U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
NEWSEARCH, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1522846
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6947 Speedway Boulevard
Suite 108
Las Vegas, Nevada 89115
(Address of Principal Office) (Zip Code)
Issuer's telephone number: 702-369-9614
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered - None
Name of each exchange on which each class is to be
registered - N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
(Title of class)
PART I
Item 1. DESCRIPTION OF BUSINESS
General
Newsearch, Inc. (the "Company"), was incorporated under the laws of
the State of Colorado on December 3, 1999. The Company was formed as a blind
pool or blank check company for the purpose of seeking to complete a merger or
business acquisition transaction, and as the successor to a previous
corporation which was also named Newsearch, Inc. ("Old Newsearch").
Old Newsearch existed under the laws of Colorado from June 21, 1984
until January 1, 1990, and during the period from December 12, 1984, through
August, 1988, it was listed in Moody's Investors Service and its shares traded
publicly in the over-the-counter "pink sheets." It was initially engaged in
the restaurant business during a period from April 1985 to September 1986 when
it owned and operated "Godfathers Pizza Company". In 1986, its restaurant
business activities were terminated, and between 1986 and 1990, Old Newsearch
unsuccessfully attempted to become engaged in various other business
activities. Finally, in 1989, Old Newsearch ceased all business activities,
and on January 1, 1990, it was administratively dissolved by the Colorado
Secretary of State for failure to file its bi-annual report and pay the
related fee.
On December 3rd, 1999, the Board of Directors authorized and issued
301,050 shares of the company's common stock in exchange for the partnership
interests of all the partners in the Newsearch Partnership (the
'Partnership'), a general partnership comprised of the former shareholders of
Newsearch, which existed during a period commencing with the dissolution of
Newsearch and terminating with the organization of the company. A distribution
of the shares was made to the former shareholders of Newsearch on a pro rata
basis of one share of Common Stock for each one hundred shares of Common Stock
of Newsearch owned of record by them prior to Newsearch's dissolution. In
addition, on December 2nd, 1999, the Board of Directors authorized and issued
700,000 restricted shares to the two Officers and Directors and two Advisors.
The Company has generally been inactive since inception. Its only
activities have been organizational ones, directed at developing its business
plan, conducting a limited search for business opportunities, and previous
efforts directed at completing a voluntary registration pursuant of Section
12(g) of the Securities Exchange Act of 1934. The Company has
not commenced any commercial operations. The Company has no full-time
employees and owns no real estate.
The Company has elected to initiate the process of voluntarily
becoming a reporting Company under the Securities Exchange Act of 1934 by
filing this Form 10-SB/A registration statement. Following the effective date
of this registration statement, the Company intends to comply with the
periodical reporting requirements of the Securities Exchange Act of 1934 and
to seek to complete a business acquisition transaction.
The Company is a "blind pool" or "blank check" company, whose business plan
is to seek, investigate, and, if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value. The acquisition of a business opportunity may be made by
purchase, merger, exchange of stock, or otherwise, and may encompass assets or
a business entity, such as a corporation, joint venture, or partnership. The
Company has very limited capital, and it is unlikely that the Company will be
able to take advantage of more than one such business opportunity. The
Company intends to seek opportunities demonstrating the potential of long-term
growth as opposed to short-term earnings. However, at the present time, the
Company has not identified any business opportunity that it plans to pursue,
nor has the Company reached any agreement or definitive understanding with any
person concerning an acquisition.
Prior to the effective date of this registration statement, it is
anticipated that the Company's officers and directors will contact broker-
dealers and other persons with whom they are acquainted who are involved in
corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses they represent have a general
interest in considering a merger or acquisition with a blind pool or blank
check entity. No direct discussions regarding the possibility of a merger
with the Company are expected to occur until after the effective date of this
registration statement. No assurance can be given that the Company will be
successful in finding or acquiring a desirable business opportunity, given the
limited funds that are expected to be available for acquisitions. Furthermore,
no assurance can be given that any acquisition which does occur will be on
terms that are favorable to the Company or its current stockholders.
The Company's search will be directed toward small and medium-sized
enterprises which have a desire to become public corporations and which are
able to satisfy, or anticipate in the reasonably near future being able to
satisfy, the minimum asset requirements in order to qualify shares for trading
on NASDAQ or on an exchange such as the American Stock Exchange. (See
"Investigation and Selection of Business Opportunities"). The Company
anticipates that the business opportunities presented to it will (i) either be
in the process of formation, or be recently organized with limited operating
history or a history of losses attributable to under-capitalization or other
factors; (ii) be experiencing financial or operating difficulties; (iii) be in
need of funds to develop a new product or service or to expand into a new
market, or have plans for rapid expansion through acquisition of competing
businesses; (iv) be relying upon an untested product or marketing concept; (v)
have a combination of the characteristics mentioned in (i) through (iv), or
other similar characteristics. The Company intends to concentrate its
acquisition efforts on properties or businesses that it believes to be
undervalued or that it believes may realize a substantial benefit from being
publicly owned. Given the above factors, investors should expect that any
acquisition candidate may have little or no operating history, or a history of
losses or low profitability.
The Company does not propose to restrict its search for investment
opportunities to any particular geographical area or industry, and may,
therefore, engage in essentially any business, to the extent of its limited
resources. This includes industries such as service, finance, natural
resources, manufacturing, high technology, product development, medical,
communications and others. The Company's discretion in the selection of
business opportunities is unrestricted, subject to the availability of such
opportunities, economic conditions, and other factors.
As a consequence of this registration of its securities, any entity
which has an interest in being acquired by, or merging into the Company, is
expected to be an entity that desires to become a public company and establish
a public trading market for its securities. In connection with such a merger
or acquisition, it is highly likely that an amount of stock constituting
control of the Company would either be issued by the Company or be purchased
from the current principal shareholders of the Company by the acquiring entity
or its affiliates. If stock is purchased from the current principal
shareholders, the transaction is very likely to be a private transaction
rather than a public distribution of securities, but is also likely to result
in substantial gains to the current principal shareholders relative to their
purchase price for such stock. In the Company's judgment, none of its
officers and directors would thereby become an "underwriter" within the
meaning of the Section 2(11) of the Securities Act of 1933, as amended as long
as the transaction is a private transaction rather than a public distribution
of securities. The sale of a controlling interest by certain principal
shareholders of the Company could occur at a time when minority shareholders
are unable to sell their shares because of the lack of a public market for
such shares.
Depending upon the nature of the transaction, the current officers
and directors of the Company may resign their management positions with the
Company in connection with a change in control or acquisition of a business
opportunity (See "Form of Acquisition," below, and "Risk Factors - The Company
- - Lack of Continuity in Management"). In the event of such a resignation, the
Company's current management would thereafter have no control over the conduct
of the Company's business.
It is anticipated that business opportunities will come to the
Company's attention from various sources, including its officers and
directors, its other stockholders, professional advisors such as attorneys and
accountants, securities broker-dealers, venture capitalists, members of
the financial community, and others who may present unsolicited proposals.
The Company has no plans, understandings, agreements, or commitments with any
individual for such person to act as a finder of opportunities for the
Company.
The Company does not foresee that it would enter into a merger or
acquisition transaction with any business with which its officers or directors
are currently affiliated. Should the Company determine in the future,
contrary to the foregoing expectations, that a transaction with an affiliate
would be in the best interests of the Company and its stockholders, the
Company is in general permitted by Colorado law to enter into such a
transaction if:
(1) The material facts as to the relationship or interest of the
affiliate and as to the contract or transaction are disclosed or are known to
the Board of Directors, and the Board in good faith authorizes, approves or
ratifies the contract or transaction by the affirmative vote of a majority
of the disinterested directors, even though the disinterested directors
constitute less than a quorum; or
(2) The material facts as to the relationship or interest of the affiliate
and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically authorized, approved or ratified in good faith by vote of the
stockholders; or
(3) The contract or transaction is fair as to the Company as of the
time it is authorized, approved or ratified, by the Board of Directors or the
stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the other
company's management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological changes, the
perceived benefit the business opportunity will derive from becoming a
publicly held entity, and numerous other factors which are difficult, if not
impossible, to analyze through the application of any objective criteria. In
many instances, it is anticipated that the historical operations of a specific
business opportunity may not necessarily be indicative of the potential for
the future because of a variety of factors, including, but not limited to, the
possible need to
expand substantially, shift marketing approaches, change product emphasis,
change or substantially augment management, raise capital, and the like.
It is anticipated that the Company will not be able to diversify,
but will essentially be limited to the acquisition of one business opportunity
because of the Company's limited financing. This lack of diversification will
not permit the Company to offset potential losses from one business
opportunity against profits from another, and should be considered an adverse
factor affecting any decision to purchase the Company's securities.
Certain types of business combination or business acquisition
transactions may be completed without any requirement that the Company first
submit the transaction to the stockholders for their approval. In the event
that a proposed transaction is structured in such a fashion that shareholder
approval is not required, holders of the Company's securities
(other than principal shareholders holding a controlling interest) should not
anticipate that they will be consulted or that they will be provided with
financial statements or any other documentation prior to the completion of the
transaction. Other types of transactions require prior approval of the
shareholders.
In the event a proposed business combination or business acquisition
transaction is structured in such a fashion that prior shareholder approval is
necessary, the Company will be required to prepare a Proxy or Information
Statement describing the proposed transaction, file it with the Securities and
Exchange Commission for review and approval, and mail a copy of it to all
Company shareholders prior to holding a shareholders meeting for purposes of
voting on the proposal. Minority shareholders who do not vote in favor of a
proposed transaction will then have the right, in the event the transaction is
approved by the required number of shareholders, to exercise statutory
dissenters rights and elect to be paid the fair value of their shares.
