US SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUER
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
LAZARUS INDUSTRIES, INC.
(Name of Small Business Issuer in its charter)
Nevada 87-0445575
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
10 West 100 South, Suite 610, Salt Lake City, Utah 84101
(Address of Principal Executive Offices and Zip Code)
Issuer's Telephone Number: (801) 532-7851
Securities to be registered under Section 12(b) of the Act:
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $0.001
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TABLE OF CONTENTS
ITEM NUMBER AND CAPTION
Part I Page No.
Item 1. Description of Business..........................................1
Item 2. Management's Discussion and Analysis or Plan of Operation ...... 7
Item 3. Description of Property ........................................ 8
Item 4. Security Ownership of Certain Beneficial Owners and Management...8
Item 5. Directors, Executive Officers, Promoters and Control Persons.... 9
Item 6. Executive Compensation ..........................................11
Item 7. Certain Relationships and Related Transactions.................. 11
Item 8. Description of Securities....................................... 12
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters............................ 12
Item 2. Legal Proceedings .............................................. 13
Item 3. Changes in and Disagreements with Accountants ................. 13
Item 4. Recent Sales of Unregistered Securities ....................... 13
Item 5. Indemnification of Directors and Officers..................... 14
PART F/S............................................................ 15, F-1
PART III
Item 1. Index to Exhibits ..............................................16
Item 2. Description of Exhibits....................................... 16
SIGNATURES ........................................................... 17
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ITEM 1. DESCRIPTION OF BUSINESS
History
Lazarus Industries, Inc. (the "Company") was organized as a Utah
corporation on December 31, 1985, under the name "Gaslight, Inc.," for the
purpose of seeking a favorable business opportunity. Immediately following
organization of the Company, it sold a total of 4,000,000 shares of its common
stock, for an aggregate of $8,000, or $0.002 per share. In order to provide
the Company with additional capital to seek to acquire or enter into a
favorable business opportunity, in January, 1987, the Company completed a
public offering pursuant to a registration statement on Form S-18, consisting
of 15,000,000 pre-split shares of common stock at an offering price of $0.01
per share, or a total gross offering of $150,000.
In the end of March, 1988, the Company completed the terms of an exchange
agreement (the "Exchange Agreement") with Lazarus Medical Innovations, Inc., a
closely-held Utah corporation ("Lazarus"), and the shareholders of Lazarus,
providing for the acquisition by the Company of Lazarus as a wholly-owned
subsidiary, in a stock-for-stock reorganization (the "reorganization").
Under the terms of the Exchange Agreement, the Company issued a total of
2,036,800 shares of common stock of the Company, or approximately 73.6% of
the issued and outstanding common stock of the Company, after giving effect to
a 1-for- 25 reverse split or share consolidation of the issued and outstanding
shares of the Company effectuated in connection with the reorganization. In
connection with the reorganization, the Company's shareholders approved, in a
special meeting of the shareholders held on March 30, 1988, the Exchange
Agreement; a 1-for 25 reverse split or share consolidation, described above;
the amendment of the Company's Articles of Incorporation to change the
Company's name to "Lazarus Industries, Inc.;" and the appointment of the five
designees of Lazarus as the management of the Company.
For a period of approximately three years following the reorganization
described above, the Company was engaged in the manufacture, development and
marketing of various medical products and devices, which was the business
conducted by its wholly-owned subsidiary, Lazarus, prior to the
reorganization. These activities were terminated in 1991, and the Company was
dormant until the end of 1996, when efforts were commenced by the new
management to reactivate the business of the Company.
General
The Company was originally organized for the purpose of creating a
capital resource fund to seek, investigate, and, if warranted, acquire or
participate in a favorable business opportunity. As described above, in
1988, the Company entered into a reorganization transaction with Lazarus, to
become engaged in the manufacture and marketing of medical devices. This
business was discontinued in 1991. The Company was dormant from 1991 until
the end of 1997, when the Company began efforts to reactivate its business in
order to seek a business opportunity to acquire.
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In the past few months, the Company has reviewed and evaluated a number
of business ventures for possible acquisition or participation by the Company.
The Company has not entered into any agreement, nor does it have any
commitment or understanding to enter into or become engaged in a transaction
as of the date of this filing. The Company continues to investigate, review,
and evaluate business opportunities as they become available and will seek to
acquire or become engaged in business opportunities at such time as specific
opportunities warrant.
To date, opportunities have been made available to the Company through
its officers and directors and through professional advisors including
securities broker-dealers and through members of the financial community. It
is anticipated that business opportunities will continue to be available
primarily from these sources.
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis regarding the quality of
the other firm's management and personnel, the asset base of such firm or
enterprise, the anticipated acceptability of new products or marketing
concepts, the merit of the firms business plan, and numerous other factors
which are difficult, if not impossible, to analyze through the application of
any objective criteria.
Since its inception, the Company has had no active business operations,
and has been seeking to acquire an interest in a business with long-term
growth potential. The Company currently has no commitment or arrangement to
participate in a business and cannot now predict what type of business it may
enter into or acquire. It is emphasized that the business objectives
discussed herein are extremely general and are not intended to be restrictive
on the discretion of the Company's management.
There are no plans or arrangements proposed or under consideration for
the issuance or sale of additional securities by the Company prior to the
identification of an acquisition candidate. Consequently, management
anticipates that it may be able to participate in only one potential business
venture, due primarily to the Company's limited capital. This lack of
diversification should be considered a substantial risk, because it will not
permit the Company to offset potential losses from one venture against gains
from another.
The Company has voluntarily filed this registration statement on Form
10-SB to become subject to the reporting requirements under the Securities
Exchange Act of 1934 (the "Exchange Act"), based on management's belief that
the Company's reporting status will enhance its ability to locate and acquire
a business opportunity. The Company intends to continue to voluntarily file
reports under the Exchange Act, regardless of whether its obligation to do so
is suspended by rule or statute.
Selection of a Business
The Company anticipates that businesses for possible acquisition will be
referred by various sources, including its officers and directors,
professional advisors, securities broker-dealers, venture capitalists, members
of the financial community, and others who may present unsolicited proposals.
The Company will not engage in any general solicitation or advertising for a
business opportunity,
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and will rely on personal contacts of its officers and directors and their
affiliates, as well as indirect associations between them and other business
and professional people. By relying on "word of mouth," the Company may be
limited in the number of potential acquisitions it can identify. While it is
not presently anticipated that the Company will engage unaffiliated
professional firms specializing in business acquisitions or reorganizations,
such firms may be retained if management deems it in the best interest of the
Company.
Compensation to a finder or business acquisition firm may take various
forms, including one-time cash payments, payments based on a percentage of
revenues or product sales volume, payments involving issuance of securities
(including those of the Company), or any combination of these or other
compensation arrangements. Consequently, the Company is currently unable to
predict the cost of utilizing such services. Management of the Company will
not be paid a finder's fee for locating a business opportunity.
The Company will not restrict its search to any particular business,
industry, or geographical location, and management reserves the right to
evaluate and enter into any type of business in any location. The Company may
participate in a newly organized business venture or a more established
company entering a new phase of growth or in need of additional capital to
overcome existing financial problems. Participation in a new business venture
entails greater risks since in many instances management of such a venture
will not have proved its ability, the eventual market of such venture's
product or services will likely not be established, and the profitability of
the venture will be unproved and cannot be predicted accurately. If the
Company participates in a more established f-in-n with existing financial
problems, it may be subjected to risk because the financial resources of the
Company may not be adequate to eliminate or reverse the circumstances leading
to such financial problems.
In seeking a business venture, the decision of management will not be
controlled by an attempt to take advantage of any anticipated or perceived
appeal of a specific industry, management group, product, or industry, but
will be based on the business objective of seeking long-term capital
appreciation in the real value of the Company. The Company will not acquire
or merge with a business or corporation in which the Company's officers,
directors, or promoters, or their affiliates or associates, have any direct or
indirect ownership interest.
The analysis of new businesses will be undertaken by or under the
supervision of the officers and directors. In analyzing prospective
businesses, management will consider, to the extent applicable, the available
technical, financial, and managerial resources; working capital and other
prospects for the future; the nature of present and expected competition; the
quality and experience of management services which may be available and the
depth of that management; the potential for further research, development, or
exploration; the potential for growth and expansion; the potential for profit;
the perceived public recognition or acceptance of products, services, or trade
or service marks; name identification; and other relevant factors.
The decision to participate in a specific business may be based on
management's analysis of the quality of the other firm's management and
personnel, the anticipated acceptability of new products or marketing
concepts, the merit of technological changes, and other factors which are
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difficult, if not impossible, to analyze through any objective criteria. It
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially shift marketing approaches, expand significantly,
change product emphasis, change or substantially augment management, and other
factors.
The Company will analyze all available factors and make a determination
based on a composite of available facts, without reliance on any single
factor. The period within which the Company may participate in a business
cannot be predicted and will depend on circumstances beyond the Company's
control, including the availability of businesses, the time required for the
Company to complete its investigation and analysis of prospective businesses,
the time required to prepare appropriate documents and agreements providing
for the Company's participation, and other circumstances.
Acquisition of a Business
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, or other reorganization
with another corporation or entity; joint venture; license; purchase and sale
of assets; or purchase and sale of stock, the exact nature of which cannot now
be predicted. Notwithstanding the above, the Company does not intend to
participate in a business through the purchase of minority stock positions.
On the consummation of a transaction, it is likely that the present management
and shareholders of the Company will not be in control of the Company. In
addition, a majority or all of the Company's directors may, as part of the
terms of the acquisition transaction, resign and be replaced by new directors
without a vote of the Company's shareholders.
In connection with the Company's acquisition of a business, the present
shareholders of the Company, including officers and directors, may, as a
negotiated element of the acquisition, sell a portion or all of the Company's
Common Stock held by them at a significant premium over their original
investment in the Company. As a result of such sales, affiliates of the
entity participating in the business reorganization with the Company would
acquire a higher percentage of equity ownership in the Company. Management
does not intend to actively negotiate for or otherwise require the purchase of
all or any portion of its stock as a condition to or in connection with any
proposed merger or acquisition. Although the Company's present shareholders
did not acquire their shares of Common Stock with a view towards any
subsequent sale in connection with a business reorganization, it is not
unusual for affiliates of the entity participating in the reorganization to
negotiate to purchase shares held by the present shareholders in order to
reduce the amount of shares held by persons no longer affiliated with the
Company and thereby reduce the potential adverse impact on the public market
in the Company's common stock that could result from substantial sales of such
shares after the business reorganization. Public investors will not receive
any portion of the premium that may be paid in the foregoing circumstances.
Furthermore, the Company's shareholders may not be afforded an opportunity to
approve or consent to any particular stock buy-out transaction.
In the event sales of shares by present shareholders of the Company,
including officers and directors, is a negotiated element of a future
acquisition, a conflict of interest may arise because directors will be
negotiating for the acquisition on behalf of the Company and for sale of their
shares
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for their own respective accounts. Where a business opportunity is well
suited for acquisition by the Company, but affiliates of the business
opportunity impose a condition that management sell their shares at a price
which is unacceptable to them, management may not sacrifice their financial
interest for the Company to complete the transaction. Where the business
opportunity is not well suited, but the price offered management for their
shares is high, Management will be tempted to effect the acquisition to
realize a substantial gain on their shares in the Company. Management has not
adopted any policy for resolving the foregoing potential conflicts, should
they arise, and does not intend to obtain an independent appraisal to
determine whether any price that may be offered for their shares is fair.
Stockholders must rely, instead, on the obligation of management to fulfill
its fiduciary duty under state law to act in the best interests of the Company
and its stockholders.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance on exemptions from registration under applicable
federal and state securities laws. 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, under certain
conditions, or at specified times thereafter. Although the terms of such
registration rights and the number of securities, if any, which may be
registered cannot be predicted, it may be expected that registration of
securities by the Company in these circumstances would entail substantial
expense to the Company. The issuance of substantial additional securities and
their potential sale into any trading market which may develop in the
Company's securities may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to structure the acquisition as a so-called
"tax-free" event under sections 351 or 368(a) of the Internal Revenue Code of
1986, (the "Code"). In order to obtain tax-free treatment under section 351
of the Code, it would be necessary for the owners of the acquired business to
own 80% or more of the voting stock of the surviving entity. In such event,
the shareholders of the Company would retain less than 20% of the issued and
outstanding shares of the surviving entity. Section 368(a)(1) of the Code
provides for tax-free treatment of certain business reorganizations between
corporate entities where one corporation is merged with or acquires the
securities or assets of another corporation. Generally, the Company will be
the acquiring corporation in such a business reorganization, and the tax-free
status of the transaction will not depend on the issuance of any specific
amount of the Company's voting securities. It is not uncommon, however, that
as a negotiated element of a transaction completed in reliance on section 368,
the acquiring corporation issue securities in such an amount that the
shareholders of the acquired corporation will hold 50% or more of the voting
stock of the surviving entity. Consequently, there is a substantial
possibility that the shareholders of the Company immediately prior to the
transaction would retain less than 50% of the issued and outstanding shares of
the surviving entity. Therefore, regardless of the form of the business
acquisition, it may be anticipated that stockholders immediately prior to the
transaction will experience a significant reduction in their percentage of
ownership in the Company.
Notwithstanding the fact that the Company is technically the acquiring
entity in the foregoing circumstances, generally accepted accounting
principles will ordinarily require that such transaction
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be accounted for as if the Company had been acquired by the other entity
owning the business and, therefore, will not permit a write-up in the carrying
value of the assets of the other company. The manner in which the Company
participates in a business will depend on the nature of the business, the
respective needs and desires of the Company and other parties, the management
of the business, and the relative negotiating strength of the Company and such
other management.
The Company will participate in a business only after the negotiation and
execution of appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require
specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to such
closing, will outline the manner of bearing costs if the transaction is not
closed, will set forth remedies on default, and will include miscellaneous
other terms.
Operation of Business After Acquisition
The Company's operation following its acquisition of a business will be
dependent on the nature of the business and the interest acquired. The
Company is unable to predict whether the Company will be in control of the
business or whether present management will be in control of the Company
following the acquisition. It may be expected that the business will present
various risks, which cannot be predicted at the present time.
Governmental Regulation
It is impossible to predict the government regulation, if any, to which
the Company may be subject until it has acquired an interest in a business.
The use of assets and/or conduct of businesses which the Company may acquire
could subject it to environmental, public health and safety, land use, trade,
or other governmental regulations and state or local taxation. In selecting a
business in which to acquire an interest, management will endeavor to
ascertain, to the extent of the limited resources of the Company, the effects
of such government regulation on the prospective business of the Company. In
certain circumstances, however, such as the acquisition of an interest in a
new or start-up business activity, it may not be possible to predict with any
degree of accuracy the impact of government regulation. The inability to
ascertain the effect of government regulation on a prospective business
activity will make the acquisition of an interest in such business a higher
risk.
Competition
The Company will be involved in intense competition with other business
entities, many of which will have a competitive edge over the Company by
virtue of their stronger financial resources and prior experience in business.
There is no assurance that the Company will be successful in obtaining
suitable investments.
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Employees
The Company is a development stage company and currently has no
employees. Executive officers, who are not compensated for their time
contributed to the Company, will devote only such time to the affairs of the
Company as they deem appropriate, which is estimated to be no more than 20
hours per month per person, until such time as the Company enters into active
negotiations to acquire or reorganize with a business. 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 businesses. The need for employees and their
availability will be addressed in connection with a decision whether or not to
acquire or participate in a specific business industry.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Three and Six Month Periods Ended June 30, 1999, and Calendar Years Ended
December 31, 1998 and 1997
The Company has had no revenue from continuing operations for the three
and six month periods ended June 30, 1999, and June 30, 1998, or the years
ended December 31, 1998 and December 31, 1997. General and administrative
expenses for the three and six month periods ended June 30, 1999 and 1997, and
for the years ended December 31, 1998 and 1997, consisted of general corporate
administration, professional expenses and accounting and auditing costs.
