U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 1999
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- -------------
Commission File No. 33-12346-D
-----------
CARDIFF INTERNATIONAL,INC.
-------------------------------------
(Name of Small Business Issuer in its Charter)
COLORADO 84-1044583
-------- -----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5525 SOUTH 900 EAST, SUITE 110
Salt Lake City, Utah 84117
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 262-8844
9889 Santa Monica Blvd., #205
Beverly Hills, CA 90210
-----------
(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: Common
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year:
September 30, 1999 - $0.
<PAGE>
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
December 1, 1999 - 0. There are approximately 110,000 shares of common
voting stock of the Company held by non-affiliates. Because there has been no
"public market" for the Company's common stock during the past three years, and
there is no par value for the Company's common stock, the Company considers the
value of its shares of common stock to be $0. If the Company had a par value for
its common stock, the aforementioned shares would be valued at par.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
--- ---
None; Not Applicable.
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
December 1, 1999
675,290
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained in Item
13 of this Report.
Transitional Small Business Issuer Format Yes X No
--- ---
<PAGE>
PART I
Item 1. Description of Business.
------------------------
Business Development.
- ---------------------
Organization and Charter Amendments.
-----------------------------------
Cardiff International, Inc., formerly United American, Inc., (the
"Company") was incorporated under the laws of the State of Colorado under the
name "Cardiff Financial, Inc.", on October 14, 1986. The purpose for which the
corporation was organized were namely: (1) To engage in the transaction of all
lawful business or pursue any other lawful purpose or purposes for which a
corporation may be organized under the laws of the State of Colorado; (2) To
have, enjoy and exercise all of the rights, powers and privileges conferred upon
corporations organized under the laws of the state of Colorado, whether now or
hereafter in effect, and whether or not herein specifically mentioned.
The Company had an initial authorized capital consisting of 300,000,000
shares of no par value common stock.
Effective April 1989, the Company completed a merger with United American,
Inc., ("United"). United failed to carry out obligations required of it pursuant
to the merger and the merger was cancelled by the Company on a unilateral basis
on July 3, 1989.
Effective December 4, 1989, the Company changed its name from United
American, Inc., to Cardiff International, Inc.
Public Offering.
---------------
The Company originally issued 12,000,000 shares of its no par value common
stock, in exchange for $16,000.
The Company filed a Form S-18 Registration Statement effective on or about
June 1987 to offer and sell to the public 30,000,000 shares of common stock, no
par value, and warrants to purchase 30,000,000 shares of common stock. The
offering generated $300,000 gross from the sale of these units and incurred
offering costs of $49,501 which have been charged against the proceeds of the
offering. The Company also received $100 for the sale of underwriter's warrants
allowing the public offering underwriter the right to acquire 3,000,000 shares
of the Company's stock at $0.02 per share.
Material Changes in Control Since Inception and Related Business History.
- -------------------------------------------------------------------------
In April 1989, the Company entered into an agreement with United American,
Inc., a Washington corporation whereby the Company agreed to acquire 100% of the
outstanding shares of common stock of United American, Inc., in exchange for
123,000,000 shares of common stock of the Company. After the closing of this
business combination, the Company rescinded the transaction on July 3, 1989 due
to the inability of United American, Inc., to raise $2,000,000 in funding by the
agreed deadline of July 1, 1989. The 123,000,000 shares of common stock of the
Company were voided and returned to authorized but inissued stock after the
combination was terminated.
On December 30, 1996, the Board of Directors of the Company authorized the
issuance of 156,000,000 shares of the company's common voting stock to Mr. Art
Beroff, a consultant to the Company. The issuance of these shares increased the
total number of shares outstanding from 144,000,000 to 300,000,000.
On April 27, 1998, the Board of Directors and Shareholders holding
201,770,900 of the 300,000,000 or approximately 67% of the Company's issued and
outstanding common voting stock authorized a reverse split of the 300,000,000
shares of the Company's common voting stock on a basis of one for one thousand
(1:1,000), thus, the shares of common voting stock outstanding were reduced from
300,000,000 to 300,000. Appropriate adjustments were made to the paid in capital
and capital surplus accounts of the Company. In addition, the shares authorized
for issuance were reduced from 300,000,000 to 30,000,000.
On December 15, 1998, the Board of Directors of the Company authorized the
issuance of 125,000 post-split shares of the Company's common voting stock to
Charles Calello, President and Director.
On May 1, 1999, the Board of Directors authorized the issuance of 250,000
post-split shares of the Company's common voting stock to Jenson Services, Inc.,
consultant to the Company.
Sales of "Unregistered" and "Restricted" Securities Over The Past Three Years.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name and Address Date Number of Shares Consideration
- ---------------- ---- ---------------- -------------
<S> <C> <C> <C>
Art Beroff* 12/30/96 156,000 $156
Charles Calello* 12/15/98 125,000 Services
Jenson Services, Inc.* 7/19/96 250,000 Services
</TABLE>
*See Part II, Item 10 and 11 for information regarding executive
compensation and stock ownership.
Business.
- ---------
Other than the above-referenced matters and seeking and investigating
potential assets, properties or businesses to acquire, the Company has had no
business operations since 1992. To the extent that the Company intends to
continue to seek the acquisition of assets, property or business that may
benefit the Company and its stockholders, it is essentially a "blank check"
company. Because the Company has limited assets and conducts no business,
management anticipates that any such acquisition would require it to issue
shares of its common stock as the sole consideration for the acquisition. This
may result in substantial dilution of the shares of current stockholders. The
Company's Board of Directors shall make the final determination whether to
complete any such acquisition; the approval of stockholders will not be sought
unless required by applicable laws, rules and regulations, its Articles of
Incorporation or Bylaws, or contract. The Company makes no assurance that any
future enterprise will be profitable or successful.