The analysis of business opportunities will be undertaken by or
under the supervision of the Company's officers and directors, none of whom
are professional business analysts (See "Management"). Although there are no
current plans to do so, Company management might hire an outside consultant to
assist in the investigation and selection of business opportunities, and might
pay a finder's fee. Since Company management has no current plans to use any
outside consultants or advisors to assist in the investigation and selection
of business opportunities, no policies have been adopted regarding use of such
consultants or advisors, the criteria to be used in selecting such consultants
or advisors, the services to be provided, the term of service, or the total
amount of fees that may be paid. However, because of the limited resources of
the Company, it is likely that any such fee the Company agrees to pay would be
paid in stock and not in cash.
Otherwise, in analyzing potential business opportunities, Company
management anticipates that it will consider, among other things, the
following factors:
(1) Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
(2) The Company's perception of how any particular business
opportunity will be received by the investment community and by the Company's
stockholders;
(3) Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a significant
prospect in the foreseeable future of becoming, sufficient to enable the
securities of the Company to qualify for listing on an exchange or on a
national automated securities quotation system, such as NASDAQ, so as to
permit the trading of such securities to be exempt from the requirements of
Rule 15c2-6 adopted by the Securities and Exchange Commission (See "Risk
Factors - The Company - Regulation of Penny Stocks").
(4) Capital requirements and anticipated availability of required
funds, to be provided by the Company or from operations, through the sale of
additional securities, through joint ventures or similar arrangements, or from
other sources;
(5) The extent to which the business opportunity can be advanced;
(6) Competitive position as compared to other companies of similar
size and experience within the industry segment as well as within the industry
as a whole;
(7) Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;
(8) The cost of participation by the Company as compared to the
perceived tangible and intangible values and potential; and
(9) The accessibility of required management expertise, personnel,
raw materials, services, professional assistance, and other required
items.
IN REGARD TO THE POSSIBILITY THAT THE SHARES OF THE COMPANY WOULD
QUALIFY FOR LISTING ON NASDAQ, THE CURRENT STANDARDS FOR INITIAL LISTING
INCLUDE, AMONG OTHER REQUIREMENTS, THAT THE COMPANY (I) HAVE NET TANGIBLE
ASSETS OF AT LEAST $4,000,000, OR A MARKET CAPITALIZATION OF $50,000,000, OR
NET INCOME OF NOT LESS THAN $750,000 IN ITS LATEST FISCAL YEAR OR IN TWO OF
THE LAST THREE FISCAL YEAR; (II) HAVE A PUBLIC FLOAT (I.E. SHARES THAT ARE NOT
HELD BY ANY OFFICER, DIRECTOR OR 10% SHAREHOLDER) OF AT LEAST 1,000,000
SHARES; (III) HAVE A MINIMUM BID PRICE OF AT LEAST $4.00; (IV) HAVE AT LEAST
300 ROUND LOT SHAREHOLDERS (I.E. SHAREHOLDERS WHO OWN NOT LESS THAN 100
SHARES); AND (V) HAVE AN OPERATING HISTORY OF AT LEAST ONE YEAR OR A MARKET
CAPITALIZATION OF AT LEAST $50,000,000. MANY, AND PERHAPS MOST, OF THE
BUSINESS OPPORTUNITIES THAT MIGHT BE POTENTIAL CANDIDATES FOR A COMBINATION
WITH THE COMPANY WOULD NOT SATISFY THE NASDAQ LISTING CRITERIA.
No one of the factors described above will be controlling in the
selection of a business opportunity, and management will attempt to analyze
all factors appropriate to each opportunity and make a determination based
upon reasonable investigative measures and available data. Potentially
available business opportunities may occur in many different industries and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Potential investors must recognize that, because of the
Company's limited capital available for investigation and management's limited
experience in business analysis, the Company may not discover or adequately
evaluate adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in a
business opportunity. It expects, however, that the analysis of specific
proposals and the selection of a business opportunity may take several months
or more.
Prior to making a decision to participate in a business opportunity,
the Company will generally request that it be provided with written materials
regarding the business opportunity containing as much relevant information as
possible, including, but not limited to, such items as a
description of products, services and company history; management resumes;
financial information; available projections, with related assumptions upon
which they are based; an explanation of proprietary products and services;
evidence of existing patents, trademarks, or
services marks, or rights thereto; present and proposed forms of compensation
to management; a description of transactions between such company and its
affiliates during relevant periods; a description of present and required
facilities; an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable period of
time not to exceed 60 days following completion of a merger or acquisition
transaction; and the like.
As part of the Company's investigation, the Company's executive
officers and directors may meet personally with management and key personnel,
may visit and inspect material facilities, obtain independent analysis or
verification of certain information provided, check references of management
and key personnel, and take other reasonable investigative measures, to the
extent of the Company's limited financial resources and management expertise.
It is possible that the range of business opportunities that might
be available for consideration by the Company could be limited by the impact
of Securities and Exchange Commission regulations regarding purchase and sale
of "penny stocks." The regulations would affect, and possibly impair, any
market that might develop in the Company's securities until such time as they
qualify for listing on NASDAQ or on an exchange which would make them exempt
from applicability of the "penny stock" regulations. See "Risk Factors -
Regulation of Penny Stocks."
Company management believes that various types of potential merger
or acquisition candidates might find a business combination with the Company
to be attractive. These include acquisition candidates desiring to create a
public market for their shares in order to enhance liquidity for current
shareholders, acquisition candidates which have long term plans for raising
capital through the public sale of securities and believe that the possible
prior existence of a public market for their securities would be beneficial,
and acquisition candidates which plan to acquire additional assets through
issuance of securities rather than for cash, and believe that the possibility
of development of a public market for their securities will be of assistance
in that process. Acquisition candidates which have a need for an immediate
cash infusion are not likely to find a potential business combination with the
Company to be an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which the Company may
participate in a business opportunity. Specific business opportunities will
be reviewed as well as the respective needs and desires of the Company and the
promoters of the opportunity and, upon the basis of that review
and the relative negotiating strength of the Company and such promoters, the
legal structure or method deemed by management to be suitable will be
selected. Such structure may include, but is not limited to leases, purchase
and sale agreements, licenses, joint ventures and other contractual
arrangements. The Company may act directly or indirectly through an interest
in a partnership, corporation or other form of organization. Implementing
such structure may require the merger, consolidation or reorganization of the
Company with other corporations or forms of business organization. In
addition, the present management and stockholders of the Company most likely
will not have control of a majority of the voting shares of the Company
following a merger or reorganization transaction. As part of such a
transaction, the Company's existing directors may resign and new directors may
be appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in a
business opportunity through the issuance of Common Stock or other securities
of the Company. Although the terms of any such transaction cannot be
predicted, it should be noted that in certain circumstances the criteria for
determining whether or not an acquisition is a so-called "tax free"
reorganization under the Internal Revenue Code of 1986, depends upon the
issuance to the stockholders of the acquired company of a controlling interest
(i.e. 80% or more) of the common stock of the combined entities immediately
following the reorganization. If a transaction were structured to take
advantage of these provisions rather than other "tax free" provisions provided
under the Internal Revenue Code, the Company's current stockholders would
retain in the aggregate 20% or less of the total issued and outstanding
shares. This could result in substantial additional dilution in the equity of
those who were stockholders of the Company prior to such reorganization. Any
such issuance of additional shares might also be done simultaneously with a
sale or transfer of shares representing a controlling interest in the Company
by the current officers, directors and principal shareholders. (See
"Description of Business - General").
It is anticipated that any new securities issued in any
reorganization would be issued in reliance upon one or more exemptions from
registration under applicable federal and state securities laws to the extent
that such exemptions are available. In some circumstances, however, as a
negotiated element of the transaction, the Company may agree to register such
securities either at the time the transaction is consummated, or under certain
conditions at specified times thereafter. The issuance of substantial
additional securities and their potential sale into any trading market that
might develop in the Company's securities may have a depressive effect upon
such market.
The Company will participate in a business opportunity only after
the negotiation and execution of a written agreement. Although the terms of
such agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions
which must be satisfied by each of the parties thereto prior to such closing,
outline the manner of bearing costs if the transaction is not closed, set
forth remedies upon default, and include miscellaneous other terms.
As a general matter, the Company anticipates that it, and/or its
principal shareholders will enter into a letter of intent with the management,
principals or owners of a prospective business opportunity prior to signing a
binding agreement. Such a letter of intent will set forth the terms of the
proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of
the other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for
accountants, attorneys and others. If a decision is made not to participate
in a specific business opportunity, the costs incurred in the related
investigation would not be recoverable. Moreover, because many providers of
goods and services require compensation at the time or soon after the goods
and services are provided, the inability of the Company to pay until an
indeterminate future time may make it impossible to procure goods and
services.
Investment Company Act and Other Regulation
The Company may participate in a business opportunity by purchasing,
trading or selling the securities of such business. The Company does not,
however, intend to engage primarily in such activities. Specifically, the
Company intends to conduct its activities so as to avoid being classified as
an "investment company" under the Investment Company Act of 1940 (the
"Investment Act"), and therefore to avoid application of the costly and
restrictive registration and other provisions of the Investment Act, and the
regulations promulgated thereunder.
The Company's plan of business may involve changes in its capital
structure, management, control and business, especially if it consummates a
reorganization as discussed above. Each of these areas is regulated by the
Investment Act, in order to protect purchasers of investment company
securities. Since the Company will not register as an investment company,
stockholders will not be afforded these protections.
Competition
The Company expects to encounter substantial competition in its
efforts to locate attractive business combination opportunities. The
competition may in part from business development companies, venture capital
partnerships and corporations, small investment companies, brokerage firms,
and the like. Some of these types of organizations are likely to be in a
better position than the Company to obtain access to attractive business
acquisition candidates either because they have greater experience, resources
and managerial capabilities than the Company, because they are able to offer
immediate access to limited amounts of cash, or for a variety of other reason.