These costs were $2,362 and $2,693 for the three month period ended June 30,
1999 and 1998, respectively; and $4,597 and $6,172 for the six month period
ended June 30, 1999 and 1998, respectively. These costs were $6,665 and
$90,669 for the years ended December 31, 1998 and 1997, respectively; however,
$90,000 of such expenses in the year ended December 31, 1997 were attributable
to the sale and issuance of 3,000,000 shares of common stock to officers and
directors for services. All remaining expenses are attributable to costs and
professional fees incurred to update the Company in order to make a Form 10-SB
filing.
The Company had no interest expense in 1997 and 1998, or in the six
months ended June 30, 1999. Interest income for the Company for the years
ended December 31, 1998 and 1997, and the three months and six months ended
June 30, 1999 and 1998, was nominal ($880 in 1998, $0 in 1997; $341 and $655
for the three months and six months ended June 30, 1999; and no income for the
six months ended June 30, 1997).
As a result of all of these factors, the Company has realized a net loss
for the three months and six months ended June 30, 1999 of $2,021 and $3,942,
respectively; a net loss for the three months and six months ended June 30,
1998, of $2,693 and $6,172, respectively, and for the years ended December 31,
1998 and 1997, of $5,785 and $90,669, respectively.
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Liquidity and Capital Resources
At June 30, 1999, the Company had working capital of approximately
$34,000, as compared to working capital of approximately $38,000 at December
31, 1998. Working capital as of both dates consists of short-term
investments, and cash and cash equivalents. Although the Company's most
significant assets consist largely of cash and cash equivalents, the Company
has no intent to become, or hold itself out to be, engaged primarily in the
business of investing, reinvesting, or trading in securities. Accordingly,
the Company does not anticipate being required to register pursuant to the
Investment Company Act of 1940, and expects to be limited in its ability to
invest in securities, other than cash equivalents and government securities,
in the aggregate amount of over 40% of its assets. There can be no assurance
that any investment made by the Company will not result in losses.
The Company has very limited liquid assets, and such assets may not be
sufficient for the Company to meet its operating needs over the next twelve
months. The Company does not anticipate, however, that it will require
substantial revenue, or additional cash assets, until it enters into an
acquisition or reorganization transaction with a business opportunity. The
Company has no material revenues and its needs for capital will in all
likelihood change dramatically if it acquires an interest in a business
opportunity in the next twelve months. The Company's current operating plan
is to (a) cover the administrative and reporting requirements of a public
company; and (b) search for, and investigate, potential businesses, products,
technologies and companies for acquisition. At present, the Company has no
understandings, commitments or agreements with respect to the acquisition of
any business, product, technology or company, and there can be no assurance
that the Company will be able to identify any such business, product,
technology or entity suitable for an acquisition or reorganization
transaction. Moreover, there can be no assurance the Company will be
successful in its efforts to enter into consummate an acquisition or
reorganization transaction on terms favorable or beneficial to the Company and
its shareholders, or that it, or its successor, will be able to effectively
manage the business opportunity the Company acquires or becomes engaged in.
ITEM 3. DESCRIPTION OF PROPERTY
The Company uses offices and related clerical services at 10 West 100
South, Suite 610, Salt Lake City, Utah 84101, provided by an officer and
director of the Company at a monthly rental rate of $200.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth as of August 8, 1999, the number and
percentage of the outstanding shares of common stock which, according to the
information supplied to the Company, were beneficially owned by (i) each
person who is currently a director of the Company, (ii) each executive
officer, (iii) all current directors and executive officers of the Company as
a group and (iv) each person who, to the knowledge of the Company, is the
beneficial owner of
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more than 5% of the outstanding common stock. Except as otherwise indicated,
the persons named in the table have sole voting and dispositive power with
respect to all shares beneficially owned, subject to community property laws
where applicable.
Common Percent of
Name and Address Shares Options(1) Class(2)
- ----------------------- ------------ ---------- ----------
Jack M. Gertino (3)
10 West 100 South, Suite 610
Salt Lake City, Utah 84101 1,176,915 100,000 17.06
James C. Lewis (3)
10 West 100 South, Suite 600
Salt Lake City, Utah 84101 1,106,915 100,000 16.12
Sandra Speciale (3)
853 13th Avenue
Salt Lake City, Utah 84103 1,001,000 -0- 13.37
All Executive officers and
Directors as a Group (3 persons) 3,284,830 200,000 46.55
(1) These figures represent options that are vested or will vest within 10
years from the date as of which information is presented in the table.
(2) These figures represent the percentage of ownership of the named
individuals assuming each of them alone has exercised his or her options, and
percentage ownership of all officers and directors of a group assuming all
such purchase rights held by such individuals are exercised.
(3) Messrs. Gertino, Lewis and Speciale are all of the officers and
directors of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
Directors and Officers
The following table sets forth the names, ages, and positions with the
Company for each of the directors and officers of the Company.
Name Age Positions(1) Since
- ---------------- ----- ----------------------------- ------
Jack M. Gertino 60 President and Director 1997
James C. Lewis 47 Secretary/Treasurer and Director 1997
Sandra Speciale 51 Director 1997
All executive officers are elected by the Board and hold office until the
next Annual Meeting of stockholders and until their successors are elected and
qualify.
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The following is information on the business experience of each director
and officer.
Jack M. Gertino, age 60, has been a private investor and business
consultant in Salt Lake City, Utah, for the past five years. From June 1995
through October 1996, Mr. Gertino was an owner of a Tunex Service Center
franchise in Layton, Utah, which offers automotive Tune-up services. He is
currently pursuing a number of real estate projects, including the recent
purchase and operation of a commercial office building in Salt Lake City.
From February 1992 to the present, he has served as a director of Red Horse
Entertainment Corporation, a publicly held shell corporation seeking a
business acquisition. Since February, 1986, he has also served as an officer
and director of Comet Technologies, Inc., a publicly held Nevada shell
corporation seeking a business acquisition.
James C. Lewis, age 47, an attorney, has been practicing law in the state
of Utah since 1979. Mr. Lewis has been a partner in the firm of Lewis Law
Offices since 1997 where he concentrates his practice in the areas of
litigation, corporate, commercial and real estate law. Mr. Lewis was a
partner in the firm of Diumenti & Lewis from 1993-1997. From 1987 to 1992, he
was a partner in the firm of Lewis & Lehman. From 1979 to 1985, he was an
attorney with Kruse, Landa & Maycock, where he concentrated his practice in
corporate and transactional law. During the past few years, Mr. Lewis has
been involved in the private development of a number of real estate projects.
Mr. Lewis graduated from the University of Utah in 1976 with an undergraduate
degree in psychology, and from the University of San Diego in 1979 with a
juris doctorate degree.
Sandra Speciale, age 51, worked as an independent marketing
representative and consultant in the consumer electronics business, from 1978
to 1985. From 1985 to 1989, she was a partner in Advanced Marketing, a
consumer electronics firm, where she was instrumental in taking this marketing
organization from $1,000,000 to $40,000,000 in annual sales. Since 1989, she
has been an independent consultant, focusing primarily on the marketing of
medical products. She attended the University of Utah from 1968 to 1978,
taking various courses in theater arts, and business, but did not receive a
degree. She continues to attend seminars and conferences in the medical
products industry.
Other Shell Company Activities
Mr. Gertino is currently a director of Red Horse Entertainment
Corporation and Comet Technologies, Inc., both publicly held shell
corporations seeking a business acquisition. The possibility exists that one
or more of the officers and directors of the Company could become officers
and/or directors of other shell companies in the future, although they have no
intention of doing so at the present time. Certain conflicts of interest are
inherent in the participation of the Company's officers and directors as
management in other shell companies, which may be difficult, if not
impossible, to resolve in all cases in the best interests of the Company.
Failure by management to conduct the Company's business in its best interests
may result in liability of management of the Company to the shareholders.
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ITEM 6. EXECUTIVE COMPENSATION
The Company has no agreement or understanding, express or implied, with
any officer, director, or principal stockholder, or their affiliates or
associates, regarding employment with the Company or compensation for
services. The Company has no plan, agreement, or understanding, express or
implied, with any officer, director, or principal stockholder, or their
affiliates or associates, regarding the issuance to such persons of any shares
of the Company's authorized and unissued common stock. There is no
understanding between the Company and any of its present stockholders
regarding the sale of a portion or all of the common stock currently held by
them in connection with any future participation by the Company in a business.
There are no other plans, understandings, or arrangements whereby any of the
Company's officers, directors, or principal stockholders, or any of their
affiliates or associates, would receive funds, stock, or other assets in
connection with the Company's participation in a business. No advances have
been made or contemplated by the Company to any of its officers, directors, or
principal stockholders, or any of their affiliates or associates.
There is no policy that prevents management from adopting a plan or
agreement in the future that would provide for cash or stock based
compensation for services rendered to the Company.
On acquisition of a business, it is possible that current management will
resign and be replaced by persons associated with the business acquired,
particularly if the Company participates in a business by effecting a stock
exchange, merger, or consolidation as discussed under "BUSINESS." In the event
that any member of current management remains after effecting a business
acquisition, that member's time commitment and compensation will likely be
adjusted based on the nature and location of such business and the services
required, which cannot now be foreseen.
In August, 1999, the Company granted to Jack M. Gertino and James C.
Lewis, officers and directors, options to purchase 100,000 shares of common
stock each at an exercise price of $0.05. There was no public market for the
Company's common stock as of the date of grant, and the book value of the
Company's common stock was approximately $0.045 per share on the date of
grant. The options are vested and expire in August 2009. The options were
issued to compensate these persons for their services to the Company over the
past year, for which they have received minimal compensation.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 2, 1997, the Company issued to Jack M. Gertino, James C.
Lewis and Sandra Speciale, officers and directors, 1,000,000 share each, in
consideration of services provided by these individuals during the preceding
months in reactivating the Company. At the time of issuance of these shares,
and at all times since 1991, there has not been any market for the common
stock of the Company.
From January, 1998 through March, 1998, the Company sold a total of
1,533,334 shares of restricted common stock to ten (10) private investors, at
a price of $0.03 per share, or a total
11
<PAGE>
of $46,000, to provide the Company with working capital to pursue its plan of
updating accountings and pursuing a favorable business opportunity.
On August 10, 1999, the Company granted options to Jack M. Gertino and
James C. Lewis, to purchase a total of 100,000 shares each of the Company's
common stock, at an exercise price of $0.05 per share. The options expire in
August, 2009.
Except the transactions described above, there are no proposed
transactions and no transactions during the past two years to which the
Company was a party and in which any officer, director, or principal
shareholder, or their affiliates or associates, was also a party.
ITEM 8. DESCRIPTION OF SECURITIES
The Company is authorized to issue 50,000,000 shares of common stock, par
value $0.001 per share, of which 7,485,417 shares are issued and outstanding.
Holders of common stock are entitled to one vote per share on each matter
submitted to a vote at any meeting of stockholders. Shares of common stock do
not carry cumulative voting rights and, therefore, holders of a majority of
the outstanding shares of common stock will be able to elect the entire board
of directors, and, if they do so, minority stockholders would not be able to
elect any members to the board of directors. The Company's board of directors
has authority, without action by the Company's stockholders, to issue all or
any portion of the authorized but unissued shares of common stock, which would
reduce the percentage ownership in the Company of its stockholders and which
may dilute the book value of the common stock. Stockholders of the Company
have no pre-emptive rights to acquire additional shares of common stock. The
common stock is not subject to redemption and carries no subscription or
conversion rights. In the event of liquidation of the Company, the shares of
common stock are entitled to share equally in corporate assets after
satisfaction of all liabilities. Holders of common stock are entitled to
receive such dividends as the board of directors may from time to time declare
out of funds legally available for the payment of dividends. The Company has
not paid dividends on its common stock and does not anticipate that it will
pay dividends in the foreseeable future.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE
REGISTRANT'S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
There is no established trading market for the common stock, and there
has not been a trading market in the Company's common stock since 1991. For
the past several years, there have been no public transactions in the common
stock of the Company, to the best knowledge of the Company. The Company's
common stock is not quoted on the OTC Bulletin Board, the "pink sheets," or in
any other quotation system. Following the filing and review of this Form
10-SB, the Company anticipates that it will seek to have its common stock
quoted on the OTC Bulletin Board; however, there can be no assurance the
Company will be successful in accomplishing this objective.
12
<PAGE>
The Company currently has outstanding a total of 1,533,334 shares of
restricted common stock held by individuals who purchased such stock in
private transactions from January through March, 1998. In addition, there are
outstanding to the Company's officers, options to purchase 200,000 shares of
common stock at an exercise price of $0.05 per share, which options expire in
August, 2009. After March, 2000, All shares of common stock outstanding may
be sold without restriction under Rule 144(k) promulgated under the Securities
Act of 1933, except 3,000,000 shares which are held by officers and directors
("Control Shares"). Control Shares may be sold subject to complying with all
of the terms and conditions of Rule 144, except the one-year holding period
which has been satisfied.
Since its inception, no dividends have been paid on the Company's common
stock. The Company intends to retain any earnings for use in its business
activities, so it is not expected that any dividends on the common stock will
be declared and paid in the foreseeable future.
At September 8, 1999, there were approximately 236 holders of record of
the Company's Common Stock.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings, and
to the best of its knowledge, no such proceedings by or against the Company
have been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants since the
Company's organization.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
In December, 1997, the Company issued a total of 3,000,000 shares of
restricted common stock to Jack M. Gertino, James C. Lewis and Sandra
Speciale, or 1,000,000 shares each, for services rendered to the Company in
reactivating its business. At the time of such stock issuances, the Company
was dormant. These individuals contributed services to bring the Company's
corporate status and financial accountings current, and to commence efforts to
make the Company a reporting company under the Securities Exchange Act of
1934.
In order to provide the Company with operating capital, from January,
1998 to March, 1998, the Company sold a total of 1,533,334 shares of the
Company's restricted common stock to 10 private investors, at a price of $0.03
per share, or a total purchase price of $46,000. These shares were sold in
reliance on the exemption from registration set forth in Section 4(2) of the
Securities Act of 1933 as amended, and applicable state exemptions from the
registration requirements. The private investors were provided with all
available information regarding the Company, and were given the opportunity to
ask questions and receive answers from officers and directors regarding their
investment. Each investor executed an investment letter, acknowledging
13
<PAGE>
that he or she was purchasing restricted shares for investment, and further
acknowledging that such shares of common stock could not be resold in the
absence of a registration, or an exemption from the registration requirements,
including Rule 144 of the Securities Act of 1933 as amended.
On August 10, 1999, the Company granted to Jack M. Gertino and James C.
Lewis options to purchase 100,000 shares of common stock each at an exercise
price of $0.05, all of which expire in August, 2009. The options were issued
as compensation for services rendered to the Company. The options were issued
in reliance on the exemption from registration set forth in Section 4(2) of
the Securities Act of 1933.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 16-10a-902 of the Utah Revised Business Corporation Act provides
in relevant part as follows:
(1) Except as provided in Subsection (4), a corporation may indemnify
an individual made a party to a proceeding because he is or was a director,
against liability incurred in the proceeding if:
(a) his conduct was in good faith; and
(b) he reasonably believed that his conduct was in, or not opposed
to, the corporation's best interests; and
(c) in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(3) The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contenders or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.
