U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (Fee Required)
For the fiscal year ended September 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1943 [No Fee Required]
For the transition period from __________________ to _________________
CONDOR CAPITAL, INC.
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(Name of small business issuer in its charter)
Colorado 84-1075696
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8891 East Easter Place, Englewood, Colorado 80112
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(Address of principal executive offices) (zip code)
Issuer's telephone number: 303-741-0749
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Securities to be registered under Section 12(b) of the Exchange Act: None
Title of each class: None.
Name of each exchange on which registered: None.
Securities to be registered under Section 12(g) of the Exchange Act: None.
Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes No X
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form, and no disclosure will be
contained, to the best of the registrant'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. [X]
State issuer's revenues for its most recent fiscal year. $0.00
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. There is no established trading market for the Registrant's common stock.
Based on the most recent private placement of the Registrant's common stock at a
maximum price of $0.0033 per share, the aggregate value of common stock held by
non-affiliates is $30,752.
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date. 11,820,010 shares of common
stock were outstanding as of April 8, 1998.
DOCUMENTS INCORPORATED BY REFERENCE: None
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Item 1. Business.
(a) General Development of Business.
Condor Capital, Inc., (the "Registrant") is a corporation formed under the
laws of the State of Colorado on December 22, 1987 to evaluate, structure and
complete a merger with, or to acquire business prospects consisting of private
companies, partnerships or sole proprietorships.
By Prospectus dated June 8, 1988, the Registrant conducted a public
offering whereby it sold 30,000,000 Units at $0.01 per Unit, for net proceeds of
approximately $243,000. The public offering closed on October 20, 1988. Each
Unit consisted of one share of the Registrants's no par common stock and four
(4) Class A Common Stock purchase warrants. Each Class A Warrant entitled the
holder at a price of $0.02 per Class A Warrant exercised, to purchase one share
of Common Stock and one Class B Common Stock Purchase Warrant during the two
year period commencing June 8, 1988. Each Class B Warrant entitled the holder to
purchase one share of Common Stock at $0.03 per share during the three year
period commencing on June 8, 1988. The exercise period of the Class A Warrants
was extended from time to time but all extension periods have lapsed prior to
exercise of any Class A Warrants. Accordingly, all of the Class A Warrants and
Class B Warrants have expired by their terms.
On October 27, 1989, the Registrant and Redding Acquisition Corp., a New
York corporation, and B. Meyers & Company, the sole shareholder of Redding
("Redding's Shareholder") entered into an agreement whereby Redding was to
become a wholly owned subsidiary of the Registrant. In connection therewith, the
Registrant was to issue 133,100,000 restricted shares of its no par value common
stock and 141,100 shares of its Class A no par preferred stock to Redding's
Shareholder, in exchange for all of the issued and outstanding shares of
Redding.
Redding Acquisition Corp. intended to acquire a television station using
the Registrant's capital. Management of Redding represented to management of the
Registrant that they were prepared to conclude an acquisition for an identified
television station.
On October 27, 1989, pursuant to the terms of the agreement, Messrs. Dale
B. Carson, Robert M. Geller and Sanford L. Schwartz resigned as officers and
Directors of the Registrant, and Mr. Allen R. Goldstone resigned as President
while remaining on the Board of Directors. Messrs. Tom LaRousch and Bill
O'Callaghan were elected President and Secretary/Treasurer, respectively, and
were also appointed to the Board of Directors.
On November 17, 1989, the Registrant's shareholders, at a special meeting,
replaced the new Board of Directors with Messrs. Goldstone, Geller and Schwartz,
which Directors then replaced Messrs. LaRousch and O'Callaghan with Mr.
Goldstone as President, Mr. Geller as Vice President and Mr. Schwartz as
Secretary and Treasurer of the Registrant. These Directors also resolved on
November 17, 1989, that it would be in the best interest of the Registrant and
its shareholders to seek rescission of the Registrant's acquisition of Redding
and to recover as much of the Registrant's remaining funds as possible.
The Board of Directors' decision to seek rescission was based upon the
Board's opinion that the officers appointed pursuant to the October 27, 1989
Agreement could not or would not satisfactorily perform their duties and that
the continuation of Redding Acquisition Corp. as a wholly owned subsidiary of
the Registrant did not sufficiently improve the Registrant's ability to further
its business plan nor advance the interests of shareholders so as to justify the
number of shares to be issued to Redding's Shareholder, nor justify the further
expenditure of its capital pursuant to the business plan of the Redding
appointed management.
