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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
________________________________________________________________________________
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1999
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
BERENS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Commission file number: 0-22711
Nevada 87-05065948
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
701 N. Post Oak Road, Suite 350, Houston, Texas 77024
(Address of Principal Executive Office) (Zip Code)
(713) 682-7400
--------------
(Registrant's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [_]
As of June 30, 1999 registrant had 4,500,000 shares of Common Stock outstanding.
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PART I
ITEM 1. FINANCIAL STATEMENTS
BERENS INDUSTRIES, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
__________
(UNAUDITED)
JUNE 30, DECEMBER 31,
1999 1998
ASSETS (UNAUDITED) NOTE
- ------ ------------ ------------
Current assets:
Cash and cash equivalents $ 98,379 $ --
-------- --------
Total current assets 98,379 --
Property and equipment, net of accumulated
depreciation of $1,457 at June 30, 1999 27,683 --
-------- --------
Total assets $126,062 $ --
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Federal withholding tax payable $ 10,560 $ --
Due to stockholders -- 7,764
--------- --------
Total current liabilities 10,560 7,764
--------- --------
Commitment and contingencies
Stockholders' equity:
Common stock, $.001 par value, 20,000,000
shares authorized, 4,500,000 and 737,505
shares issued and outstanding at June 30,
1999 and December 31, 1998, respectively 4,500 738
Additional paid-in capital 256,500 57,469
Losses accumulated during the development
stage (145,498) (65,971)
--------- --------
Total stockholders' equity 115,502 (7,764)
--------- --------
Total liabilities and stockholders'
equity $ 126,062 $ --
========= ========
Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. See accompanying notes.
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BERENS INDUSTRIES, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND
THE PERIOD FROM INCEPTION, FEBRUARY 26, 1999,
TO JUNE 30, 1999
__________
(UNAUDITED)
THREE MONTHS
ENDED INCEPTION TO
JUNE 30, JUNE 30,
1999 1999
------------- -------------
Costs and expenses:
Salaries and wages $ 52,597 $ 52,597
Stock compensation to consultants 60,000 60,000
Legal and consulting fees 28,500 28,500
Depreciation expense 1,457 1,457
Other 2,944 2,944
---------- ----------
Net loss $ (145,498) $ (145,498)
========== ==========
Basic and dilutive net loss per
common share $(0.11) $(0.14)
========== ==========
Weighted average shares outstanding 1,364,583 1,049,314
========== ==========
See accompanying notes.
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BERENS INDUSTRIES, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION, FEBRUARY 26, 1999,
TO JUNE 30, 1999
__________
(UNAUDITED)
<TABLE>
<CAPTION>
LOSSES
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE
------------------- PAID-IN DEVELOMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
--------- ------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance at inception,
February 26, 1999 - $ - $ - $ - $ -
Net proceeds from an
initial capitalization 2,900,000 2,900 198,100 - 201,000
Recapitalization effective
June 15, 1999 737,505 738 (738) - -
Common stock issued as
compensation for services
to consultants 862,495 862 59,138 - 60,000
Net loss - - - (145,498) (145,498)
--------- ------- ---------- ----------- -----------
Balance at June 30, 1999 4,500,000 $4,500 $256,500 $(145,498) $ 115,502
========= ======= ========== =========== ===========
</TABLE>
See accompanying notes.
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BERENS INDUSTRIES, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND
THE PERIOD FROM INCEPTION, FEBRUARY 26, 1999,
TO JUNE 30, 1999
__________
(UNAUDITED)
THREE MONTHS
ENDED INCEPTION TO
JUNE 30, JUNE 30,
1999 1999
------------- -------------
Cash flows from operating activities:
Net loss $(145,498) $(145,498)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 1,457 1,457
Common stock issued as compensation for
services to consultants 60,000 60,000
Changes in operating assets and
liabilities:
Increase in federal withholding
tax payable 10,560 10,560
--------- ---------
Net cash used in operating
activities (73,481) (73,481)
--------- ---------
Cash flows from investing activities:
Purchase of computers and equipment (29,140) (29,140)
--------- ---------
Net cash used in investing
activities (29,140) (29,140)
--------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock 200,000 201,000
--------- ---------
Net cash provided by financing
activities 200,000 201,000
--------- ---------
Net increase in cash and cash equivalents 97,379 98,379
Cash and cash equivalents at beginning
of period 1,000 -
--------- ---------
Cash and cash equivalents at end of
period $ 98,379 $ 98,379
========= =========
See accompanying notes.