(4) A corporation may not indemnify a director under this section:
(a) in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation;
(b) in connection with any other proceeding charging that the
director derived an improper personal benefit, whether or not involving action
in his official capacity, in which proceeding he was adjudged liable on the
basis that he derived an improper personal benefit.
(5) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
14
<PAGE>
Section 16-10a-903, Utah Revised Business Corporation Act, provides as
follows:
Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was successful on the merits or otherwise, in the
defense of any proceeding, or in the defense of any claim, issue, or matter in
the proceeding, to which he was a party because he is or was a director of the
corporation, against reasonable expenses incurred by him in connection with
the proceeding or claim with respect to which he has been successful.
Section 16-10a-907, Utah Revised Business Corporation Act, provides as
follows:
Unless a corporation's articles of incorporation provide otherwise:
(1) An officer of the corporation is entitled to mandatory
indemnification under Section 16-10a-903, and is entitled to apply for
court-ordered indemnification under Section 16-10a-905, in each case to the
same extent as a director;
(2) The corporation may indemnify and advance expenses to an officer,
employee, fiduciary, or agent of the corporation to the same extent as to a
director; and
(3) A corporation may also indemnify and advance expenses to an
officer, employee, fiduciary, or agent who is not a director to a greater
extent, if not inconsistent with public policy, and if provided for by its
articles of incorporation, bylaws, general or specific action of its board of
directors, or contract.
The Company's articles of incorporation provide that the Company may
indemnify to the full extent of its power to do so under Utah law, all
directors, officers, employees, and/or agents of the Company for liabilities
and expenses reasonably incurred in connection with any action, suit, or
proceeding to which such person may be a party by reason of such person's
position with the Company. Consequently, the Company intends to indemnify its
officers, directors, employees, and agents to the full extent permitted by the
statute noted above.
PART F/S
FINANCIAL STATEMENTS
The following financial statements of the Company appear at the end of
this report beginning with the Index to Financial Statements on page F-1.
(a) Audited Financial Statements
Independent Auditors' Report
Balance Sheet as of December 31, 1998
Statement of Operations for the Years Ended December 31, 1998 and 1997
and from Inception (December 31, 1985) through December 31, 1998
Statement of Stockholders' Equity From Inception through December 31,
1998
15
<PAGE>
Statement of Cash Flows for the Years Ended December 31, 1998 and 1997
and from Inception through December 31, 1998
Notes to the Financial Statements
(b) Unaudited Financial Statements
Balance Sheets as of June 30, 1999 (unaudited) and December 31, 1998
Statements of Operations for the Three Months and Six Months Ended
June 30, 1999 and 1998, and from Inception (December 31, 1985)
Through June 30, 1999
Statements of Stockholders' Equity from Inception through December 31,
1999
Statements of Cash Flow for the Three Months and Six Months Ended
June 30, 1999 and 1998, and from Inception through December 31, 1999
Notes to Financial Statements
PART III
ITEM 1. INDEX TO EXHIBITS
Copies of the following documents are included as exhibits to this report
pursuant to Item 601 of Regulation S-B.
Exhibit No. SEC Ref. No. Description/ Title of Document Page
1 (3)(i) Articles of Incorporation, as amended E-1
2 (3)(ii) Bylaws E-6
3 (10) Option granted to Jack M. Gertino
dated August 10, 1999 E-15
4 (10) Option granted to James C. Lewis
dated August 10, 1999 E-22
5 (27) Financial Data Schedules *
* The Financial Data Schedules are presented only in the electronic filing
with the Securities and Exchange Commission
ITEM 2. DESCRIPTION OF EXHIBITS
See Item 1, Part III, above.
16
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned thereunto duly authorized.
LAZARUS INDUSTRIES, INC.
Date: September 8, 1999 By: /s/ Jack M. Gertino
----------------------------
Jack M. Gertino, President
In accordance with the Exchange Act, the registration statement has been
signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
Date: September 8, 1999 /s/ Jack M. Gertino
-----------------------------
Jack M. Gertino, Director
Date: September 8, 1999 /s/ James C. Lewis
----------------------------
James C. Lewis, Director
<PAGE> 17
JONES, JENSEN
& COMPANY, LLC
Certified Public Accountants and Consultants
INDEPENDENT AUDITORS' REPORT
-----------------------------
Board of Directors
Lazarus Industries, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Lazarus Industries, Inc. (a
development stage company) as of December 31, 1998 and the related statements
of operations, stockholders' equity, and cash flows for the years ended
December 31, 1998 and 1997, and from the date of inception on December 31,
1985 through December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lazarus Industries, Inc. as
of December 31, 1998 and the results of its operations and its cash flows for
the years ended December 31, 1998 and 1997, and from the date of inception on
December 31, 1985 through December 31, 1998, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company is a development stage company with no
significant operating revenues to date, which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
June 29, 1999
- ------------------------------
50 South Main Street
Suite 1450
Salt Lake City, Utah 84144
Telephone (801) 328-4408
Facsimile (801) 328-4461
- -------------------------------
<PAGE> 18
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
December 31,
1998
--------------
CURRENT ASSETS
Cash in bank $ 40,215
--------------
Total Current Assets 40,215
--------------
TOTAL ASSETS $ 40,215
==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable (Note 3) $ 2,221
Taxes payable 100
--------------
Total Current Liabilities 2,321
--------------
Total Liabilities 2,321
--------------
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 50,000,000 shares
authorized; 7,485,417 issued and outstanding 7,486
Capital in excess of par value 283,428
Deficit accumulated during the development stage (253,020)
--------------
Total Stockholders' Equity 37,894
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 40,215
==============
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 19
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Operations
From
Inception on
December 31,
For the Years Ended 1985 through
December 31, December 31,
1998 1997 1998
-------------- -------------- -------------
REVENUES $ - $ - $ -
-------------- -------------- -------------
EXPENSES
General and administrative 6,665 90,669 98,986
-------------- -------------- -------------
Total Expenses 6,665 90,669 98,986
-------------- -------------- -------------
LOSS FROM OPERATIONS (6,665) (90,669) (98,986)
-------------- -------------- -------------
OTHER INCOME (EXPENSE)
Interest income 880 - 880
Loss from discontinued
operations - - (154,914)
-------------- -------------- -------------
Total Other Income (Expense) - - (154,034)
-------------- -------------- -------------
NET LOSS $ (5,785) $ (90,669) $ (253,020)
============== ============== =============
BASIC LOSS PER SHARE $ (0.00) $ (0.03)
============== ==============
The accompanying notes are an integral part of these financial statements
5
<PAGE> 20
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on December 31, 1985 through December 31, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1985 - $ - $ - $ -
Shares issued for cash at $0.002 160,000 160 7,840 (433)
Shares issued through public
offering at $0.01 per share 555,523 556 138,325 -
Capital contributed by shareholders - - 54,077 -
Net loss from inception on
December 31, 1995 through
December 31, 1987 - - - (735)
------------- ------------ ------------ -------------
Balance, December 31, 1987 715,523 716 200,242 (1,168)
Shares issued to public at $0.01
per share 44,480 44 11,086 -
Shares issued in acquisition of
wholly- owned subsidiary at
$0.001 per share 2,036,800 2,037 - -
Shares issued for finders fee
at $0.001 per share 152,000 152 - -
Shares issued to public at
$0.10 per share for cash 3,280 3 325 -
Public offering costs - - (44,059) -
Net loss for the year ended
December 31, 1988 - - - (98,275)
------------- ------------ ------------ -------------
Balance, December 31, 1988 2,952,083 2,952 167,594 (99,443)
Net loss for the year ended
December 31, 1989 - - - (39,018)
------------- ------------ ------------ -------------
Balance, December 31, 1989 2,952,083 $ 2,952 $ 167,594 $ (138,461)
------------- ------------ ------------ -------------
The accompanying notes are an integral part of these financial statements
6
</TABLE>
<PAGE> 21
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on December 31, 1985 through December 31, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1989 2,952,083 $ 2,952 $ 167,594 $ (138,461)
Assets distributed to shareholders - - (15,632) -
Net loss for the year ended
December 31, 1990 - - - (17,153)
------------- ------------ ------------ -------------
Balance, December 31, 1990 2,952,083 2,952 151,962 (155,614)
Net loss for the year ended
December 31, 1991 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1991 2,952,083 2,952 151,962 (155,714)
Net loss for the year ended
December 31, 1992 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1992 2,952,083 2,952 151,962 (155,814)
Net loss for the year ended
December 31, 1993 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1993 2,952,083 2,952 151,962 (155,914)
Net loss for the year ended
December 31, 1994 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1994 2,952,083 2,952 151,962 (156,014)
Net loss for the year ended
December 31, 1995 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1995 2,952,083 2,952 151,962 (156,114)
Net loss for the year ended
December 31, 1996 - - - (452)
------------- ------------ ------------ -------------
Balance, December 31, 1996 2,952,083 $ 2,952 $ 151,962 $ (156,566)
------------- ------------ ------------ -------------
The accompanying notes are an integral part of these financial statements.
</TABLE> 7
<PAGE> 22
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
From Inception on December 31, 1985 through December 31, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 2,952,083 $ 2,952 $ 151,962 $ (156,566)
December 2, 1997 shares issued to
officers at $0.03 per share for
services 3,000,000 3,000 87,000 -
Net loss for the year ended
December 31, 1997 - - - (90,669)
------------- ------------ ------------ -------------
Balance, December 31, 1997 5,952,083 5,952 238,962 (247,235)
January 12, 1998 shares issued
for cash at $0.03 per share 1,116,667 1,117 32,382 -
March 10, 1998 shares issued for
cash at $0.03 per share 416,667 417 12,084 -
Net loss for the year ended
December 31, 1998 - - - (5,785)
------------- ------------ ------------ -------------
Balance, December 31, 1998 7,485,417 $ 7,486 $ 283,428 $ (253,020)
============= ============ ============ =============
The accompanying notes are an integral part of these financial statements.
8
</TABLE>
<PAGE> 23
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
December 31,
For the Years Ended 1985 through
December 31, December 31,
1998 1997 1998
-------------- -------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,785) $ (90,669) $ (253,020)
Adjustments to reconcile net loss to
net cash used by operating activities:
Stock for services - 90,000 90,000
Change in operating assets and liabilities:
Accounts payable - - 2,221
Increase in taxes payable - 669 100
-------------- -------------- -------------
Net Cash (Used) by Operating Activities (5,785) - (160,699)
-------------- -------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
-------------- -------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net stock offering proceeds 46,000 - 200,914
-------------- -------------- -------------
Net Cash Provided by Financing Activities 46,000 - 200,914
-------------- -------------- -------------
INCREASE IN CASH 40,215 - 40,215
CASH AT BEGINNING OF PERIOD - - -
-------------- -------------- -------------
CASH AT END OF PERIOD $ 40,215 $ - $ 40,215
============== ============== =============
CASH PAID FOR:
Taxes $ - $ - $ -
Interest $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
9
</TABLE>
<PAGE> 24
LAZARUS INDUSTRIES, INC.
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Lazarus Industries, Inc. was incorporated under the laws for the State of
Utah on December 31, 1985. The Company was incorporated for the purpose of
engaging in the business of developing, manufacturing and marketing
proprietary medical devices. In 1991, the Company discontinued its
operations, and liquidated its assets leaving the Company dormant until 1996
when the Company began its operations again.
b. Provision for Taxes
At December 31, 1998, the Company had net operating loss carryforwards of
approximately $253,000 that may be offset against future taxable income
through 2013. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of
the net operating loss carryforwards are offset by a valuation allowance of
the same amount
c. Accounting Method
The financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end.
d. 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
disclosure of contingent assets and 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.
e. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
f. Basic Loss Per Share
Basic loss per share has been calculated based on the weighted average
number of shares of common stock outstanding during the period.
NOTE 2 - DISCONTINUED OPERATIONS
On March 29, 1988, Gaslight, Inc. (Registrant) consummated an exchange
agreement (the "Exchange Agreement"), with Lazarus and the shareholders of
Lazarus providing for the acquisition of Lazarus as a wholly-owned subsidiary
of the Registrant.
10
<PAGE> 25
LAZARUS INDUSTRIES, INC.
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
NOTE 2 - DISCONTINUED OPERATIONS (Continued)
Under the terms of the Exchange Agreement, the Registrant was required to
call and convene a meeting of its stockholders for the purpose of submitting
to its stockholders for approval proposals for a 25-to-1 reverse stock split
or share consolidation of the 19,000,000 shares of the Registrant's common
stock issued and outstanding at March 18, 1988; approval of the Exchange
Agreement, amendment of the Registrant's Articles of Incorporation to change
its name to "Lazarus Industries, Inc." and the election of five designees of
Lazarus to the Board of Directors of the Registrant. In connection with the
acquisition of Lazarus, the Registrant issued 2,036,800 post-split shares of
its restricted common stock, par value $0.001 to the stockholders of Lazarus
in exchange for all the issued and outstanding capital stock of Lazarus.
Consequently, Lazarus became a wholly-owned subsidiary of the Registrant.
NOTE 3 - RELATED-PARTY TRANSACTIONS
The Company's president paid expenses out of pocket which created a
payable to him of approximately $2,200. No terms have been made on the
payable. The payable is included in accounts payable.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using 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. The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. Management
intends to seek a merger with an existing, operating company, in the interim
it has committed to meeting the Company's minimal operating expenses.