The Company is not currently engaging in any substantive business activity
and has no plans to engage in any such activity in the foreseeable future. In
its present form, the Company may be deemed to be a vehicle to acquire or merge
with a business or company. The Company does not intend to restrict its search
to any particular business or industry, and the areas in which it will seek out
acquisitions, reorganizations or mergers may include, but will not be limited
to, the fields of high technology, manufacturing, natural resources, service,
research and development, communications, transportation, insurance, brokerage,
finance and all medically related fields, among others. The Company recognizes
that the number of suitable potential business ventures that may be available to
it may be extremely limited, and may be restricted to entities who desire to
avoid what these entities may deem to be the adverse factors related to an
initial public offering ("IPO"). The most prevalent of these factors include
substantial time requirements, legal and accounting costs, the inability to
obtain an underwriter who is willing to publicly offer and sell shares, the lack
of or the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other conditions
or requirements imposed by various federal and state securities laws, rules and
regulations. Any of these types of entities, regardless of their prospects,
would require the Company to issue a substantial number of shares of its common
stock to complete any such acquisition, reorganization or merger, usually
amounting to between 80 and 95 percent of the outstanding shares of the Company
following the completion of any such transaction; accordingly, investments in
any such private entity, if available, would be much more favorable than any
investment in the Company.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as pro
forma financial information consisting of a pro forma condensed balance sheet,
pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none of
which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific objective
criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of changing
market strategies, plant or product expansion, changes in product emphasis,
future management personnel and changes in innumerable other factors. Further,
in the case of a new business venture or one that is in a research and
development mode, the risks will be substantial, and there will be no objective
criteria to examine the effectiveness or the abilities of its management or its
business objectives. Also, a firm market for its products or services may yet
need to be established, and with no past track record, the profitability of any
such entity will be unproven and cannot be predicted with any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may actually
participate in any specific business endeavor. The Company anticipates that
proposed business ventures will be made available to it through personal
contacts of directors, executive officers and principal stockholders,
professional advisors, broker dealers in securities, venture capital personnel,
members of the financial community and others who may present unsolicited
proposals. In certain cases, the Company may agree to pay a finder's fee or to
otherwise compensate the persons who submit a potential business endeavor in
which the Company eventually participates. Such persons may include the
Company's directors, executive officers, beneficial owners or their affiliates.
In this event, such fees may become a factor in negotiations regarding a
potential acquisition and, accordingly, may present a conflict of interest for
such individuals.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business or
company in which the Company's executive officers, directors, beneficial owners
or their affiliates may have an ownership interest. Current Company policy does
not prohibit such transactions. Because no such transaction is currently
contemplated, it is impossible to estimate the potential pecuniary benefits to
these persons.
Further, substantial fees are often paid in connection with the completion
of these types of acquisitions, reorganizations or mergers, ranging from a small
amount to as much as $250,000. These fees are usually divided among promoters or
founders, after deduction of legal, accounting and other related expenses, and
it is not unusual for a portion of these fees to be paid to members of
management or to principal stockholders as consideration for their agreement to
retire a portion of the shares of common stock owned by them. In the event that
such fees are paid, they may become a factor in negotiations regarding any
potential acquisition by the Company and, accordingly, may present a conflict of
interest for such individuals.
<PAGE>
Year 2000.
- ----------
Because the Company is not presently engaged in any substantial business
operations, management does not believe that computer problems associated with
the change of year to the year 2000 will have any material effect on its
operations. However, the possibility exists that the Company may merge with or
acquire a business that will be negatively affected by the "year 2000" problem.
The effect of such problem or the Company in the future can not be predicted
with any accuracy until such time as the Company identifies a merger or
acquisition target.
Principal Products and Services.
- --------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activities to be conducted by
the Company are to manage its current limited assets and to seek out and
investigate the acquisition of any viable business opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or merger
through which securities of the Company will be issued or exchanged.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts, professionals,
securities broker dealers, venture capital personnel, members of the financial
community and others who may present unsolicited proposals; the Company may also
advertise its availability as a vehicle to bring a company to the public market
through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
- --------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
- --------------------------------
Management believes that there are literally thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the Company; many
of these companies have substantial current assets and cash reserves.
Competitors also include thousands of other publicly-held companies whose
business operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a private
entity may have access to the public capital markets. There is no reasonable way
to predict the competitive position of the Company or any other entity in the
strata of these endeavors; however, the Company, having limited assets and cash
reserves, will no doubt be at a competitive disadvantage in competing with
entities which have recently completed IPO's, have significant cash resources
and have recent operating histories when compared with the complete lack of any
substantive operations by the Company for the past several years.
Sources and Availability of Raw Materials and Names of Principal Suppliers.
- --------------------------------------------------------------------------
None; not applicable.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements
or Labor Contracts.
- --------------------------------------------------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or Services.
- ---------------------------------------------------------------------
Because the Company currently produces no products or services, it is not
presently subject to any governmental regulation in this regard. However, in the
event that the Company engages in a merger or acquisition transaction with an
entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
Effect of Existing or Probable Governmental Regulations on Business.
- -------------------------------------------------------------------
The integrated disclosure system for small business issuers adopted by the
Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer; provided,
however, an entity is not a small business issuer if it has a public float (the
aggregate market value of the issuer's outstanding securities held by
non-affiliates) of $25 million or more.
The Commission, state securities commissions and the North American
Securities Administrators Association, Inc. ("NASAA") have expressed an interest
in adopting policies that will streamline the registration process and make it
easier for a small business issuer to have access to the public capital markets.
The present laws, rules and regulations designed to promote availability to the
small business issuer of these capital markets and similar laws, rules and
regulations that may be adopted in the future will substantially limit the
demand for "blank check" companies like the Company, and may make the use of
these companies obsolete.
Research and Development.
- -------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
- -------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
Number of Employees.
- --------------------
None.
Item 2. Description of Property.
-----------------------
The Company has no assets, property or business; its principal executive
office address and telephone number are the business office address and
telephone number of a majority shareholder, Jenson Services, Inc., and are
currently provided at no cost. Because the Company currently has no business
operations, its activities will be limited to keeping itself in good standing in
the State of Colorado, seeking out acquisitions, reorganizations or mergers and
preparing and filing the appropriate reports with the Securities and Exchange
Commission. These activities have consumed an insubstantial amount of
management's time.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
On April 27, 1998, the Board of Directors and Shareholders holding
201,770,900 of the 300,000,000 or approximately 67% of the Company's issued and
outstanding common voting stock authorized a reverse split of the 300,000,000
shares of the Company's common voting stock on a basis of one for one thousand
(1:1,000), thus, the shares of common voting stock outstanding were reduced from
300,000,000 to 300,000. Appropriate adjustments were made to the paid in capital
and capital surplus accounts of the Company. In addition, the shares authorized
for issuance were reduced from 300,000,000 to 30,000,000.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
- ------------------
The Company's common stock was previously listed on the OTC-BB under the
symbol "UAMI". However, there is currently no market nor has there been a market
for the Company's common stock since June 1996. In order to establish a market
for the Company's common stock, the Company will have to apply for a new trading
symbol with the NASD.
Holders of Common Stock
- -------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 694.
Dividends
- ---------
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty,
and until the Company completes any acquisition, reorganization or merger, as to
which no assurance may be given, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its common stock.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations or had any revenues
from operations during the last two calendar years. The Company's plan of
operation for the next 12 months is to continue to seek the acquisition of
assets, properties or businesses that may benefit the Company and its
stockholders. Management anticipates that to achieve any such acquisition, the
Company will issue shares of its common stock as the sole consideration for such
acquisition.
