SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB/A-1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12 (g) of the Securities Exchange Act of 1934
ATR Industries, Inc.
--------------------
(Name of Small business Issuer in its charter)
Nevada 13-3422912
------------- -------------------
(State or other jurisdiction of (I.R.S. Employee Identification No.)
Incorporation or organization)
4614 North University Drive
Ft. Lauderdale, Florida 33351
------------------------------ --------
(Address of principal executive offices) (Zip Code)
(954) 572-4023
-----------------
Issuer's telephone number, including area code
Securities to be registered under Section 12(b) of
the Act:
None
Securities to be registered under Section 12(g) of
the Act:
Common Stock, $.001 par value
Convertible Preferred Stock, $.001 par value
<PAGE>
ITEM 1 . DESCRIPTION OF BUSINESS
The Company was originally named Tri-Capital Corporation and
was incorporated in Nevada in 1987. The name was changed in
1988 to Advanced Appearance of America, and changed again in
March 1998 to ATR Industries, Inc.. Advanced Appearance of
America, was a public shell company, with no operations or
revenues, for 3 years prior to the ATR Industries, Inc. name
change. The Company then acquired on June 1, of 1998 ATR
Industries, Inc. of Florida (AKA Cleaning Express USA and
Cleaning Express of South Palm Beach, Inc.), a private Florida
Corporation, for 3,000,000 restricted shares of ATR
Industries, Inc., the Nevada Corporation. The Company is
authorized to issue One Hundred Million (100,000,000) Common
Shares, $.001 par value. The Company is also authorized to
issue Fifty Million (50,000,000) Convertible Preferred Shares,
$.001 par value.
The Company's executive offices are located at 4614 North
University Drive, Fort Lauderdale, Florida 33551. These
offices consist of 1,100 square feet, which are leased month
to month for $1,000.00 per month. The Boca Raton offices are
located at ( ) . These offices consist of 1,000 square feet,
which are leased month to month for $636.00 per month.
There are presently issued and outstanding 12,816,604 Common
Shares and 1,000,000 Preferred
Shares.
Corporate Operations. The Company offers home cleaning
services and through its emphasis on budget pricing, has
developed a niche in the home cleaning industry. The Company
currently operates two offices and dispatches 40-50 workers
daily, in teams of two. The Company specializes in affordable
home services. The present geographic scope for Cleaning
Express USA includes the following areas of South Florida:
Dade County, Broward County, and South Palm Beach County.
The Company through its wholly owned subsidiary Beautymax.com
is developing an e-commerce web site. Edward Roth, CEO has
owned and operated beauty salons for 10 years. Mr. Roth has
also been a management consultant for beauty operations, as
well as worked in the sales of beauty products. Through Mr.
Roth, the Company has entered into a web site development
contract with Meurer Marketing of Los Angeles to development
its store web site The site will be designed and built to
produce a world -wide marketing of cosmetic, hair care, nail
and skin care and general beauty lines on a discounted basis.
Beautymax.com will catalogue popular products, primarily to
females 18-40 years, including a department aimed at ethnic
customers. Visitors to the online store will be able to shop
24 hours a day, regardless of world time zones, and online
customers will be able to shop and order in English, Spanish,
or French. Beautymax.com has projected a launch date on the
Internet of September 15, 1999. We have already launched a
preview site for the general public, now available for
viewing. We expect to generate immediate revenues upon opening
the web site. Initial site development costs have been paid
for by the web designer. Expenses for development, marketing
and advertisement are projected at five hundred thousand
dollars for the first three to six months, and projected at
four to six million annually for global operations. The
anticipated source of funding will be raised through a planned
secondary stock offering in the near future. Registration
documents are presently being prepared.
The Company would like to develop the Beautymax.com "concept",
which is, " Max Beauty, Max Discount", and will provide the
best everyday low prices, by providing Internet customers with
price and selection. We will be progressively adding more
items on a monthly basis.
Beautymax.com has initial link and marketing arrangement with
two internet shopping
2
<PAGE>
destinations. Strategic marketing alliances with major search
engines are being negotiated, along with a complete marketing
campaign developed by a national advertising agency.
Distribution and Marketing for home cleaning services will be
through print adds, television and radio commercials. Secondly
on a local level, management uses a call back system for
quality control; customers who are not happy after service are
offered a discount fro a makeup. Our customer policies allow
us to reward each customer with a future discount for
referring a friend for service.
Beauty products will be marketed over the "World Wide Web" via
the "Internet". All customer orders will be implimented by
online credit card or cyber cash systems with a virtual
shopping cart. Actual in-house staff is projected at 3-6 new
employees for the first 12 months. These new employee's will
be managed by the three employee's that are presently on
staff. Initially we anticipate a catalogue format with about
1000-3000 products, new product lines will be added as web
traffic and "hits" increase. The Company intends on
maintaining a floating inventory of products. The initial
source of funds will provided by a 504 offering , and
anticipated secondary stock offering along with 30 day lines
of credit to be established. Current available product
sourcing eliminates the need for extended inventory.
Beautymax.com will address the risks associated with security
breaches for online credit cards and cyber cash systems by
utilizing the services of a leading provider of custom
processing solutions, that provide the highest levels of
secured customer transactions including high level encryption
standards to ensure a safe and secure funding , including
checkless checks and all major credit cards using state of the
art electronic processing. At the present time, we are
reviewing various proposals from companies that guarantee
secure transactions.
Competition. The home cleaning and beauty care related sales
industries are highly competitive with respect to price,
service, quality and internet location. As a result anyone in
these arena's may have a high failure rate. There are numerous
well-established larger competitors in both the home cleaning
and beauty care industries with comprehensive web sites,
possessing substantially greater financial, marketing,
personnel and other resources than the company. There can be
no assurance that the Company will be able to respond to
various competitive factors affecting the business.
Principal suppliers. The company is in contract negotiations
with suppliers of beauty related items, and has verbal
commitments from three suppliers, however does not have any
principal suppliers at this time. The principal suppliers to
Beautymax.com will be wholesale distributors, who do not sell
retail, but do supply other retail stores and export
companies.
Dependence on One or a Few Major Customers. The Company does
not expect that any single customer will account for more than
ten percent of its business.
Need for Government approval. At the present time there is no
need for government approval, this may change in the future.
Research and Development. There has been no research and
development to date.
Employees. The Company has three full time employees, and the
40-50 workers used by the company are independent contractors
to service and provide home clean services to our existing and
new customers that have been established for 3 years of
operations.
3
<PAGE>
ITEM 2. Management's Discussion and Analysis or Plan of Operation
Trends and uncertainties. Demand for the Company's home
cleaning services and Beautymax products will be dependent on,
among other things, market acceptance of the Company's
concept, the quality of its Web site and general economic
conditions which are cyclical in nature. Inasmuch as a major
portion of the Company's activities is the receipt of revenues
form the sales of its products, the Company's business
operations may be adversely affected by the Company's
competitors and prolonged recessionary periods.