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BERENS INDUSTRIES, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
__________
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements have been prepared in
accordance with generally accepted accounting principles and the rules of the
U.S. Securities and Exchange Commission, and should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's Annual Report of Form 10-KSB for the year ended December 31, 1998.
In the opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
results of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year. Notes to the
financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for the most recent fiscal year
ended December 31, 1998, as reported in the Form 10-KSB, have been omitted.
2. GENERAL
Effective June 15, 1999, National Air Corporation acquired BerensGallery.com
(together the "Company") in a recapitalization transaction accounted for
similar to a reverse acquisition (see Note 2). BerensGallery.com is
currently involved in the development of an online auction site for sale of
exclusive paintings and other art works. The Company is a development stage
enterprise because since its inception, substantially all its efforts have
been devoted to Web site development and fund raising activities.
3. RECAPITALIZATION
Effective June 15, 1999 National Air Corporation was acquired by
BerensGallery.com in a recapitalization transaction accounted for similar to
a reverse acquisition, except that no goodwill was recorded. National Air
Corporation was the "acquired" company in the transaction, but remains the
surviving legal entity. Prior to the acquisition National Air Corporation
was a non-operating public shell corporation with no significant assets.
Accordingly, the transaction was treated as an issuance of stock by National
Air Corporation for BerensGallery.com, Inc.'s net monetary assets,
accompanied by a recapitalization. Since this transaction is in substance, a
recapitalization of BerensGallery.com and not a business combination,
proforma information is not presented. The balance sheet of National Air
Corporation is presented as of December 31, 1998 in the accompanying
financial statements because it is the legal reporting entity. However,
December 31, 1998 is prior to the inception of BerensGallery.com.
4. COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards ("SFAS")
No. 130, Reporting Comprehensive Income, which requires a company to display
an amount representing comprehensive income as part of the Company's basic
financial statements. Comprehensive income includes such items as unrealized
gains or losses on certain investment securities and certain foreign currency
translation adjustments. The Company's financial statements include none of
the additional elements that affect comprehensive income. Accordingly,
comprehensive income and net income are identical.
5. ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
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disclosures of contingent assets or liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
6. INCOME TAX
The difference between the Federal statutory income tax rate and the
Company's effective income tax rate is primarily attributable to increases in
valuation allowances for deferred tax assets relating to net operating
losses.
7. SUBSEQUENT EVENTS
In July 1999, the Company's stockholders approved 1) a change in the name of
the Company from National Air Corporation to Berens Industries, Inc.; 2) a
change in the number of authorized shares of the Company's common stock from
20,000,000 to 50,000,000 shares; and 3) a change in the number of authorized
shares of the Company's preferred stock from 1,000,000 Class A, par value
$0.25 and 1,000,000 Class B, par value $0.10 to 10,000,000, par value $0.001.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Some of the statements contained in this Form 10-QSB, discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information. These statements are
subject to known and unknown risks, uncertainties, and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and is
derived using numerous assumptions. Important factors that may cause actual
results to differ from projections include, for example:
. the success or failure of management's efforts to implement their
business strategy;
. the Company's ability to raise sufficient capital to meet operating
requirements;
. the Company's ability to compete with major established companies;
. the Company's ability to retain an active user base, to attract new
users who list items for sale and who complete transactions through
the Company's service and to maintain customer satisfaction;
. the Company's ability to keep its web site operational and to manage
the number of items listed on its service;
. federal, state or local government regulation, including
investigations prompted by items improperly listed or sold by its
users;
. the introduction of new sites, services and products by the Company
or its competitors;
. volume, size, timing and completion rate of trades on the Company's
web site;
. seasonal effects on revenue in the Company's online service;
. the success of the Company's brand building and marketing campaigns;
. the amount and timing of operating costs and capital expenditures
relating to maintaining and expanding the business, operations and
infrastructure of the Company;
. the Company's ability to upgrade and develop its systems and
infrastructure to accommodate growth;
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. the Company's ability to attract new personnel in a timely and
effective manner;
. the Company's ability to retain key employees in its online business;
. the timing, cost and availability of advertising in traditional media
and on other websites and online services;
. consumer trends and popularity of the artwork sold at auction;
. the level of use of the Internet and online services;
. increasing consumer acceptance of the Internet and other online
services for commerce and, in particular, the trading of products such
as those listed on the Company's web site;
. consumer confidence in the security of transactions on the Company's
web site; and
. general economic conditions and economic conditions specific to the
Internet and electronic commerce industries.