During the next 12 months, the Company's only foreseeable cash requirements
will relate to maintaining the Company in good standing or the payment of
expenses associated with reviewing or investigating any potential business
venture, which the Company expects to pay from its cash resources. As of
September 30, 1999, it had no cash or cash equivalents. If additional funds are
required during this period, such funds may be advanced by management or
stockholders as loans to the Company. Because the Company has not identified any
such venture as of the date of this Report, it is impossible to predict the
amount of any such loan. However, any such loan should not exceed $25,000 and
will be on terms no less favorable to the Company than would be available from a
commercial lender in an arm's length transaction. As of the date of this Report,
the Company is not engaged in any negotiations with any person regarding any
such venture.
Results of Operations.
- ----------------------
Other than restoring and maintaining its good corporate standing in the
State of Colorado, compromising and settling its debts and seeking the
acquisition of assets, properties or businesses that may benefit the Company and
its stockholders, the Company has had no material business operations in the two
most recent calendar years, or since before 1992.
At September 30, 1999, the Company had no assets.
During the fiscal year ended September 30, 1999, the Company had net loss
of $8,217. The Company has received no revenues in either of its two most recent
fiscal years.
Liquidity.
- ---------
During the fiscal years ended September 30, 1999 and 1998, a shareholder
and consultant paid general and administrative expenses on behalf of the Company
totaling $8,217 and $685, respectively. The unsecured loan bears no interest and
is due on demand.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended
September 30, 1999 and 1998
Independent Auditors' Report
Balance Sheets - September 30, 1999
Statements of Operations for the years ended
September 30, 1999 and 1998
Statements of changes in Stockholders' (Deficit) from
September 30, 1997 through Septemer 30, 1999
Statements of Cash Flows for the years ended
September 30, 1999 and 1998
Notes to the Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
CARDIFF INTERNATIONAL, INC.
FINANCIAL STATEMENTS
With
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
September 30, 1999 and 1998
<S> <C>
Report of Independent Certified Public Accountants F-2
Financial Statements:
Balance Sheets F-3 & F-4
Statements of Operations F-5
Statement of Changes in Stockholders' (Deficit) F-6
Statements of Cash Flows F-7
Notes to Financial Statements F-8
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Cardiff International, Inc.
Boca Raton, FL 33433
We have audited the accompanying balance sheets of Cardiff International,
Inc. as of September 30, 1999 and 1998, and the related statements of
operations, stockholders' (deficit) and cash flows for the years then ended.
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 audits 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 Cardiff International, Inc.
as of September 30, 1999 and 1998, and the results of its operations, changes in
its stockholders' (deficit) and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
The accompanying balance sheets have been prepared assuming that the
Company will continue as a going concern. As described in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubts about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Schumacher & Associates, Inc.
Certified Public Accountants
12, 835 East Arapahoe Road
Tower II, Suite 110
Englewood, Colorado 80112
October 1, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
CARDIFF INTERNATIONAL, INC.
BALANCE SHEET
September 30, 1999
ASSETS
<S> <C>
Current Assets: $ -
----------
TOTAL ASSETS $ -
==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 1,000
Accounts payable, stockholders 14,470
----------
Total Current Liabilities 15,470
----------
TOTAL LIABILITIES 15,470
----------
Stockholders' (Deficit):
Common Stock, no par value
30,000,000 shares authorized
675,000 shares issued and outstanding 320,314
Additional paid-in capital 225,345
Accumulated (deficit) (561,129)
----------
TOTAL STOCKHOLDERS' (DEFICIT) (15,470)
----------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ -
==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
CARDIFF INTERNATIONAL, INC.
BALANCE SHEET
September 30, 1998
ASSETS
------
<S> <C>
Current Assets: $ -
----------
TOTAL ASSETS $ -
==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 1,628
Accounts payable, stockhor 6,000
----------
Total Current Liabilit 7,628
----------
TOTAL LIABILITIES 7,628
----------
Stockholders' (Deficit):
Common Stock, no par value
30,000,000 shares authorized
300,000 shares issued and outstanding 319,939
Additional paid-in capital 225,345
Accumulated (deficit) (552,912)
----------
TOTAL STOCKHOLDERS' (DEFICIT) (7,628)
----------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ -
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
CARDIFFF INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
Years Ended
September 30,
1999 1998
<S> <C> <C>
Revenue ................................ $ -- $ --
---------- ----------
Expenses:
Stock issued for services ....... 375 --
Other ........................... 7,842 685
---------- ----------
Total .......................... 8,217 685
---------- ----------
Net (Loss) ............................. $ (8,217) $ (685)
========== ==========
(Loss) Per Share ....................... $ (.01) $ (nil)
Weighted Average Shares Outstanding .... 675,000 300,000
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
CARDIFF INTERNATIONAL , INC
STATEMENT OF CHANGES OF STOCKHOLDERS' (DEFICT)
From September 30, 1997 through September 30, 1999
Common Stock Additional Paid-In Accumulated
No./Shares Amount Capital Deficit Total
---------- ------ ------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance at
September 30,
1997 300,000 $ 319,939 $225,345 $(552,227) $ (6,943)
Net (Loss)
For the year
Ended
September 30,
1998 - - - (685) (685)
------- ------- ------- ------- -------
Balance at
September 30,
1998 300,000 319,939 225,345 (552,912) (7,628)
Common stock
Issued 375,000 375 - - 375
Net Loss for
The year
ended
September 30,
1999 - - - (8,217) (8,217)
------- ------- ------- -------
Balance at
September 30,
1999
675,000 $ 319,939 $ 225,345 $(561,129) $ (15,470)
======= ========= ========= ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
CARDIFF INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
Years Ended September 30,
<S> <C> <C>
1999 1998
---- ----
Cash Flows Operating Activities:
Net (loss) $ (8,217) $ (685)
Stock issued for services 375 -
Increase in accounts payable 7,842 685
--------- ---------
Net Cash (used in) Operating Activities - -
--------- ---------
Cash Flows from Investing Activities - -
--------- ---------
Cash Flows from Financing Activity: - -
--------- ---------
Increase in Cash
- -
Cash, Beginning of Year -
Cash, Beginning of Year - -
--------- ---------
Cash End of Year $ - $ -
========= =========
Interest Paid $ - $ -
========= =========
Income Taxes Paid $ - $ -
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
CARDIFF INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1999 and 1998
(1) Summary of Accounting Policies
------------------------------
This summary of significant accounting policies of Cardiff
International, Inc. (Company) is presented to assist in understanding the
Company's financial statements. The financial statements and notes are
representations of the Company's management who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
(a) Organization and principles of Consolidation
--------------------------------------------
Cardiff International, Inc. (Company) was incorporated under the
laws of Colorado on October 14, 1986. The Company is an inactive
entity other than it is looking for a business combination candidate.
The Company has selected the last day of September as its year end.
(b) Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
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
revenue and expenses during the reporting period. Actual results could
differ from those estimates.
(2) Basis of Presentation - Going Concern
-------------------------------------
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. However, the Company has
sustained operating losses since its inception and has a net capital
deficiency. These matters raise substantial doubt about the Company's
ability to continue as going concern. Management is attempting to locate a
business combination candidate.