<PAGE> 26
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
June 30, December 31,
1999 1998
-------------- --------------
(Unaudited)
CURRENT ASSETS
Cash $ 37,885 $ 40,215
-------------- --------------
Total Current Assets 37,885 40,215
-------------- --------------
TOTAL ASSETS $ 37,885 $ 40,215
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,612 $ -
Accounts payable - related party
(Note 3) 2,221 2,221
Taxes payable 100 100
-------------- --------------
Total Current Liabilities 3,933 2,321
-------------- --------------
STOCKHOLDERS' EQUITY
Common stock 50,000,000 shares authorized,
at $0.001 par value; 7,485,417 shares
issued and outstanding 7,486 7,486
Additional paid-in capital 283,428 283,428
Deficit accumulated during the
development stage (256,962) (253,020)
-------------- --------------
Total Stockholders' Equity 33,952 37,894
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 37,885 $ 40,215
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE> 27
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the For the December 31,
Three Months Ended Six Months Ended 1985 Through
June 30, June 30, June 30,
1999 1998 1999 1998 1999
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
EXPENSES
General and administrative 2,362 2,693 4,597 6,172 103,583
------------- ------------ ------------ ------------- -------------
Total Expenses 2,362 2,693 4,597 6,172 103,583
------------- ------------ ------------ ------------- -------------
Loss from Operations (2,362) (2,693) (4,597) (6,172) (103,583)
------------- ------------ ------------ ------------- -------------
OTHER INCOME
(EXPENSE)
Interest income 341 - 655 - 1,535
Loss from discontinued
operations - - - - (154,914)
------------- ------------ ------------ ------------- -------------
Total Other Income
(Expense) 341 - 655 - (153,379)
------------- ------------ ------------ ------------- -------------
NET LOSS $ (2,021) $ (2,693) $ (3,942) $ (6,172) $ (256,962)
============= ============ ============ ============= =============
BASIC LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============= ============ ============ =============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 28
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on December 31, 1985 through June 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1985 - $ - $ - $ -
Shares issued for cash at $0.002 160,000 160 7,840 (433)
Shares issued through public
offering at $0.01 per share 555,523 556 138,325 -
Capital contributed by shareholders - - 54,077 -
Net loss from inception on
December 31, 1995 through
December 31, 1987 - - - (735)
------------- ------------ ------------ -------------
Balance, December 31, 1987 715,523 716 200,242 (1,168)
Shares issued to public at $0.01
per share 44,480 44 11,086 -
Shares issued in acquisition of
wholly- owned subsidiary at
$0.001 per share 2,036,800 2,037 - -
Shares issued for finders fee
at $0.001 per share 152,000 152 - -
Shares issued to public at
$0.10 per share for cash 3,280 3 325 -
Public offering costs - - (44,059) -
Net loss for the year ended
December 31, 1988 - - - (98,275)
------------- ------------ ------------ -------------
Balance, December 31, 1988 2,952,083 2,952 167,594 (99,443)
Net loss for the year ended
December 31, 1989 - - - (39,018)
------------- ------------ ------------ -------------
Balance, December 31, 1989 2,952,083 $ 2,952 $ 167,594 $ (138,461)
------------- ------------ ------------ -------------
The accompanying notes are an integral part of the financial statements
</TABLE>
<PAGE> 29
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on December 31, 1985 through June 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1989 2,952,083 $ 2,952 $ 167,594 $ (138,461)
Assets distributed to shareholders - - (15,632) -
Net loss for the year ended
December 31, 1990 - - - (17,153)
------------- ------------ ------------ -------------
Balance, December 31, 1990 2,952,083 2,952 151,962 (155,614)
Net loss for the year ended
December 31, 1991 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1991 2,952,083 2,952 151,962 (155,714)
Net loss for the year ended
December 31, 1992 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1992 2,952,083 2,952 151,962 (155,814)
Net loss for the year ended
December 31, 1993 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1993 2,952,083 2,952 151,962 (155,914)
Net loss for the year ended
December 31, 1994 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1994 2,952,083 2,952 151,962 (156,014)
Net loss for the year ended
December 31, 1995 - - - (100)
------------- ------------ ------------ -------------
Balance, December 31, 1995 2,952,083 2,952 151,962 (156,114)
Net loss for the year ended
December 31, 1996 - - - (452)
------------- ------------ ------------ -------------
Balance, December 31, 1996 2,952,083 $ 2,952 $ 151,962 $ (156,566)
------------- ------------ ------------ -------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 30
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
From Inception on December 31, 1985 through June 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 2,952,083 $ 2,952 $ 151,962 $ (156,566)
December 2, 1997 shares issued to
officers at $0.03 per share for
services 3,000,000 3,000 87,000 -
Net loss for the year ended
December 31, 1997 - - - (90,669)
------------- ------------ ------------ -------------
Balance, December 31, 1997 5,952,083 5,952 238,962 (247,235)
January 12, 1998 shares issued
for cash at $0.03 per share 1,116,667 1,117 32,382 -
March 10, 1998 shares issued for
cash at $0.03 per share 416,667 417 12,084 -
Net loss for the year ended
December 31, 1998 - - - (5,785)
------------- ------------ ------------ -------------
Balance, December 31, 1998 7,485,417 $ 7,486 $ 283,428 $ (253,020)
Net loss for the six months ended
June 30, 1999 (unaudited) - - - (3,942)
------------- ------------ ------------ -------------
Balance, June 30, 1999 (unaudited) 7,485,417 $ 7,486 $ 283,428 $ (256,962)
============= ============ ============ =============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 31
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the For the December 31,
Three Months Ended Six Months Ended 1985 Through
June 30, June 30, June 30,
1999 1998 1999 1998 1999
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) $ (2,021) $ (2,693) $ (3,942) $ (6,172) $ (256,962)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Stock issued for services - - - - 90,000
Changes in operating assets
and liabilities:
Increase in accounts payable 1,612 - 1,612 - 3,833
Increase in taxes payable - - - - 100
------------- ------------ ------------ ------------- -------------
Net Cash Provided (Used)
by Operating Activities (409) (2,693) (2,330) (6,172) (163,029)
------------- ------------ ------------ ------------- -------------
CASH FLOWS FROM
INVESTING ACTIVITIES - - - - -
------------- ------------ ------------ ------------- -------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Net stock offering proceeds - - - 46,000 200,914
------------- ------------ ------------ ------------- -------------
Net Cash Provided (Used)
by Financing Activities $ - $ - $ - $ 46,000 $ 200,914
------------- ------------ ------------ ------------- -------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 32
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the For the December 31,
Three Months Ended Six Months Ended 1985 Through
June 30, June 30, June 30,
1999 1998 1999 1998 1999
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN CASH $ (409) $ (2,693) $ (2,330) $ 39,828 $ 37,885
CASH AT BEGINNING OF PERIOD 38,294 42,521 40,215 - -
------------- ------------ ------------ ------------- -------------
CASH AT END OF PERIOD $ 37,885 $ 39,828 $ 37,885 $ 39,828 $ 37,885
============= ============ ============ ============= =============
SUPPLEMENTAL CASH FLOW
INFORMATION
Cash paid for interest $ - $ - $ - $ - $ -
Cash paid for taxes $ - $ - $ - $ - $ -
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 33
LAZARUS INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999 and December 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Lazarus Industries, Inc. was incorporated under the laws for the State of
Utah on December 31, 1985. The Company was incorporated for the purpose of
engaging in the business of developing, manufacturing and marketing
proprietary medical devices. In 1991, the Company discontinued its
operations, and liquidated its assets leaving the Company dormant until 1996
when the Company began its operations again.
b. Provision for Taxes
At June 30, 1999, the Company had net operating loss carryforwards of
approximately $257,000 that may be offset against future taxable income
through 2014. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of
the net operating loss carryforwards are offset by a valuation allowance of
the same amount
c. Accounting Method
The financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end.
d. 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
disclosure of contingent assets and 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.
e. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
f. Basic Loss Per Share
Basic loss per share has been calculated based on the weighted average
number of shares of common stock outstanding during the period.
g. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. Such adjustments are of a normal recurring nature.
<PAGE> 34
LAZARUS INDUSTRIES, INC.
Notes to Consolidated Financial Statements
June 30, 1999 and December 31, 1998
NOTE 2 - DISCONTINUED OPERATIONS
On March 29, 1988, Gaslight, Inc. (Registrant) consummated an exchange
agreement (the "Exchange Agreement"), with Lazarus and the shareholders of
Lazarus providing for the acquisition of Lazarus as a wholly-owned subsidiary
of the Registrant.
Under the terms of the Exchange Agreement, the Registrant was required to
call and convene a meeting of its stockholders for the purpose of submitting
to its stockholders for approval proposals for a 25-to-1 reverse stock split
or share consolidation of the 19,000,000 shares of the Registrant's common
stock issued and outstanding at March 18, 1988; approval of the Exchange
Agreement, amendment of the Registrant's Articles of Incorporation to change
its name to "Lazarus Industries, Inc." and the election of five designees of
Lazarus to the Board of Directors of the Registrant. In connection with the
acquisition of Lazarus, the Registrant issued 2,036,800 post-split shares of
its restricted common stock, par value $0.001 to the stockholders of Lazarus
in exchange for all the issued and outstanding capital stock of Lazarus.
Consequently, Lazarus became a wholly-owned subsidiary of the Registrant.
NOTE 3 - RELATED-PARTY TRANSACTIONS
The Company's president paid expenses out of pocket which created a
payable to him of approximately $2,200. No terms have been made on the
payable. The payable is included in accounts payable.
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using 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. The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. Management
intends to seek a merger with an existing, operating company, in the interim
it has committed to meeting the Company's minimal operating expenses.
Exhibit 1 (Ex 3.1)
ARTICLES OF INCORPORATION
OF
GASLIGHT, INC.
We, the undersigned, natural persons being more than eighteen years
of age, acting as incorporators of a corporation pursuant to the provisions of
the Utah Business Corporation Act, do hereby adopt the following Articles of
Incorporation for such corporation:
ARTICLE I
NAME
The name of the corporation hereby created shall be:
GASLIGHT, INC.
ARTICLE II
DURATION
1. The purposes for which the corporation is to obtain loan and/or
equity financing for clients engaged in any business which may have potential
for profit. This loan and/or equity financing will be obtained from banks,
life insurance companies and other financial organizations.
2. To be involved in investing and/or management.
3. To engage in any other act and activity for which corporations may be
organized under the State of Utah.
ARTICLE IV
CAPITALIZATION
The Corporation shall have authority to issue 50,000,000 (fifty million)
shares of stock each having a par value of one-tenth of one cent ($0.001).
All stock of the Corporation shall be of the same class and shall have the
same rights and preferences. Fully paid stock of this Corporation shall not
be liable for further call or assessment. The authorized trading shares shall
be issued at the discretion of the Directors.
E-1
<PAGE>
ARTICLE V
PAID IN CAPITAL
The Corporation shall not commence business until value of the least
$1,000 has been received by it as consideration for the issuance of its
shares.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation shall indemnify any and all persons who may serve or who
have served at any time as Directors or officers or who at the request of the
Board of Directors of the Corporation may serve or at any time have served as
directors or officers of another corporation in which the Corporation at such
time owned or may own shares of stock or of which it was or may be a creditor,
and their respective heirs, administrators, successors and assigns, against
any and all expenses, including amounts paid upon judgements, counsel fees and
amounts paid in settlement (before or after suit is commenced), actually and
necessarily by such persons in connection with the defense or settlement of
any claim, action, suit or proceeding in which they, or any of them, are made
parties or a party, or which may be asserted against them or any of them, by
reason of being or having been directors or officers of the Corporation, or of
such other corporation, except in relation to matters as to which any such
director or officer of the Corporation or of such other corporation, or former
director or officer or person shall be adjudged in any action, suit or
proceeding to be liable, for his own negligence or misconduct in the
performance of his duty. Such indemnification shall be in addition to any
other rights to which those indemnified may be entitled under any law, by law,
agreement, vote of stockholders, or otherwise.
ARTICLE VII
OFFICERS AND DIRECTORS CONTRACTS
No contract or other transaction between this corporation and any other
firm or corporation shall be affected by the fact that a Director or officer
of this Corporation has an interest in, or is a director or officer of such
firm or other corporation. Any officer or Director, individually or with
others, may be a party to, or may have an interest in, any transaction of this
Corporation or any transaction in which this Corporation is a party or has an
interest. Each person who is now or may become an officer or director of this
Corporation is hereby relieved from liability that he might otherwise obtain
in the event such officer or director contracts with this Corporation for the
benefit of himself or any firm or other corporation in which he may have an
interest, provided such officer or Director acts in good faith.
E-2
<PAGE>
ARTICLE VIII
REGISTERED OFFICE AND AGENT
The address of the initial registered officer of the Corporation and
its mutual registered agents at such address is:
Lynn G. Westlund
2889 So. Main, Suite 200
Salt Lake City, Utah 84115
ARTICLE IX
DIRECTORS
The Corporation shall have not less than three (3) nor more than nine (9)
directors as determined, from time to time, by the Board of Directors. The
Corporation shall have not less than three (3) persons. The name and
addresses of the persons who are to serve as directors until the first annual
meeting of shareholders and until their successors are elected and shall
qualify are as follows:
Henry Gullion III 742 Sheringham Ct.
Farmington, Utah
Lynn G. Westlund P.O. Box 15365
Salt Lake City, Utah 84115
Dr. Brent H. Craven 195 East Gentile
Layton, Utah 84041
ARTICLE XI
PRE-EMPTIVE RIGHTS
There shall be no pre-emptive rights to acquire unissued and/or treasury
shares of the stock of the Corporation.
ARTICLE XII
VOTING OF SHARES
Each outstanding share of common stock of the Corporation shall be
entitled to one vote on each matter submitted to a vote at the meeting of the
stockholders. Each stockholder shall be
E-3
<PAGE>
entitled to vote his or its shares in person or by proxy, executed in writing
by such stockholders, or by his duly authorized attorney-in-fact. At each
election of Directors, every stockholder entitled to vote in such election
shall have the right to vote, in person or by proxy, the number of shares
owned by him or it for as many persons as there are Directors to be elected
and for whose election he or it has the right to vote, but the shareholder
shall have no right to accumulate his or its votes with regard to such
election.
ARTICLE XIII
AMENDMENTS
These articles may be amended without notice at any annual meeting of the
stockholders or at any special meeting called for that purpose by a vote of
the majority of the stock duly represented and entitled to vote at such a
meeting.
ARTICLE XIV
COMPENSATION
The compensation to be paid to the officers and directors will be fixed
by the Board of Directors and the Board of Directors is hereby authorized to
make provisions for reasonable compensation to its Directors and officers for
their services and to provide reimbursement for expenses incurred in
performing services as required. Any Director may also serve the Corporation
in any other capacity.
ARTICLE XV
LIABILITIES
The Directors, officers and stockholders of the Corporation should not be
liable for the debts or obligations of the Corporation.
ARTICLE XVI
SIMILAR BUSINESS
The Director, officer, stockholder shall have the right to engage in a
similar business to that of the Corporation so long as they do not violate any
trust imposed upon them in the course of performing their duties when acting
for the Corporation.
E-4
<PAGE>
STATE OF UTAH )
) ss.
COUNTY OF UTAH )
On the 30th day of December, 1985, personally appeared before me HENRY
GULLION, III, LYNN G. WESTLUND AND DR. BRENT H. CRAVEN who acknowledged to me
that they are the persons who signed the foregoing Articles of Incorporation
as incorporators and that they have read the foregoing Articles of
Incorporation and know the contents thereof, and that the same is true of
their knowledge as to those matters upon which they operate on information and
belief, and as to those matters believe them to be true.
/s/ Henry Gullion, III
----------------------
HENRY GULLION, III
/s/ Lynn G. Westlund
------------------------
LYNN G. WESTLUND
/s/ Dr. Brent H. Craven
--------------------------
DR. BRENT H. CRAVEN
SUBSCRIBED AND SWORN TO before me this 30th day of December, 1985.
/s/ Nadine Kee
------------------
NOTARY PUBLIC
Residing at:
My Commission Expires:
7/9/88
E-5
<PAGE>
ARTICLES OF AMENDMENT
TO ARTICLES OF INCORPORATION
OF
GASLIGHT, INC.
(changed herein to "LAZARUS INDUSTRIES, INC.")
In accordance with Section 16-10-57 of the Utah Code Annotated, 1953, as
amended, Gaslight, Inc. (the "Corporation"), a Utah corporation, does hereby
adopt the following amendment (the "Amendment") to the Articles of
Incorporation.
1. The Articles of Incorporation of the Corporation are hereby
amended by deleting Article I in its entirety and inserting the following in
lieu thereof:
The name of the Corporation hereby created shall be:
LAZARUS INDUSTRIES, INC.
2. Except as specifically provided herein, the provisions of the
Corporation's Articles of Incorporation shall remain unamended and shall
continue in full force and effect.
3. By execution of this Amendment to the Articles of Incorporation,
the president and secretary of said Corporation do hereby certify that the
foregoing Amendment to the Articles of Incorporation was adopted as an
Amendment to the original Articles of Incorporation of Gaslight, Inc., by the
shareholders of said Corporation pursuant to a special meeting of the
shareholders of the Corporation held on March 30, 1988. As of March 16, 1988,
the record date for such meeting, there was a total of 19,000,000 shares of
the Corporation's common stock issued and outstanding, of which 10,886,600
shares voted for the adoption of this Amendment to the Articles of
Incorporation, and no shares were voted against the Amendment.
DATED this 30th day of March, 1988.
GASLIGHT, INC.
ATTEST:
/s/ Don A. Stringham, Secretary By /s/ Harrison M. Lazarus
- -------------------------------- ---------------------------
Don A. Stringham, Secretary Harrison M. Lazarus, President
E-6
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
The undersigned, Harrison M. Lazarus and Don A. Stringham, being first
duly sworn, depose and say:
That they have executed the foregoing Amendment to the Articles of
Incorporation of Gaslight, Inc. for and on behalf of such corporation; that
they are the president and secretary, respectively, of such corporation; and
to the best of their knowledge, information, and belief, the statements made
in such Amendment to the Articles of Incorporation are true.
