and shall be subject to inspection by any
Director, officer, or Shareholder at any time during usual
business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject,
during the whole time of the meeting, to the inspection of any
Shareholder. The original share transfer books shall be prima
facie evidence as to the Shareholders entitled to examine such
list or transfer books or to vote at any meeting of
Shareholders. However, failure to prepare and to make the list
available in the manner provided above shall not affect the
validity of any action taken at the meeting.
3.06 VOTES PER SHARE
Each outstanding share, regardless of class, shall be
entitled to one (1) vote on each matter submitted to a vote at
a meeting of Shareholders, except to the extent that the
voting rights of the shares of any class or classes are
limited or denied pursuant to the Articles of Incorporation. A
Shareholder may vote in person or by proxy executed in writing
by the Shareholder, or by the Shareholder's duly authorized
attorney-in-fact.
3.07 CUMULATIVE VOTING
No shareholder shall have the right to cumulative voting.
3.08 PROXIES
A Shareholder may vote either in person or by proxy
executed in writing by the Shareholder or his or her duly
authorized attorney in fact. Unless otherwise provided in the
proxy or by law, each proxy shall be revocable and shall not
be valid after eleven (11) months from the date of its
execution,
3.09 QUORUM
3.09(a) QUORUM OF SHAREHOLDERS
As to each item of business to be voted on, the presence
(in person or by proxy) of the persons who are entitled to
vote a majority of the outstanding voting shares on that
matter shall constitute the quorum necessary for the
consideration of the matter at a Shareholders' meeting. The
vote of the holders of a majority of the shares entitled to
vote on the matter and represented at a meeting at which a
quorum is present shall be the act of the Shareholders'
meeting.
3.09(b) ADJOURNMENT FOR LACK OR LOSS OF
QUORUM
No business may be transacted in the absence of a quorum,
or upon the withdrawal of enough Shareholders to leave less
than a quorum, other than to adjourn the meeting from time to
time by the vote of a majority of the shares represented at
the meeting.
3.10 VOTING BY VOICE OR BALLOT
Elections for Directors need not be by ballot unless a
Shareholder demands election by ballot before the voting
begins.
3.11 CONDUCT OF MEETINGS
Meetings of the Shareholders shall be chaired by the
President, or, in the President's absence, a Vice President
designated by the President, or, in the absence of such
designation, any other person chosen by a majority of the
Shareholders of the Corporation present in person or by proxy
and entitled to vote. The Secretary of the Corporation, or, in
the Secretary's absence, an Assistant Secretary, shall act as
Secretary of all meetings of the Shareholders. In the absence
of the Secretary or Assistant Secretary, the Chairman shall
appoint another person to act as Secretary of the meeting.
3.12 ANNUAL MEETINGS
The time, place, and date of the annual meeting of the
Shareholders of the Corporation, for the purpose of electing
Directors and for the transaction of any other business as may
come before the meeting, shall be set from time to time by a
majority vote of the Board of Directors. If the day fixed for
the annual meeting shall be on a legal holiday in the State of
Nevada, such meeting shall be held on the next succeeding
business day. If the election of Directors is not held on the
day thus designated for any annual meeting, or at any
adjournment thereof, the Board of Directors shall cause the
election to be held at a special meeting of the Shareholders
as soon thereafter as possible.
3.13 FAILURE TO HOLD ANNUAL MEETING
If, within any 13-month period, an annual Shareholders'
Meeting is not held, any Shareholder may apply to a court of
competent jurisdiction in the county in which the principal
office of the Corporation is located for a summary order that
an annual meeting be held.
3.14 SPECIAL MEETINGS
A special Shareholders' meeting may be called at any time
by. (a) the President; (b) the Board of Directors; or (c) one
or more Shareholders holding in the aggregate one-tenth or
more of all the shares entitled to vote at the meeting. Such
meeting may be called for any purpose. The party calling the
meeting may do so only by written request sent by registered
mail or delivered in person to the President or Secretary. The
officer receiving the written request shall within ten (10)
days from the date of its receipt cause notice of the meeting
to be sent to all the Shareholders entitled to vote at such a
meeting. If the officer does not give notice of the meeting
within ten (10) days after the date of receipt of the written
request, the person or persons calling the meeting may fix the
time of the meeting and give the notice. The notice shall be
sent pursuant to Section 3.04 of these Bylaws. The notice of a
special Shareholders' meeting must state the purpose or
purposes of the meeting and, absent consent of every
Shareholder to the specific action taken, shall be limited to
purposes plainly stated in the notice, notwithstanding other
provisions herein.