In view of these matters, continuing as a going concern is dependent
upon the Company's ability to meet its financing requirements, raise
additional capital, and the success of its future operations or completion
of a successful business combination. Management believes that actions
planned and presently being taken to revise the Company's operating and
financial requirements provide the opportunity for the Company to continue
as a going concern.
(3) Common Stock Issued
-------------------
During the year ended September 30, 1999, the Company issued 375,000
shares of its restricted common stock for services, of which 125,000 were
issued to a stockholder/officer of the Company. The shares and services
were recorded in the financial statements at $.001 per share par value.
F-8
<PAGE>
CARDIFF INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1999 and 1998
(4) Income Taxes
------------
The Company has net operating loss carryovers of approximately
$561,000 but due to the change in ownership of the Company, the loss
carryovers have been, in all material respects, eliminated.
(5) Stock Split
-----------
During the year ended September 30, 1999 the Company effected a one
for 1000 reverse stock split. All references to common stock have been
retroactively changed to give effect to the reverse stock split.
(6) Related Party Transactions
--------------------------
As of September 30, 1999 the Company had outstanding accounts payable
to stockholders totaling $14,470. The balance payable is uncollateralized,
bears no interest and has no written repayment terms.
F-9
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
None; Not Applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
- --------------------------------------------------
On or about December 8, 1999 the current directors, executive officers,
and/or 10% holders of the Company's common stock filed Form 3, Initial Statement
of Beneficial Ownership of Securities, in accordance with Section 16(a) of the
Exchange Act.
Identification of Directors and Executive Officers
- --------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
Charles Calello President 07/89 *
Director 10/86 *
Kathleen L. Morrison Secretary 03/99 *
Director 03/99 *
Clay Calello Secretary 07/89 03/99
Vice President 07/89 *
Director 07/89 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
- --------------------
Charles Calello. President and Director. Mr. Calello has served as a
Director and Chairman of the Board of Directors of the Company since January,
1987. Mr. Calello has been directly involved in the music business since 1962.
He has been self-employed or President of privately held companies such as
Charles Calello Productions, Space Cowboy Music, and Calello Music. Mr. Calello
has published, arranged, produced, co-produced, composed, or orchestrated music,
scores, songs, or albums for groups and individuals such as Gladys Knight, Bill
Medley, Juice Newton, Eddie Rabbit, Deborah Allen, Barbara Streisand, Englebert
Humperdinck, Barry Manilow, Glen Campbell, Bruce Springsteen, Neil Diamond, Lou
Christie, The Four Seasons, and Frank Sinatra.
Clay Calello, Director and Vice President. Mrs. Calello has served as a
Director and Vice President since July 1989. Mrs Calello is the wife of Mr.
Charles Calello. Mrs. Calello has been involved in the fashion industry since
1974, first as clothing designer in Chicago and later as a fashion
consultant/trouble shooter in Beverly Hills California. In 1981, Mrs. Calello
started the music company, Shem Production, Inc. The company specialized in
producing music packages for television commercials, television shows and
records. Her company produced the music for such products as Coors Beer,
McDonald's, Coca Cola, Nescafe and Oldsmobile. Her Company provided music for
the hit TV series Crime Story as well as 9 top ten records. Since 1992, Mrs.
Calello has been involved in various cultural and non profit organizations
including Boca Pops and the Florida Atlantic University.
Kathleen L. Morrison, Director and Secretary. Mrs. Morrison is 41 years
old. For the past 6 years, she has been the office manager for two persons, one
of which is Jenson Services, Inc., which is a consultant to and a majority
stockholder of the Company. For seven years, she was the editor of "Super Group"
a vertical market computer magazine targeting HP3000 users. Mrs. Morrison
received a B.A. degree from Colorado State University in 1978.
Significant Employees.
- ----------------------
The Company has no employees who are not executive officers, but who are
expected to make a significant contribution to the Company's business.
Family Relationships.
- ---------------------
Charles Calello, President and Director and Clay Calello, Vice President
and Director are husband and wife. Other than the aforementioned, there are no
additional family relationships between the officers and directors.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
Except as stated above, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person of
the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
Management is informed and believed that certain former directors,
executive officers, and/or 10% holders of the company's stock may not have
timely filed the forms required by section 16(a) of the Exchange Act. However,
present management is unable to determine what forms should have been filed and
when.
On or about December 8, 1999 the current directors, executive officers,
and/or 10% holders of the Company's common stock filed form 3's in accordance
with Section 16(a) of the Exchange Act.
Item 10. Executive Compensation.
-----------------------
The following table sets forth the aggregate compensation paid by the Company
for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricted lying Pay- Comp-
Position Ended ($) ($) Compen- Stock Options outs ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles J.
Calello 9/30/99 0 0 0 0 0 0 0
President, 9/30/98 0 0 0 125,000* 0 0 0
Director 9/30/97 0 0 0 0 0 0 0
Kathleen L.
Morrison 9/30/99 0 0 0 0 0 0 0
Secretary, 9/30/98 0 0 0 0 0 0 0
Director 9/30/97 0 0 0 0 0 0 0
Clay Calello 9/30/99 0 0 0 0 0 0 0
Vice President 9/30/98 0 0 0 0 0 0 0
and Director 9/30/97 0 0 0 0 0 0 0
Director
</TABLE>
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the fiscal
years ending September 30, 1999, 1998, or 1997, or the period ending on the date
of this Report. Mr. Charles Calello, President and Director was issued 125,000
shares of the Company's "Restricted" common stock on December 15, 1998.
*Mrs Calello may be deemed beneficial owner of these shares due to her
relationship with Charles Calello. Mrs. Calello is the wife of Charles Calello.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
There are no arrangements pursuant to which any of the Company's directors
was compensated during the Company's last completed calendar year for any
service provided as director.
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements.
- -------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or any subsidiary, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the shareholdings of those persons who
beneficially own more than five percent of the Company's common stock as of the
date of this Report, with the computations being based upon 675,290 shares of
common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class (1)
- ---------------- ------------------ --------
<S> <C> <C>
Art Beroff 156,000 23.1%
156-34 88th Street
Howard Beach, NY 11414
Jenson Services, Inc. 250,000 37.0%
5525 S. 900 E. #110
Salt Lake City, UT
84117
Charles Calello 156,625* 23.2%
23368 Mirabello Circle
Boca Raton, FL 33433
------- ----
562,625 83.3%
</TABLE>
*Clay Calello may be deemed beneficial owner of these shares due to her
relationship with Charles Calello. Mrs. Calello is the wife of Charles Calello.
<PAGE>
Security Ownership of Management.