The Company also will experience competition from other public "blind pool"
companies, some of which may also have funds available for use by an
acquisition candidate.
Administrative Offices
The Company currently maintains a mailing address at 6947 Speedway
Boulevard, Suite 108, Las Vegas, Nevada 89115, which is the office address of
its President. The Company's telephone number there is 702-643-9583. Other
than this mailing address, the Company does not currently maintain any other
office facilities, and does not anticipate the need for maintaining office
facilities at any time in the foreseeable future. The Company pays no rent or
other fees for the use of this mailing address.
Employees
The Company is in the development stage and currently has no
employees. Management of the Company expects to use consultants, attorneys
and accountants as necessary, and does not anticipate a need to engage any
full-time employees so long as it is seeking and evaluating business
opportunities. The need for employees and their availability will be
addressed in connection with the decision whether or not to acquire or
participate in specific business opportunities.
Risk Factors
A. Conflicts of Interest. Certain conflicts of interest exist
between the Company and its officers and directors. They have other business
interests to which they currently devote attention, and are expected to
continue to do so. As a result, conflicts of interest may arise that
can be resolved only through their exercise of judgment in a manner which is
consistent with their fiduciary duties to the Company. See "Management," and
"Conflicts of Interest."
It is anticipated that the Company's principal shareholders may
actively negotiate or otherwise consent to the purchase of a portion of their
common stock as a condition to, or in connection with, a proposed merger or
acquisition transaction. In this process, the Company's
principal shareholders may consider their own personal pecuniary benefit
rather than the best interests of other Company shareholders. Depending upon
the nature of a proposed transaction, Company shareholders other than the
principal shareholders may not be afforded the opportunity to approve or
consent to a particular transaction. See "Conflicts of Interest."
B. Possible Need for Additional Financing. The Company has
very limited funds, and such funds may not be adequate to take advantage of
any available business opportunities. Even if the Company's currently
available funds prove to be sufficient to pay for its operations until it is
able to acquire an interest in, or complete a transaction with, a business
opportunity, such funds will clearly not be sufficient to enable it to exploit
the opportunity. Thus, the ultimate success of the Company will depend, in
part, upon its ability to raise additional capital. In the event the Company
requires modest amounts of additional capital to fund its operations until it
is able to complete a business acquisition transaction, such funds are
expected to be provided by the principal shareholders. However, the Company
has not investigated the availability, source, or terms that might govern the
acquisition of the additional capital which is expected to be required in
order to exploit a business opportunity, and will not do so until it has
determined the level of need for such additional financing. There is no
assurance that additional capital will be available from any source or, if
available, that it can be obtained on terms acceptable to the Company. If not
available, the Company's operations will be limited to those that can be
financed with its modest capital.
C. Regulation of Penny Stocks. The Company's securities,
when available for trading, will be subject to a Securities and Exchange
Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of
$1,000,000 or having an annual income that exceeds $200,000 (or that,
when combined with a spouse's income, exceeds $300,000). For transactions
covered by the rule, the broker-dealer must make a special suitability
determination for the purchaser and receive the purchaser's written agreement
to the transaction prior to the sale. Consequently, the rule may affect the
ability of broker-dealers to sell the Company's securities and also may affect
the ability of purchasers of the Company's securities to sell such securities
in any market that might develop therefor.
In addition, the Securities and Exchange Commission has adopted a
number of rules to regulate "penny stocks." Such rules include Rule 3a51-1
under the Securities Act of 1933, and Rules 15g-1, 15g-2, 15g-3, 15g-4, 15g-5,
15g-6, and 15g-7 under the Securities Exchange Act of
1934, as amended. Because the securities of the Company may constitute "penny
stocks" within the meaning of the rules, the rules would apply to the Company
and to its securities. The rules may further affect the ability of the
Company's shareholders to sell their shares in any public market which might
develop.
Shareholders should be aware that, according to Securities and
Exchange Commission Release No. 34-29093, the market for penny stocks has
suffered in recent years from patterns of fraud and abuse. Such patterns
include (i) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (ii)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (iii) "boiler room" practices involving
high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (iv) excessive and undisclosed bid-ask
differentials and markups by selling broker-dealers; and (v) the wholesale
dumping of the same securities by promoters and broker-dealers after prices
have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a
position to dictate the behavior of the market or of broker-dealers who
participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to the Company's securities.
D. No Operating History. The Company was formed in December
3, 1999, as a blind pool or blank check entity, for the purpose of registering
its common stock under the 1934 Act and acquiring a business opportunity. The
Company has no operating history, revenues from
operations, or assets other than a modest amount of cash from private sales of
stock. The Company faces all of the risks of a new business and the special
risks inherent in the investigation, acquisition, or involvement in a new
business opportunity. The Company must be regarded as a new or "start-up"
venture with all of the unforeseen costs, expenses, problems, and difficulties
to which such ventures are subject.
E. No Assurance of Success or Profitability. There is no
assurance that the Company will acquire a favorable business opportunity. Even
if the Company should become involved in a business opportunity, there is no
assurance that it will generate revenues or profits, or that the market price
of the Company's outstanding shares will be increased thereby.
F. Possible Business - Not Identified and Highly Risky. The
Company has not identified and has no commitments to enter into or acquire a
specific business opportunity. As a result, it is only able to make general
disclosures concerning the risks and hazards of acquiring a business
opportunity, rather than providing disclosure with respect to specific risks
and hazards relating to a particular business opportunity. As a general
matter, prospective investors can expect any potential business opportunity to
be quite risky. See Item 1 "Description of Business."
G. Type of Business Acquired. The type of business to be
acquired may be one that desires to avoid effecting its own public offering
and the accompanying expense, delays, uncertainties, and federal and state
requirements which purport to protect investors. Because of the Company's
limited capital, it is more likely than not that any acquisition by the
Company will involve other parties whose primary interest is the acquisition
of control of a publicly traded company. Moreover, any business opportunity
acquired may be currently unprofitable or present
other negative factors.
H. Impracticability of Exhaustive Investigation. The
Company's limited funds and the lack of full-time management will make it
impracticable to conduct a complete and exhaustive investigation and analysis
of a business opportunity before the Company commits its capital or other
resources thereto. Management decisions, therefore, will likely be made
without detailed feasibility studies, independent analysis, market surveys and
the like which, if the Company had more funds available to it, would be
desirable. The Company will be particularly dependent in making decisions
upon information provided by the promoter, owner, sponsor, or others
associated with the business opportunity seeking the Company's participation.
A significant portion of the Company's available funds may be expended for
investigative expenses and other expenses related to preliminary aspects of
completing an acquisition transaction, whether or not any business opportunity
investigated is eventually acquired.
I. Lack of Diversification. Because of the limited financial
resources that the Company has, it is unlikely that the Company will be able
to diversify its acquisitions or operations. The Company's probable inability
to diversify its activities into more than one area will subject the Company
to economic fluctuations within a particular business or industry and
therefore increase the risks associated with the Company's operations.
J. Need for Audited Financial Statements. The Company will
require audited financial statements from any business that it proposes to
acquire. Since the Company will be subject to the reporting provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), it will be
required to include audited financial statements in its periodical reports for
any existing business it may acquire. In addition, the lack of audited
financial statements would prevent the securities of the Company from becoming
eligible for listing on NASDAQ, the automated quotation system sponsored by
the National Association of Securities Dealers, Inc., or on any existing stock
exchange. Moreover, the lack of such financial statements is likely to
discourage broker-dealers from becoming or continuing to serve as market
makers in the securities of the Company. Finally, without audited financial
statements, the Company would almost certainly be unable to offer securities
under a registration statement pursuant to the Securities Act of 1933, and the
ability of the Company to raise capital would be significantly limited.
Consequently, acquisition prospects that do not have, or are unable to provide
reasonable assurances that they will be able to obtain, the required audited
statements would not be considered by the Company to be appropriate for
acquisition.
K. Other Regulation. An acquisition made by the Company may
be of a business that is subject to regulation or licensing by federal, state,
or local authorities. Compliance with such regulations and licensing can be
expected to be a time-consuming, expensive process and may limit other
investment opportunities of the Company.
L. Dependence upon Management; Limited Participation of
Management. The Company will be entirely dependent upon the experience of its
officers and directors in seeking, investigating, and acquiring a business and
in making decisions regarding the Company's operations. It is possible that,
from time to time, the inability of such persons to devote their full time
attention to the business of the Company could result in a delay in progress
toward implementing its business plan. See "Management." Because investors
will not be able to evaluate the merits of possible future business
acquisitions by the Company, they should critically assess the information
concerning the Company's officers and directors.
M. Lack of Continuity in Management. The Company does not
have an employment agreement with any of its officers or directors, and as a
result, there is no assurance that they will continue to manage the Company in
the future. In connection with acquisition of a business opportunity, it is
likely the current officers and directors of the Company may resign. A
decision to resign will be based upon the identity of the business opportunity
and the nature of the transaction, and is likely to occur without the vote or
consent of the stockholders of the Company.
N. Indemnification of Officers and Directors. The Company's
Articles of Incorporation provide for the indemnification of its directors,
officers, employees, and agents, under certain circumstances, against
attorney's fees and other expenses incurred by them in any litigation to which
they become a party arising from their association with or activities on
behalf of the Company. The Company will also bear the expenses of such
litigation for any of its directors, officers, employees, or agents, upon such
person's promise to repay the Company therefor if it is ultimately determined
that any such person shall not have been entitled to indemnification. This
indemnification policy could result in substantial expenditures by the Company
which it will be unable to recoup.