Capital and Source of Liquidity. The company will require
substantial capital in order to meet its current and strategic
business plan. Continued development and marketing of
subsidiary companies require capital. We are considering a
$10,000,000 secondary offering to meet these capital needs. As
of March 31, 1999 the Company has issued 12,816,604 Common
Shares valued at $12,816.60
Operating activities generated a net loss of $48,921 during
the afore mentioned period. The loss for the period was funded
from $41,235 in advances from the majority stockholder, Edward
A. Roth, President. Depreciation of $2,600 was added back to
operating activities because it did not require the use of
cash. There was a $12,300 increase in recoverable income taxes
during the period resulting from the increase in the
recoverable income tax account on the balance sheet. The
recoverable income tax account increased due to the net
operating loss increase during the period. This translates
into a carryback of federal and state income taxes to prior
periods for federal and state income tax purposes. Accounts
receivable decreased $699 during the period resulting in a net
cash operating source of funds during the period. Accounts
payable, accrued expenses and the excess of outstanding checks
over the bank balance increased from the prior period. This
caused a source of cash from operating activities.
There were no investing activities during the period.
Financing activities consisted of principal repayments under
the company's capitalized lease obligation which it has for
its office equipment. In addition, the company was funded by a
$3,000 issuance of common stock during the period. The company
acquired all of the then outstanding common stock of ATR
Industries, Inc. And its wholly owned subsidiary (Florida
corporation), formerly known as Cleaning Express USA, in
exchange for 3,000,000 of its own shares valued at a par
valued at a par value of $.001 per share.
The shareholder loan payable of $41,235 at December 31, 1998
is payable to Edward A. Roth, President, and majority
shareholder. The loan is not evidenced by a written promissary
note, rather is an oral agreement. There is no interest on
this loan and the effects of imputed interest are immaterial
to the financial statements taken as a whole. The shareholder
loan was repaid in full subsequent to year end.
On a long term basis, liquidity is dependent on continuation
and expansion of operations, receipt of revenues, additional
infusions of capital and debt financing. The Company believes
that additional capital and debt financing in the short term
will allow the Company to develop its Home Cleaning and Beauty
related products marketing. However , there can be no
assurance that the Company will be able to obtain additional
equity or debt financing in the future, if at all. If we are
unable to raise additional capital the company will grow but
at a considerable slower pace.
Plan of Operation. The Company is not delinquent on any of
its obligations even though the Company has begun to generate
revenue. The Company intends to market its products utilizing
4
<PAGE>
cash made available from the private and public sale of its
securities. The Company is of the opinion that revenues from
the sales of its products along with proceeds of the sale of
its securities will be sufficient to pay its expenses.
ITEM 3. DESCRIPTION OF PROPERTY
The Company's executive offices are located at 4614 North
University Drive, Fort Lauderdale (Lauderhill), Florida 33351.
These offices consist of 1,100 square feet, which are leased
month to month for $1,000.00 per month. The Boca Raton offices
are located at ( ) . These offices consist of 1,000 square
feet, which are leased month to month for $636.00 per month.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(1) (2) (3) (4)
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Owner
Common Edward A. Roth 4,156,000* 32.4%
4614 North University Dr.
Fort Lauderdale, Fla. 33351
Preferred Edward A. Roth 500,000* 50%
Common Alisha M. Roth 4,156,000 32.4%
4614 North University Dr.
Fort Lauderdale, Fla. 33351
Preferred Alisha M. Roth 500,000 50%
Common Barbara Patigalia 1,000 .00007%
Common Jon J. Marks 0 0%
Common All Directors 8,313,000 64.8007%
Preferred As a group 1,000,000 100%
</TABLE>
* Edward A. Roth and Alisha M. Roth are the beneficial owners of
different securities, but hold them as Joint Tenancy.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Name and Age Position Term(s) of Office
Edward A. Roth, President and Director 1997 to present
age 43
Alisha M. Roth, Secretary, Treasurer 1997 to present
age 33 and Director
Barbara Patigalia, Director 1997 to present
age 52
Jon J. Marks, Director 1998 to present
age 54
5
<PAGE>
Edward A.Roth. Mr.Roth has been President and Director of the
Company since 1997. Mr.Roth previously served as Vice-
President and Director of Operations for Cleaning Express USA
since it's inception in November 1994. During this period Mr.
Roth developed and implimented all operations and developments
creating a company that started with less than 50 customers,
and today services over 8,000 customers in South Florida. Mr.
Roth was President of Advanced Appearance, a chain of Beauty
Salons, in Alabama and Florida form 1978 to 1988. Prior to
this Mr. Roth served as a management consultant working inde-
pendently for 20 years. Mr.Roth has attended Auburn University
majoring in Business and marketing, and is also a veteran of
the United States Air Force. Edward A. Roth is married to
Alisha M. Roth
Alisha M. Roth. Mrs. Roth serves as Secretary and Director of
the Company since 1997. Mrs.Roth served previously as Presi-
dent of Cleaning Express USA, and during her tenure she was in
charge of staffing and customer relations. Mrs. Roth has been
with Cleaning Express USA since 1994, prior to that she was a
resident of Trinadad, West Indies. Mrs. Roth has owned and
operated her own business in the restaurant and pre-school
development areas, and has 8 years of management experience.
Alisha M. Roth is married to Edward A. Roth.
Barbara Patigalia. Ms.Patigalia is a language pathologist with
the Head Start program in Maryland, and serves as President of
the League of Women Voters in Potomac, Maryland. Ms. Patigalia
has no business experience during the last 5 years.
Jon J. Marks. Mr. Marks is CEO of Marketing Magic,Inc. founded
in 1984. Mr. Marks writes a monthly newspaper column on
Advertising, Marketing and Promotions for the Business to
Business Newspaper in Florida. Mr. Marks created a business
radio show on AM stations WSRF and WWNN in South Florida. Mr.
Marks ha authored a book, " Barter: The Original Currency".
Mrs Marks is Co-Founder and shareholder of Entertainment Radio
Systems, Inc. through 1997, Co-Founder and shareholder of
Business to Business Newspapers through 1996 and Co-Founder
and shareholder of Explosive Promotions through 1992. Mr.
Marks has a Bachelor of Business Administration from Florida
Atlantic University in 1971 and a Master of Public Adminis-
tration in 1974.
ITEM 6. EXECUTIVE COMPENSATION
Remuneration. The Company has bentered into an employment
agreement with Edward A. Roth for a term of three years.
Pursuant to the agreement, Mr. Roth serves as President,
Director and General Manager. Mr. Roth shall receive an
annualized base salary of $125,000 and is entitled to an
incentive bonus of 2% of the gross profits. Mr. Roth's salary
has not started to accrue.
The Company has also entered into an employment agreement with
Alisha Roth for a term of three years. Pursuant to the agree-
ment, Mrs. Roth serves as Secretary, Treasurer and Director.
Mrs. Roth shall receive and annualized salary of $60,000, pay-
able in installments according to the Employer's regular pay-
roll schedule. Mrs. Roth salary has not started to accrue.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions, or proposed transactions
during the past two years to which the Company or any Officers
or Directors were a party.
ITEM 8. LEGAL PROCEEDINGS
There have been no legal proceedings against the Company since
inception, nor is the Company aware of any disputes which may
result in legal proceedings.
6
<PAGE>
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is traded in the over-the-counter
market and listed on the NASDAQ bulletin board under the
symbol "AATR".
The following table sets forth the range of high and low bid
quotations for the Company's common stock for each quarter
since commencement of trading ( January 1998, as reported by
the OTC Bulletin Board). The Company's market makers are Hill
& Co., . The quotations represent inter-dealer prices without
retail markup, markdown or commission, and may not necessarily
represent actual transactions.
Quarter Ended High Bid Low Bid
3/31/99* $7.00 .25
* There was no trading prior to this time.
The Company has never paid any cash dividends nor does it
intend, at this time, to make any cash distributions to its
shareholders as dividends in the near future.