- ---------------------------------
The following table sets forth the shareholdings of the Company's directors
and executive officers as of the date of this Report:
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Beneficially Owned of Class *
- ---------------- ------------------------- --------
<S> <C> <C>
Charles Calello 156,625* 23.2%
23368 Mirabello Circle
Boca Raton, FL 33433
Clay Calello 0 0
23368 Mirabello Circle
Boca Raton, FL 33433
Kathleen Morrison 0 0
9352 Sterling Dr.
Sandy, UT 84093
------- ------
All directors and executive
officers as a group 156,625 23.2%%
(3 persons)
</TABLE>
*Mrs. Clay Calello may be deemed beneficial owner of these shares due to
her relationship with Charles Calello. Mrs. Calello is the wife of Charles
Calello.
Changes in Control.
- -------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
- -------------------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
For a description of transactions between members of management, five
percent stockholders, "affiliates", promoters and finders, see the caption
"Sales of "Unregistered" and "Restricted" Securities over the past three years"
of Item I.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
- -------------------
None; Not Applicable.
Exhibits
- --------
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
3.1 Initial Articles of Incorporation,
as filed October 14, 1986.
3.1i Articles of Amendment to the
Articles of Incorporation, as filed on
April 14, 1989
3.1ii Articles of Amendment to the Articles of Incorporation,
as filed on January 14, 1990
3.1ii Articles of Amendment to the Articles of Incorporation,
as filed on September 16, 1998.
3.2 By-Laws
27 Financial Data Schedule
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
None; Not Applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CARDIFF INTERNATIONAL, INC.
Date: 12-6-99 By/S/ Charles Calello
Charles Calello
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
CARDIFF INTERNATIONAL, INC.
Date: 12-6-99 By/S/Charles Calello
Travis T. Jenson
President and Director
Date: 12-6-99 By/S/Kathleen Morrison
Kathleen Morrison
Secretary and Director
<PAGE>
ARTICLES OF INCORPORATION
OF
CARDIFF FINANCIAL, INC.
ARTICLE I
The name of the Corporation is CARDIFF FINANCIAL, INC.
ARTICLE II
This corporation is organized under the laws of the State of Colorado.
ARTICLE III
The period of duration of the corporation shall be perpetual.
ARTICLE IV
The nature of the business of the corporation, the purposes for which it is
organized and its powers are an follows:
1. To engage in the transaction of all lawful business or pursue any other
lawful purpose or purposes for which a corporation may be organized under the
laws of the State of Colorado.
2. To have, enjoy and exercise all of the rights, powers and privileges
conferred upon corporations organized under the laws of the State of Colorado,
whether now or hereafter in effect, and whether or not herein specifically
mentioned.
The foregoing enumeration of purposes and powers shall not limit or
restrict in any manner the exercise of other and further rights and powers which
may now or hereafter be allowed or permitted by law,
ARTICLE V
1. The total number of shares which the corporation shall have authority to
issue is 300,0000,000, which shall consist of one class only, designated "common
stock". Each of such shares shall have no par value.
2. The corporation shall have the right to impose restrictions on the
transfer of all, or any part of its shares and may become party to agreements
entered into by any of its shareholders restricting transfer or encumbrance of
any of its shares, or subjecting any of its shares to repurchase or resale
obligations. ARTICLE VI
Shareholders shall have no preemptive rights to acquire additional or
treasury shares of the corporation or securities convertible into shares or
carrying stock purchase warrants or privileges or stock lights or options.
ARTICLE VII
The shareholders, by vote or concurrence of a majority of the outstanding
shares of the corporation or any class or series thereof, entitled to vote on
the subject matter, may take any action which, except for this Article would
require a two-thirds vote under the Colorado Corporation Code, as amended.
ARTICLE VIII
1. The business and affairs of the corporation shall be managed by a board
of directors which shall be elected at the annual meeting of the shareholders,
or at a special meeting called for that purpose,
2. The initial board of directors shall consist of the following members,
who shall serve until the first annual meeting of shareholders and until their
successor be elected and qualified:
Director Address
Rafe Cohen
14900 Ventura Blvd., #330
Sherman Oakes, CA 91405
Ron Nadel
6442 Cavaleri Road
Malibu, CA 90265
Charles J. Calello
132 Spalding Drive, #216
Beverly Hills, CA 90212
3. The number of directors may be increased or decreased from time to time
in the manner provided in the bylaws of the corporation, but no decrease shall
have the effect of shortening the term of any incumbent director.
ARTICLE IX
Cumulative voting shall not be permitted in the election of directors.
ARTICLE X
The initial registered office of the corporation shall be 7730 E. Belleview
Ave., Suite #301, Englewood, Colorado 80111, and the initial registered agent at
such address shall be Marq J. Warner.
ARTICLE XI
No contract or other transaction between the corporation and one or more of
its directors or any other corporation, firm, association, or entity in which
one or more of its directors are directors or officers or are financially
interested shall be either voidable solely because of such relationship or
interest or solely because such directors are present at the meeting of the
board of directors or a committee thereof which authorizes, approves, or
ratifies such contract or transaction or solely because their votes are counted
for such purposes if: (a) the fact of such relationship or interest is disclosed
or known to the board of directors or committee which authorizes, approves, or
ratifies the contract or transaction by a vote or consent sufficient for the
purposes without counting the votes or consents of such interested directors; or
(b) the fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve, or ratify such
contract or transaction by vote or written consent; or (c) the contract or
transaction is fair and reasonable to the corporation. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the board of directors or a committee thereof which authorizes, approves, or
ratifies such contract or transaction.
ARTICLE XII
l. The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the corporation), by reason of the
fact that he is or was a director, officers employee or agent of the corporation
or is or was serving at the request of the corporation, is a director, officer,
employee, or agent of another corporation partnership, joint ventures trusts or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner be reasonably believed to be in 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 or conviction or upon a plea of nolo
contendere or its equivalent shall not of itself create a presumption that a
person did not act in good faith and in a manner which he reasonably believed to
be in the best interests of the corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
2. The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
ventures, trusts or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the corporation; but no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person has been adjudged to be liable for negligence or misconduct in
the performance of his duty to the corporation unless and only to the extent
that the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnification for such expenses which such court deems proper.
3. To the extent that a director, officer, employee, or agent of the
corporation has been successful on the merits in defense of any action, suit or
proceeding referred to in paragraph 1 or 2 of this Article XII or in defense of
any claim, issue, or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
4. Any indemnification under Paragraph 1 or 2 of this Article XII (unless
ordered by a Court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standards of conduct set forth in said paragraph 1 or 2. Such
determination shall be made by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit, or
proceeding, or, if such a quorum is not obtainable or even if obtainable a
quorum of disinterested directors so directed by independent legal counsel in a
written opinion, or by the shareholders.
5. Expenses (including attorneys' fees) incurred in defending a civil or
criminal action, suit, or proceeding may be paid by the corporation in advance
of the final disposition of such action suit, or proceeding as authorized in
paragraph 4 of this Article XII upon receipt of an undertaking by or on behalf
the director, officer, employee or agent to repay such amount unless it is
ultimately determined that he is entitled to be indemnified by the corporation
as authorized in this Article XII.