GENERAL
National Air Corporation ("Company") was incorporated under the laws of the
State of Nevada on January 9, 1985. On June 15, 1999, the Company entered into
a Reorganization Agreement with Berensgallery.com, Inc., a Nevada Corporation
("Berens Gallery"), whereby Berens Gallery became a wholly-owned subsidiary of
the Company (See "Recent Developments"). On August 2, 1999, the Company filed
its Restated Articles of Amendment, thereby changing its name to Berens
Industries, Inc. Hereinafter, any reference to the Company includes its
subsidiary Berens Gallery.
The Company is developing a web-based community in which buyers and sellers
are brought together in an efficient and entertaining auction format to buy and
sell personal items such as art, antiques, coins, collectibles, memorabilia,
stamps and toys. The Company plans to operate through its web site at
www.berensgallery.com and intends to permit sellers to list items for sale,
buyers to bid on items of interest and all users to browse through listed items
in a fully automated, topically arranged, intuitive and easy-to-use online
service that is available 24 hours a day, seven days a week.
The Company has a limited operating history on which to base an evaluation
of our business and prospects. The Company's prospects must be considered in
light of the risks, expenses and difficulties frequently encountered by
companies in their early stage of development, particularly companies in new and
rapidly evolving markets such as online commerce. The Company will encounter
various risks in implementing and executing our business strategy. There can be
no assurance that the Company will be successful in addressing such risks, and
the failure to do so could have a material adverse effect on our business.
From the inception of its operations through June 30, 1999, the Company has
utilized funds obtained primarily through private placements to develop its web
site. The Company has not generated any revenues and has incurred net losses
totaling approximately $145,498 from inception of operations through June 30,
1999.
The Company is currently seeking short-term and long-term debt or equity
financing sufficient to fund projected working capital and web site development
and marketing needs. However, there is no assurance that the Company will be
successful in raising funds, or that the amount and terms of any financing will
be acceptable. Failure to obtain sufficient funding will adversely impact the
Company's financial position.
Recent Developments
Effective June 15, 1999, the Company acquired all of the issued and
outstanding shares of capital stock of
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Berensgallery.com, Inc., a Nevada corporation ("Subsidiary"). In connection with
such acquisition, the Company issued an aggregate of 2,900,000 shares of
authorized but unissued common stock, $0.001 par value, to the shareholders of
Subsidiary ("Shareholders"). The Shareholders exchanged an aggregate of
2,900,000 shares of Subsidiary common stock for the 2,900,000 shares of Company
common stock. Currently therewith, the Company issued 862,495 shares of common
stock to certain consultants, for services rendered pursuant to Regulation D of
the Securities Act of 1933. On August 2, 1999, the Company filed its Restated
Articles of Incorporation changing its name to Berens Industries, Inc.
PLAN OF OPERATIONS
The Company has been in the development stage since its inception and has
not generated any revenues from operations. However, the Company anticipates
that expenses will continue to increase during 1999 with the development of its
web site. Additional capital will be necessary to expand operations or continue
current operations. In the event that no cash from operations is received, the
Company anticipates that its cash balance as of June 30, 1999 of $98,379 will
provide sufficient working capital for approximately four months or until
October 1999. As a result, the Company estimates that it will require
additional proceeds of at least $50,000 to fund planned operations through
December 31, 1999. The Company's estimates are based on monthly expenditures of
approximately $25,000, although unexpected expenses may limit the period of time
within which the Company's current cash balance may be utilized.
The Company has financed its growth primarily from the sale of common
stock. From the inception of its current operations, it has received $200,000
from the sale of its common stock. The Company's sources of external and
internal financing are limited, and it is not expected that its internal source
of liquidity will improve until net cash is provided by operating activities,
and, until such time, it will rely upon external sources for liquidity. The
Company has not established any lines of credit or other significant financing
arrangement with any third-party lenders. There can be no assurance that the
Company will be able to obtain financing on reasonable terms, if at all. Until
the Company is able to develop, construct and operate its web site and derive
revenues therefrom, the Company will continue to use cash obtained from outside
sources for its operations and development of its business.
In the future, the Company may be required to seek debt or equity financing
(public or private), curtail operations, sell assets, or otherwise bring cash
flows in balance if it approaches a condition of cash insufficiency. The
Company anticipates a need for additional capital, but has no specific
commitments with respect thereto. There is no assurance that the Company will
be successful in any such effort.
Cash Flow Used in Operating Activities. Net cash used in operating
activities was $73,481 for the three months ended June 30, 1999. The
expenditures were in connection with the Company's initial development of its
web site and the hiring of personnel.