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On December 20, 1989, the Registrant entered into a settlement agreement
with Redding, Meyers and the former officers, directors, shareholder and/or
consultant of Redding whereby the Acquisition Agreement of October 27, 1989 was
rescinded, the shares to be issued to Redding and to Meyers were canceled and
approximately $160,000 was returned to the Registrant.
On December 14, 1989, the Registrant entered into a letter of intent with
Aviation Management Group, Inc. ("AMG"), pursuant to which the Registrant
proposed to acquire 100% of the issued and outstanding common stock of AMG in
exchange for 160,000,000 restricted shares of the Registrant's no par value
common stock and 140,000 shares of the Registrant's convertible preferred stock.
The definitive agreement with AMG and its shareholders was executed on
January 22, 1990. Pursuant to the agreement, 160,000,000 shares of the
Registrant's no par value common stock and 140,000 shares of the Registrant's
Class B convertible preferred stock were issued to the shareholders of AMG in
exchange for 100% of the outstanding common stock of AMG. Sixty million
(60,000,000) shares of the Registrant's no par value common stock issued to the
AMG shareholders were placed in escrow with legal counsel to the Registrant at
that time to be released if and when the Registrant at that time became listed
for trading on the National Association of Securities Dealers Automated
Quotation (NASDAQ) system by January 25, 1994. The Registrant's Board of
Directors set the preferences of the Class B convertible preferred stock as a
$0.01 per preferred share liquidation preference prior to a distribution of
liquidated assets to common stock, conversion of 40,000 shares of the Class B
Preferred to up to 40,000,000 shares of its common stock upon the Registrant's
Common Stock becoming listed for trading on NASDAQ, and conversion of the
remaining 100,000 shares of the preferred to up to 100,000,000 shares of common
stock upon the Registrant having a net worth of at least $2,000,000 as shown on
the Registrant's audited financial statements. The 60,000,000 shares of common
stock held in escrow were subsequently canceled for failure to obtain NASDAQ
listing within the prescribed deadline.
Also pursuant to the AMG Agreement, Messrs. Goldstone, Carson, Schwartz and
Geller resigned as officers and Directors of the Registrant and Messrs. Andrew
L. Stumpf, Burnell M. Calvin, John T. Forrester, Robert J. Brozovich and Robert
Hirsekorn were appointed to the Board of Directors of the Registrant. Messrs.
Stumpf, Calvin and Forrester were appointed President and Vice Presidents.
Kathleen S. Stumpf was appointed Secretary and Treasurer.
The business plan of the Registrant's new management was to develop a
regional airline company through acquisitions and joint ventures. The business
plan required significantly greater capital than the Registrant possessed. The
Registrant's available business development capital was to be used to pay
management's salaries and expenses while seeking potential acquisitions and
joint ventures as well as additional financing.
In March 1990, the new Management of the Registrant began contacting
airline and aircraft repair businesses offered for sale in trade publications
and evaluating the responses for possible acquisitions. During the fiscal year,
the Registrant evaluated approximately twenty-five (25) responses to its
inquiries. While several discussions were held with potential acquisitions, no
preliminary or definitive agreements were concluded.
On May 21, 1990 the Registrant, through a newly formed wholly owned
subsidiary, Condor Printing and Publishing, Inc., entered into an agreement with
Kevin P. Hager, an unaffiliated individual, to purchase a printing business
operating as Speedy Print of Aurora for a $55,000 promissory note to be repaid
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from the operations of the printing business. The Registrant and its President,
Mr. Stumpf, guaranteed payment of the Note. Management of the Registrant
intended to operate this business in order to generate revenue to continue the
primary objective of seeking acquisition of a airline or aircraft repair
station.
Also in May 1990, the Registrant, through Condor Insurance Services, Inc.,
a newly formed, wholly owned subsidiary, entered into an agreement with Burnell
Calvin, the Registrant's Vice President at the time, to operate Mr. Calvin's
insurance business in Colorado Springs, Colorado. Management of the Registrant
intended to operate this second business in order to generate revenue to
continue the primary objective of seeking acquisition of an airline or aircraft
repair station.
On January 31, 1991, the Registrant, its wholly owned subsidiary Condor
Printing and Publishing, Inc., Mr. Stumpf and Mr. Hager entered into an
agreement whereby the Registrant transferred all assets of the Speedy Print of
Aurora business back to Mr. Hager. The Agreement also released the Registrant's
guarantee under the May 21, 1990 Agreement.