As of March 31, 1999, the number of holders of the Company's
common stock is 64.
Item 10. RECENT SALES OF UNREGISTERED SECURITIES
In February 1999 the Company completed an offering of
4,350,910 Common Shares under Rule 504 of Regulation D of the
Securities Act of 1933 at .22 per Common Share to the
following:
Name # of Common Shares
Michael, David Irrevocable Trust 503,273
Senkovski, Alexander Irrevocable Trust 503,273
A-Z Oil LLC 435,091
China Connection 435,091
East-West Trading Corporation 435,091
Sequoia International 435,091
Karston Electronics LTD 435,091
Leeward Consulting Group, LLC 435,091
Lexington Sales Corporation LTD 435,091
Oriental Investments Limited 435,091
Item 11. DESCRIPTION OF SECURITIES
Qualification. The following statements constitute summaries
of the material provisions of the Company's Certificate of
incorporation and Bylaws, as amended. Such summaries do not
purport to be complete and are qualified in their entirety by
reference to the full text of the Certificate of Incorporation
and Bylaws.
The Company's articles of incorporation authorize it to issue
up to 100,000,000 Common Shares, $.001 par value per Common
Share and 50,000,000 Convertible Preferred Shares, $.001 par
value per share, with each preferred share convertible into 10
shares of common stock, including but not limited to voting
rights.
Common and Preferred Stock. All outstanding Common Shares and
Preferred Shares are legally issued, fully paid and
non-assessable.
7
<PAGE>
Liquidation Rights. Upon liquidation or dissolution, and after
payment of the Preferred Shareholders, each outstanding Common
Share will be entitled to share equally in the remaining
assets of the Company legally available for distribution to
shareholders after the payment of all debts and other
liabilities.
Dividend Rights. There are no limitations or restrictions upon
the rights of the Board of Directors to declare dividends out
of any funds legally available therefor. The Company has not
paid dividends to date and it is not anticipated that any
dividends will be paid in the foreseeable future. The Board of
Directors initially may follow a policy of retaining earnings,
if any, to finance the future growth of the Company.
Accordingly, future dividends, if any, will depend upon, among
other considerations, the Company's need for working capital
and its financial conditions at the time.
Voting Rights. Holders of Common Shares of the Company are
entitled to cast one vote for each share held at all
shareholders meetings for all purposes.
Other Rights. Common Shares are not redeemable, have no
conversion rights and carry no preemptive or other rights to
subscribe to or purchase additional Common Shares in the event
of a subsequent offering.
Convertible Preferred Stock. The Corporation is authorized to
issue Fifty Million (50,000,000) Convertible Preferred Shares,
par value $.001 per share. The rights, peferences, privileges
and restrictions granted to and imposed on the Common Shares
and the Preferred Shares are identical in all respects, except
that the holders of the Preferred Shares have certain
conversion rights and a liquidation preference as set forth
below.
A. Liquidation Preference
1. In the event of any liquidation,
dissolution or winding up of this
corporation, either voluntary or
involuntary, the holders of the Preferred
Stock shall be entitled to receive, prior
and in preference to any distribution of any
of the assets of the Company to the holders
to Common Stock by reason of their ownership
thereof, an amount per share equal to the
price for which such share was originally
issued, as adjusted for any stock dividends,
combination or splits with respect to such
shares. If upon the occurrence of such
event, the assets and funds thus distributed
among the holders of Preferred Shares shall
be insufficient to permit the entire assets
and funds of this corporation legally
available for distribution shall be
distributed ratably among the holders of
Preferred Shares in proportion to the number
of shares of Preferred shares owned by such
holder.
2. After payment has been made to the
holders of the Preferred Shares of the full
amounts to which they shall be entitled,
then the entire remaining assets and funds
of the corporation legally available for
distribution, if any shall be distributed
equally among the Common Shareholders.
B. Conversion.
1. The Preferred Shares shall convert on a
10 to 1 basis into Common Shares at any time
at the direction of the Preferred
Shareholder.
C. Voting Rights
1. Holders of Preferred Shares of the
Company are entitled to cast ten votes for
each preferred share held at all
shareholders meetings for all purposes.
8
<PAGE>
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification. The Company shall indemnify to the fullest
extent permitted by, and in the manner permissible under the
laws of the State of Nevada, any person made, or threatened to
be made, a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact
that he is or was a director or officer of the Company, or
served any other enterprise as director, officer or employee
at the request of the Company. The Board of Directors, in its
discretion, shall have the power on behalf of the Company to
indemnify any person, other than a director or officer, made a
party to any action, suit or proceeding by reason of the fact
that he/she is or was an employee of the Company.
Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling
persons of the Company, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities ( other
than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceedings) is
asserted by such director, officer, or controlling person in
connection with any securities being registered, the Company
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issues.
ITEM 13. FINANCIAL STATEMENTS
The financial statements and supplemental data required by
this ITEM 13 follow the index of financial statements
appearing at ITEM 15 of this Form 10-SB
ITEM 14.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been no changes in or disagreements with
accountants regarding accounting and financial disclosure.
ITEM 15. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Independent Auditor's Report
Balance Sheet from inception to December 31, 1998
Statement of Operation for the Period from Inception to
December 31, 1998. Statement of cash Flows for the Period from
Inception to December 31, 1998. Statement of Changes in
Stockholder's Equity for the Period from Inception to December
31, 1998.
Exhibits
3.1 Articles of incorporation
3.2 By-Laws
9
<PAGE>
CONTENTS
=====================================================================
INDEPENDENT AUDITOR'S REPORT................................ ............. F-2
BALANCE SHEET
ASSETS, LIABILITIES AND STOCKHOLDERS' DEFICIT..................... F-3
STATEMENT OF OPERATIONS................................................... F-5
STATEMENT OF CASH FLOWS.................................................... F-6
STATEMENT OF STOCKHOLDERS' DEFICIT.......................................... F-7
NOTES TO FINANCIAL STATEMENTS.............................................. F-8
=====================================================================
F-1
<PAGE>
Michael J. Bongiovanni, C.P.A., P.A.
12433 Willingdon Road
Charlotte, N.C. 28078
(704) 904-2390
To the Board of Directors
ATR INDUSTRIES, INC. (a Nevada corporation) & SUBSIDIARIES
4614 North University Drive
Lauderhill, Florida 33351
I have audited the accompanying balance sheet of ATR Industries, Inc. (a
Nevada corporation) and its wholly-owned subsidiaries as of December 31, 1998
and the related statements of operations, stockholders' deficit, and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from
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. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ATR Industries, Inc. (a Nevada
corporation) and its wholly-owned subsidiaries as of December 31, 1998, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Michael J. Bongiovanni, C.P.A.