Cash Flow Used in Investing Activities. Net cash used in investing
activities for the three months ended June 30, 1999, was $29,140. This net cash
used represents the purchase of computers and equipment necessary to begin
operations.
Cash Flow Provided by Financing Activities. Net cash provided by financing
activities for the three months ended June 30, 1999, was $200,000, as a result
of the sale of common stock.
YEAR 2000 COMPLIANCE
The year 2000 poses certain issues for business and consumer computing,
particularly the functionality of software for two-digit storage of dates and
special meanings for certain dates such as 9/9/99. The year 2000 is also a leap
year, which may also lead to incorrect calculations, functions, or system
failure. The problem exists for many kinds of software, including software for
mainframes, PCs, and embedded systems.
In assessing the effect of the Year 2000 Problem, management determined
that there existed two general areas that needed to be evaluated:
<PAGE>
. Internal infrastructure and
. Supplier/third-party relationships.
A discussion of the various activities related to assessment and actions
resulting from those evaluations is set forth below.
INTERNAL INFRASTRUCTURE.
The Company is in the process of verifying that all of its personal
computers and software are Year 2000 compliant. The Company is in the process
of replacing or upgrading all items that have been found not to be Year 2000
compliant. The Company intends to determine if the software vendors of all of
our critical applications have represented that their products are Year 2000
compliant. The costs related to these efforts have not been determined.
SUPPLIERS/THIRD-PARTY RELATIONSHIPS.
The Company relies on its outside vendors for water, electrical, and
telecommunications services as well as climate control, building access, and
other infrastructure services. The Company does not intend to independently
evaluate the Year 2000 compliance of the systems utilized to supply these
services. The Company has received no assurance of compliance from the
providers of these services. There can be no assurance that these suppliers
will resolve any or all Year 2000 Problems with these systems before the
occurrence of a material disruption to the Company's business. Any failure of
these third-parties to resolve Year 2000 problems with their systems in a timely
manner could have a material adverse effect on the Company's business.
CONTINGENCY PLANS.
The Company has not currently developed a formal contingency plan to be
implemented as part of its efforts to identify and correct Year 2000 Problems
affecting its internal systems. However, if it deems necessary, the Company may
take the following actions:
. Accelerated replacement of affected equipment or software;
. Short to medium-term use of backup equipment and software;
. Increased work hours for Company personnel;
. Other similar approaches.
If the Company is required to implement any of these contingency plans,
such plans could have a material adverse effect on its business.
Based on the actions taken to date as discussed above, the Company is
reasonably certain that it has or will identify and resolve all Year 2000
Problems that could materially adversely affect its business and operations.
PART II
Pursuant to the Instructions to Part II of the Form 10-QSB, Items 1,3 and 5 are
omitted.
ITEM 2. CHANGES IN SECURITIES
The following information sets forth certain information, as of August 19,
1999, for all securities the Company sold since March 31, 1998, without
registration under the Act, excluding any information "previously reported" as
defined in Rule 12b-2 of the Securities Exchange Act of 1934. There were no
underwriters in any of these transactions, nor were any sales commissions paid
thereon.
In August 1999, the Company issued warrants to purchase an aggregate of
56,750 shares of Company common stock at an exercise price of $0.01 per share to
two officers and one director of the Company for services rendered. The Company
believes these
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transactions were exempt from registration pursuant to Section 4(2) of the Act,
as the officers and the director were accredited investors.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On July 11, 1999, the board of directors of the Company and the
majority shareholders voted to take action without a meeting by written
consent.
(b) None; not applicable.
(c) The board of directors and a majority of the shareholders voted in
favor of (1) changing the name of the Corporation from "National Air
Corporation" to "Berens Industries, Inc."; (2) increasing the number of
authorized shares of Company common stock from 20,000,000, par value
$.001 to 50,000,000, par value $.001; and (3) increasing the number of
authorized shares of Company preferred stock from 1,000,000 Class A,
par value $.25 and 1,000,000 Class B, par value $.10 to 10,000,000, par
value $.001. The board voted unanimously in favor of the amendments to
the Company's articles of incorporation, and of the 4,500,000 shares of
the Company's common stock currently outstanding, 2,700,000 shares
approved the action by written consent to amend and restate the
Company's Articles of Incorporation.
(d) None; not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are to be filed as part of this Form 10-QSB:
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
Exhibit 3.1/(1)/ Restated Articles of Incorporation of National Air
Corporation
Exhibit 3.2/(2)/ Bylaws of National Air Corporation
Exhibit 3.3/(2)/ Common Stock Certificate
(1) Filed herewith.