O. Dependence upon Outside Advisors. To supplement the
business experience of its officers and directors, the Company may be required
to employ accountants, technical experts, appraisers, attorneys, or other
consultants or advisors. The selection of any such advisors will be made by
the Company's officers without any input from stockholders. Furthermore, it is
anticipated that such persons may be engaged on an "as needed" basis without a
continuing fiduciary or other obligation to the Company. In the event the
officers of the Company consider it necessary to hire outside advisors, they
may elect to hire persons who are affiliates, if those affiliates are able to
provide the required services.
P. Leveraged Transactions. There is a possibility that any
acquisition of a business opportunity by the Company may be leveraged, i.e.,
the Company may finance the acquisition of the business opportunity by
borrowing against the assets of the business opportunity to be acquired, or
against the projected future revenues or profits of the business opportunity.
This could increase the Company's exposure to larger losses. A business
opportunity acquired through a leveraged transaction is profitable only if it
generates enough revenues to cover the related debt and expenses. Failure to
make payments on the debt incurred to purchase the business opportunity could
result in the loss of a portion or all of the assets acquired. There is no
assurance that any business opportunity acquired through a leveraged
transaction will generate sufficient revenues to cover the related debt and
expenses.
Q. Competition. The search for potentially profitable
business opportunities is intensely competitive. The Company expects to be at
a disadvantage when competing with many firms that have substantially greater
financial and management resources and capabilities than the Company. These
competitive conditions will exist in any industry in which the Company may
become interested.
R. No Foreseeable Dividends. The Company has not paid
dividends on its Common Stock and does not anticipate paying such dividends in
the foreseeable future.
S. Loss of Control by Present Management and Stockholders. In
conjunction with completion of a business acquisition, it is anticipated that
the Company will issue an amount of the Company's authorized but unissued
Common Stock that represents the great majority of the voting power and equity
of the Company. In conjunction with such a transaction, the Company's current
officers, directors and principal shareholders could also sell all, or a
portion, of their controlling block of stock to the acquired company's
stockholders. Such a transaction would result in a greatly reduced percentage
of ownership of the Company by its current shareholders. As a result, the
acquired company's stockholders would control the Company, and it is likely
that they would replace the Company's management with persons who are unknown
at this time.
T. No Public Market Exists. There is currently no public
market for the Company's common stock, and no assurance can be given that a
market will develop or that a shareholder ever will be able to liquidate his
investment without considerable delay, if at all. If a market should develop,
the price may be highly volatile. Factors such as those discussed in this
"Risk Factors" section may have a significant impact upon the market price of
the securities offered hereby. Owing to the low price of the securities, many
brokerage firms may not be willing to effect transactions in the securities.
Even if a purchaser finds a broker willing to effect a transaction in these
securities, the combination of brokerage commissions, state transfer taxes, if
any, and any other selling costs may exceed the selling price. Further, many
lending institutions will not permit the use of such securities as collateral
for any loans.
U. Rule 144 Sales. All of the presently outstanding shares
of Common Stock are "restricted securities" within the meaning of Rule 144
under the Securities Act of 1933, as amended. As restricted shares, these
shares may be resold only pursuant to an effective registration statement or
under the requirements of Rule 144 or other applicable exemptions from
registration under the Act and as required under applicable state securities
laws. Rule 144 provides in essence that a person who has held restricted
securities for a prescribed period may, under certain conditions, sell every
three months, in brokerage transactions, a number of shares that does not
exceed the greater of 1.0% of a company's outstanding common stock or the
average weekly trading volume during the four calendar weeks prior to the
sale. There is no limit on the amount of restricted securities that may be
sold by a nonaffiliate after the restricted securities have been held by the
owner for a period of at least two years. A sale under Rule 144 or under any
other exemption from the Act, if available, or pursuant to subsequent
registrations of shares of Common Stock of present stockholders, may have a
depressive effect upon the price of the Common Stock in any market that may
develop. As of the date hereof, 301,050 of the currently outstanding shares
of common stock of the Company have been held by the current owners thereof
for a period of more than two years, and accordingly, such shares are
currently available for resale in accordance with the provisions of Rule 144.
V. Blue Sky Considerations. Because the securities
registered hereunder have not been registered for resale under the blue sky
laws of any state, the holders of such shares and persons who desire to
purchase them in any trading market that might develop in the future, should
be aware that there may be significant state blue-sky law restrictions upon
the ability of investors to sell the securities and of purchasers to purchase
the securities. Some jurisdictions may not allow the trading or resale of
blind-pool or "blank-check" securities under any circumstances. Accordingly,
investors should consider the secondary market for the Company's securities to
be a limited one.
Item 2- Management's Discussion and Analysis or Plan of Operation.
Results of Operations
During the period from December 3, 1999 (inception) to the time of
this filing, the Company has engaged in no significant operations other than
organizational activities, acquisition of capital and preparation for
registration of its securities under the Securities Exchange Act of 1934, as
amended. No revenues were received by the Company during this period.
For the current fiscal year, the Company anticipates incurring a
loss as a result of expenses associated with registration and compliance with
reporting obligations under the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates. The Company
anticipates that until a business combination is completed with an acquisition
candidate, it will not generate revenues. The Company may also continue to
operate at a loss after completing a business combination, depending upon the
performance of the acquired business.
Need for Additional Financing
The Company's existing capital will not be sufficient to meet the
Company's cash needs, including the costs of completing its registration and
complying with its continuing reporting obligations under the Securities
Exchange Act of 1934. Accordingly, additional capital will be required.
No commitments to provide additional funds have been made by
management or other stockholders, and the Company has no plans, proposals,
arrangements or understandings with respect to the sale or issuance of
additional securities prior to the location of a merger or acquisition
candidate. Accordingly, there can be no assurance that any additional funds
will be available to the Company to allow it to cover its expenses.
Notwithstanding the foregoing, to the extent that additional funds are
required, the Company anticipates receiving such funds in the form of
advancements from current shareholders without issuance of additional shares
or other securities, or through the private placement of restricted securities
rather than through a public offering. The Company does not currently
contemplate making a Regulation S offering.
Regardless of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash. For
information as to the Company's policy in regard to payment for consulting
services, see "Certain Relationships and Transactions."
Year 2000 issues are not currently material to the Company's
business, operations or financial condition, and the Company does not
currently anticipate that it will incur any material expenses to remediate
Year 2000 issues it may encounter. However, Year 2000 issues may
become material to the Company following its completion of a business
combination transaction. In that event, the Company will be required to adopt
a plan and a budget for addressing such issues.
Item 3. Description of Property.
The Company currently maintains a mailing address at 6947 Speedway
Boulevard, Suite 108, Las Vegas, Nevada 89115, which is the address of its
President. The Company pays no rent for the use of this mailing address. The
Company does not believe that it will need to maintain an office at any time
in the foreseeable future in order to carry out its plan of operations
described herein. The Company's telephone number is 702 643-9583.
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% or more
of the outstanding Common Stock of the Company. Also included
are the shares held by all executive officers and directors as a group.
% of
Number of Shares Class
Name and address Owned Beneficially Owned
Rhett Nielson 150.000 15.0
528 Chelsea Drive
Henderson, Nevada 89014
Joey Smith 150,000 15.0
6947 Speedway Boulevard
Suite 108
Las Vegas, Nevada 89115
Irwin Krushansky 200,000 20.0
7706 E. Napa Place
Denver, Colorado 80237
Max C. Tanner 200,000 20.0
2950 E. Flamingo Road
Suite G
Las Vegas, Nevada 89121
All directors and executive 300,000 30.0
officers (2 persons)
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and executive officers currently serving the Company are as
follows:
Name Age Positions Held and Tenure
Joey Smith 32 President, and a Director since
Inception.
Rhett Nielson 29 Vice President/Secretary/Treasurer
and a Director since Inception.
The directors named above will serve until the next annual meeting
of the Company's stockholders or until their successors are duly elected and
have qualified. 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 any of the directors or officers of the Company and any other person
pursuant to which any director or officer was or is to be selected as a
director or officer, and there is no arrangement, plan or understanding as to
whether non-management shareholders will exercise their voting rights to
continue to elect the current directors to the Company's board. There are
also no arrangements, agreements or understandings between non-management
shareholders and management under which non-management shareholders may
directly or indirectly participate in or influence the management of the
Company's affairs.
The directors and officers will devote their time to the Company's
affairs on an "as needed" basis, which, depending on the circumstances, could
amount to as little as two hours per month, or more than forty hours per
month, but more than likely will fall within the range of five to ten hours
per month. There are no agreements or understandings for any officer or
director to resign at the request of another person, and none of the officers
or directors are acting on behalf of, or will act at the direction of, any
other person.
Biographical Information
Joey Smith, age 32, has been the President, and a Director of the Company
since December 3, 1999, the date of Inception. Mr. Smith attended Denver
Business College in Honolulu, Hawaii from 1993 to 1995, majoring in Graphic
Design. Since November 1999, he has been President and CEO of Speedway
Printing, a private Nevada corporation. Prior to this, he served from
November,1997 to November 1999 as President of Venture Hospitality Management
Corporation, a private Nevada corporation that sought out for acquisition, sub
par performing restaurants. During the years of 1998 and part of 1999 he was
the Regional Manager for Little Caesar's Pizza, overseeing nearly 40
restaurants in Northern Utah. During the years of 1996 and 1997 he was the
General Manager of Magelby's Restaurant in Provo, Utah. From 1995 to 1996, Mr.
Smith was employed as Director of Operations of International Food Service
Foundation. From 1992 to 1994, Mr. Smith was employed as a General Manager for
Kinko's Copy Centers and during 1990 to 1992 he worked for Subway Sandwiches
as a General Manager.
Rhett Nielson, age 29, has been the Secretary / Treasurer and a
Director of the Company since December 3, 1999, the date of Inception. Mr.