ARTICLE FOUR-OFFICERS
4.01 TITLE AND APPOINTMENT
The officers of the Corporation shall be a President and
a Secretary, as required by law. The Corporation may also
have, at the discretion of the Board of Directors, a Chairman
of the Board, one or more Vice Presidents, a Treasurer, one or
more Assistant Secretaries, and one or more Assistant
Treasurers. Any two or more offices, including President and
Secretary, may be held by one person. All officers shall be
elected by and hold office at the pleasure of the Board of
Directors, which shall fix the compensation and tenure of all
officers.
4.01(a) CHAIRMAN OF THE BOARD
The Chairman, if there shall be such an officer, shall,
if present, preside at the meetings of the Board of Directors
and exercise and perform such other powers and duties as may
from time to time be assigned to the Chairman by the Board of
Directors or prescribed by these Bylaws.
4.01(b) PRESIDENT
Subject to such supervisory powers, if any, as may be
given to the Chairman, if there is one, by the Board of
Directors, the President shall be the chief executive officer
of the Corporation and shall, subject to the control of the
Board of Directors, have general supervision, direction, and
control of the business and officers of the Corporation. The
President shall have the general powers and duties of
management usually vested in the office of President of a
corporation; shall have such other powers and duties as may be
prescribed by the Board of Directors or the Bylaws; and shall
be ex officio a member of all standing committees, including
the executive committee, if any. In addition, the President
shall preside at all meetings of the Shareholders and in the
absence of the Chairman, or if there is no Chairman, at all
meetings of the Board of Directors.
4.01(c) VICE PRESIDENT
Any Vice President shall have such powers and perform
such duties as from time to time may be prescribed by these
Bylaws, by the Board of Directors, or by the President. In the
absence or disability of the President, the senior or duly
appointed Vice President, if any, shall perform all the duties
of the President, pending action by the Board of Directors
when so acting, such Vice President shall have all the powers
of, and be subject to all the restrictions on, the President.
4.01(d) SECRETARY
The Secretary shall:
1) See that all notices are duly given in
accordance with the provisions of these Bylaws and as
required by law. In case of the absence or disability of
the Secretary. or the Secretary's refusal or neglect to
act, notice may be given and served by an Assistant
Secretary or by the Chairman, the President, any Vice
President, or by the Board of Directors.
2) Keep the minutes of corporate meetings, and the
Corporate Record Book, as set out in Section 7.01 hereof.
3) Maintain, in the Corporate Record Book, a
record of all share certificates issued or canceled and
all shares of the Corporation canceled or transferred.
4) Be custodian of the Corporation's records and
of any seal which the Corporation may from time to time
adopt. when the Corporation exercises its right to use a
seal, the Secretary shall see that the seal is embossed
on all share certificates prior to their issuance and on
all documents authorized to be executed under seal in
accordance with the provisions of these Bylaws
5) In general, perform all duties incident to the
office of Secretary, and such other duties as from time
to time may be required by Sections 7.01, 7.02, and 7.03
of these Bylaws, by these Bylaws generally, by the Board
of Directors, or by the President.
4.01(e) TREASURER
The Treasurer shall:
1) Have charge and custody of, and be responsible
for, all funds and securities of the Corporation, and
deposit all funds in the name of the Corporation in those
banks, trust companies, or other depositories that shall
be selected by the Board of Directors.
2) Receive, and give receipt for, monies due and
payable to the Corporation.
3) Disburse or cause to be disbursed the funds of
the Corporation as may be directed by the Board of
Directors, taking proper vouchers for those
disbursements.
4) If required by the Board of Directors or the
President, give to the Corporation a bond to assure the
faithful performance of the duties of the Treasurer's
office and the restoration to the Corporation of all
corporate books, papers, vouchers, money, and other
property of whatever kind in the Treasurer's possession
or control, in case of the Treasurer's death,
resignation, retirement, or removal from office. Any such
bond shall be in a sum satisfactory to the Board of
Directors, with one or more sureties or a surety company
satisfactory to the Board of Directors.
5) In general, perform all the duties incident to
the office of Treasurer and such other duties as from
time to time may be assigned to the Treasurer by Sections
7.O4 and 7.05 of these Bylaws, by these Bylaws generally,
by the Board of Directors, or by the President.
4.01(f) ASSISTANT SECRETARY AND ASSISTANT
TREASURER
The Assistant Secretary or Assistant Treasurer
shall have such powers and perform such duties as
the Secretary or Treasurer, respectively, or as the
Board of Directors or President may prescribe. In
case of the absence of the Secretary or Treasurer,
the senior Assistant Secretary or Assistant
Treasurer, respectively, may perform all of the
functions of the Secretary or Treasurer.