(2) Filed previously on registration statement Form 10-SB SEC File No.0-22711.
(b) Reports on Form 8-K.
The Company filed a report on Form 8-K file number 0-22711, dated June 30,
1999, describing the Company's reorganization as discussed above in Item 2 --
"Recent Developments."
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SIGNATURES
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the undersigned, thereunto duly authorized.
Berens Industries, Inc.
Date: August 23, 1999 /s/ Marc I. Berens
---------------------------------------
Marc I. Berens, Chief Executive Officer
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EXHIBIT 3.1
RESTATED ARTICLES OF INCORPORATION
OF
NATIONAL AIR CORPORATION
National Air Corporation, pursuant to Sections 78.390 and 78.403 of the
Nevada Revised Statutes, adopts this Amended and Restated Articles of
Incorporation. The following Amended and Restated Articles of Incorporation
was adopted by unanimous consent of the Board of Directors pursuant to Section
78.315 of the Nevada Revised Statutes and by Consent of Majority Stockholders
pursuant to Section 78.320 of the Nevada Revised Statutes.
The following Amended and Restated Articles of Incorporation amends the
original Articles of Incorporation in its entirety, as follows:
ARTICLE I.
The name of the corporation shall be Berens Industries, Inc. (hereinafter
called the "Corporation").
ARTICLE II.
The total number of shares of stock that the Corporation shall have
authority to issue is 60,000,000, consisting of 50,000,000 shares of common
stock, par value $.001 per share ("Common Stock"), and 10,000,000 shares of
preferred stock par value $.001 per share ("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time to
time in one or more series, each of which shall have such distinctive
designation or title as shall be determined by the Board of Directors of the
Corporation ("Board of Directors") prior to the issuance of any shares thereof.
Preferred Stock shall have such voting powers, full or limited, or no voting
powers, and such preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof, as
shall be stated in such resolution or resolutions providing for the issue of
such class or series of Preferred Stock as may be adopted from time to time by
the Board of Directors prior to the issuance of any shares thereof. The number
of authorized shares of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the voting power of all the then outstanding shares
of the capital stock of the corporation entitled to vote generally in the
election of the directors (the "Voting Stock"), voting together as a single
class, without a separate vote of the holders of the Preferred Stock, or any
series thereof, unless a vote of any such holders is required pursuant to any
Preferred Stock Designation.
<PAGE>
ARTICLE III.
The nature of the business of the Corporation and the objects or the
purposes to be transacted, promoted, or carried on by it are as follows:
To engage in any lawful activity for which Corporations may be incorporated
under the Nevada General Corporation Law.
ARTICLE IV.
No fully paid shares of any class of stock of the Corporation shall be
subject to any further call or assessment in any manner or for any cause. The
good faith determination of the Board of Directors of the Corporation shall be
final as to the value received in consideration of the issuance of fully paid
shares.
ARTICLE V.
The Corporation shall have perpetual existence.
ARTICLE VI.
The holders of a majority of the outstanding shares of stock which have
voting power shall constitute a quorum at a meeting of stockholders for the
transaction of any business unless the action to be taken at the meeting shall
require a greater proportion.
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to fix the amount to be reserved
as working capital over and above its paid-in capital stock, and to authorize
and cause to be executed, mortgages and liens upon the real and personal
property of the Corporation.
ARTICLE VII.
The personal liability of the directors of the Corporation is hereby
eliminated to the fullest extent permitted by the Nevada General Corporation
Law, as the same may be amended and supplemented.
ARTICLE VIII.
The Corporation shall, to the fullest extent permitted by the Nevada
General Corporation Law, as the same may be amended and supplemented, indemnify
any an all persons whom it shall have power to indemnify under said Law from and
against any and all of the expenses, liabilities, or other matters referred to
in or covered by said Law, and the indemnification provided for herein shall not
be deemed exclusive of any other rights to which those indemnified may be
entitled under any Bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his
2
<PAGE>
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,
executors, and administrators of such a person.
ARTICLE IX.
The Corporation reserves the right to amend, alter, change, or repeal any
provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ARTICLE X.
Shareholders of the Corporation shall not have cumulative voting rights nor
preemptive rights.
ARTICLE XI
Special meetings of the stockholders of the Corporation for any purpose or
purposes may only be called at any time by the Board of Directors or a committee
thereof, the Chairman of the Board, or the President
Signed this 2nd day of August, 1999.
NATIONAL AIR CORPORATION
By: //s// Marc I. Berens
----------------------------------------------
Name: Marc I. Berens
Title: President
3