March 31, 1999
F-2
<PAGE>
BALANCE SHEET
ATR INDUSTRIES, INC. & SUBSIDIARIES
December 31, 1998
ASSETS
CURRENT ASSETS
Cash $ 4,164
Recoverable income taxes 14,400
Accounts receivable 500
----------------
TOTAL CURRENT ASSETS 19,064
PROPERTY AND EQUIPMENT
Furniture 4,215
Leasehold improvements 2,000
Equipment 23,631
Less: Accumulated depreciation (25,694)
-----------------
NET PROPERTY AND EQUIPMENT 4,152
OTHER ASSETS
Deposits 1,700
TOTAL OTHER ASSETS 1,700
TOTAL ASSETS $ 24,916
==========
F-3
<PAGE>
BALANCE SHEET (CONTINUED)
ATR INDUSTRIES, INC. & SUBSIDIARIES
December 31, 1998
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Excess of outstanding checks
over bank balance $ 11,366
Accounts payable and accrued expenses 11,990
Shareholder loans payable 41,235
Current portion of capitalized
lease obligation 2,482
TOTAL CURRENT LIABILITIES 67,073
LONG-TERM DEBT
Capitalized lease obligation 7,205
STOCKHOLDERS' DEFICIT
Common stock 3,183
Retained deficit (52,545)
TOTAL STOCKHOLDERS' DEFICIT (49,362)
$ 24,916
===========
F-4
<PAGE>
STATEMENT OF OPERATIONS
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Year Ended December 31, 1998
REVENUE
Sales $ 474,370
Cost of Labor (314,106)
---------
GROSS PROFIT 160,264
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
Advertising 57,581
Alarm and Security Service 326
Automobile 2,163
Casual Office Labor 16,598
Depreciation 2,600
Dues & Fees 4,447
Employee Leasing 31,040
Employee Benefits 4,706
Entertainment 3,900
Equipment Leasing 9,915
Insurance 2,741
Interest Expense 1,309
Office Expense and Supplies 4,627
Professional Fees 23,328
Public Trading 22,335
Rent 16,628
Repairs & Maintenance 3,000
Taxes & Licenses 6,760
Telephone 7,952
Utilities 1,229
------------------
TOTAL EXPENSES 223,185
OPERATING LOSS (62,921)
Income Tax Benefit 14,000
NET LOSS $ (48,921)
Retained Deficit, January 1, 1998 (3,624)
--------------------
Retained Deficit,
December 31, 1998 $ (52,545)
=============
F-5
<PAGE>
STATEMENT OF CASH FLOWS
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Year Ended December 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (48,921)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation 2,600
Recoverable income taxes increase (12,300)
(Increase) decrease in operating assets:
Accounts receivable 699 Increase (decrease) in operating liabilities:
Accounts payable & accrued expenses 11,386
Shareholder loans payable 41,235
Excess of outstanding checks over
bank balance 8,212
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,911
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock adjustment (317)
Common stock issuance 3,000
Principal repayments under capital lease (2,231)
----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 452
NET INCREASE IN CASH
AND CASH EQUIVALENTS $ 3,363
Cash and cash equivalents, beginning of period $ 801
-----------------
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 4,164
===========
F-6
<PAGE>
STATEMENT OF STOCKHOLDERS' DEFICIT
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Year Ended December 31, 1998
Common Common Retained
Stock Shares (Deficit)
Balance, January 1, 1998 $ 500 36,670,000 $ (3,624)
200 to 1 Reverse Stock Split in 1998 - (36,486,650) --
Issuance of shares on June 1, 1998 3,000 3,000,000 --
Adjustment to pre-1998 (317)
Year Ended December 31, 1998 Net Loss -0- - (48,921)
--------- ------------- -----------
Balance, December 31, 1998 $ 3,183 3,183,350 $ (52,545)
======= ========= ==========
Supplementary Information:
Common stock, par value $.001, consists of 100,000,000 authorized shares. There
are 3,183,350 shares, issued and outstanding at December 31, 1998. On June 1,
1998 the Company acquired all of the then outstanding common shares of ATR
Industries, Inc. and its wholly owned subsidiary (Florida corporations),
formerly known as Cleaning Express USA, in exchange for 3,000,000 of its own
shares.
On October 26, 1998, The Company amended its Articles of Incorporation to
authorize 50,000,000 shares of convertible preferred stock.
F-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Year Ended December 31, 1998
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - ATR Industries, Inc. (a Nevada corporation) was incorporated
on December 30, 1994. These financial statements include the effects of its
wholly-owned subsidiaries, ATR Industries, Inc. (a Florida corporation) AKA
Cleaning Express USA and Cleaning Express of South Palm Beach, Inc. On December
1, 1997, ATR Industries, Inc. (a Florida corporation) amended its Articles of
Incorporation to effect a name change from Cleaning Express USA, Inc. The
company is a full service cleaning company offering daily residential cleaning
services, carpet cleaning and other related services in the South Florida area.
The combination of entities was treated under the consolidation method.
Accounts Receivable - Accounts receivable are charged to bad debt expense as
they are deemed uncollectible based upon a periodic review of the accounts. No
bad debt expense for the year ended December 31, 1998 was recorded. At December
31, 1998, no allowance for doubtful accounts was deemed necessary in
management's opinion.
Property and Equipment - Property and equipment are recorded at cost and include
expenditures which substantially increase the productive lives of the existing
assets. Maintenance and repair costs are expensed as incurred. Depreciation is
provided using the straight-line method and other methods which approximate the
straight-line method. It is calculated over the prescribed Internal Revenue
Service recovery periods which range from 5 to 39 years.
When a fixed asset is disposed of, its cost and related accumulated depreciation
are removed from the accounts. The difference between undepreciated cost and
proceeds from disposition is recorded as gain or loss.
Cash and Cash Equivalents - For purposes of the Statement of Cash Flows, the
Company considers liquid investments with an original maturity of three months
or less to be cash equivalents.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue Recognition - Revenue is recognized when cleaning services are
performed.
F-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Year Ended December 31, 1998
Income Taxes - The Company provides for the tax effects of the transactions
reported in the financial statements. This income tax benefit consists of taxes
currently refundable due to net operating loss carryback provisions for federal
and state governments. There are no deferred income tax assets or liabilities.
Advertising - The Company charges the costs of advertising to expense when
incurred.
NOTE B - OBLIGATION UNDER CAPITAL LEASE
The Company is leasing equipment under a noncancellable capital lease which
expires in December, 2000. The obligation under capital lease has been recorded
in the accompanying Balance Sheet at the net present value of the future minimum
lease payments, discounted at an interest rate of 20%. The book value of the
equipment was approximately $5,000 at December 31, 1998.
Minimum future obligations under this capital lease at December 31, 1998 are as
follows:
Year Amount
1999 $ 3,540
2000 3,540
2001 3,540
2002 3,540
---------
Total minimum obligation 14,160
Less amount representing interest 4,473
Present value of net
minimum obligation 9,687
Less current portion 2,482
$7,205
======
F-9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ATR INDUSTRIES, INC. & SUBSIDIARIES
For the Year Ended December 31, 1998
NOTE C - COMMITMENTS
The Company leases its offices in Lauderhill and Boca Raton, Florida under
noncancellable operating leases. Future minimum rental payments as of December
31, 1998 in the aggregate and for each of the two succeeding years are as
follows:
Year Amount
1999 $13,525
2000 1,800
---------
$15,325
=======
In 1999, the Company has committed itself to compensate each of its Board of
Directors in the amount of 1,000 shares of its common stock annually and 10,000
common stock purchase options over a thirty six month period. As of the date of
this report, no option agreement has been officially adopted, there is no fair
market value for the options and none of the equity instruments have been
issued.
NOTE D - INCOME TAXES
The benefit for income taxes for the year ending December 31, 1998 consists of
the following:
Recoverable federal income taxes $ 11,000
Recoverable state income taxes 3,000
-----------
Total $ 14,000
========
The Company has approximately $70,000 of federal and state net operating losses
available which expire in the year 2013. The losses can be presently carried
back to previous taxable years to obtain federal and state income tax refunds.