4.02 REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by
vote of a majority of the Directors at any regular or special
meeting of the Board, or, except in case of an officer chosen by
the Board of Directors, by any committee or officer upon whom
that power of removal may be conferred by the Board of Directors.
Such removal shall be without prejudice to the contract rights,
if any, of the person removed. Any officer may resign at any time
by giving written notice to the Board of Directors, the
President, or the Secretary of the Corporation. Any resignation
shall take effect on the date of the receipt of that notice or at
any later time specified therein, and, unless otherwise specified
therein, the acceptance of that resignation shall not be
necessary to make it effective.
4.03 VACANCIES
Upon the occasion of any vacancy occurring in any office of
the Corporation, by reason of death, resignation, removal, or
otherwise, the Board of Directors may elect an acting successor
to hold office for the unexpired term or until a permanent
successor is elected.
4.04 COMPENSATION
The compensation of the officers shall be fixed from time to
time by the Board of Directors, and no officer shall be prevented
from receiving a salary by reason of the fact that the officer is
also a Shareholder or a Director of the Corporation, or both.
ARTICLE FIVE-AUTHORITY TO EXECUTE INSTRUMENTS
5.01 NO AUTHORITY ABSENT SPECIFIC AUTHORIZATION
These Bylaws provide certain authority for the execution of
instruments. The Board of Directors, except as otherwise provided
in these Bylaws, may additionally authorize any officer or
officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to
specific instances. Unless expressly authorized by these Bylaws
or the Board of Directors, no officer, agent, or employee shall
have any power or authority to bind the Corporation by any
contract or engagement nor to pledge its credit nor to render it
pecuniarily liable for any purpose or in any amount.
5.02 EXECUTION OF CERTAIN INSTRUMENTS
Formal contracts of the Corporation, promissory notes,
deeds, deeds of trust, mortgages, pledges, and other evidences of
indebtedness of the Corporation, other corporate documents, and
certificates of ownership of liquid assets held by the
Corporation shall be signed or endorsed by the President or any
Vice President and by the Secretary or the Treasurer, unless
otherwise specifically determined by the Board of Directors or
otherwise required by law.
ARTICLE SIX-ISSUANCE AND TRANSFER OF SHARES
6.01 CLASSES AND SERIES OF SHARES
The Corporation may issue one or more classes or series of
shares, or both. Any of these classes or series may have full,
limited, or no voting rights, and may have such other
preferences, rights, privileges, and restrictions as are stated
or authorized in the Articles of Incorporation. All shares of any
one class shall have the same voting, conversion, redemption, and
other rights, preferences, privileges, and restrictions, unless
the class is divided into series, If a class is divided into
series, all the shares of any one series shall have the same
voting, conversion, redemption, and other. rights, preferences,
privileges, and restrictions. There shall always be a class or
series of shares outstanding that has complete voting rights
except as limited or restricted by voting rights conferred on
some other class or series of outstanding shares.
6.02 CERTIFICATES FOR FULLY PAID SHARES
Neither shares nor certificates representing shares may be
issued by the Corporation until the full amount of the
consideration has been received when the consideration has been
paid to the Corporation, the shares shall be deemed to have been
issued and the certificate representing the shares shall be
issued to the shareholder.
6.03 CONSIDERATION FOR SHARES
Shares may be issued for such consideration as may be fixed
from time to time by the Board of Directors, but not less than
the par value stated in the Articles of Incorporation. The
consideration paid for the issuance of shares shall consist of
money paid, labor done, or property actually received, and
neither promissory notes nor the promise of future services shall
constitute payment nor partial payment for shares of the
Corporation.
6.04 REPLACEMENT OF CERTIFICATES
No replacement share certificate shall be issued until the
former certificate for the shares represented thereby shall have
been surrendered and canceled, except that replacements for lost
or destroyed certificates may be issued, upon such terms,
conditions, and guarantees as the Board may see fit to impose,
including the filing of sufficient indemnity.
6.05 SIGNING CERTIFICATES-FACSIMILE SIGNATURES
All share certificates shall be signed by the officer(s)
designated by the Board of Directors. The signatures of the
foregoing officers may be facsimiles. If the officer who has
signed or whose facsimile signature has been placed on the
certificate has ceased to be such officer before the certificate
issued, the certificate may be issued by the Corporation with the
same effect as if he or she were such officer on the date of its
issuance.
6.06 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer
agents or transfer clerks, and one or more registrars, at such
times and places as the requirements of the Corporation may
necessitate and the Board of Directors may designate. Each
registrar appointed, if any, shall be an incorporated bank or
trust company, either domestic or foreign.