6. The indemnification provided by this Article XII shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
the articles of incorporation, any bylaws, agreement, vote of shareholders or
disinterested directors, or otherwise, and any procedure provided for by any of
the foregoing, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of heirs, executors, and administrators of such a person.
7. The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employees or agent of the corporation
or who is or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation partnership, joint venture,
trust, or other enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this Article XII.
ARTICLE XIII
The name and address of the incorporator is:
Marq J. Warner 7730 E. Belloview, #301 Englewood, CO 80111
Executed this 3rd day of September, 1986.
By/S/ Mark J. Warner
------------------------
STATE OF COLORADO )
) ss.
County of )
I, Susan E. Reed, a notary public, hereby certify that on the 3rd day of
October, 1986, Marq J. Warner personally appeared before me, he, who, being by
me first duly sworn, declared that Marq J. Warner is the person who signed the
foregoing documents as incorporator and that the statements contained therein
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of
October, 1986.
My commission expires: My Commission Expires May 20, 1989.
By/S/ Susan E. Reed
Notary Public
1
<PAGE>
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Corporation Code, the
undersigned corporation adopts the following Articles or Amendments to its
Articles of Incorporation:
FIRST: The name of the corporation is: CARDIFF FINANCIAL, INC.
SECOND: The following amendment to the Articles of Incorporation was
adopted on April 14,1989, as prescribed by the Colorado Corporation Code, in the
manner marked with an X below:
Such amendment was adopted by the board of directors where no shares have
been issued.
X Such amendment was adopted by a vote of the shareholders. The number of
shares voted for the amendment was sufficient for approval.
The Articles of Incorporation are amended to provide that the name of the
corporation shall be amended to: "United American, Inc.".
THIRD: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as Follows: None
FOURTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount or stated capital as changed by such
amendment, are as follows: None
CARDIFF FINANCIAL, INC.
By /S/ Marvin Bechwith
Marvin Bechwith
By/S/ Arnold Depauw
Arnold Depauw
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Corporation Code, the
undersigned corporation adopts the following Articles of Amendments to its
Articles of Incorporation:
FIRST: The of name of the corporation is United American, Inc.
SECOND: The following amendment to the Articles of Incorporation was
adopted December 4, 1989, as prescribed by the Colorado Corporation Code, and,
Such Amendment was adopted by a vote of the shareholders. The number
of shares voted for the amendment was sufficient for approval:
The Articles of Incorporation are amended to provide that the name of
the said corporation shall be amended to be:
"CARDIFF INTERNATIONAL INC."
THIRD: That this amendment does not effect any exchange, reclassification,
or cancellation of issued shares.
FOURTH: That this amendment does not effect a change in the amount of
states capital.
CARDIFF INTERNATIONAL, INC
By/S/ President
By/S/ Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to Its
Articles of Incorporation.
FIRST: The name of the Corporation is: Cardiff International, Inc.
SECOND: The following amendment to the Articles of Incorporation was
adopted on April 27, 1998, as prescribed by the Colorado Business Corporation
Act, in the manner marked with an X below:
No shares have been issued or Directors Elected Action by Incorporators.
No shares have been issued by Directors Elected Action by Directors.
Such amendment was adopted by the board of directors where shares have been
issued and shareholder action was not required.
X Such amendment was adopted by a vote of the shareholders. The number of
sharers voted for the amendment was sufficient for approval.
The Articles of incorporation are amended to provide that the
total number of shares which the corporation shall have authority to
issue is 30,000,000, which shall consist of one class only designated
"common stock". Each of such shares shall have no par value.
THIRD: If changing corporate name, the new name of the corporation is:
FOURTH: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows:
All issued shares are automatically reversed splitting on a ratio of 1,000
shares to one (1) share
Cardiff International, Inc.
By/S/ Charles Calello
President
<PAGE>
BYLAWS
OF
CARDIFF FINANCIAL, INC.
ARTICLE I
Offices
1.1 Principal Offices: The principal offices of the corporation shall
initially be at 7730 East Belleview Avenue, Suite 301, Englewood, Colorado
80111, but the board of directors, in its discretion, may keep and maintain
offices wherever the business of the corporation may require.
1.2 Registered Office and Agent: The corporation shall have and
continuously maintain in the State of Colorado a registered office, which may be
the same as its principal office, and a registered agent whose business office
is identical with such registered office. The initial registered office and the
initial registered agent are specified in the Articles of Incorporation. The
corporation may change its registered office or change its registered agent, or
both, upon filing a statement as specified by law in the office of the Secretary
of State of Colorado.
ARTICLE II
Meeting of Shareholders
2.1 Time and Place: Any meeting of the shareholders may be held at such
time and place, within or outside of the State of Colorado, as may be fixed by
the board of directors or as shall be specified in the notice of the meeting or
waiver of notice of the meeting.
2.2 Annual Meeting: The annual meeting of the shareholders shall be held at
the principal offices of the corporation on the 2nd Tuesday in August of each
year, beginning in the year 1987, or at such other place or date as the board of
directors may determine.
2.3 Special Meetings: Special meetings of the shareholders, for any purpose
or purposes, may be called by the president, the board of directors, or the
holders of not less than one tenth of all of the shares entitled to vote at the
meeting.
2.4 Record Date: For the purposes of determining shareholders entitled to
notice of, or to vote at any meeting of shareholders or any adjournment thereof,
or entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the board of
directors may fix in advance a date as the record date for any such
determination of shareholders. The record date may not be fixed more than fifty
and, in the case of a meeting of the shareholders, not less than ten days before
the date of the proposed action, except when it is proposed that the authorized
shares be increased, in which case the record date shall be set not less than
thirty days before the date of such action.
2.5 Voting List: At least ten days before each meeting of shareholders, the
secretary of the corporation shall make a complete list of the shareholders
entitled to vote at such meeting, or any adjournment of such meeting, which list
shall be arranged in alphabetic order and shall contain the address of and
number of shares held by each shareholder. This list shall be kept on file at
the principal office of the corporation for a period of ten days prior to such
meeting, shall be produced and kept open at the meeting, and shall be subject to
inspection by any shareholder for any purpose germane to the meeting during
usual business hours of the corporation and during the whole time of the
meeting.
2.6 Notices: Written notice stating the place, day and hour of the meeting
and, in case of a special meeting, the purpose or purposes for which the meeting
is called, shall be delivered no less than ten nor more than fifty days before
the date of the meeting unless it is proposed that the authorized shares be
increased in which case at least thirty days notice shall be given. Notice shall
be given either personally or by mail, by or at the direction of the president,
the secretary, or the officer or person calling the meeting, to each shareholder
of record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, postage
prepaid, addressed to the shareholder at his address as it appears on the stock
transfer books of the corporation. If delivered personally, such notice shall be
deemed to be delivered when handed to the shareholder or deposited at his
address as it appears on the stock transfer books of the corporation.