/s/ Harrison M. Lazarus
----------------------
HARRISON M. LAZARUS
/s/ Don A. Stringham
-----------------------
DON A. STRINGHAM
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 30th day of March, 1988, before me, the undersigned, a notary
public, personally appeared Harrison M. Lazarus and Don A. Stringham, known to
me to the be president and secretary, respectively, of Gaslight, Inc., and
acknowledged to me that the foregoing Amendment to the Articles of
Incorporation was signed on behalf of said corporation by authority of a
resolution of its board of directors and duly acknowledged to me that said
corporation executed the same.
WITNESS MY HAND AND OFFICIAL SEAL.
/s/
---------------------------------
NOTARY PUBLIC
Residing in Salt Lake
My Commission Expires:
5/25/88
E-7
Exhibit 2 (Ex 3.2)
BYLAWS
OF
LAZARUS INDUSTRIES, INC.
A UTAH CORPORATION
<PAGE> E-8
TABLE OF CONTENTS
Page
ARTICLE I OFFICES 1
Section 1.01 Registered Off 1
Section 1.02 Locations of Offices 1
ARTICLE II SHAREHOLDERS 1
Section 2.01 Annual Meeting 1
Section 2.02 Special Meeting 1
Section 2.03 Place of Meetings 1
Section 2.04 Notice of Meetings 2
Section 2.05 Waiver of Notice 2
Section 2.06 Fixing Record Date 2
Section 2.07 Voting Lists 2
Section 2.08 Quorum 2
Section 2.09 Vote Required 3
Section 2.10 Voting of Stock 3
Section 2.11 Proxies 3
Section 2.12 Written Consent to Action by Stockholders 3
ARTICLE III DIRECTORS 4
Section 3.01 Number, Term, and Qualifications 4
Section 3.02 Vacancies and Newly Created Directorships 4
Section 3.03 General Powers 4
Section 3.04 Regular Meetings 4
Section 3.05 Special Meetings 4
Section 3.06 Meetings by Telephone Conference Call 4
Section 3.07 Notice 4
Section 3.08 Quorum 5
Section 3.09 Manner of Acting 5
Section 3.10 Compensation 5
Section 3.11 Presumption of Assent 5
Section 3.12 Resignations 5
Section 3.13 Written Consent to Action by Directors 5
Section 3.14 Removal 5
ARTICLE IV OFFICERS 6
Section 4.01 Number 6
Section 4.02 Election, Term of Office, and Qualification 6
Section 4.03 Subordinate Officers, Etc. 6
Section 4.04 Resignation 6
i
<PAGE>
Section 4.05 Removal 6
Section 4.06 Vacancies and Newly Created Offices 6
Section 4.07 The Chairman of the Board 6
Section 4.08 The President 7
Section 4.09 The Vice Presidents 7
Section 4.10 The Secretary 7
Section 4.11 The Treasurer 8
Section 4.12 General Manager 9
Section 4.13 Salaries 9
Section 4.14 Surety Bonds 9
ARTICLE V EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS 9
Section 5.01 Execution Instruments 9
Section 5.02 Loans 10
Section 5.03 Deposits 10
Section 5.04 Checks, Drafts, Etc. 10
Section 5.05 Bonds and Debentures 10
Section 5.06 Sale, Transfer, Etc. of Securities 10
Section 5.07 Proxies 10
ARTICLE VI CAPITAL SHARES 10
Section 6.01 Stock Certificates 10
Section 6.02 Transfer of Stock 11
Section 6.03 Regulations 11
Section 6.04 Maintenance of Stock Ledger at Principal
Place of Business 11
Section 6.05 Transfer Agents and Registrars 11
Section 6.06 Closing of Transfer Books and Fixing of Record
Date 11
Section 6.07 Lost or Destroyed Certificates 12
ARTICLE VII EXECUTIVE COMMITTEE AND OTHER COMMITTEES 12
Section 7.01 How Constituted 12
Section 7.02 Powers 12
Section 7.03 Proceedings 12
Section 7.04 Quorum and Manner of Acting 12
Section 7.05 Resignations 13
Section 7.06 Removal 13
Section 7.07 Vacancies 13
Section 7.08 Compensation 13
ii
<PAGE>
ARTICLE VIII INDEMNIFICATION, INSURANCE, AND OFFICER
AND DIRECTOR CONTRACTS 13
Section 8.01 Indemnification: Third Party Actions 13
Section 8.02 Indemnification: Corporate Actions 13
Section 8.03 Determination 14
Section 8.04 Advances 14
Section 8.05 Scope of Indemnification 14
Section 8.06 Insurance 14
Section 8.07 Officer and Director Contracts 15
ARTICLE IX FISCAL YEAR 15
ARTICLE X DIVIDENDS 15
ARTICLE XI AMENDMENTS 15
CERTIFICATE OF SECRETARY 16
<PAGE> iii
BYLAWS
OF
LAZARUS INDUSTRIES, INC.
ARTICLE I
OFFICES
Section 1.01 Registered Office. The registered office shall be in
the city of Salt Lake, county of Salt Lake, state of Utah.
Section 1.02 Locations of Offices. The corporation may also have
offices at such other places both within and without the state of Utah as the
board of directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
STOCKHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the stockholders
shall be held on the second Tuesday of the third month following the
anniversary of incorporation or at such other time designated by the board of
directors and as is provided for in the notice of the meeting, provided, that
whenever such date falls on a legal holiday, the meeting shall be held on the
next succeeding business day, beginning with the year following the filing of
the articles of incorporation, for the purpose of electing directors and for
the transaction of such other business as may come before the meeting. If the
election of directors shall not be held on the day designated herein for the
annual meeting of the stockholders, or at any adjournment thereof, the board
of directors shall cause the election to be held at a special meeting of the
stockholders as soon thereafter as may be convenient.
Section 2.02 Special Meetings. Special meetings of the stockholders
may be called at any time by the chairman of the board, the president, or by
the board of directors, or in their absence or disability, by a vice
president, or by the secretary, upon the written request of the holders of not
less than one-tenth of all the shares entitled to vote at the meeting, such
written request to state the purpose or purposes of the meeting and to be
delivered to the president or secretary. In case of failure to call such
meeting within 90 days after such request, the stockholder requesting stock
may call the same.
Section 2.03 Place of Meetings. The board of directors may designate
any place, either within or without the state of incorporation, as the place
of meeting for any annual meeting or for any special meeting called by the
board of directors. A waiver of notice signed by all stockholders entitled to
vote at a meeting may designate any place, either within or without the state
of incorporation, as the place for the holding of such meeting. If no
designation is made, the place of meeting shall be at the principal office of
the corporation.
Section 2.04 Notice of Meetings. The secretary or assistant
secretary, if any, shall cause notice of the time, place and purpose or
purposes of all meetings of the stockholders (whether annual or special), to
1
<PAGE>
be mailed at least ten days, but not more than fifty days, prior to the
meeting, to each stockholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any stockholder may waive notice of
any meeting of stockholders (however called or noticed, whether or not called
or noticed and whether before, during, or after the meeting), by signing a
written waiver of notice or a consent to the holding of such meeting, or an
approval of the minutes thereof. Attendance at a meeting, in person or by
proxy, shall constitute waiver of all defects of notice regardless of whether
waiver, consent, or approval is signed or any objections are made, unless
attendance is solely for the purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not
lawfully called or convened. All such waivers, consents, or approvals shall
be made a part of the minutes of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in
writing without a meeting, or stockholders entitled to receive payment of any
dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect to any change, conversion, or exchange of
stock, or for the purpose of any other lawful action, the board of directors
may fix in advance a date as the record date for any such determination of
stockholders, such date in any case to be not more than fifty days and, in
case of a meeting of stockholders, not less than ten days prior to the date on
which the particular action requiring such determination of stockholders is to
be taken. If no record date is fixed for the determination of stockholders
entitled to notice of or to vote at a meeting, the day preceding the date on
which notice of the meeting is mailed shall be the record date. For any other
purpose, the record date shall be the close of business on the date on which
the resolution of the board of directors pertaining thereto is adopted. When
a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this section, such determination
shall apply to any adjournment thereof. Failure to comply with this section
shall not affect the validity of any action taken at a meeting of
stockholders.
Section 2.07 Voting Lists. The officers of the corporation shall
cause to be prepared from the stock ledger at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote
at such meeting or any adjournment thereof, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present. The
original stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section, or the books of the corporation, or to vote in person or by proxy at
any meeting of stockholders.
Section 2.08 Quorum. Stock representing one-half of the voting power
of all outstanding stock of the corporation entitled to vote, present in
person or represented by proxy, shall constitute a quorum at all meetings of
the stockholders for the transaction of business, except as otherwise provided
by statute or by the articles of incorporation. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present
or
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represented any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than 30
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder
or record entitled to vote at the meeting.
Section 2.09 Vote Required. When a quorum is present at any meeting,
the vote of the holders of stock having a majority of the voting power present
in person or represented by proxy shall decide any question brought before
such meeting, unless the question is one on which by express provision of the
statutes of the state of Utah or of the articles of incorporation a different
vote is required, in which case such express provision shall govern and
control the decision of such question.
Section 2.10 Voting of Stock. Unless otherwise provided in the
articles of incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of
the capital stock having voting power held by such stockholder, subject to the
modification of such voting rights of any class or classes of the
corporation's capital stock by the articles of incorporation.
Section 2.11 Proxies. At each meeting of the stockholders, each
shareholder entitled to vote shall be entitled to vote in person or by proxy,
provided, however, that the right to vote by proxy shall exist only in case
the instrument authorizing such proxy to act shall have been executed in
writing by the registered holder or holders of such stock, as the case may be,
as shown on the stock ledger of the corporation or by his attorney thereunto
duly authorized in writing. Such instrument authorizing a proxy to act shall
be delivered at the beginning of such meeting to the secretary of the
corporation or to such other officer or person who may, in the absence of the
secretary, be acting as secretary of the meeting. In the event that any such
instrument shall designate two or more persons to act as proxy, a majority of
such persons present at the meeting, or, if only one be present, that one
shall (unless the instrument shall otherwise provide) have all of the powers
conferred by the instrument upon all persons so designated. Persons holding
stock in a fiduciary capacity shall be entitled to vote the stock so held, and
the persons whose shares are pledged shall be entitled to vote, unless in the
transfer by the pledgor on the books of the corporation he shall have
expressly empowered the pledgee to vote thereon, in which case the pledgee, or
his proxy, may represent such stock and vote thereon. No proxy shall be voted
or acted on after 11 months from its date, unless the proxy provides for a
longer period.
Section 2.12 Written Consent to Action by Stockholders. Unless
otherwise provided in the articles of incorporation, any action required to be
taken at any annual or special meeting of stockholders of the corporation, or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice, and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by all of the holders of outstanding stock entitled to vote
with respect to the subject matter thereof.
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ARTICLE III
DIRECTORS
Section 3.01 Number, Term, and Qualifications. The number of
directors which shall constitute the whole board shall be not less than three
nor more than nine. Within the limits above specified, the number of
directors shall be determined by resolution of the board of directors or by
the stockholders at the annual meeting of the stockholders or a special
meeting called for such purpose, except as provided in section 3.02 of this
article, and each director elected shall hold office until his successor is
elected and qualified. Directors need not be residents of the state of
incorporation or stockholders of the corporation.
Section 3.02 Vacancies and Newly Created Directorships. Vacancies
and newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in
office, though less than a quorum, or by a sole remaining director, and the
directors so chosen shall hold office until the next annual election and until
their successors are duly elected and shall qualify. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute.
Section 3.03 General Powers. The business of the corporation shall
be managed under the direction of its board of directors which may exercise
all such powers of the corporation and do all such lawful acts and things as
are not by statute, the articles of incorporation, or bylaws directed or
required to be exercised or done by the stockholders.
Section 3.04 Regular Meetings. A regular meeting of the board of
directors shall be held without other notice than this bylaw immediately
following, and at the same place as, the annual meeting of shareholders. The
board of directors may provide by resolution, the time and place either within
or without the state of incorporation, for the holding of additional regular
meetings without other notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the board of
directors may be called by or at the request of the chairman of the board,
president, vice president or any two directors. The person or persons
authorized to call special meetings of the board of directors may fix any
place, either within or without the state of incorporation, as the place for
holding any special meeting of the board of directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the
board of directors may participate in a meeting of the board of directors or a
committee of the board of directors by means of conference telephone or
similar communication equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to
this section shall constitute presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given at
least five days prior thereto by written notice delivered personally or mailed
to each director at his regular business address or residence, or by telegram.
If mailed, such notice shall be deemed to be delivered when deposited in
United States mail so addressed, with postage thereon prepaid. If notice be
given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive notice
of any meeting. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where
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a director attends a meeting solely for the express purpose of objecting to
the transaction of any business because the meeting is not lawfully called or
convened.
Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the
board of directors, but if less than a majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
Section 3.09 Manner of Acting. The act of a majority of the
directors present at a meeting at which a quorum is present shall be the act
of the board of directors, and individual directors shall have no power as
such.
Section 3.10 Compensation. By resolution of the board of directors,
the directors may be paid their expenses, if any, of attendance at each
meeting of the board of directors, and may be paid a fixed sum for attendance
at each meeting of the board of directors or a stated salary as director. No
such payment shall preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
Section 3.11 Presumption of Assent. A director of the corporation
who is present at a meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting,
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof, or shall
forward such dissent by registered or certified mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
Section 3.12 Resignations. A director may resign at any time by
delivering a written resignation to either the president, a vice president,
the secretary or assistant secretary, if any. The resignation shall become
effective on its acceptance by the board of directors; provided, that if the
board has not acted thereon within ten days from the date presented, the
resignation shall be deemed accepted.
Section 3.13 Written Consent to Action by Directors. Any action
required to be taken at a meeting of the directors of the corporation or any
other action which may be taken at a meeting of the directors or of a
committee, may be taken without a meeting, if a consent in writing, setting
forth the action so taken, shall be signed by all of the directors, or all of
the members of the committee, as the case may be. Such consent shall have the
same legal effect as a unanimous vote of all the directors or members of the
committee.
Section 3.14 Removal. At a meeting expressly called for that
purpose, one or more directors may be removed by a vote of a majority of the
shares of outstanding stock of the corporation entitled to vote at an election
of directors.
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ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a
president, a secretary, a treasurer, and such other officers as may be
appointed by the board of directors, including, a chairman of the board, one
or more vice presidents, an assistant secretary, an assistant treasurer, or a
general manager.
Section 4.02 Election, Term of Office and Qualifications. The
officers shall be chosen by the board of directors annually at its annual
meeting. In the event of failure to choose officers at an annual meeting of
the board of directors, officers may be chosen at any regular or special
meeting of the board of directors. Each such officer (whether chosen at an
annual meeting of the board of directors to fill a vacancy or otherwise) shall
hold his office until the next ensuing annual meeting of the board of
directors and until his successor shall have been chosen and qualified, or
until his death or until his resignation or removal in the manner provided in
these bylaws. Any one person may hold any two or more of such offices except
that the president shall not also be the secretary. No person holding two or
more offices shall act in or execute any instrument in the capacity of more
than one office. The chairman of the board, if any, shall be and remain
director of the corporation during the term of his office. No other officer
need be a director.