6.07 CONDITIONS OF TRANSFER
The party in whose name shares of stock stand on the books
of the Corporation shall be deemed the owner thereof as regards
the Corporation, provided that whenever any transfer of shares
shall be made for collateral security, and not absolutely, and
prior written notice thereof shall be given to the Secretary of
the Corporation, or to its transfer agent, if any, such fact
shall be stated in the entry of the transfer.
6.08 REASONABLE DOUBTS AS TO RIGHT TO TRANSFER
When a transfer of shares is requested and there is
reasonable doubt as to the right of the person seeking the
transfer, the Corporation or its transfer agent, before recording
the transfer of the shares on its books or issuing any
certificate therefor, may require from the person seeking the
transfer reasonable proof of that person's right to the transfer.
If there remains a reasonable doubt of the right to the transfer,
the Corporation may refuse a transfer unless the person gives
adequate security or a bond of indemnity executed by a corporate
surety or by two individual sureties satisfactory to the
Corporation as to form, amount, and responsibility of sureties.
The bond shall be conditioned to protect the Corporation, its
officers, transfer agents, and registrars, or any of them,
against any loss, damage, expense, or other liability for the
transfer or the issuance of a new certificate for shares.
ARTICLE SEVEN-CORPORATE RECORDS AND ADMINISTRATION
7.01 MINUTES OF CORPORATE MEETINGS
The Corporation shall keep at the principal office, or such
other place as the Board of Directors may order, a book recording
the minutes of all meetings of its Shareholders and Directors,
with the time and place of each meeting, whether such meeting was
regular or special, a copy of the notice given of such meeting,
or of the written waiver thereof, and, if it is a special
meeting, how the meeting was authorized. The record book shall
further show the number of shares present or represented at
Shareholders' meetings, and the names of those present and the
proceedings of all meetings.
7.02 SHARE REGISTER
The Corporation shall keep at the principal office, or at
the office of the transfer agent, a share register showing the
names of the Shareholders, their addresses, the number and class
of shares issued to each, the number and date of issuance of each
certificate issued for such shares, and the number and date of
cancellation of every certificate surrendered for cancellation.
The above information may be kept on an information storage
device such as a computer, provided that the device is capable of
reproducing the information in clearly legible form. If the
Corporation is taxed under Internal Revenue Code Section 1244 or
Subchapter S, the Officer issuing shares shall maintain the
appropriate requirements regarding issuance.
7.03 CORPORATE SEAL
The Board of Directors may at any time adopt, prescribe the
use of, or discontinue the use of, such corporate seal as it
deems desirable, and the appropriate officers shall cause such
seal to be affixed to such certificates and documents as the
Board of Directors may direct.
7.04 BOOKS OF ACCOUNT
The Corporation shall maintain correct and adequate accounts
of its properties and business transactions, including accounts
of its assets, liabilities, receipts, disbursements, gains,
losses, capital, surplus, and shares. The corporate bookkeeping
procedures shall conform to accepted accounting practices for the
Corporation's business or businesses. subject to the foregoing,
The chart of financial accounts shall be taken from, and designed
to facilitate preparation of, current corporate tax returns. Any
surplus, including earned surplus, paid-in surplus, and surplus
arising from a reduction of stated capital, shall be classed by
source and shown in a separate account. If the Corporation is
taxed under Internal Revenue Code Section 1244 or Subchapter S,
the officers and agents maintaining the books of account shall
maintain the appropriate requirements.
7.05 INSPECTION OF CORPORATE RECORDS
A Director or Shareholder demanding to examine the
Corporation's books or records may be required to first sign an
affidavit that the demanding party will not directly or
indirectly participate in reselling the information and will keep
it confidential other than in use for proper purposes reasonably
related to the Director's or Shareholder's role. A Director who
insists on examining the records while refusing to sign this
affidavit thereby resigns as a Director.
7.06 FISCAL YEAR
The fiscal year of the Corporation shall be as determined by
the Board of Directors and approved by the Internal Revenue
Service. The Treasurer shall forthwith arrange a consultation
with the Corporation's tax advisers to determine whether the
Corporation is to have a fiscal year other than the calendar
year. If so, the Treasurer shall file an election with the
Internal Revenue Service as early as possible, and all
correspondence with the IRS, including the application for the
Corporation's Employer Identification Number, shall reflect such
non-calendar year election.
7.07 WAIVER OF NOTICE
Any notice required by law or by these Bylaws may be waived
by execution of a written waiver of notice executed by the person
entitled to the notice. The waiver may be signed before or after
the meeting.
ARTICLE EIGHT--ADOPTION OF INITIAL BYLAWS
The foregoing bylaws were adopted by the Board of Directors
on October 25, 2000.
/S/ Timothy K. Wong President, Secretary, Treasurer and Director
Timothy K. Wong WISDOM HOLDINGS, INC.