F-10
3.1 ARTICLES OF INCORPORATION
OF
TRI CAPITAL CORPORATION
We the undersigned, being each of the original incorporators herein named, for
the purpose of forming a corporation to do business both within and without the
State of Nevada, and in pursuance of the corporation laws of the State of
Nevada, being Chapter 78 of the Nevada Revised Statutes, do make and file these
Articles of Incorporation hereby declaring and certifying that the facts herein
stated are true:
1. The name of the corporation is TRI CAPITAL CORP.
2. Its principal office in the County of Tahoe, State of Nevada is located at
350 South Center Street, Suite 4040, Reno, Nevada 89501. The name and address of
its Resident Agent is Elliott R. Pearson, 350 South Center Street, Suite 404,
Reno, Nevada 89501.
3. The purpose for which the corporation is organized are to engage in any
activity or business not in conflict with the laws of the State of Nevada or of
the United States of America, and without limiting the generality of the
foregoing, specifically:
1. To have and to exercise all the powers now or hereafter conferred by
the laws of the State of Nevada upon corporations organized pursuant to the laws
under which the corporation is organized and any and all acts amendatory thereof
and supplemental thereto.
2. To discount and negotiate promissory notes, drafts, bill of exchange
and other evidence of debts, and to collect for others money due them on notes,
checks, drafts, bill of exchange, commercial paper and other evidence of
indebtedness.
3. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage, pledge, or otherwise dispose of, to guaranty, to
invest, trade, and deal in and with personal property of every class and
description.
4. To enter into any kind of contract or agreement, cooperative or
profit sharing plan with its officers or employees that the corporation may deem
advantageous or expedient or otherwise to reward or pay such persons for their
services as the directors may deem fit.
5. To purchase, lease, or otherwise acquire, in whole or in part, the
business, the good will, rights, franchises and property of every kind, and to
undertake the whole or any part of the assets or liabilities, of any person,
firm, association, non-profit or profit corporation, or own property necessary
or suitable for its purposes, and to pay the same in cash, in the stocks or
bonds of this company or otherwise, to hold or in any manner dispose of the
whole or any part of the business or property so acquired and to exercise all of
the powers necessary to incidental to the conduct of such business.
6. To lend or borrow money and to negotiate and make loans, either on
its own account or as agent, or broker for others.
7. To enter into, make, perform and carry out contracts of every kind
and for any lawful purpose, without limit as to amount with any person, firm,
association, cooperative profit or non-profit corporation, municipality, State
or Government or any subdivision, district or department thereof.
8. To buy, sell, exchange, negotiate, or otherwise deal in, or
hypothecate securities, stocks, bonds, debentures, mortgages, notes or other
collaterals or securities, created or issued by any corporation wherever
organized including this corporation, within such limits as may be provided by
law, and while owner of any such sticks or other collaterals to exercise all
rights, powers and privileges of ownership, including the right to vote the
same, to subscribe for stock of any corporation to be organized, other than to
promote the organization thereof.
9. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage, pledge, license, or otherwise dispose of any
letters, patents, copyrights, or trademarks of every class and description.
10. To do any and all other such acts, things, business or businesses
in any manner connected with or necessary, incidental, convenient or auxiliary
to do any of these objects hereinbefore enumerated, or calculated,
1
<PAGE>
directly or indirectly, to promote the interest of the corporation; and in
carrying on its purposes, or for the purpose of obtaining or furthering any of
its business, to do any and all acts and things, and to exercise any and all
other powers which a co-partnership or natural person could do or exercise, and
which now or hereafter may be authorized by law, and in any other part of the
world.
11. The several clauses contained in this statement of powers shall be
construed as both purposes and powers. And the statements contained in each of
these causes shall be in no way limited or restricted, by reference to or
inference form, the terms of any other clauses, but shall be regarded as
independent purposes and powers, and no recitations, expression or declaration
of specific or special powers or purposes herein enumerated shall be deemed to
be exclusive, but is hereby expressly declared that all other lawful powers not
inconsistent herewith, are hereby included.
4. The aggregate number of shares which the corporation shall have authority to
issue is 100,000,000. Each share will have a par value of .001.
5. The governing board shall be styled "Director", and the first Board
shall be one (1) in number. So long as all of the shares of the
corporation are owned beneficially and of record by either one or two
shareholders, the number of directors may be less than three, but not less then
the number of shareholders. Otherwise, the number of directors shall not be less
than three.
Subject to the foregoing limitations, the number of directors shall not
be reduced to less than one, and may, at any time or times, be increased or
decreased by a duly adopted amendment to these Articles of Incorporation, or in
such manner as shall be provided in the By-laws of the corporation duly adopted
by either the Board of Directors or the shareholders.
The names and addresses of the first Board of Directors are as follows:
Directors Address
Monroe Arndt 350 Broadway, 4th flr
New York, NY 1001
6. All shares are to be non-assessable.
7. The names and addresses of the incorporators of the Corporation are as
follows:
Name Address
Elliott R. Pearson 350 S. Center St. # 404
Reno, NV 89501
8. The period of its duration ir perpetual.
9 Provisions for the regulation of the internal affairs of the corporation are
contained in the By-laws of this Corporation.
DATED this 4th Day of August, 1987
------------------------------
Elliott R. Pearson
2
3.2 BYLAWS
FOR THE REGULATION, EXCEPT AS OTHERWISE
PROVIDED BY STATUTE OR ITS ARTICLES OF INCORPORATION
OF
ATR INDUSTRIES, INC.
ARTICLE 1
OFFICES
The registered office of the Corporation in the State of Nevada shall be located
in the City and State designated in the Articles of Incorporation. The
Corporation May also maintain offices at such other places within or without the
State of Nevada as the Board of Directors may, from time to time, determine.
ARTICLE 2
MEETINGS OF SHAREHOLDERS
Section 1- Annual Meetings (Chapter 78.310)
The annual meeting of the shareholders of the Corporation shall be held at the
time fixed, from time to time, by the Directors.
Section 2- Special Meetings (Chapter 78.310)
Special meetings of the shareholders may be called by the Board of Directors or
such person or persons authorized by the Board of Directors and shall be held
within or without the State of Nevada.
Section 3- Place of Meetings (Chapter 78.310)
Meetings of shareholders shall be held at the registered office of the
Corporation, or at such other places, within or without the State of Nevada as
the Directors may from time to time fix. If no designation is made, the meeting
shall be held at the Corporation's registered office in the state of Nevada.
Section 4- Notice of Meetings (Section 78.370)
(a) Written or printed notice of each meeting of shareholders, whether annual or
special, signed by the president, vice president of secretary, stating the time
when and place where it is to be held, as well as the purpose or purposes for
which the meeting is called, shall be served either personally or by mail, by or
at the direction of the direction of the president, the secretary, or the
officer or the person calling the meeting, not less than ten or more than sixty
days before the date of the meeting, unless the lapse of the prescribed time
shall have been waived before or after the taking of such action, upon each
shareholder of record entitled to vote at such meeting, and to any other
shareholder to whom the giving of notice may be required by law. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
addressed to the shareholder as it appears on the share transfer records of the
Corporation or to the current address, which a shareholder has delivered to the
Corporation in a written notice. (b) Further notice to a shareholder is not
required when notice of two consecutive annual meetings, and all notices of
meetings or of the taking of action by written consent without a meeting to him
or her during the period between those two consecutive annual meetings; or all,
and at least two payments sent by first-class mail of dividends or
1
<PAGE>
interest of securities during a 12-month period have been mailed addressed to
him or her at his or her address as shown on the records of the Corporation and
have been returned undeliverable.