Section 4.03 Subordinate Officers, Etc. The board of directors from
time to time may appoint such other officers or agents as it may deem
advisable, each of whom shall have such title, hold office for such period,
have such authority and perform such duties as the board of directors from
time to time may determine. The board of directors from time to time may
delegate to any officer or agent the power to appoint any such subordinate
officer or agents and to prescribe their respective titles, terms of office,
authorities and duties. Subordinate officers need not be stockholders or
directors.
Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the board of directors, the president, or
the secretary. Unless otherwise specified therein, such resignation shall
take effect upon delivery.
Section 4.05 Removal. Any officer may be removed from office at any
special meeting of the board of directors called for that purpose or at a
regular meeting, by the vote of a majority of the directors, with or without
cause. Any officer or agent appointed in accordance with the provisions of
section 4.03 hereof may also be removed, either with or without cause, by any
officer upon whom such power of removal shall have been conferred by the board
of directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy
shall occur in any office by reason of death, resignation, removal,
disqualification or any other cause, or if a new office shall be created, then
such vacancies or newly created offices may be filled by the board of
directors at any regular or special meeting.
Section 4.07 The Chairman of the Board. The chairman of the board,
if there by such an officer, shall have the following powers and duties:
(a) He shall preside at all stockholders' meetings;
(b) He shall preside at all meetings of the board of directors; and
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(c) He shall be a member of the executive committee, if any.
Section 4.08 The President. The president shall have the following
powers and duties:
(a) If no general manager has been appointed, he shall be the chief
executive officer of the corporation, and, subject to the direction of the
board of directors, shall have general charge of the business, affairs and
property of the corporation and general supervision over its officers,
employees and agents;
(b) If no chairman of the board has been chosen, or if such officer
is absent or disabled, he shall preside at meetings of the stockholders and
board of directors;
(c) He shall be a member of the executive committee, if any;
(d) He shall be empowered to sign certificates representing stock
of the corporation, the issuance of which shall have been authorized by the
board of directors; and
(e) He shall have all power and perform all duties normally
incident to the office of a president of a corporation and shall exercise such
other powers and perform such other duties as from time to time may be
assigned to him by the board of directors.
Section 4.09 The Vice President. The board of directors may, from
time to time, designate and elect one or more vice presidents, one of whom may
be designated to serve as executive vice president. Each vice president shall
have such powers and perform such duties as from time to time may be assigned
to him by the board of directors or the president. At the request or in the
absence or disability of the president, the executive vice president or, in
the absence or disability of the executive vice president, the vice president
designated by the board of directors or (in the absence of such designation by
the board of directors) by the president, as senior vice president, shall
perform all the duties of the president, and when so acting, shall have all
the powers of, and be subject to all the restrictions on, the president.
Section 4.10 The Secretary. The secretary shall have the following
powers and duties:
(a) He shall keep or cause to be kept a record of all of the
proceedings of the meetings of the stockholders and of the board of directors
in books provided for that purpose;
(b) He shall cause all notices to be duly given in accordance
with the provisions of these bylaws and as required by statute;
(c) He shall be the custodian of the records and of the seal of
the corporation, and shall cause such seal (or a facsimile thereof) to be
affixed to all certificates representing stock of the corporation prior to the
issuance thereof and to all instruments, the execution of which on behalf of
the corporation under its seal shall have been duly authorized in accordance
with these bylaws, and when so affixed he may attest the same;
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(d) He shall see that the books, reports, statements,
certificates and other documents and records required by statute are properly
kept and filed;
(e) He shall have charge of the stock ledger of the corporation and
cause the such books to be kept in such manner as to show at any time the
amount of the shares of the corporation of each class issued and outstanding,
the manner in which and the time when such stock was paid for, the names
alphabetically arranged and the addresses of the holders of record thereof,
the number of shares held by each holder and time when each became such holder
of record; and he shall exhibit at all reasonable times to any director, on
application, the original or duplicate stock ledger. He shall cause the stock
ledger referred to in section 6.04 hereof to be kept and exhibited at the
principal office of the corporation, or at such other place as the board of
directors shall determine, in the manner and for the purpose provided in such
section;
(f) He shall be empowered to sign certificates representing stock
of the corporation, the issuance of which shall have been authorized by the
board of directors; and
(g) He shall perform in general all duties incident to the office
of secretary and such other duties as are given to him by these bylaws or as
from time to time may be assigned to him by the board of directors or the
president.
Section 4.11 The Treasurer. The Treasurer shall have the following
powers and duties:
(a) He shall have charge and supervision over and be responsible
for the monies, securities, receipts and disbursements of the corporation;
(b) He shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the corporation
in such banks or trust companies or with such banks or other depositories as
shall be selected in accordance with section 5.03 hereof;
(c) He shall cause the monies of the corporation to be disbursed by
checks or drafts (signed as provided in section 5.04 hereof) drawn upon the
authorized depositories of the corporation, and cause to be taken and
preserved property vouchers for all monies disbursed;
(d) He shall render to the board of directors or the president,
whenever requested, a statement of the financial condition of the corporation
and of all of his transactions as treasurer, and render a full financial
report at the annual meeting of the stockholders, if called on to do so;
(e) He shall cause to be kept correct books of account of all the
business and transactions of the corporation and exhibit such books to any
directors on request during business hours;
(f) He shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements giving such
information as he may desire with respect to any and all financial
transactions of the corporation; and
(g) He shall perform in general all duties incident to the office
of treasurer and such other duties as are given to him by these bylaws or as
from time to time may be assigned to him by the board of directors or the
president.
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Section 4.12 General Manager. The board of directors may employ and
appoint a general manager who may, or may not, be one of the officers or
directors of the corporation. The general manager, if any, shall have the
following powers and duties:
(a) He shall be the chief executive officer of the corporation and,
subject to the directions of the board of directors, shall have general charge
of the business affairs and property of the corporation and general
supervision over its officers, employees and agents;
(b) He shall have the exclusive management of the business of the
corporation and of all of its dealings, but at all times subject to the
control of the board of directors;
(c) Subject to the approval of the board of directors or the
executive committee, if any, he shall employ all employees of the corporation,
or delegate such employment to subordinate officers, or such division chiefs,
and shall have authority to discharge any person so employed; and
(d) He shall make a report to the president and directors
quarterly, or more often if required to do so, setting forth the result of the
operations under his charge, together with suggestions looking to the
improvement and betterment of the condition of the corporation, and shall
perform such other duties as the board of directors shall require.
Section 4.13 Salaries. The salaries or other compensation of the
officers of the corporation shall be fixed from time to time by the board of
directors except that the board of directors may delegate to any person or
group of persons the power to fix the salaries or other compensation of any
subordinate officers or the agents appointed in accordance with the provision
of section 4.03 hereof. No officer shall be prevented from receiving any such
salary or compensation by reason of the fact that he is also a director of the
corporation.
Section 4.14 Surety Bonds. In case the board of directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the board
of directors may direct, conditioned upon the faithful performance of his
duties to the corporation, including responsibility for negligence and for the
accounting of all property, monies or securities of the corporation which may
come into his hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation
contained in the articles of incorporation or these bylaws, the president or
any vice president or the general manager, if any, may, in the name and on
behalf of the corporation, execute and deliver any contract or other
instrument authorized in writing by the board of directors. The board of
directors may, subject to any limitation contained in the articles of
incorporation or in these bylaws, authorize in writing any officer or agent to
execute and deliver any contract or other instrument in the name and on behalf
of the corporation; any such authorization may be general or confined to
specific instances.
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Section 5.02 Loans. No loan or advance shall be contracted on behalf
of the corporation, no negotiable paper or other evidence of its obligation
under any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred or conveyed
as security for the payment of any loan, advance, indebtedness or liability of
the corporation, unless and except as authorized by the board of directors.
Any such authorization may be general or confined to specific instances.
Section 5.03 Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such banks or
trust companies or with such bankers or other depositories as the board of
directors may select, or as from time to time may be selected by any officer
or agent authorized to do so by the board of directors.
Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances,
checks, endorsements, and, subject to the provisions of these bylaws,
evidences of indebtedness of the corporation shall be signed by such officer
or officers or such agent or agents of the corporation and in such manner as
the board of directors from time to time may determine. Endorsements for
deposit to the credit of the corporation in any of its duly authorized
depositories shall be in such manner as the board of directors from time to
time may determine.
Section 5.05 Bonds and Debentures. Every bond and debenture issued
by the corporation shall be evidenced by an appropriate instrument which shall
be signed by the president or a vice president and by the secretary and sealed
with the seal of the corporation. The seal may be a facsimile, engraved or
printed. Where such bond or debenture is authenticated with the manual
signature of an authorized officer of the corporation or other trustee
designated by the indenture of trust or other agreement under which such
security is issued, the signature of any of the corporation's officers named
thereon may be a facsimile. In case any officer who signed, or whose
facsimile signature has been used on any such bond or debenture, shall cease
to be an officer of the corporation for any reason before the same has been
delivered by the corporation, such bond or debenture may nevertheless be
adopted by the corporation and issued and delivered as though the person who
signed it or whose facsimile signature has been used thereon had not ceased to
be such officer.
Section 5.06 Sale, Transfer, Etc. of Securities. Sales, transfers,
endorsements and assignments of shares, bonds and other securities owned by or
standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to
any such sale, transfer, endorsement or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by any
officer or agent thereunto authorized by the board of directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of
other corporations owned by or standing in the name of the corporation shall
be executed and delivered on behalf of the corporation by the president or any
vice president and the secretary or assistant secretary of the corporation, or
by any officer or agent thereunder authorized by the board of directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by the president
or any vice president and the secretary or assistant secretary, and sealed
with the seal (which may be a facsimile, engraved or printed) of the
corporation, certifying the number and kind, class or series of stock owned by
him in the corporation; provided, however, that where such a certificate is
countersigned by (a) a transfer agent or any assistant transfer agent, or (b)
registered by a registrar, the
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signature of any may be a facsimile. In case any officer who shall have
signed, or whose facsimile signature or signatures shall have been used on any
such certificate, shall cease to be such officer of the corporation, for any
reason, before the delivery of such certificate by the corporation, such
certificate may nevertheless be adopted by the corporation and be issued and
delivered as though the person who signed it, or whose facsimile signature or
signatures shall have been used thereon, has not ceased to be such officer.
Certificates representing stock of the corporation shall be in such form as
provided by the statutes of the state of incorporation. There shall be
entered upon the stock books of the corporation at the time of issuance of
each stock, the number of the certificate issued, the name and address of the
person owning the stock represented thereby, the number and kind, class or
series of such stock and the date of issuance thereof. Every certificate
exchanged or returned to the corporation shall be marked "canceled" with the
date of cancellation.
Section 6.02 Transfer of Stock. Transfers of stock of the
corporation shall be made on the books of the corporation by the holder of
record thereof, or by his attorney thereunto duly authorized by a power of
attorney duly executed in writing and filed with the secretary of the
corporation or any of its transfer agents, and upon surrender of the
certificate or certificates, properly endorsed or accompanied by proper
instruments of transfer, representing such stock. Except as provided by law,
the corporation and transfer agents and registrars, if any, shall be entitled
to treat the holder of record of any stock as the absolute owner thereof for
all purposes, and accordingly shall not be bound to recognize any legal,
equitable or other claim to or interest in such stock on the part of any other
person whether or not it or they shall have express or other notice thereof.
Section 6.03 Regulations. Subject to the provisions of this section
6 and of the articles of incorporation, the board of directors may make such
rules and regulations as they may deem expedient concerning the issuance,
transfer, redemption and registration of certificates for stock of the
corporation.
Section 6.04 Maintenance of Stock Ledger at Principal Place of
Business. A stock ledger (or books where more than one kind, class or series
of stock is outstanding) shall be kept at the principal place of business of
the corporation, or at such other place as the board of directors shall
determine, containing the names alphabetically arranged of original
stockholders of the corporation, their addresses, their interest, the amount
paid on their shares, and all transfers thereof and the number and class of
stock held by each. Such stock ledgers shall at all reasonable hours be
subject to inspection by persons entitled by law to inspect the same.
Section 6.05 Transfer Agents and Registrars. The board of directors
may appoint one or more transfer agents and one or more registrars with
respect to the certificates representing stock of the corporation, and may
require all such certificates to bear the signature of either or both. The
board of directors may from time to time define the respective duties of such
transfer agents and registrars. No certificate for stock shall be valid until
countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such stock, and until registered by a
registrar, if at such date the corporation had a registrar for such stock.
Section 6.06 Closing of Transfer Books and Fixing of Record Date.
(a) The board of directors shall have power to close the stock
ledgers of the corporation for a period of not to exceed fifty days preceding
the date of any meeting of the stockholders, or the date for payment of any
dividend, or the date for the allotment of rights, or capital stock shall go
into effect, or a date in connection with obtaining the consent of
stockholders for any purpose.
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(b) In lieu of closing the stock ledgers as aforesaid, the board of
directors may fix in advance a date, not exceeding fifty days preceding the
date of any meeting of stockholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining any such consent, as a record date for the
determination of the stockholders entitled to a notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital stock
or to give such consent.
(c) If the stock ledgers shall be closed or a record date set for
the purpose of determining stockholders entitled to notice of or to vote at a
meeting of stockholders, such books shall be closed for, or such record date
shall be, at least ten days immediately preceding such meeting.
Section 6.07 Lost or Destroyed Certificates. The corporation may
issue a new certificate for stock of the corporation in place of any
certificate theretofore issued by it, alleged to have been lost or destroyed,
and the board of directors may, in their discretion, require the owner of the
lost or destroyed certificate or his legal representatives, to give the
corporation a bond in such form and amount as the board of directors may
direct, and with such surety or sureties as may be satisfactory to the board,
to indemnify the corporation and its transfer agents and registrars, if any,
against any claims that may be made against it or any such transfer agent or
registrar on account of the issuance of such new certificate. A new
certificate may be issued without requiring any bond when, in the judgment of
the board of directors, it is proper to do so.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The board of directors may designate
an executive committee and such other committees as the board of directors may
deem appropriate, each of which committees shall consist of one or more
directors. Members of the executive committee and of any such other committee
shall be designated annually at the annual meeting of the board of directors;
provided, however, that at any time the board of directors may abolish or
reconstitute the executive committee and of any such other committee shall
hold office until his successor shall have been designated or until his
resignation or removal in the manner provided in these bylaws.
Section 7.02 Powers. During the intervals between meetings of the
board of directors, the executive committee shall have and may exercise all
powers of the board of directors in the management of the business and affairs
of the corporation, except for the power to fill vacancies in the board of
directors or to amend these bylaws, and except for such powers as by law may
not be delegated by the board of directors to an executive committee.
Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the board of directors, may fix
its own presiding and recording officer or officers, and may meet at such
place or places, at such time or times and upon such notice (or without
notice) as it shall determine from time to time. It will keep a record of its
proceedings and shall report such proceedings to the board of directors at the
meeting of the board of directors next following.
Section 7.04 Quorum and Manner of Acting. At all meetings of the
executive committee, and of such other committees as may be designated
hereunder by the board of directors, the presence of members
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constituting a majority of the total authorized membership of the committee
shall be necessary and sufficient to constitute a quorum for the transaction
of business, and the act of a majority of the members present at any meeting
at which a quorum is present shall be the act of such committee. The members
of the executive committee, and of such other committees as may be designated
hereunder by the board of directors, shall act only as a committee and the
individual members thereof shall have no powers as such.
Section 7.05 Resignations. Any member of the executive committee,
and of such other committees as may be designated hereunder by the board of
directors, may resign at any time by delivering a written resignation to
either the president, the secretary, or assistant secretary, or to the
presiding officer of the committee of which he is a member, if any shall have
been appointed and shall be in office. Unless otherwise specified therein,
such resignation shall take effect upon delivery.