2.7 Quorum: Except as otherwise provided by law, a majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at any meeting of the shareholders. if a quorum shall not be present or
represented, the shareholders present in person or by proxy may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, for a period not to exceed sixty days at any one adjournment, until the
number of shares required for a quorum shall be present. At any such adjourned
meeting at which a quorum is represented, any business way be transacted which
might have been transacted at the meeting originally called. The shareholders
present or represented at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
2.8 Voting: Except as otherwise provided by law, all matters shall be
decided by a vote of the majority of the shares represented at the meeting and
entitled to vote on the subject matter. Each outstanding share shall be entitled
to one vote on such matters submitted to a vote of the shareholders. A
shareholder may vote either in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact. Such proxy shall be
filed with the secretary of the corporation before or at the time of the
meeting. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided by law, but shall be by written ballot if
such written vote is demanded by any shareholder present in person or by proxy
and entitled to vote.
2.9 Waiver: Whenever law or these bylaws require a notice of a meeting to
be given, a written waiver of notice signed by a shareholder entitled to notice,
whether before, at, or after the time stated in the notice, shall be equivalent
to the giving of notice. Attendance of a shareholder in person or by proxy at a
meeting constitutes a waiver of notice of a meeting, except where a shareholder
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
2.10 Action by Shareholders Without a Meeting: Any action required to or
which may be taken at a meeting of the shareholders may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to such action.
Such consent may be executed in counterparts and shall be effective as of the
date of the last signature thereon.
ARTICLE III
Directors
3.1 Authority of Board of Directors: The business and affairs of the
corporation shall be managed by a board of directors which shall exercise all
the powers of the corporation, except as otherwise provided by Colorado law or
the Articles of Incorporation of the corporation.
3.1 Number: The number of directors of this corporation shall, in no case,
be less than three, except where the number of shareholders is less than three,
in which case the number of directors may be the same as the number of
shareholders. Subject to such limitation, the number of directors shall be fixed
by resolution of the board of directors, and may be increased or decreased by
resolution of the board of directors, but no decrease shall have the effect of
shortening the term of any incumbent director.
3.3 Qualification: Directors shall be natural persons at the age of
eighteen years or older, but need not be residents of the State of Colorado or
shareholders of the corporation.
3.4 Election: The board of directors shall be elected at the annual meeting
of the shareholders or at a special meeting called for that purpose.
3.5 Term: Each director shall be elected to hold office until the next
annual meeting of shareholders or until his successor shall have been elected
and qualified.
3.6 Removal and Resignation: Any director may be removed at a meeting
expressly called for that purpose, with or without cause, by a vote of the
holders of the majority of shares entitled to vote at an election of directors.
Any director may resign at any time by giving written notice to the president or
to the secretary, and acceptance of such resignation shall not be necessary to
make it effective unless the notice so provides.
3.7 Vacancies: Any vacancy occurring on the board of directors and any
directorship to be filled by reason of an increase in the size of the board of
directors shall be filled by the affirmative vote of a majority, though less
than a quorum, of the remaining directors. A director elected to fill a vacancy
shall hold office during the unexpired term of his predecessor in office. A
director elected to fill a position resulting from an increase in the board of
directors shall hold office until the next annual meeting of shareholders and
until his successor shall have been elected and qualified.
3.8 Meetings: A regular meeting of the board of directors shall be held
immediately after, and at the same place as, the annual meeting of shareholders.
No notice of this meeting of the board of directors need be given. The board of
directors, or any committee designated by the board of directors may, by
resolution, establish a time and place for additional regular meetings which may
thereafter be held without further notice. Special meetings of the board of
directors, or any committee designated by the board of directors, may be called
by the president or any two members of the board of directors or of such
committee.
3.9 Notices: Notice of a special meeting stating the date, hour and place
of such meeting shall be given to each member of the board of directors, the
committee of the board of directors, by the secretary, the president or the
members of the board or such committee calling the meeting. The notice may be
deposited in the United States mail at least seven days before the meeting
addressed to the director at the last address he has furnished to the
corporation for this purpose, and any notice so mailed shall be deemed to have
been given at the time it is mailed. Notice may also be given at least two days
before the meeting in person, or by telephone, prepaid telegram, telex,
cablegram or radiogram, and such notice shall be deemed to have been given at
the time when the personal or telephone conversation occurs, or when the
telegram, telex, cablegram or radiogram is either personally delivered to the
director or delivered to the last address of the director furnished to the
corporation by him for this purpose.
3.10 Quorum: Except as provided in Section 3.7 of these bylaws, a majority
of the number of directors fixed in accordance with these bylaws constitute a
quorum for the transaction of business at all meetings of the board of
directors. The act of a majority of the directors present at any meeting at
which a quorum is present he the act of the board of directors, except as
otherwise specifically required by law.
3.11 Waiver: A written waiver of notice signed by a director entitled to,
whether before, at or after the time stated thereon, shall be equivalent to the
giving of notice. Attendance of a director at a meeting constitutes a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of business because the meeting
is not lawfully called or convened.
3.12 Attendance by Telephone: Members of the board of directors or any
committee designated by the board of directors may participate in a meeting of
the board of directors or committee by means of a conference telephone or
similar communications equipment by which all persons participating in the
meeting can hear each other at the same time. Such participation shall
constitute presence in a person at the meeting.
3.13 Action by Directors Without a Meeting: Any action required to or which
may be taken at a meeting of the board of directors, executive committee, or
other committee of the directors 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, executive or other committee members entitled to vote with respect to
the proposed action. Such consent may be executed in counterparts and shall be
effective as of the date of the last signature thereon.
ARTICLE IV
Committees
4.1 Executive and Other Committees Authorized: The board of directors by
resolution adopted by a majority of the entire board of directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in the resolution, shall have all of the
authority of the board of directors. The board of directors may provide by
resolution such powers, limitations, and procedures for such committees as the
board deems advisable. However, no such executive or other committee shall have
the authority of the board of directors in reference to amending the articles of
incorporation, adopting a plan of merger or consolidation, recommending to the
shareholders the sale, lease, exchange, or other disposition of all or
substantially all of the property and assets of the corporation otherwise than
in the usual and regular course of its business, recommending to the
shareholders a voluntary dissolution of the corporation or a revocation thereof,
or amending these bylaws.
ARTICLE V
Officers
5.1 Number and Election: The officers of the corporation shall be a
president, a secretary and a treasurer, who shall be elected by the board of
directors. In addition, the board of directors may elect one or more vice
presidents and the board of directors or the president may appoint one or more
assistant secretaries or assistant treasurers, and such other subordinate
officers as he shall deem necessary, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the president. Any two or more offices may be held by the
same person, except the offices of the president and secretary. The officers of
the corporation shall be natural persons of the age of eighteen years or older.