Nielson attended Scottsdale Community College in Scottsdale, Arizona from 1989
to 1990, and he attended the University of Nevada Las Vegas from 1993 to 1996
majoring in Business Finance. From 1996 to the present, he has been President
of his own private printing company. From 1995 to 1996, Mr. Nielson was an
Account Manager for PDQ Printing, a Nevada private corporation. During 1992
through 1995. He was employed as an Account Manager for Kinko's Copy Center.
During a two year period of 1990 and 1991, he resided in London, England, and
prior to this, he worked as a Property Manager for Johnson American
Properties, in Arizona, 1988 to 1990.
Indemnification of Officers and Directors
As permitted by Colorado law, the Company's Articles of
Incorporation provide that the Company 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 the Company pursuant to the foregoing provisions, the Company 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.
Conflicts of Interest
None of the officers of the Company will devote more than a portion
of his time to the affairs of the Company. There will be occasions when the
time requirements of the Company's business conflict with the demands of the
officers' other business and investment activities. Such conflicts may require
that the Company 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 the Company.
The officers, directors and principal shareholders of the Company
may actively negotiate for the purchase of a portion of their common stock as
a condition to, or in connection with, a proposed merger or acquisition
transaction. It is anticipated that a substantial premium may be paid by the
purchaser in conjunction with any sale of shares by the Company's officers,
directors and principal shareholders made as a condition to, or in connection
with, a proposed merger or acquisition transaction. The fact that a
substantial premium may be paid to members of Company management to acquire
their shares creates a conflict of interest for them and may compromise their
state law fiduciary duties to the Company's other shareholders. In making any
such sale, members of Company management may consider their own personal
pecuniary benefit rather than the best interests of the Company and the
Company's other shareholders, and the other shareholders are not expected to
be afforded the opportunity to approve or consent to any particular buy-out
transaction involving shares held by members of Company management.
Item 6. Executive Compensation.
No officer or director has received any compensation from the
Company. Until the Company acquires additional capital, it is not anticipated
that any officer or director will receive compensation from the Company other
than reimbursement for out-of-pocket expenses incurred on behalf of the
Company. See "Certain Relationships and Related Transactions." The Company
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.
No officer, director, promoter, or affiliate of the Company has or
proposes to have any direct or indirect material interest in any asset
proposed to be acquired by the Company through security holdings, contracts,
options, or otherwise.
The Company 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 rather than in cash. Any such issuance of stock would be made
on an ad hoc basis. Accordingly, the Company is unable to predict whether, or
in what amount, such a stock issuance might be made.
It is not currently anticipated that any salary, consulting fee, or
finder's fee shall be paid to any of the Company's directors or executive
officers, or to any other affiliate of the Company except as described under
"Executive Compensation" above.
The Company does not maintain an office, but it does maintain a
mailing address at the residence of its President, for which it pays no rent,
and for which it does not anticipate paying rent in the future. It is likely
that the Company will not establish an office until it has completed a
business acquisition transaction, but it is not possible to predict what
arrangements will actually be made with respect to future office facilities.
Although management has no current plans to cause the Company to do
so, it is possible that the Company may enter into an agreement with an
acquisition candidate requiring the sale of all or a portion of the Common
Stock held by the Company's current stockholders to the acquisition candidate
or principals thereof, or to other individuals or business entities, or
requiring some other form of payment to the Company'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 the
Company'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 the
Company 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
The Company's Articles of Incorporation authorize the issuance of
100,000,000 shares of Common Stock. Each record holder of Common Stock is
entitled to one vote for each share held on all matters properly submitted to
the stockholders for their vote. Cumulative voting for the election of
directors is not permitted by the Articles of Incorporation. Holders of
outstanding shares of Common Stock are entitled to such dividends as may be
declared from time to time by the Board of Directors out of legally available
funds; and, in the event of liquidation, dissolution or winding up of the
affairs of the Company, holders are entitled to receive, ratably, the net
assets of the Company 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
nonassessable. To the extent that additional shares of the Company's Common
Stock are issued, the relative interests of then existing stockholders may be
diluted.
Preferred Stock
The Company's Articles of Incorporation authorize the issuance of
50,000,000 shares of preferred stock. The Board of Directors of the Company
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 the
Company. The Company anticipates that preferred stock may be utilized in
making acquisitions.
Transfer Agent
The Company's Transfer Agent is American Securities Transfer &
Trust, Inc., 12039 West Alameda Parkway, Lakewood, Colorado 80228.
Reports to Stockholders
The Company plans to furnish its stockholders with an annual report
for each fiscal year ending December 31 containing financial statements
audited by its independent certified public accountants. In the event the
Company enters into a business combination with another company, it is the
present intention of management to continue furnishing annual reports to
stockholders. Additionally, the Company may, in its sole discretion, issue
unaudited quarterly or other interim reports to its stockholders when it deems
appropriate. The Company intends to comply with the periodic reporting
requirements of the Securities Exchange Act of 1934.
PART II
Item 1. Market Price and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
There has been no established public trading market for the
Company's securities since its inception on December 3, 1999. As of the time
of this filing, the Company had approximately 143 shareholders of record. No
dividends have been paid to date and the Company's Board of Directors does not
anticipate paying dividends in the foreseeable future.
Item 2. Legal Proceedings
The Company is not a party to any pending legal proceedings, and no
such proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner of
record or beneficial owner of more than 5.0% of the securities of the Company,
or any associate of any such director, officer or security holder is a party
adverse to the Company or has a material interest adverse to the Company in
reference to pending litigation.
Item 3. Changes in and Disagreements with Accountants.
In December 1999, the Company engaged Brad Beackstead, Certified
Public Accountant, 330 East Warm Springs Road, Las Vegas, Nevada 89119, as its
independent auditor to complete audits of its financial statements as of its
fiscal year ending December 31, 1999. There have been no disagreements on
any matter of accounting principles or practices, financial statement
disclosure, auditing scope or procedure or any matter which would have caused
any disagreement in connection with its report.
Item 4. Recent Sales of Unregistered Securities.
The Company has made no unregistered sales of securities within the
past three years. The most recent issuance of shares by the Company was in
December 1999 when it issued 301,050 restricted shares of its common stock to
the general partners of Newsearch a general partnership which existed during
the period commencing with the dissolution of Old Newsearch and terminating
with the organization of the Company. The general partners in Newsearch
Partnership were the former shareholders of Old Newsearch prior to its
administrative dissolution in 1990. The 301,050 newly-issued, restricted
shares of common stock of the Company were exchanged in the reorganization for
the general partners' interests in the Partnership and their certificates
representing all 30,105,000 shares of common stock of Old Newsearch which were
issued and outstanding prior to its dissolution. The distribution of shares
of common stock to the former shareholders of Old Newsearch was made pro rata
on the basis of one share of common stock of the Company for each 100 shares
of common stock of Old Newsearch. In addition, in December 1999, the Company
issued 700,000 restricted shares to its Officers and Directors and two
Advisors. The Company's issuance of shares to was made in reliance upon the
exemption from registration contained in Section 4(2) under the Securities Act
of 1933, as amended, for sales of securities not involving a public offering.
Item 5. Indemnification of Directors and Officers
The Articles of Incorporation and the Bylaws of the Company, filed
as Exhibits 2.1 and 2.2, respectively, provide that the Company 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 the
Company's best interest and is a party by reason of his status as an officer
or director, absent a finding of negligence or misconduct in the performance
of duty.
<PAGE>
PART F/S
Newsearch, Inc.
(a Development Stage Company)
Report of Independent Certified Accountant
Balance Sheet
December 31, 1999
Assets
Cash $2,702
------
Total Assets $2,702
======
Liabilities and Stockholders' Equity
Common Stock, $0.001 par value,
100,000,000 shares authorized; 1,001,050
Shares issued and outstanding at 12/31/99 1,001
Preferred Stock, $0.001 par value,
50,000,000 shares authorized; no shares
Issued and outstanding at 12/31/99 -0-
Additional paid-in capital 1,701
Retained earnings -0-
-----
Total Stockholders' Equity 2,702
-----
Total Liabilities and Stockholders' Equity $2,702
======
Statement of Operations and Equity Accumulated During the Developmental Stage
Revenue $ -0-
General and administrative expenses -0-
Amortization of organizational costs -0-
-------
Net income or (loss) $ -0-
=======
Weighted average number of common shares outstanding 1,001,050
Net income or (loss) per share $ -0-
=======
Statement of Stockholders' Equity
For the period December 3,1999 (Date of Inception) to December 31, 1999
Deficit
Accumulated
During Total
Common Stock Additional Development Stockholders'
Shares Amount Paid-In Stage Equity
------ ------ ---------- ----------- -------------
December 31,1999
Issued for cash 1,001,050 1,001.00 1,701.00 2,702.00
Net Income
December 3,1999
(inception) to
December 31,1999 0.00 0.00
Balance as of
December 31,1999 1,001,050 1,001.00 1,701.00 0.00 2,702.00
========= ========= ====== ==== ========
Statement of Cash Flows
For the period
December 3,1999 (date of inception) to December 31,1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss -0-
Net cash used by operating activities -0-
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used by investing activities -0-
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock 1,001
Additional paid-in capital 1,701
Net cash provided by financing activities 2,702
Beginning cash, December 3,1999 (date of inception) -0-
Ending cash, December 31,1999 2,702
NON-CASH TRANSACTIONS
Interest expense -0-
Income taxes -0-
Notes to Financial Statement
December 31,1999
Note 1- History and organization of the company
The company was organized December 3,1999 (Date of Inception) under the laws
of the State of Colorado, as Newsearch, Inc. The Company has no operations
and in accordance with SFAS #7, the Company is considered a developmental
stage company. The Company was formed as a blind pool or blank check company
for the purpose of seeking to complete a merger or business acquisition
transaction, as a successor to a previous corporation which was also named
Newsearch, Inc. ("Old Newsearch"). The Company is authorized to issue
100,000,000 shares of $0.001 par value common stock and 50,000,000 shares of
$0.001 par value preferred stock.