Section 7.06 Removal. The board of directors may at any time remove
any member of the executive committee or of any other committee designated by
it hereunder either for or without cause.
Section 7.07 Vacancies. If any vacancy shall occur in the executive
committee or of any other committee designated by the board of directors
hereunder, by reason of disqualification, death, resignation, removal or
otherwise, the remaining members shall, until the filling of such vacancy,
constitute the then total authorized membership of the committee and continued
to act, unless such committee consisted of more than one member prior to the
vacancy or vacancies and is left with only one member as a result thereof.
Such vacancy may be filled at any meeting of the board or directors.
Section 7.08 Compensation. The board of directors may allow a fixed
sum and expenses of attendance to any member of the executive committee, or of
any other committee designated by it hereunder, who is not an active salaried
employee of the corporation for attendance at each meeting of the said
committee.
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation
shall have the power to 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 proceedings, whether civil, criminal, administrative, or
investigative, except 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
attorney's fees, judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with the 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 on a plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the person did not
act in good faith and in a manner which 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, he had reasonable cause to believe that his
conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or
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<PAGE>
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 attorney's 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, and 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 to the corporation,
unless and only to the extent that the court in which the action or suit was
brought shall determine on application that, despite the adjudication of
liability but in view of all circumstances of the case, the person is fairly
and reasonably entitled to indemnity for such expenses as the court deems
proper.
Section 8.03 Determination. 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 8.01 and 8.02 hereof, or in defense of any claim, issue, or matter
therein, he shall be indemnified against expenses, including attorney's fees,
actually and reasonably incurred by him in connection the defense. Any
indemnification under sections 8.01 and 8.02, unless ordered by a court, shall
be made by the corporation only as authorized in the specific case on a
determination that indemnification of the director, officer, employee, or
agent is proper in the circumstances because he has met the applicable
standard of conduct set forth in sections 8.01 or 8.02. The determination
must be made by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the act, suit, or proceeding
or by the stockholders by a majority vote of a quorum of stockholders at any
meeting duly called for such purpose.
Section 8.04 Advances. Expenses incurred in defending a civil or
criminal action, suit, or proceeding may be paid by the corporation in advance
of the final disposition of the action, suit, or proceeding on receipt of an
undertaking by or on behalf of the director, officer, employee, or agent to
repay the amount advanced if it is ultimately determined that he is not
entitled to be indemnified by the corporation.
Section 8.05 Scope of Indemnification. The indemnification and
advancement of expenses authorized in or ordered by the corporation pursuant
to sections 8.01, 8.02, 8.04:
(a) does not exclude any other rights to which a person seeking
indemnification or advancement of expenses, including corporate personnel
other than directors or officers, may be entitled under the statutes of the
state of incorporation, articles of incorporation, or any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise for either an
action in his official capacity or an action in another capacity while holding
his office; and
(b) continues for a person who has ceased to be a director,
officer, employee, or agent and inures to the benefit of the heirs, executors,
and administrators of such a person.
Section 8.06 Insurance. The corporation may 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 as a director,
officer, employee, or agent, or arising out of his status as such, whether or
not the corporation would have the power to indemnify him against any such
liability and expenses.
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<PAGE>
Section 8.07 Officer and Director Contracts. No contract or other
transaction between the corporation and any other firm or corporation shall be
affected by the fact that a director or officer of the corporation has an
interest in, or is a director or officer of the corporation or any such other
corporation. Any officer or director, individually or with others, may be a
party to, or may have an interest in, any transaction of the corporation or
any transaction in which the corporation is a party or has an interest. Each
person who is now or may become an officer of director of the corporation is
hereby relieved from liability that he might otherwise obtain in the event
such officer or director contracts with the corporation for the benefit of
himself or any firm or other corporation in which he may have an interest;
provided, such officer or director acts in good faith.
ARTICLES IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
board of directors.
ARTICLE X
DIVIDENDS
The board of directors may from time to time declare, and the corporation
may pay, dividends on its outstanding stock in the manner and upon the terms
and conditions provided by the articles of incorporation and by law.
ARTICLE XI
AMENDMENTS
All bylaws of the corporation, whether adopted by the board of directors
or the stockholders, shall be subject to amendment, alteration or repeal, and
new bylaws may be made, except that no bylaw adopted or amended by the
stockholders shall be altered or repealed by the board of directors.
15
<PAGE>
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that he/she is the secretary of
Lazarus Industries, Inc., a corporation duly organized under and by virtue of
the laws of the state of Utah; that the above and foregoing bylaws of said
corporation were duly and regularly adopted as such by the board of directors
of said corporation by unanimous consent dated April 10, 1998, and that the
above and foregoing bylaws are now in full force and effect and supersede and
replace any prior bylaws of the corporation.
DATED this 10th day of April, 1998.
/s/ James C. Lewis
James C. Lewis, Secretary
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Exhibit 3 (Exhibit 10.1)
LAZARUS INDUSTRIES, INC.
Option for the Purchase of 100,000
Shares of Common Stock
Par Value $0.001
STOCK OPTION AGREEMENT
THE HOLDER OF THIS OPTION, BY ACCEPTANCE HEREOF, BOTH WITH RESPECT TO THE
OPTION AND COMMON STOCK ISSUABLE UPON EXERCISE OF THE OPTION, AGREES AND
ACKNOWLEDGES THAT THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
AC-F'), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT OR OTHER COMPLIANCE UNDER THE SECURITIES
ACT OR THE LAWS OF THE APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER, AND ITS COUNSEL, TO THE EFFECT T14AT
THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND
SUCH STATE STATUTES.
This is to certify that, for value received, JACK M. GERTINO (the "Optionee")
is entitled to purchase from LAZARUS INDUSTRIES, INC. (the "Company"), on the
terms and conditions hereinafter set forth, all or any part of 100,000 shares
("Option Shares") of the Company's common stock, par value $0.001 (the "Common
Stock"), at the purchase price of $0.05 per share ("Option Price"). Upon
exercise of this option in whole or in part, a certificate for the Option
Shares so purchased shall be issued and delivered to the Optionee. If less
than the total option is exercised, a new option of similar tenor shall be
issued for the unexercised portion of the options represented by this
Agreement.
This option is granted subject to the following further terms and conditions:
1. This option shall vest and be exercisable immediately, and shall
expire at 5:00 p.m. Salt Lake City time on August 10, 2009. In order to
exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or in the case of
exercise after Optionee's death, Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
(a) Deliver to the Corporate Secretary of the Corporation an executed
notice of exercise in substantially the form of attached to this Agreement
(the "Exercise Notice") in which there is specified the number of Option
Shares which are to be purchased under the exercised option.
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(b) Pay the aggregate Option Price for the purchased shares through
one or more of the following alternatives:
(i) full payment in cash or by check made payable to the
Corporation's order;
(ii) full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Company's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date (as
such term is defined below);
(iii) full payment through a combination of shares of Common Stock
held for the requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date and cash or check payable to the Company's order;
(iv) full payment effected through a broker-dealer sale and
remittance procedure pursuant to which Optionee shall provide concurrent
irrevocable written instructions (i) to a brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate Option Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld
in connection with such purchase and (ii) to the Company to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale transaction; or
(v) full payment through conversion of the option to purchase
Option Shares into the number of fully paid and nonassessable Option Shares
calculated pursuant to the following formula:
X = Y (A-B)
-------
A
where: X = the number of Option Shares to be issued to the
Optionee;
Y = the number of Option Shares for which the conversion right
is being exercised;
A = the Fair Market Value per share as of the date of exercise
of such conversion right; and
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<PAGE>
B = the Option Price with respect to such Option Shares.
(c) Furnish to the Corporation appropriate documentation that the
person or persons exercising the option (if other than Optionee) have the
right to exercise this option.
(d) For purposes of this Agreement, the Exercise Date shall be the
date on which the executed Exercise Notice shall have been delivered to the
Company. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the option exercise, payment of the
Option Price for the purchased shares must accompany such Exercise Notice.
(e) For all valuation purposes under this Agreement, the Fair Market
Value per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:
(i) If the Common Stock is not at the time listed or admitted to
trading on any national securities exchange but is traded on the Nasdaq
National Market, the Fair Market Value shall be the mean between the highest
"bid" and lowest "offered" quotations of a share of Common Stock on such date
(or if none, on the most recent date on which there were bid and offered
quotations of a share of Common Stock), as reported by the Nasdaq National
Market or any successor system.
(ii) If the Common Stock is at the time listed or admitted to
trading on any national securities exchange, then the Fair Market Value shall
be the closing selling price per share on the date in question on the
securities exchange, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no reported sale of Common
Stock on such exchange on the date in question, then the Fair Market Value
shall be the closing selling price on the exchange on the last preceding date
for which such quotation exists.
(iii) If the Common Stock is not listed on such date on any
national securities exchange nor included in the Nasdaq National Market, but
is traded in the over-the-counter market the highest "bid" quotation of a
share of Common Stock on such date (or if none, on the most recent date on
which there were bid quotations of a share of Common Stock), as reported on
the Nasdaq Smallcap Market or the NASD OTC Bulletin Board, as applicable.
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<PAGE>
(f) Upon such exercise, the Company shall issue and cause to be
delivered with all reasonable dispatch (and in any event within three business
days of such exercise) to or upon the written order of the Optionee at its
address, and in the name of the Optionee, a certificate or certificates for
the number of full Option Shares issuable upon the exercise together with such
other property (including cash) and securities as may then be deliverable upon
such exercise. Such certificate or certificates shall be deemed to have been
issued and the Optionee shall be deemed to have become a holder of record of
such Option Shares as of the Exercise Date.
2. The Optionee acknowledges that the shares subject to this option have
not and will not be registered as of the date of exercise of this option under
the Securities Act or the securities laws of any state. The Optionee
acknowledges that this option and the shares issuable on exercise of the
option, when and if issued, are and will be "restricted securities" as defined
in Rule 144 promulgated by the Securities and Exchange Commission and must be
held indefinitely unless subsequently registered under the Securities Act and
any other applicable state registration requirements. Except as provided
herein, the Company is under no obligation to register the securities under
the Securities Act or under applicable state statutes. In the absence of such
a registration or an available exemption from registration, sale of the Option
Shares may be practicably impossible. 'ne Optionee shall confirm to the
Company the representations set forth above in connection with the exercise of
all or any portion of this option. The Company agrees to register or qualify
the Option Shares, but not this option, for resale as follows:
(a) If, at any time during the period in which the rights represented
by this Agreement are exercisable, the Company proposes to file a registration
statement or notification under the Securities Act for the primary or
secondary sale of any debt or equity security, it will give written notice at
least 30 days prior to the filing of such registration statement or
notification to the Optionee of its intention to do so. The Company agrees
that, after receiving written notice from the Optionee of its desire to
include its Option Shares in such proposed registration statement or
notification, the Company shall afford the Optionee the opportunity to have
its Option Shares included therein. Notwithstanding the provisions of this
paragraph 2(b), the Company shall have the right, at any time after it shall
have given written notice pursuant to this paragraph (whether or not a written
request for inclusion of the Option Shares shall be made) to elect not to file
any such proposed registration statement or notification or to withdraw the
same after the filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Option Shares in any
registration statement or notification under this paragraph 2(b) if, in the
opinion of the underwriter, the inclusion of the Option Shares in such
registration statement or notification would be materially detrimental to the
proposed offering of debt or equity securities pursuant to which the Company
gave notice to the holders under this paragraph; provided, that the Option
Shares shall not be excluded from any such registration statement or
notification if debt or equity securities of the Company held by any other
persons are, or will be, included in such registration statement or
notification.
(b) In connection with the filing of a registration statement,
notification, or post-effective amendment under this section, the Company
covenants and agrees:
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(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without limitation,
printing charges, legal fees and disbursements of counsel for the Company,
blue sky expenses, accounting fees and filing fees, but not including legal
fees and disbursements of counsel to the Optionee and any sales commissions on
Option Shares offered and sold;
(ii) to take all necessary action which may reasonably be required
in qualifying or registering the Option Shares included in a registration
statement, notification or post-effective amendment for the offer and sale
under the securities or blue sky laws of such states as requested by the
Optionee; provided that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such jurisdiction; and
(iii) to utilize its best efforts to keep the same effective on a
continuous or shelf basis until all registered Option Shares of the Optionee
have been sold.
(c) The Optionee shall cooperate with the Company and shall furnish
such information as the Company may request in connection with any such
registration statement, notification or posteffective amendment hereunder, on
which the Company shall be entitled to rely, and the Optionee shall indemnify
and hold harmless the Company (and all other persons who may be subject to
liability under the Securities Act or otherwise) from and against any and all
claims, actions, suits, liabilities, losses, damages, and expenses of every
nature and character (including, but without limitation, all attorneys' fees
and amounts paid in settlement of any claim, action, or suit) which arise or
result directly or indirectly from any untrue statement of a material fact
furnished by the Optionee in connection with such registration or
qualification, or from the failure of the Optionee to furnish material
information in connection with the facts required to be included in such
registration statement, notification or posteffective amendment necessary to
make the statements therein not misleading.
3. The Company, during the term of this Agreement, will obtain from the
appropriate regulatory agencies any requisite authorization in order to issue
and sell such number of shares of its Common Stock as shall be sufficient to
satisfy the requirements of the Agreement.
4. The number of Option Shares purchasable upon the exercise of this
option and the Option Price per share shall be subject to adjustment from time
to time subject to the following terms. If the outstanding shares of Common
Stock of the Company are increased, decreased, changed into or exchanged for a
different number or kind of shares of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse
stock split, the Company or its successors and assigns shall make an
appropriate and proportionate
E-32
<PAGE>
adjustment in the number or kind of shares, and the per-share Option Price
thereof, which may be issued to the Optionee under this Agreement upon
exercise of the options granted under this Agreement. The purchase rights
represented by this option shall not be exercisable with respect to a fraction
of a share of Common Stock. Any fractional shares of Common Stock arising
from the dilution or other adjustment in the number of shares subject to this
option shall rounded up to the nearest whole share.
5. The Company covenants and agrees that all Option Shares which may be
delivered upon the exercise of this option will, upon delivery, be free from
all taxes, liens, and charges with respect to the purchase thereof, provided,
that the Company shall have no obligation with respect to any income tax
liability of the Optionee and the Company may, in its discretion, withhold
such amount or require the Optionee to make such provision of funds or other
consideration as the Company deems necessary to satisfy any income tax
withholding obligation under federal or state law.
6. The Company agrees at all times to reserve or hold available a
sufficient number of shares of Common Stock to cover the number of Option
Shares issuable upon the exercise of this and all other options of like tenor
then outstanding.
7. This option shall not entitle the holder hereof to any voting rights or
other rights as a shareholder of the Company, or to any other rights
whatsoever, except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this option or the interest represented hereby
or the Option Shares purchasable hereunder until or unless, and except to the
extent that, this option shall be exercised..
8. The Company may deem and treat the registered owner of this option as
the absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary.
9. In the event that any provision of this Agreement is found to be
invalid or otherwise unenforceable under any applicable law, such invalidity
or unenforceability shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other Provisions shall
be given full force and effect to the same extent as though the invalid or
unenforceable provision were not contained herein.
10. This Agreement shall be governed by and construed in accordance with
the internal laws of the state of Utah, without regard to the principles of
conflicts of law thereof.
11. Except as otherwise provided herein, this Agreement shall be binding
on and inure to the benefit of the Company and the person to whom an option is
granted hereunder, and such person's heirs, executors, administrators,
legatees, personal representatives, assignees, and transferees.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this option to be executed by the
signature of its duly authorized officer, effective this 10th day of August,
1999.