5.2 President: The president shall be the chief executive officer of the
corporation and shall preside at all meetings of shareholders and of the board
of directors. Subject to the d-Lrection- and control of the board of directors,
he shall have general and active management of the business of the corporation
and shall see that all orders and resolutions of the board of directors are
carried into effect. He may execute contracts, deeds and other instruments on
behalf of the corporation as is necessary and appropriate. He shall perform such
additional functions and duties as are appropriate and customary for the office
of president and as the board of directors may prescribe from, time to time.
5.3 Vice President: The vice president, or, if there shall be more than
one, the vice presidents in the order determined by the board of directors,
shall be the officers(s) next in seniority after the president. Each vice
president shall also perform such duties and exercise such powers as are
appropriate and as are prescribed by the board of directors or president. Upon
the death, absence or disability of the president, the vice president, or if
there shall be more than one, the vice presidents in the order determined by the
board of directors, shall perform the duties and exercise the powers of the
president.
5.4 Secretary: The secretary shall give, or cause to be given, notice of
all meetings of the shareholders and special meetings of the board of directors,
keep the minutes of such meetings, have charge of the corporate seal and stock
records, be responsible for the maintenance of all corporate records and files
and the preparation and filing of reports to governmental agencies, other than
tax returns, have authority to affix the corporate seal to any instrument
requiring it (and, when so affixed, it may be attested by his signature), and
perform such other functions and duties as are appropriate and customary for the
office of secretary as the board of directors or the president may prescribe
from time to time.
5.5 Assistant Secretary: The assistant secretary, or, if there shall be
more than one, the assistant secretaries in the order determined by the board of
directors or the president, shall, in the death, absence of disability of the
secretary or in case such duties are specifically delegated to him by the board
of directors, president or secretary, perform the duties and exercise the powers
of the secretary and shall, under the supervision of the secretary, perform such
other duties and have such other powers as may be prescribed from time to time
by the board of directors or the president.
5.6 Treasurer: The treasurer shall have control of the funds and the care
and custody of all stock, bonds and other securities owned by the corporation
and shall be responsible for the preparation and filing of tax returns. He shall
receive all moneys ,oaid to the corporation and shall have authority to give
receipts and vouchers, to sign and endorse checks and warrants in its name and
on its behalf, and give full discharge for the same. He shall also have charge
of disbursement of the funds of the corporation, shall keep full and accurate
records of the receipts and disbursements, and shall deposit all moneys and
other valuable effects in the name and to the credit of the corporation in such
depositories as shall be designated by the board of directors. He shall perform
such other duties and have such other powers as are appropriate and customary
for the office of treasurer as the board of directors or president may prescribe
from time to time.
5.7 Assistant Treasurer: The assistant treasurer, or, if there shall be
more than one, the assistant treasurers in the order determined by the board of
directors or the president, shall, in the death, absence or disability of the
treasurer or in case such duties are specifically delegated to him by the board
of directors, president, or treasurer, perform the duties and exercise the
powers of the treasurer, and shall, under the supervision of the treasurer,
perform such other duties and have such other powers as the board of directors
or the president may prescribe from time to time.
5.8 Removal and Resignation: Any officer elected or appointed by the board
of directors may be removed at any time by the affirmative vote of a majority of
the board of directors. Any officer appointed by the president may be removed at
any time by the board of directors or the president. Any officer may reslgn at
any time by giving written notice of his resignation to the president or to the
secretary, and acceptance of such resignation shall not be necessary to make it
effective, unless the notice so provides. Any vacancy occurring in any office,
the election or appointment to which is made by the board of directors, shall be
filled by the board of directors. Any vacarcy occurring in any office of the
corporation may be filled by the president for the unexpired portion of the
term.
5.9. Compensation: Officers shall receive such compensation for their
services as may be authorized or ratified by the board of directors. Election or
appointment of an officer shall not of itself create a contract right to
compensation for services performed as such officer.
ARTICLE VI
Stock
6.1 Certificates: Certificates representing sharss of the capital stock of
the corporation shall be in such form as may be approved by the board of
directors and shall be signed by the president or any vice president and by the
secretary or an assistant secretary. All certif icates shall be consecutively
numbered and the names of the owners, the number of the shares and the date of
issue shall be entered on the books of the corporation. Each certificate
representing shares shall state upon its face (a) that the corporation is
organized under the laws of the State of Colorado, (b) the name of the person to
whom issued, (c) the number of shares which the certificate represents, (d) the
par value, if any, of each share represented by the certificate, and (e) any
restriction placed upon the transfer of the shares represented by the
certificate.
6.2 Facsimile Signature: When a certificate is signed (1) by a transfer
agent other than the corporation or its employee, or (2) by a registrar other
than the corporation or its employee, any other signature on the certificate may
be facsimile. In case any officer, transfer agent or registrar who has signed,
or whose facsimile signature or signatures have been placed upon, any
certificate, shall cease to be such officer, transfer agent, or registrar,
whether because of death, resignation or otherwise, before the certificate is
issued by the corporation, it may nevertheless be issued by the corporation with
the same effect as if he were such officer, transfer agent or registrar at the
date of issue.
6.3. Transfers of Stock: Transfers of shares shall be made on the books of
the corporation only upon presentation of the certificate or certificates
representing such shares properly endorsed by the person or persons appearing
upon the face of such certificate to be the owner, or accompanied by a proper
transfer or assignment separate from the certificate, except as may otherwise be
expressly provided by the statutes of the State of Colorado or by order of a
court of competent jurisdiction. The officers or transfer agents of the
corporation may, in their discretion, require a signature guaranty before making
any transfer. The corporation shall be entitled to treat the person in whose
name any shares of stock are registered on its books as the owner of those
shares for all purposes, and shall not be bound to recognize any equitable or
other claim or interest in the shares on the part of any other person, whether
or not the corporation shall have notice of such claim or interest.
ARTICLE VII
Miscellaneous
7.1 Corporate Seal: The board of directors may adopt a seal which shall be
circular in form and shall bear the name of the corporation and the words "SEAL"
and "COLORADO" which, when adopted, shall constitute the corporate seal of the
corporation. The seal may be used by causing it or a facsimile thereof to be
impressed, affixed, manually reproduced, or rubber stamped with indelible ink.
7.2 Fiscal Year: The board of directors may, by resolution, adopt a fiscal
year for this corporation.
7.3 Amendment to Bylaws: These bylaws may at any time and from time to time
be amended, supplemented or repealed by the board of directors.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000811222
<NAME> CARDIFF INTERNATIONAL, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 15,470
<BONDS> 0
0
0
<COMMON> 320,314
<OTHER-SE> (335,784)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,217
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8,217)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,217)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