Section 5- Quorum (Section 78.320)
(a) Except as other wise provided herein, or by law, or in the Articles of
Incorporation (such Articles and any amendments thereof being hereinafter
collectively referred to as the "Articles of Incorporation"), a quorum shall be
present at all meetings of shareholders of the Corporation, if the holders of a
majority of the shares entitled to vote of that matter are represented at the
meeting in person or by proxy.
(b) The subsequent withdrawal of any shareholder form the meeting, after the
commencement of a meeting, or the refusal of any shareholder represented in
person or by proxy to vote, shall have no effect of the existence of a quorum,
after a quorum has been established at such meeting.
(c) Despite the absence of a quorum at any meeting of shareholders, the
shareholders present may adjourn the meeting.
Section 6- Voting and Acting (Section 78.320 & 78.350)
(a) Except as otherwise provided by law, the Articles of Incorporation, or these
Bylaws, any corporate action, the affirmative vote of the majority of shares
entitled to vote on that matter and represented either in person or by proxy at
a meeting of shareholders at which a quorum is present, shall be the act of the
shareholders of the Corporation.
(b) Except as otherwise provided by statute, the Certificate of Incorporation,
or these bylaws, at each meeting of shareholders, each shareholder of the
Corporation entitled to vote thereat, shall be entitled to one vote for each
share registered in his name on the books of the Corporation.
(c) Where appropriate communication facilities are reasonably available, any or
all shareholders shall have the right to participate in any shareholders'
meeting, by means of conference telephone or any means of communications by
which all persons participating in the meeting are able to hear each other.
Section 7- Proxies (Section 78.355)
Each shareholder entitled to vote or to express consent or dissent without a
meeting, may do so either in person or by proxy, so long as such proxy is
executed in writing by the shareholder himself, his authorized officer,
director, employee or agent or by causing the signature of the stockholder to be
affixed to the writing by any reasonable means, including, but not limited to ,
a facsimile signature, or by his attorney-in-fact there unto duly authorized in
writing. Every proxy shall be revocable at will unless the proxy conspicuously
states that it is irrevocable and the proxy is coupled with an interest. A
telegram, telex, cablegram, or similar transmission by the shareholder, or a
photographic, photostatic, facsimile, shall be treated as a valid proxy, and
treated as a substitution of the original proxy, so long as such transmission is
a complete reproduction executed by the shareholder. If it is determined that
the telegram, cablegram or other electronic transmission is valid, the persons
appointed by the Corporation to count the votes of shareholders and determine
the validity of proxies and ballots or other persons making those determinations
must specify the information upon which they relied. No proxy shall be valid
after the expiration of six months from the date of its execution, unless
otherwise provided in the proxy. Such instrument shall be exhibited to the
Secretary at the meeting and shall be filed with the records of the Corporation.
If any shareholder designates two or more persons to act as proxies, a majority
of those persons present at the meeting, or, if one is present, then that one
has and may exercise all of the powers conferred by the shareholder upon all of
the persons so designated unless the shareholder provides otherwise.
2
<PAGE>
Section 8- Action Without a Meeting (section 78.320)
Unless otherwise provided for in the Articles of Incorporation of the
Corporation, any action to be taken at any annual or special shareholders'
meeting, may be taken without a meeting, without prior notice and without a vote
if written consents are signed by a majority of the shareholders of the
Corporation, except however if a different proportion of voting power is
required by law, the Articles of Incorporation or these Bylaws, than that
proportion of written consents is required. Such written consents must be filed
with the minutes of the proceedings of the shareholders of the Corporation.
ARTICLE 3
Board of Directors
Section 1- Number, Term, Election and Qualifications (Section 78.115, 78.330)
(a) The first Board of Directors and all subsequent Boards of the Corporation
shall consist of ( ), unless and until otherwise determined by vote of a
majority of the entire Board of Directors. The Board of Directors or
shareholders all have the power, in the interim between annual and special
meetings of the shareholders, to increase or decrease the number of Directors of
the Corporation. A Director need not be a shareholder of the Corporation unless
the Certificate of Incorporation of the Corporation or these Bylaws so require.
(b) Except as may otherwise be provided herein or in the Articles of
Incorporation, the members of the Board of Directors of the Corporation shall be
elected at the first annual shareholders' meeting and at each annual meeting
thereafter, unless their terms are staggered in the Articles of Incorporation of
the Corporation or these Bylaws, by a plurality of the votes cast at a meeting
of shareholders, by the holders of shares entitled to vote in the election.
(c) The first Board of Directors shall hold office until the first annual
meeting of shareholders and until their successors have been duly elected and
qualified or until there is a decrease in the number of Directors. Thereinafter,
Directors will be elected at the annual meeting of shareholders and shall hold
office until the annual meeting of the shareholders next succeeding his
election, unless their terms are staggered in the Articles of incorporation of
the Corporation (so long as at least one-fourth in number of the Directors of
the Corporation are elected at each annual shareholders' meeting) or these
Bylaws, or until his prior death, resignation or removal. Any Director may
resign at any time upon written notice of such resignation to the Corporation.
(d) All Directors of the Corporation shall have equal voting power unless the
Articles of Incorporation of the Corporation provide that the voting power of
individual Directors or classes of directors are greater than or less than that
of any other individual Directors or classes of Directors, and the different
voting powers may be stated in the Articles of Incorporation or may be dependent
upon any fact or event that may be ascertained outside the Articles of
Incorporation is the manner in which the fact or event may operate of those
voting powers is stated in the Articles of Incorporation. If the Articles of
Incorporation provide that any Directors have voting power greater than or less
than other Directors of the Corporation, every reference in these Bylaws to a
majority or other proportion of Directors shall be deemed to refer to majority
or other proportion of the voting power of all the Directors or classes of
Directors, as may be required by the Articles of Incorporation.
Section 2- Duties and Powers (Section 78.120)
The Board of Directors shall be responsible for the control and management of
the business and affairs, property and interests of the Corporation, and may
exercise all powers of the Corporation, except such as those stated under Nevada
state law, are in the Articles of Incorporation or these Bylaws, expressly
conferred upon or reserved the shareholders or any other person or persons named
therein.
3
<PAGE>
Section 3- Regular Meetings; Notice (Section 78.310)
(a) A regular meeting of the Board of Directors shall be held either within or
without the State of Nevada at such time and at such place as the Board shall
fix.
(b) No notice shall be required of any regular meeting of the Board of Directors
and, if given, need not specify the purpose of the meeting' provided, however
that in case the Board of Directors shall fix or change the time or place of any
regular meeting when such time and place was fixed before such change, notice of
such action shall be given to each director who shall not have been present at
the meeting at which such action was taken within the time limited, and in the
manner set forth in these Bylaws with respect to special meetings, unless such
notice shall be waived in the manner set forth in these Bylaws.
Section 4- Special Meetings, Notice (Section 78.310)
(a) Special meetings of the Board of Directors shall be held at such time and
place as may be specified in the respective notices or waivers of notice
thereof.