LAZARUS INDUSTRIES, INC.
By /s/ Jack M. Gertino, President
------------------------------
The undersigned Optionee hereby acknowledges receipt of a copy of the
foregoing option and acknowledges and agrees to the terms and conditions set
forth in the option.
/s/ Jack M. Gertino
--------------------------
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<PAGE>
Exercise Notice
(to be signed only upon exercise of Option)
TO: Lazarus Industries, Inc.
The Optionee, holder of the attached option, hereby irrevocable elects to
exercise the purchase rights represented by the option for, and to purchase
thereunder, shares of common stock of Comet Technologies, Inc., and herewith
makes payment therefor, and requests that the certificate(s) for such shares
be delivered to the Optionee at:
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
If purchase is to be effected by conversion of the option to Common
Stock, the Optionee hereby converts option rights with respect to Option
Shares represented by the option.
If acquired without registration under the Securities Act of 1933, as
amended ("Securities Act"), the Optionee represents that the Common Stock is
being acquired without a view to, or for, resale in connection with any
distribution thereof without registration or other compliance under the
Securities Act and applicable state statutes, and that the Optionee has no
direct or indirect participation in any such undertaking or in the
underwriting, of such an undertaking. The Optionee understands that the
Common Stock has not been registered, but is being acquired by reason of a
specific exemption under the Securities Act as well as under certain state
statutes for transactions by an issuer not involving any public offering and
that any disposition of the Common Stock may, under certain circumstances, be
inconsistent with these exemptions. The Optionee acknowledges that the Common
Stock must be held and may not be sold, transferred, or otherwise disposed of
for value unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Company is under no
obligation to register the Common Stock under the Securities Act, except as
provided in the Agreement for the option. The certificates representing the
Common Stock will bear a legend restricting transfer, except in compliance
with applicable federal and state securities statutes.
The Optionee agrees and acknowledges that this purported exercise of the
option is conditioned on, and subject to, any compliance with requirements of
applicable federal and state securities laws deemed necessary by the Company.
DATED this ________ day of ___________________, 1999.
___________________________
Signature
E-35
Exhibit 4 (Ex 10.2)
LAZARUS INDUSTRIES, INC.
Option for the Purchase of 100,000
Shares of Common Stock
Par Value $0.001
STOCK OPTION AGREEMENT
THE HOLDER OF THIS OPTION, BY ACCEPTANCE HEREOF, BOTH WITH RESPECT TO THE
OPTION AND COMMON STOCK ISSUABLE UPON EXERCISE OF THE OPTION, AGREES AND
ACKNOWLEDGES THAT THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
AC-F'), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT OR OTHER COMPLIANCE UNDER THE SECURITIES
ACT OR THE LAWS OF THE APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER, AND ITS COUNSEL, TO THE EFFECT T14AT
THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND
SUCH STATE STATUTES.
This is to certify that, for value received, JAMES C. LEWIS (the
"Optionee") is entitled to purchase from LAZARUS INDUSTRIES, INC. (the
"Company"), on the terms and conditions hereinafter set forth, all or any part
of 100,000 shares ("Option Shares") of the Company's common stock, par value
$0.001 (the "Common Stock"), at the purchase price of $0.05 per share ("Option
Price"). Upon exercise of this option in whole or in part, a certificate for
the Option Shares so purchased shall be issued and delivered to the Optionee.
If less than the total option is exercised, a new option of similar tenor
shall be issued for the unexercised portion of the options represented by this
Agreement.
This option is granted subject to the following further terms and conditions:
1. This option shall vest and be exercisable immediately, and shall
expire at 5:00 p.m. Salt Lake City time on August 10, 2009. In order to
exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or in the case of
exercise after Optionee's death, Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
(a) Deliver to the Corporate Secretary of the Corporation an executed
notice of exercise in substantially the form of attached to this Agreement
(the "Exercise Notice") in which there is specified the number of Option
Shares which are to be purchased under the exercised option.
E-36
<PAGE>
(b) Pay the aggregate Option Price for the purchased shares through
one or more of the following alternatives:
(i) full payment in cash or by check made payable to the
Corporation's order;
(ii) full payment in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Company's earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date (as such term is defined below);
(iii) full payment through a combination of shares of Common
Stock held for the requisite period necessary to avoid a charge to the
Company's earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date and cash or check payable to the Company's order;
(iv) full payment effected through a broker-dealer sale and
remittance procedure pursuant to which Optionee shall provide concurrent
irrevocable written instructions (i) to a brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate Option Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld
in connection with such purchase and (ii) to the Company to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale transaction; or
(v) full payment through conversion of the option to purchase
Option Shares into the number of fully paid and nonassessable Option Shares
calculated pursuant to the following formula:
X = Y (A-B)
-------
A
where: X = the number of Option Shares to be issued to the
Optionee;
Y = the number of Option Shares for which the conversion
right is being exercised;
A = the Fair Market Value per share as of the date of
exercise of such conversion right; and
B = the Option Price with respect to such Option Shares.
E-37
<PAGE>
(c) Furnish to the Corporation appropriate documentation that the
person or persons exercising the option (if other than Optionee) have the
right to exercise this option.
(d) For purposes of this Agreement, the Exercise Date shall be the
date on which the executed Exercise Notice shall have been delivered to the
Company. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the option exercise, payment of the
Option Price for the purchased shares must accompany such Exercise Notice.
(e) For all valuation purposes under this Agreement, the Fair Market
Value per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:
(i) If the Common Stock is not at the time listed or admitted to
trading on any national securities exchange but is traded on the Nasdaq
National Market, the Fair Market Value shall be the mean between the highest
"bid" and lowest "offered" quotations of a share of Common Stock on such date
(or if none, on the most recent date on which there were bid and offered
quotations of a share of Common Stock), as reported by the Nasdaq National
Market or any successor system.
(ii) If the Common Stock is at the time listed or admitted to
trading on any national securities exchange, then the Fair Market Value shall
be the closing selling price per share on the date in question on the
securities exchange, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no reported sale of Common
Stock on such exchange on the date in question, then the Fair Market Value
shall be the closing selling price on the exchange on the last preceding date
for which such quotation exists.
(iii) If the Common Stock is not listed on such date on any
national securities exchange nor included in the Nasdaq National Market, but
is traded in the over-the-counter market the highest "bid" quotation of a
share of Common Stock on such date (or if none, on the most recent date on
which there were bid quotations of a share of Common Stock), as reported on
the Nasdaq Smallcap Market or the NASD OTC Bulletin Board, as applicable.
E-38
<PAGE>
(f) Upon such exercise, the Company shall issue and cause to be
delivered with all reasonable dispatch (and in any event within three business
days of such exercise) to or upon the written order of the Optionee at its
address, and in the name of the Optionee, a certificate or certificates for
the number of full Option Shares issuable upon the exercise together with such
other property (including cash) and securities as may then be deliverable upon
such exercise. Such certificate or certificates shall be deemed to have been
issued and the Optionee shall be deemed to have become a holder of record of
such Option Shares as of the Exercise Date.
2. The Optionee acknowledges that the shares subject to this option have
not and will not be registered as of the date of exercise of this option under
the Securities Act or the securities laws of any state. The Optionee
acknowledges that this option and the shares issuable on exercise of the
option, when and if issued, are and will be "restricted securities" as defined
in Rule 144 promulgated by the Securities and Exchange Commission and must be
held indefinitely unless subsequently registered under the Securities Act and
any other applicable state registration requirements. Except as provided
herein, the Company is under no obligation to register the securities under
the Securities Act or under applicable state statutes. In the absence of such
a registration or an available exemption from registration, sale of the Option
Shares may be practicably impossible. 'ne Optionee shall confirm to the
Company the representations set forth above in connection with the exercise of
all or any portion of this option. The Company agrees to register or qualify
the Option Shares, but not this option, for resale as follows:
(a) If, at any time during the period in which the rights represented
by this Agreement are exercisable, the Company proposes to file a registration
statement or notification under the Securities Act for the primary or
secondary sale of any debt or equity security, it will give written notice at
least 30 days prior to the filing of such registration statement or
notification to the Optionee of its intention to do so. The Company agrees
that, after receiving written notice from the Optionee of its desire to
include its Option Shares in such proposed registration statement or
notification, the Company shall afford the Optionee the opportunity to have
its Option Shares included therein. Notwithstanding the provisions of this
paragraph 2(b), the Company shall have the right, at any time after it shall
have given written notice pursuant to this paragraph (whether or not a written
request for inclusion of the Option Shares shall be made) to elect not to file
any such proposed registration statement or notification or to withdraw the
same after the filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Option Shares in any
registration statement or notification under this paragraph 2(b) if, in the
opinion of the underwriter, the inclusion of the Option Shares in such
registration statement or notification would be materially detrimental to the
proposed offering of debt or equity securities pursuant to which the Company
gave notice to the holders under this paragraph; provided, that the Option
Shares shall not be excluded from any such registration statement or
notification if debt or equity securities of the Company held by any other
persons are, or will be, included in such registration statement or
notification.
(b) In connection with the filing of a registration statement,
notification, or post-effective amendment under this section, the Company
covenants and agrees:
E-39
<PAGE>
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without limitation,
printing charges, legal fees and disbursements of counsel for the Company,
blue sky expenses, accounting fees and filing fees, but not including legal
fees and disbursements of counsel to the Optionee and any sales commissions on
Option Shares offered and sold;
(ii) to take all necessary action which may reasonably be required
in qualifying or registering the Option Shares included in a registration
statement, notification or post-effective amendment for the offer and sale
under the securities or blue sky laws of such states as requested by the
Optionee; provided that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such jurisdiction; and
(iii) to utilize its best efforts to keep the same effective on a
continuous or shelf basis until all registered Option Shares of the Optionee
have been sold.
(c) The Optionee shall cooperate with the Company and shall furnish
such information as the Company may request in connection with any such
registration statement, notification or posteffective amendment hereunder, on
which the Company shall be entitled to rely, and the Optionee shall indemnify
and hold harmless the Company (and all other persons who may be subject to
liability under the Securities Act or otherwise) from and against any and all
claims, actions, suits, liabilities, losses, damages, and expenses of every
nature and character (including, but without limitation, all attorneys' fees
and amounts paid in settlement of any claim, action, or suit) which arise or
result directly or indirectly from any untrue statement of a material fact
furnished by the Optionee in connection with such registration or
qualification, or from the failure of the Optionee to furnish material
information in connection with the facts required to be included in such
registration statement, notification or posteffective amendment necessary to
make the statements therein not misleading.
3. The Company, during the term of this Agreement, will obtain from the
appropriate regulatory agencies any requisite authorization in order to issue
and sell such number of shares of its Common Stock as shall be sufficient to
satisfy the requirements of the Agreement.
4. The number of Option Shares purchasable upon the exercise of this
option and the Option Price per share shall be subject to adjustment from time
to time subject to the following terms. If the outstanding shares of Common
Stock of the Company are increased, decreased, changed into or exchanged for a
different number or kind of shares of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse
stock split, the Company or its successors and assigns shall make an
appropriate and proportionate
E-40
<PAGE>
adjustment in the number or kind of shares, and the per-share Option Price
thereof, which may be issued to the Optionee under this Agreement upon
exercise of the options granted under this Agreement. The purchase rights
represented by this option shall not be exercisable with respect to a fraction
of a share of Common Stock. Any fractional shares of Common Stock arising
from the dilution or other adjustment in the number of shares subject to this
option shall rounded up to the nearest whole share.
5. The Company covenants and agrees that all Option Shares which may be
delivered upon the exercise of this option will, upon delivery, be free from
all taxes, liens, and charges with respect to the purchase thereof, provided,
that the Company shall have no obligation with respect to any income tax
liability of the Optionee and the Company may, in its discretion, withhold
such amount or require the Optionee to make such provision of funds or other
consideration as the Company deems necessary to satisfy any income tax
withholding obligation under federal or state law.
6. The Company agrees at all times to reserve or hold available a
sufficient number of shares of Common Stock to cover the number of Option
Shares issuable upon the exercise of this and all other options of like tenor
then outstanding.
7. This option shall not entitle the holder hereof to any voting rights or
other rights as a shareholder of the Company, or to any other rights
whatsoever, except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this option or the interest represented hereby
or the Option Shares purchasable hereunder until or unless, and except to the
extent that, this option shall be exercised..
8. The Company may deem and treat the registered owner of this option as
the absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary.
9. In the event that any provision of this Agreement is found to be
invalid or otherwise unenforceable under any applicable law, such invalidity
or unenforceability shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other Provisions shall
be given full force and effect to the same extent as though the invalid or
unenforceable provision were not contained herein.
10. This Agreement shall be governed by and construed in accordance with
the internal laws of the state of Utah, without regard to the principles of
conflicts of law thereof.
11. Except as otherwise provided herein, this Agreement shall be binding
on and inure to the benefit of the Company and the person to whom an option is
granted hereunder, and such person's heirs, executors, administrators,
legatees, personal representatives, assignees, and transferees.
E-41
<PAGE>
IN WITNESS WHEREOF, the Company has caused this option to be executed by
the signature of its duly authorized officer, effective this 10th day of
August, 1999.
LAZARUS INDUSTRIES, INC.
By /s/ Jack M. Gertino, President
-------------------------------
The undersigned Optionee hereby acknowledges receipt of a copy of the
foregoing option and acknowledges and agrees to the terms and conditions set
forth in the option.
/s/ James C. Lewis
----------------------
E-42
<PAGE>
Exercise Notice
(to be signed only upon exercise of Option)
TO: Lazarus Industries, Inc.
The Optionee, holder of the attached option, hereby irrevocable elects to
exercise the purchase rights represented by the option for, and to purchase
thereunder, shares of common stock of Comet Technologies, Inc., and herewith
makes payment therefor, and requests that the certificate(s) for such shares
be delivered to the Optionee at:
_________________________________________________________
________________________________________________________
_________________________________________________________
If purchase is to be effected by conversion of the option to Common
Stock, the Optionee hereby converts option rights with respect to Option
Shares represented by the option.
If acquired without registration under the Securities Act of 1933, as
amended ("Securities Act"), the Optionee represents that the Common Stock is
being acquired without a view to, or for, resale in connection with any
distribution thereof without registration or other compliance under the
Securities Act and applicable state statutes, and that the Optionee has no
direct or indirect participation in any such undertaking or in the
underwriting, of such an undertaking. The Optionee understands that the
Common Stock has not been registered, but is being acquired by reason of a
specific exemption under the Securities Act as well as under certain state
statutes for transactions by an issuer not involving any public offering and
that any disposition of the Common Stock may, under certain circumstances, be
inconsistent with these exemptions. The Optionee acknowledges that the Common
Stock must be held and may not be sold, transferred, or otherwise disposed of
for value unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Company is under no
obligation to register the Common Stock under the Securities Act, except as
provided in the Agreement for the option. The certificates representing the
Common Stock will bear a legend restricting transfer, except in compliance
with applicable federal and state securities statutes.
The Optionee agrees and acknowledges that this purported exercise of the
option is conditioned on, and subject to, any compliance with requirements of
applicable federal and state securities laws deemed necessary by the Company.
DATED this________ day of _________________________, 1999.
__________________________
Signature
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 40,215
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40,215
<CURRENT-LIABILITIES> 2,321
<BONDS> 0
0
0
<COMMON> 7,486
<OTHER-SE> 30,408
<TOTAL-LIABILITY-AND-EQUITY> 40,215
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,665
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,785)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,785)
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<CHANGES> 0
<NET-INCOME> (5,785)
<EPS-BASIC> (0.00)
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</TABLE>