Old Newsearch existed under the laws of Colorado from June 21,1984 until
January 1,1990, and during the period from December 12,1984 through August
,1988, it was listed in Moody's Investors Services and its shares publically
traded in the over-the-counter "pink sheets". It was initially engaged in the
restaurant business during a period from April 1985 to September 1986. In
1986, its restaurant business activities were terminated, and between 1986 and
1990, Old Newsearch unsuccessfully attempted to become engaged in various
other business activities. In 1989, Old Newsearch ceased all business
activities, and on January 1,1990, it was administratively dissolved by the
Colorado Secretary of State for failure to file its bi-annual report and pay
the related fees.
On December 31,1999, the Company issued 700,000 shares of its $0.001 par value
common stock to its directors and 301,050 shares on a prorates basis to those
holding shares prior to the state of Colorado administratively dissolving the
Company in January 1990 for a total amount of $2,702.00. Of the total
$2,702.00, $1,001.00 is considered common stock and $1,701.00 is considered
additional paid-in capital.
There have been no other issuances of common or preferred stock.
Note 2- Accounting policies and procedures
Accounting policies and procedures have not been determined except as follows:
1. The Company uses the accrual method of accounting.
2. Earnings per share is computed using the weighted average number of
shares of common stock outstanding.
3. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
4. The cost of equipment is depreciated over the estimated useful life
of the equipment utilizing the straight line method of depreciation.
5. The Company will review its need for a provision for federal income
Tax after each operating quarter and each period for which a
statement of operations is issued.
6. The Company has adopted December 31 as its fiscal year end.
Note 3- Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not commenced its planned principal
operations. Without realization of capital, it would be unlikely for the
Company to continue as a going concern.
Note 4- Related party transactions
The Company does not lease or rent any property. Office services are provided
without charge by a director. Such costs are immaterial to the financial
statements and, accordingly, have not been reflected therein. The officers
and directors of the Company are involved in other business activities and
may, in the future, become involved in other business activities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and other business interests. The
Company has not formulated a policy for the resolution of such conflicts.
Note 5- Warrants and options
There are no warrants or options outstanding to acquire any additional shares
of common stock.
Note 6- Year 2000 issue
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise
in systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 issue may be experienced before, on, or
after January 1, 2000, and if not addressed, the impact on operations and
financial reporting may range from minor errors to significant system failure
which could affect an entity's ability to conduct normal business operations.
It is not possible to be certain that all aspects of the Year 2000 issue
affecting the entity, including those related to the efforts of customers,
suppliers, or other third parties will be fully resolved.
PART III
Exhibit No. Description
3.0 Certificate of Incorporation of Newsearch, Incorporated
consisting of Articles of Incorporation filed with the Secretary
of State of the State of Nevada on December 2,1999, filed with
the SEC in this Registration Statement.
3.1 By-Laws of Newsearch, Incorporated, dated December 2,1999, are
attached hereto, filed with the SEC in this Registration
Statement.
4.0 Common Stock Certificate, filed with the SEC in this
Registration Statement.
27.0 Financial Data Schedule for the period ending December 31,1999,
filed with the SEC in this Registration Statement.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
Newsearch, Inc.
(Registrant)
Date: April 4, 2000 By: /s/Joey Smith
----------------------------
President and Director
CERTIFICATE
I, DONETTA DAVIDSON, Secretary of State of the State of Colorado, do hereby
certify that NEWSEARCH INCORPORATED did on the THIRD day of DECEMBER, 1999,
file in this office the original Articles of Incorporation; that said Articles
are now on file and of record in the office of the Secretary of State of
Colorado, and further, that said Articles contain all the provisions required
by the law of said State of Colorado.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal of
State, at my office in Carson City, Nevada, this THIRD day of DECEMBER, A.D.
1999.
/s/ DONETTA DAVIDSON
Secretary of State
[Filed stamped as follows: "Filed in the office of the Secretary of State of
the State of Colorado, December 3, 1999]
ARTICLES OF INCORPORATION
NEWSEARCH, INC.
KNOW ALL MEN BY THESE PRESENTS:
That I, Irwin Krushansky, desiring to establish a corporation under the
name of NEWSEARCH, INC., for the purpose of becoming a body corporate under
and by virtue of the laws of the State of Colorado and, in accordance with the
provisions of the laws of said State, do hereby make, execute and acknowledge
this certificate in writing of my intention to become a body corporate under
and by virtue of said laws.
ARTICLE I
The corporate name of the corporation shall be:
NEWSEARCH, INC.
ARTICLE II
The nature of the business and the objects and purposes to be
transacted, promoted and carried on are to do any or all of the things herein
mentioned as fully and to the same extent as natural persons might or could
do, and in any part of the world, to wit:
(a) To engage in the business of finding companies, providing financial
consulting, and negotiating business agreements in the areas of mergers,
acquisitions and reorganizations.
(b) To manufacturing, purchase or otherwise acquire and to hold, own,
mortgage or otherwise lien, pledge, lease, sell, assign, exchange, transfer or
in any manner dispose of, and to invest, deal and trade in and with goods,
wares, merchandise and personal property of any and every class and
description, within or without the State of Colorado.
(c) To acquire the goodwill, rights and property and to undertake the
whole or any part of the assets and liabilities, of any person, firm,
association or corporation; to pay for the same in cash, the stock of the
corporation, bonds or otherwise; to hold or in any manner dispose of the whole
or any part of the property so purchased; to conduct in any lawful manner the
whole or any part of any business so acquired and to exercise all the powers
necessary or convenient in and about the conduct and management of such
business.
(d) To guarantee, purchase or otherwise acquire, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of shares of the capital
stock, bonds or other evidences of indebtedness created by other corporations
and, while the holder of such stock, to exercise all the rights and privileges
of ownership, including the right to vote thereon, to the same extent as a
natural person might or could do.
(e) To purchase or otherwise acquire, apply for, register, hold, use,
sell or in any manner dispose of and to grant licenses or other rights and in
any manner deal with patents, inventions, improvements, processes, formulas,
trademarks, trade names, rights and licenses secured under letters patent,
copyright or otherwise.
(f) To enter into, make and perform contracts of every kind for any
lawful purpose, with any person, firm, association or corporation, town, city,
county, body politic, state, territory, government, colony or dependency
thereof.
(g) To borrow money for any of the purposes of the corporation and to
draw, make, accept, endorse, discount, execute, issue, sell, pledge or
otherwise dispose of promissory notes, drafts, bills of exchange, warrants,
bonds, debentures and other negotiable or nonnegotiable, transferable
instruments and evidences of indebtedness, and to secure the payment thereof
and the interest thereon by mortgage or pledge, conveyance or assignment in
trust of the whole or any part of the property of the corporation at the time
owned or thereafter acquired.
(h) To lend money to, or guarantee the obligations of, or to otherwise
assist the directors of the corporation or of any other corporation the
majority of whose voting capital stock is owned by the corporation, upon the
affirmative vote of at least a majority of the outstanding shares entitled to
vote for directors.
(i) To purchase, take, own, hold, deal in, mortgage or otherwise pledge,
and to lease, sell, exchange, convey, transfer or in any manner whatever
dispose of real property, within or without the State of Colorado.
(j) To purchase, hold, sell and transfer the shares of its capital
stock.
(k) To have one or more offices and to conduct any or all operations and
business and to promote its objects, within or without the State of Colorado,
without restrictions as to place or amount.
(l) To do any or all of the things herein set forth as principal, agent,
contractor, trustee, partner or otherwise, alone or in company with others.
(m) The objects and purposes specified herein shall be regarded as
independent objects and purposes and, except where otherwise expressed, shall
be in no way limited or restricted by reference to or inference from the terms
of any other clauses or paragraph of these Articles of Incorporation.
(n) The foregoing shall be construed both as objects and powers and the
enumeration thereof shall not be held to limit or restrict in any manner the
general powers conferred on this corporation by the laws of the State of
Colorado.
ARTICLE III
The authorized capital stock of the corporation is one hundred million
(100,000,000) shares, which shall be "Common Stock" $.001 par value and shall
be voting stock. There is also authorized fifty million (50,000,000) shares
of convertible, non cumulative, non voting preferred stock.
Dividends in cash, property or shares of the corporation may be paid upon
the Common Stock, as and when declared by the board of directors, out of funds
of the Corporation to the extent and in the manner permitted by law.
ARTICLE IV
The corporation shall have perpetual existence.
ARTICLE V
The governing board of this corporation shall be known as directors, and
the number of directors may from time to time be increased or decreased in
such manner as shall be provided by the By-Laws of this corporation, provided
that the number of directors shall not be reduced to less than one.
The name and post office address of the incorporator is
Irwin Krushansky 7706 E. Napa Place
Denver, Colorado 80237
The names and post office addresses of the original Board of Directors
are as follows:
Irwin Krushansky 7706 E. Napa Place
Denver, CO 80237
The principal office of the company is located at:
7706 E. Napa Place
Denver, CO 80237
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized:
To manage and govern the corporation by majority vote of members present
at any regular or special meeting at which a quorum shall be present.
To make, alter, or amend the By-Laws of the corporation at any regular or
special meeting.
To fix the amount to be reserved as working capital over and above its
capital stock paid in, to authorize and cause to be executed mortgages and
liens upon the real and personal property of this corporation.
To designate one or more committees, each committee to consist of two or
more of the directors of the corporation, which, to the extent provided by
resolution or in the By-Laws of the corporation, shall have and may exercise
the powers of the Board of Directors in the management of the business and
affairs of the corporation. Such committee or committees shall have such name
or names as may be stated in the By-Laws of the corporation or as may be
determined from time to time by resolution adopted by the Board of Directors.