(b) Except as otherwise required statute, written notice of special meetings
shall be mailed directly to each Director, addressed to him at his residence or
usual place of business, or delivered orally. With sufficient time for the
convenient assembly of Directors thereat, or shall be sent to him at such place
by telegram, radio or cable, or shall be delivered to him personally or given to
him orally, not later than the day before the day on which the meeting is to be
held. If mailed, the notice of any special meeting shall be deemed to be
delivered on the second day after it is deposited in the United States mails, so
addressed, with postage prepaid. If notice is given by telegram, it shall be
deemed to be delivered when the telegram is delivered to the telegraph company.
A notice, or waiver of notice, except as required by these Bylaws, need not
specify the business to be Transacted at or the purpose or purposes of the
meeting.
(c) Notice of any special meeting shall not be required to be given to any
director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver of
notice, whether before or after the meeting. Notice of any adjourned meeting
shall not be required to be given.
Section 5- Chairperson
The Chairperson of the Board, if any and if present, shall preside at all
meetings of the Board of Directors. If there shall be no Chairperson, or he or
she shall be absent, then the President shall preside, and in his absence, any
other director chosen by the Board of Directors shall preside.
Section 6- Quorum and Adjournments (Section 78.315)
(a) At all meetings of the Board of Directors, or any committee thereof, the
presence of a majority of the entire Board, or such committee thereof, shall
constitute a quorum for the transaction of business, except as otherwise
provided by law, by the Certificate of Incorporation, or these Bylaws.
(b) A majority of the directors present at the time and place of any regular or
special meeting, although less than a quorum, may adjourn the same from time to
time without notice, whether or not a quorum exists. Notice of such adjourned
meeting shall be given to Directors not present at time of the adjournment and,
unless the time and place
4
<PAGE>
of the adjourned meeting are announced at the time of the adjournment, to the
other Directors who were present at the adjourned meeting.
Section 7- Manner of Acting (Section 78.315)
(a) At all meetings of the Board of Directors, each director present shall have
one vote, irrespective of the number of shares of stock, if any, which he may
hold.
(b) Except as otherwise provided by law, by the Articles of Incorporation, or
these bylaws, action approved by a majority of the votes of the Directors
present at any meeting of the Board or any committee thereof, at which a quorum
is present shall be the act of the Board of Directors or any committee thereof.
(c) Any action authorized in writing made prior or subsequent to such action, by
all of the Directors entitled to vote thereon and filed with the minutes of the
Corporation shall be the act of the Board of Directors, or any committee
thereof, and have the same force and effect as if the same had been passed by
unanimous vote at a duly called meeting of the Board or committee for all
purposes.
(d) Where appropriate communications facilities are reasonably available, any or
all directors shall have the right to participate in any Board of Directors
meeting, or a committee of the Board of Directors meeting, by means of
conference telephone or any means of communications by which all persons
participating in the meeting are able to hear each other.
Section 8- Vacancies (Section 78.335)
(a) Unless otherwise provided for by the Articles of Incorporation of the
Corporation, any vacancy in the Board of Directors occurring by reason of an
increase in the number of directors, or by reason of the death, resignation,
disqualification, removal or inability to act of any director, or other cause,
shall be filled by an affirmative vote of a majority of the remaining directors,
though less than a quorum of the Board or by a sole remaining Director, at any
regular meeting or special meeting of the Board of Directors called for that
purpose except whenever the shareholders of any class or classes or series
thereof are entitled to elect one or more Directors by the Certificate of
Incorporation of the Corporation, vacancies and newly created directorships of
such class or classes or series may be filled by a majority of the Directors
elected by such class or classes or series thereof then in office, or by a sole
remaining Director so elected.
Section 9- Resignation (Section 78.335)
A Director may resign at any time by giving written notice of such resignation
to the Corporation.
Section 10- Removal (Section 78.335)
Unless otherwise provided for by the Articles of Incorporation, one or more or
all the Directors of the Corporation may be removed with or without cause at any
time by a vote of two-thirds of the shareholders entitled to vote thereon, at a
special meeting of the shareholders called for that purpose, unless the Articles
of Incorporation provide that Directors may only be removed for cause, provided
however, such Director shall not be removed if the Corporation states in its
Articles of Incorporation that its Directors shall be elected by cumulative
voting and there are a sufficient number of shares cast against his or her
removal, which if cumulatively voted at an e4lection of Directors would be
sufficient to elect him or her. If a Director was elected by a voting group of
shareholders, only the shareholders of that voting group may participate in the
vote to remove that Director.
5
<PAGE>
Section 11- Compensation (Section 78.140)
The Board of Directors may authorize and establish reasonable compensation of
the Directors for services to the Corporation as Directors, including, but not
limited to attendance at any annual or special meeting of the Board.
Section 12- Committees (Section 78.125)
Unless otherwise provided for by the Articles of Incorporation of the
Corporation, the Board of Directors, may from time to time designate from among
its members one or more committees, and alternate members thereof, as they deem
desirable, each consisting of one or more members, with such powers and
authority (to the extent permitted by law and these Bylaws ) as may be provided
in such resolution. Unless the Articles of Incorporation or Bylaws state
otherwise, the Board of Directors may appoint natural persons who are not
Directors to serve on such committees authorized herein. Each such committee
shall serve at the pleasure of the Board and, unless otherwise stated by law,
the Certificate of Incorporation of the Corporation or these Bylaws, shall be
governed by the rules and regulations stated herein regarding the Board of
Directors.
ARTICLE 4
OFFICERS
Section 1- Number, Qualifications, Election and Term of Office (Section 78.130)
(a) The Corporation's officers shall have such titles and duties as shall be
stated in these Bylaws or in a resolution of the Board of Directors which is not
inconsistent with these Bylaws. The officers of the Corporation shall consist of
a president, secretary and treasurer, and also may have one or more vice
presidents, assistant secretaries and assistant treasurers and such other
officers as the Board of Directors may from time to time deem advisable. Any
officer may hold two or more offices in the Corporation.
(b) The officers of the Corporation shall be elected by the Board of Directors
at the regular annual meeting of the Board following the annual meeting of
shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have been
duly elected and qualified, subject to earlier termination by his or her death,
resignation or removal.
Section 2- Resignation
Any officer may resign at any time by giving written notice of such resignation
to the Corporation.
Section 3- Removal
Any officer elected by the Board of Directors may be removed, either with or
without cause, and a successor elected by the Board at any time, and any officer
or assistant officer, if appointed by another officer, may likewise by removed
by such officer.
Section 4- Vacancies
A vacancy, however caused, occurring in the Board and any newly created
Directorships resulting from an increase in the authorized number of Directors
may be filled by the Board of Directors.
6
<PAGE>
Section 5- Bonds
The Corporation may require any or all of its officers or Agents to post a bond,
or otherwise, to the Corporation for the faithful performance of their positions
or duties.
Section 6- Compensation
The compensation of the officers of the Corporation shall be fixed from time to
time by the Board of Directors.
ARTICLE 5
SHARES OF STOCK
Section 1- Certificate of Stock (Section 78.235)
(a) The shares of the Corporation shall be represented by certificates or shall
be uncertified shares.
(b) Certificated shares of the Corporation shall be signed , (either manually or
by facsimile), by officers or agents designated by the Corporation for such
purposes, and shall certify the number of shares owned by him in the
Corporation. Whenever any certificate is countersigned or otherwise
authenticated by a transfer agent or transfer clerk, and by a registrar, then a
facsimile of the signatures of the officers or agents, the transfer agent or
transfer clerk or the registrar of the Corporation may be printed or
lithographed upon the certificate in lieu of the actual signatures. If the
corporation uses facsimile signatures of its officers and agents on its stock
certificates, it cannot act as registrar of its own stock, but its transfer
agent and registrar may be identical if the institution action in those dual
capacities countersigns or otherwise authenticates any stock certificates in
both capacities. If any officer who has signed or whose facsimile signature has
been placed upon such certificate, shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with the same
effect as if he were such officer at the date of its issue.