The Board of Directors shall have power and authority to sell, lease,
exchange or otherwise dispose of all or substantially all of the property and
assets of the corporation, if in the usual and regular course of its business,
upon such terms and conditions as the Board of Directors may determine without
vote or consent of the shareholders.
The Board of Directors shall have power and authority to sell, lease,
exchange or otherwise dispose of all or substantially all of the property or
assets of the corporation, including its good will, if not in the usual and
regular coarse of its business, upon such terms and conditions as the Board of
Directors may determine, provided that such sale shall be authorized or
ratified by the affirmative vote of the shareholders of at least a majority of
the shares entitled to vote thereon at a shareholders meeting called for that
purpose, or when authorized or ratified by the written consent of all the
shareholders of the shares entitled to vote thereon.
The Board of Directors shall have power and authority to merge or
consolidate the corporation upon such terms and condition as the Board of
Directors may authorize provided that such merger or consolidation is approved
or ratified by the shares entitled to vote thereon at a shareholders meeting
called for that purpose, or when authorized or ratified by the written consent
of all the shareholders of the shares entitled to vote thereon.
The Board of Directors may, from time to time, distribute to its
shareholders, without approval of the shareholders, in partial liquidation,
out of stated capital or capital surplus of the corporation, a portion of its
assets, in cash or in property, so long as the partial liquidation is in
compliance with Title 7, Article 5, Section III, of the 1973 Colorado Revised
Statutes.
The corporation shall be dissolved upon the affirmative vote of the
shareholders of at least a majority of the shares entitled to vote thereon at
a meeting called for that purpose, or when authorized or ratified by the
written consent of all the shareholders of the shares entitled to vote
thereon.
The corporation shall revoke voluntary dissolution proceedings upon the
affirmative vote of the shareholders of at least a majority of the shares
entitled to vote at a meeting called for that purpose, or when authorized or
ratified by the written consent of all the shareholders of the shares entitled
to vote.
ARTICLE VI
The following provisions are inserted for the management of the business
and for the conduct of the affairs of the corporation, and the same are in
furtherance of and not in limitation of the powers conferred by law:
No contract or other transactions of the corporation with any other
person, firm or corporation, or in which this corporation is interested, shall
be affected or invalidated by (a) the fact that any one or more of the
directors or officers of this corporation is interested in or is a director or
officer of such other firm or corporation: or (b) the fact that any director
or officer of this corporation, individually or jointly with others, may be a
party to or may be interested in any such contract or transaction, so long as
the contract or transaction is authorized, approved or ratified at a meeting
of the Board of Directors by sufficient vote thereon by directors not
interested therein, to which such fact of relationship or interest has been
disclosed, or the contract or transaction has been approved or ratified by
vote or written consent of the shareholders entitled to vote, to whom such
fact of relationship or interest has been disclosed, or so long as the
contract or transaction is fair and reasonable to the corporation. Each
person who may become a director or officer of the corporation is hereby
relieved from any liability that might otherwise arise by reason of his
contracting with the corporation for the benefit of himself or any firm or
corporation in which he may be in any way interested.
The officers, directors and other members of management of this
corporation shall be subject to the doctrine or corporate opportunities only
insofar as it applies to business opportunities in which this corporation has
expressed an interest as determined from time to time by the corporation's
Board of Directors as evidenced by resolutions appearing in the corporation's
minutes. When such areas of interest are delineated, all such business
opportunities within such areas of interest which come to the attention of the
officers, directors and other members of management of this corporation shall
be disclosed promptly to this corporation and made available to it. The Board
of Directors may reject any business opportunity presented to it and
thereafter any officer, director, or other member of management may avail
himself of such opportunity. Until such time as this corporation, through its
Board of Directors, has designated an area of interest, the officers,
directors and other members of management of this corporation shall be free to
engage in such areas of interest on their own and the provisions hereof shall
not limit the rights of any officer, director or other member of management of
this corporation to continue a business existing prior to the time that such
area of interest is designated by this corporation. This provision shall not
be construed to release any employee of the corporation (other that an
officer, director or member of management) from any duties which he may have
to the corporation.
ARTICLE VII
Each director and each officer of the corporation shall be indemnified by
the corporation as follows:
(a) The corporation shall indemnify any person who was or is a party,
or is threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was 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 expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement, actually
and reasonably incurred by him in connection with such action, suit or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding, by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not of itself create a presumption that
the person did not act in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the corporation and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(b) The corporation shall indemnify any person who was or is a party,
or is threatened to be made a party, to any threatened, pending or completed
action or suit by or in the right of the corporation, to procure a judgment in
its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was 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
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit, if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation, unless, and only
to the extent that, the court in which such action or suit was brought shall
determine upon application, that despite the adjudication of liability, but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification for such expenses which such court deems proper.
(c) To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (a) and (b) of this
Article, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under Sections (a) or (b) of this Article
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the officer, director and employee or agent is proper in the circumstances,
because he has met the applicable standard of conduct set forth in Sections
(a) or (b) of this Article. Such determination shall be made (i) by the Board
of Directors by a majority vote of a quorum, consisting of directors who were
not parties to such action, suit or proceeding, or (ii) if such a quorum is
not obtainable, or even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
affirmative vote of the holders of a majority of the shares of stock entitled
to vote and represented at a meeting called for such purpose.
(e) Expenses (including attorneys' fees) incurred in defending a civil
or criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding, as
authorized in Section (d) of this Article, upon receipt of an understanding by
or on behalf of the director, officer, employee or agent to repay such amount,
unless it shall ultimately be determined that he is entitled to be indemnified
by the corporation as authorized in this Article.
(f) The Board of Directors may exercise the corporation's power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was 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 him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under this
Article.
(g) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under these Articles of Incorporation, the By-Laws, agreements, vote
of the shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs and personal representatives of such a person.
ARTICLE VIII
The initial registered office of said corporation shall be located at
7706 E. Napa Place, Denver, CO 80237 and the initial registered agent of the
corporation shall be Irwin Krushansky.
Part or all of the business of said corporation may be carried on in the
City of Denver, County of Denver or any other place in the state of Colorado
or beyond the limits of the state of Colorado, in other states or territories
of the United States and in foreign countries.
ARTICLE IX
Whenever a compromise or arrangement is proposed by the corporation
between it and its creditors or any class of them, and/or between said
corporation and its shareholders or any class of them, any court of equitable
jurisdiction may, on the application of any receiver or receivers appointed
for said corporation, or on the application of trustees in dissolution, order
a meeting of the creditors or class of creditors and/or of the shareholders or
class of shareholders of said corporation, as the case may be, to be notified
in such manner as the court decides. If a majority in number, representing at
least three-fourths in amount of the creditors or class of creditors, and/or
the holders of the majority of the stock or class of stock of said
corporation, as the case may be, agree to any compromise or arrangement and/or
to any reorganization of said corporation, as a consequence of such compromise
or arrangement, the said compromise or arrangement and/or the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding upon all the creditors or class of creditors, and/or
on all the shareholders or class of shareholders of said corporation, as the
case may be, and also on said corporation.
ARTICLE X
No shareholder in the corporation shall have the preemptive right to
subscribe to any and all additional issues of stock and/or other securities of
any or all classes of this corporation or securities convertible into stock or
carrying stock purchase warrants, options or privileges.
ARTICLE XI
Meetings of shareholders may be held at such time and place as the
By-Laws shall provide. At all meetings of the shareholders, one-third of all
shares entitled to vote shall constitute a quorum.
ARTICLE XII
Cumulative voting shall not be allowed.
ARTICLE XIII
These Articles of Incorporation may be amended by resolution of the Board
of Directors if no shares have been issued, and if shares have been issued, by
affirmative vote of the shareholders of at least a majority of the shares
entitled to vote hereon at a meeting called for that purpose, or, when
authorized, when such action is ratified by the written consent of all the
shareholders of the shares entitled to vote thereon.
ARTICLE XIV
Whenever the shareholders must approve or authorize any matter, whether
now or hereinafter required by the laws of the State of Colorado, the
affirmative vote of a majority of the shares entitled to vote thereon shall be
necessary to constitute such approval or authorization.
IN TESTIMONY WHEREOF, I have hereunto set my hand and seal on this 2nd
day of December, 1999.
Irwin Krushansky, Incorporator, Registered Agent
BY-LAWS
NEWSEARCH, INC.
ARTICLE I. STOCKHOLDERS MEETINGS:
The Directors shall be annually elected by the stockholders at their
annual meeting to be held in the month of April of each year, the time, place,
and date at which shall be at the discretion of the Board of Directors.
ARTICLE II. BOARD OF DIRECTORS:
Section 1. The Board of Directors shall consist of not less than one
(1) nor more than seven (7) members who shall have entire control,
supervision, and management of all the affairs of the Corporation, subject to
the provisions of laws, of the Certificate of Incorporation and of these
By-Laws and shall exercise all of the powers of the Corporation. They shall
have the power to elect a Chairman by a majority vote of all the Directors and
to prescribe the duties of all of the said officers and to fix their
compensation, and have the power to delegate from time to time such authority
as they may deem necessary to any of the officers of the Company to transact
any of its business.
Section 2. Meetings of the Board of Directors shall be held at such
time or times and at such place or places as the Board of Directors shall
determine.