(c) If the Corporation issues uncertified shares as provided for in these
Bylaws, within a reasonable time after the issuance or transfer of such
uncertified shares, and at least annually thereafter, the Corporation shall send
the shareholder a written statement certifying the number of shares owned by
such shareholder in the Corporation.
(d) Except as otherwise provided by law, the rights and obligation of the
holders of uncertified shares and the rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical.
Section 2- Lost or Destroyed Certificates (Section 104.8405)
The Board of Directors may direct a new certificate or certificates to be issued
in place of any certificate or certificates therefore issued by the Corporation
alleged to have been lost, stolen or destroyed if the owner:
(a) so requests before the Corporation has notice that the shares have bee
acquired by a bona fide purchaser, (b) files with the Corporation a sufficient
indemnity bond; and (c) satisfies such other requirements, including evidence of
such loss, theft or destruction, as may be imposed by the Corporation.
Section 3- Transfers of shares (Section 104.8401,104.8406. & 104.8416)
(a) Transfers or registration of transfers of shares of the Corporation shall be
made of the stock transfer books of the Corporation by the registered holder
thereof, or by his attorney duly authorized by a written power of attorney;
7
<PAGE>
and in the case of shares represented by certificates, only after the surrender
to the Corporation of the certificates representing such shares with such shares
properly endorsed, with such evidence of the authenticity of such endorsement,
transfer, authorization and other matters as the Corporation may reasonably
require, and the payment of all stock transfer taxes due thereon.
(b) The Corporation shall be entitled to treat the holder of record of any share
or shares 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 share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
Section 4- Record Date (Section 78.215 & 78.350)
(a) The Board of Directors may fix, in advance, which shall not be more than
sixty days before the meeting or action requiring a determination of
shareholders, as the record date for the determination of shareholders entitled
to receive notice of, or to vote at, any meeting of shareholders, or to consent
to any proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividends, or allotment of any
rights, or for the purpose of any other action. If no record date is fixed, the
record date for shareholders entitled to notice of meeting shall be at the close
of business on the day preceding the day on which notice is given, or, if no
notice is given, the day on which the meeting is held, or if notice is waived,
at the close of business on the day before the day on which the meeting is held.
(b) the Board of Directors may fix a record date, which shall not precede the
date upon which the resolution fixing the record date is adopted for
shareholders entitled to receive payment of any dividend or other distribution
or allotment of any rights of shareholders entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action.
(c) A determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date for the adjourned meeting.
Section 5- Fractions of Shares/Scrip (Section 78.205)
The Board of Directors may authorize the issuance of certificates or payment of
money for fractions of a share, either represented by a certificate or
uncertificated, which shall entitle the holder to exercise voting rights,
receive dividends and participate in any assets of the Corporation in the event
of liquidation, in proportion to the fractional holdings; or it may authorize
the payment in case of the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it may
authorize the issuance, subject to such conditions as may be permitted by law,
of scrip in registered or bearer form over the manual or facsimile signature of
and officer or agent of the Corporation or its agent for that purpose,
exchangeable as therein provided for full shares, but such scrip shall not
entitle the holder to any rights of shareholder, except as therein provided. The
scrip may contain any provisions or conditions that the Corporation deems
advisable. If a scrip ceases to be exchangeable for full share certificates, the
shares that would otherwise have been issuable as provided on the scrip are
deemed to be treasury shares unless the scrip contains other provisions for
their disposition.
ARTICLE 6
DIVIDENDS
(a) Dividends may be declared and paid out of any funds available therefor, as
often, in such amounts, and at such time or times as the Board of Directors may
determine and shares may be issued pro rata and without consideration to the
Corporation's shareholders or to the shareholders of one or more classes or
series.
8
<PAGE>
(b) Shares of one class or series may not be issued as a share dividend to
shareholders of another class or series unless:
(i) so authorized by the Articles of Incorporation;
(ii) a majority of the shareholders of the class or series to be issued
approve the issue; or (iii) there are no outstanding shares of the
class or series of shares that are authorized to be issued.
ARTICLE 7
FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be subject to
change by the Board of Directors from time to time, subject to applicable law.
ARTICLE 8 (Section 78.065)
CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be prescribed and
altered, from time to time, by the Board of Directors. The use of a seal or
stamp by the Corporation on corporate documents is not necessary and the lack
thereof shall not in any way affect the legality of a corporate document.
ARTICLE 9
AMENDMENTS
Section 1- By Shareholders
All Bylaws of the Corporation shall be subject to alteration or repeal, and new
Bylaws may be made, by a majority vote of the shareholders at the time entitled
to vote in the election of Directors even though these Bylaws may also be
altered, amended or repealed by the Board of Directors.
Section 2- By Directors (Section 78.120)
The Board of Directors shall have power to make, adopt, alter, amend and repeal,
from time to time, Bylaws of the Corporation.
ARTICLE 10 (Section 78.375)
WAIVER OF NOTICE
Whenever any notice is required to given by law, the Articles of Incorporation
or these Bylaws, a written waiver signed by the person or persons entitled to
such notice, whether before or after the meeting by any person, shall constitute
a waiver of notice of such meeting.
ARTICLE 11 (Section 78.140)
No contract or transaction shall be void or voidable if such contract or
transaction is between the corporation and one or more of its Directors or
Officers, or between the Corporation and any other corporation, partnership,
association, or other organization in which one or more of its Directors or
Officers, are directors or officers, or have a financial interest, when such
Director or Officer is present at or participates in the meeting of the Board,
or the committee of the shareholders which authorizes the contract or
transaction or his, her or their votes are counted for such purpose, if:
9
<PAGE>
(a) the material facts as to his, her or their relationship or interest and as
to the contract or transaction are disclosed or are known to the Board of
Directors or the committee and are noted in the minutes of such meeting, and the
Board or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested Directors, even though the
disinterested Directors be less than a quorum, or
(b) the material facts as to his, her or their relationship or relationships or
interest or interests and as to the contract or transaction are disclosed or are
known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the shareholders;
or
(c) the contract or transaction is fair as to the Corporation as of the time it
is authorized, approved or ratified, by the Board of Directors, a committee of
the shareholder; or
(d) the fact of the common directorship, office or financial interest is not
disclosed or known to the Director or Officer at the time the transaction is
brought before the Board of Directors of the Corporation for such action.
Such interested Directors may be counted when determining the presence of a
quorum at the Board of Directors or committee meeting authorizing the contract
or transaction.
ARTICLE 12 (Section 78.150 & 78.165)
ANNUAL LIST OF OFFICERS, DIRECTORS, AND REGISTERED AGENTS
The Corporation shall, within sixty days after the filing of its Articles of
Incorporation with the Secretary of State, and annually thereafter on or before
the last day of the month in which the anniversary date of incorporation occurs
each year, file with the Secretary of State a list of its president, secretary
and treasurer and all of its Directors, along with the post office box or street
address, either residence or business, and a designation of its resident agent
in the state of Nevada. Such list shall be certified by an officer of the
Corporation.
----------------------------
(Registrant)
Date __________________________________
By ___________________________________
*Print the name and title of each signing officer under his or her signature
10