Section 3. Special meetings of the Board of Directors may be held at
any time when called by the President or by any two (2) directors of the
Company, and written notice of such call shall be given unless the same is
waived by attendance or in writing. Such notice shall be given twenty-four
hours before the meeting takes place, but the subject of the meeting need not
be stated. When any three (3) directors shall sign a written consent to any
meeting or the record thereof, the acts of such meeting shall be valid as if
called, and each director notified, and as if a quorum were actually present
at such meeting; a majority of the directors then in office shall constitute a
quorum for the transaction of business, and it shall be necessary for a
majority vote of all of the directors to pass or adopt a motion or resolution;
however, in the absence of the quorum of the Board, a minority shall have the
power to adjourn.
Section 4. The Board of Directors may, in its discretion, by
resolution adopted by a majority of the whole Board, constitute a general
Executive Committee for the Board, appoint the members thereof, and specify
its authority and responsibility. Such committee shall be composed of not
less than three (3) members of the Board of Directors or as the case may be
who shall serve at the pleasure of the Board. The executive committee shall
have such powers and shall perform such duties as the Board may delegate to it
in writing from time to time, including the immediate oversight and management
of the business affairs of the Corporation. The Executive Committee shall be
organized and shall perform its functions as directed by the Board and shall
report periodically to the Board. The Committee shall act by a majority of
the members thereof, and any action duly taken by the Executive Committee
within the course and scope of its authority shall be binding on the
Corporation. The Executive Committee may be abolished at any time by the vote
of the whole majority of the Board of Directors, and during the course of the
committee's existence, the membership thereof may be increased or decreased
and the authority and duties of the committee changed by the Board of
Directors as it may deem appropriate.
ARTICLE III. OFFICERS
Section 1. The officers of this Company shall consist of a President, a
Vice President, a Secretary and a Treasurer, and such other offices as the
Board of Directors shall from time to time appoint. The Board of Directors
may appoint such subordinate officers as may be desirable from time to time.
It shall not be necessary for an officer to be stockholder of the Company.
Section 2. Such officers shall be chosen by the directors at the
organization meeting of the Company and thereafter at the first meeting of the
directors, following the annual meeting of the stockholders in each year,
which first meeting shall follow the said annual meetings or shall be held as
soon as a quorum of directors are present.
Section 3. Said officers shall hold their respective offices until such
time as their successors shall be duly elected and qualified to enter upon the
respective duties of their offices.
Section 4. Vacancies among the Board of Directors may be filled at any
meeting when or such vacancies occur by a majority vote of the remaining
Directors of the Company.
ARTICLE IV. DUTIES OF OFFICERS:
Section 1. President: The President shall be the chief executive
officer of the Company. He shall preside at all meetings of the stockholders
and directors, when present; shall have general management of the business of
the Company, as instructed by the Board of Directors; shall execute all orders
and all resolutions of the directors, and stockholders; shall, with the
Secretary, execute any and all instruments of the Corporation, including
bonds, mortgages, contracts and other instruments requiring the same, and the
seal when so affixed, shall be attested by the signature of the Secretary.
The
President shall sign certificates of stock. The President shall have the
general superintendence and direction of all the officers, as instructed by
the Board, and shall see that their duties are properly performed.
Section 2. Vice President: In the absence of the President, the Vice
President shall be invested with the powers and shall perform the duties of
the President; the Vice President shall also exercise such powers and perform
such duties as shall from time to time be prescribed by the directors.
Section 3. Secretary: The Secretary shall attend all meetings of the
stockholders and directors and act as secretary thereof and shall keep a
record of the Minutes of all proceedings and shall keep full and accurate
Minutes of proceedings of the Board of Directors and of the stockholders in
proper books, and shall perform like duties for the standing committees, when
required. He shall give, or cause to be given, all notice of all meetings of
the stockholders and of the directors when duly called, and shall perform such
duties as may be required by the directors or President.
Section 4. Treasurer: The Treasurer shall keep full and accurate
account of receipts and disbursements in books belonging to the Company and
shall deposit all monies and other valuable effects in the name and to the
credit of the Company in such depositories as may be designated by the
directors. He shall disburse the funds of the Company as may be authorized by
the directors or President, taking proper vouchers for such disbursements and
shall render to the President and directors at the regular meeting of the
Board of Directors and at such other times as they, or a majority of them, may
require it, an account of all his transactions as Treasurer, and of the
financial condition of the Company.
ARTICLE V. EXECUTIVE'S COMPENSATION:
If the compensation paid to any officer, director or other executive
employee of the Company is determined to be excessive by the Internal Revenue
Service, then, and in such event, said officer, director, director or other
executive employee must return the amount determined to be excessive to the
Company immediately upon such determination.
ARTICLE VI. INDEMNIFICATION:
The Company shall indemnify and hold harmless each person who shall serve
at any time thereafter as a director or officer of the Company from and
against any and all claims and p73 liabilities to which such person shall
become subject by reason of his having heretofore or hereafter been a director
or officer of the Company, or by reason of any action alleged to have been
heretofore or hereafter taken or omitted by him as such director or officer,
and shall reimburse each person for all legal and other expenses reasonably
incurred by him in connection with any such claim or liability; provided,
however, that no such person shall be indemnified against, or be reimbursed
for, any expense incurred in connection with any claim or liability arising
out of his own negligence or willful misconduct.
The rights accruing to any person under the foregoing provisions of this
Article shall not exclude any other right to which he may be lawfully
entitled, nor shall anything herein contained restrict the right of the
Corporation to indemnify or reimburse such person in any proper case even
though not specifically herein provided for. The Company, its directors,
officers, employees and agents shall be fully protected in taking any action
or making any payment under this Article VI, or in refusing so to do, in
reliance upon the advise of counsel.
ARTICLE VII. STOCKHOLDERS
Section 1. The annual meeting of the stockholders of this Corporation
shall be held in the month of April of each year, the time, date and place of
which shall be at the decision of the Board of Directors.
Section 2. Special meeting of the stockholders may be called at any time
by resolution of the Board of Directors or upon a written request to the
President by the holders of not less than one-tenth of all shares entitled to
vote at the meeting.
Section 3. Notice for the meetings of the stockholders shall be in the
manner and form prescribed by law, such notice, however, may be waived, and
when so done, shown on the Minutes of such meetings and shall serve in lieu
thereof and instead of such notice in any instance.
ARTICLE VIII. VACANCIES
If the office of any director or of the President, Vice President,
Secretary or Treasurer becomes vacant by reason of death, resignation,
disqualification or otherwise, the directors in office, by a majority vote,
may choose a successor or successors to hold office for the unexpired term.
ARTICLE IX. CERTIFICATE OF STOCK
The capital stock of this Company shall be represented by certificates
signed by the President and Secretary and sealed by the seal of the Company,
and the said stock shall be issued fully paid and non-assessable.
Certificates of stock shall be numbered and registered as issued. All
transfer of stock of the Company shall be made by the assignment of the
certificate representing the same duly signed by the person in whose name such
certificate was issued and surrender of the certificate to the Secretary. All
transfers of stock of the Company shall be made upon the books of the Company
by the holder of the shares in person or by their duly authorized attorney or
legal representative. Certificates of stock shall be entitled to treat the
registered holder of any shares as the absolute owner thereof, and,
accordingly, shall not be bound to recognize any equitable claim or interest
in such share on the part of any person whether or not it shall be express or
other notice thereof, save as expressly provided by the statutes of the State
of Colorado.
ARTICLE X. FISCAL YEAR:
The fiscal year of this Corporation shall begin on the first day of
January and end the last day of December.
ARTICLE XI. SEAL:
The corporate seal of this Company shall consist of the words "NEWSEARCH,
INC." encircling the words "CORPORATE SEAL" an impression of which is hereto
affixed.
ARTICLE XII. DIVIDENDS:
Dividends shall be declared at such time as the Board of Directors shall
think proper and to the best interest of the Company.
ARTICLE XIII. AMENDMENTS
The By-Laws may be changed, amended, suspended or repealed by a majority
vote of all of the members of the Board of Directors at any regular or special
meeting.
These By-Laws approved this 2nd day of December, 1999.
_________________________
Director
SEAL:
(In form of certificate, two-sided)
Newsearch, Inc.
INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO
25,000,000 SHARES OF COMMON STOCK AUTHORIZED, $.001 PAR VALUE
NUMBER--------- SHARES----------
CUSIP
This certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF
Newsearch, Inc.
Transferable on the books of the corporation in person or by duly authorized
attorney upon surrender of this certificate properly endorsed. This
certificate and the shares represented hereby are subject to the laws of the
State of Colorado, and to the Certificate of Incorporation and Bylaws by the
Corporation, as now or hereafter amended. This certificate is not valid
unless countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the signature of its duly
authorized officers.
DATED
(Seal as follows: "NEWSEARCH, INC. CORPORATE SEAL, COLORADO")
/S/JOEY SMITH /S/RHETT NIELSON
PRESIDENT SECRETARY
Countersigned and Registered
AMERICAN SECURITIES TRANSFER & TRUST
12039 West Alameda Parkway
Suite Z-2
Lakewood, CO 80228
By:
---------------------------------------
AUTHORIZED SIGNATURE
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -CUSTODIAN -
TEN NET - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants ACT_________________________
in common (State)
Additional abbreviations may also be used though not in the above list.
For Value Received, ______________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
_______________________________________________________________________Shares
of the capital stock represented by the within certificate, and do hereby
irrevocably constitute and appoint_________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated___________________
NOTICE: SIGNATURE MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERNATION OR ENLARGEMENT OR ANY
CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, BROKER OR ANY OTHER
ELIGIBLE GUARANTOR INSTITUTION THAT IS AUTHORIZED TO DO SO UNDER THE
SECURITIES TRANSFER AGENTS MEDALLION PROGRAM (STAMP) UNDER RULES PROMULGATED
BY THE U.S. SECURITIES AND EXCHANGE COMMISSION.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENT DATED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<NAME> NEWSEARCH, INC / NV
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 2702
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<RECEIVABLES> 0
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0
0
<COMMON> 2001
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