On February 18, 1991, the Registrant entered into agreements with Mr.
Stumpf and Mr. Calvin respectively whereby in consideration of the transfer to
the Registrant of all of each of their respective shares of common stock in the
Registrant and mutual indemnification, the Registrant transferred all of its
shares in Condor Printing and Publishing, Inc. to Mr. Stumpf and all of its
shares in Condor Insurance Services, Inc., to Mr. Calvin. Pursuant to these
agreements Messrs., Stumpf and Calvin transferred to the Registrant the
93,120,000 shares of common stock and 6,400,000 shares of common stock issued to
them respectively pursuant to the AMG agreement. These shares have since been
canceled. A portion of the shares agreed to be canceled were included within the
60,000,000 escrowed shares described above. In addition, all 140,000 shares of
the Registrant's Class B convertible preferred stock were subsequently returned
to the Registrant for cancellation. As a result of these transactions, AMG
remained a subsidiary of the Registrant, but effective January 1, 1995, AMG was
administratively dissolved by the office of the Colorado Secretary of State.
On February 18, 1991, the Board of Directors of the Registrant met to
discuss the financial condition of the Registrant. Mr. Stumpf reported that Mr.
Forester had resigned his positions with the Registrant due to other
responsibilities preventing him from active participation in the affairs of the
Registrant. Mr. Stumpf further reported that despite conservative efforts the
Registrant's funds had been dissipated in the pursuit of acquisition candidates
and that while the corporation's liabilities would be met, the Registrant did
not have sufficient capital to continue its search for acquisitions and would
have to discontinue operations. Mr. Virgil Rose was appointed to the Board of
Directors and Messrs. Stumpf and Calvin and Ms. Stumpf resigned their respective
positions with the Registrant. Thereafter, Mr. Rose was appointed President and
Mr. Hirsekorn was named as Secretary/Treasurer. The Board also authorized the
issuance of 2,000,000 restricted shares of common stock of the Registrant to
Robert D. Hirsekorn in consideration of his past services to the Registrant.
The reconstituted Management of the Registrant resolved to preserve the
remaining assets and the corporate existence of the Registrant while continuing
to seek a business combination with another entity seeking the advantages of an
existing publicly held corporation notwithstanding the Registrant's lack of
capital. Management recognized that the Registrant's lack of capital was a
serious disadvantage both in terms of attractiveness to a potential acquiring
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entity as well as restricting Management's ability to promote the Registrant and
pursue negotiations. It was determined that the best way to proceed was to seek
a business combination partner through the personal business contacts of
Management.
In April 1992, the Registrant entered into negotiations with Analytical
Development Corporation (ADC), a company headquartered in Colorado Springs,
Colorado, engaged in the business of water pollution remediation through
chemical processes. The proposed transaction with ADC contemplated a Plan of
Merger with ADC to be submitted to the Registrant's and ADC's shareholders
pursuant to a combined proxy and prospectus. On May 15, 1992, ADC terminated the
negotiations.
In August 1992, the Registrant entered into a letter of intent with
International Golf Investments (IGI), a California corporation whereby the
Registrant agreed to issue to the shareholders of IGI a number of shares of the
Registrant's common stock representing not less than ninety percent (90%) of the
issued and outstanding shares of the Registrant's common stock in exchange for
one hundred percent (100%) of the outstanding shares of IGI. In conjunction with
the exchange of shares, nominees designated by IGI would be appointed to the
Board of Directors of the Registrant and would constitute a majority of the
Board of Directors. IGI was to be engaged in the business of acquiring,
developing and operating golf courses in the United States including the
retailing of golf related merchandise in its golf course pro shops.
The letter of intent with IGI contemplated the execution of a definitive
agreement containing customary terms for the proposed exchange of shares and
change in control. On January 27, 1993, the Registrant informed IGI that the
letter of intent was terminated.
Effective, December 31, 1992, Virgil Rose resigned as President and
Director. Also effective that date John Henz was appointed as Director, Mr.
Hirsekorn was named President and Mr. Henz was named Secretary/Treasurer.
Thereafter the Registrant resumed its original business direction of
seeking a merger, reverse acquisition or other defined change in control
agreement which would be in the best interests of the Registrant's shareholders.
As a result thereof, the Registrant began negotiations with GolfNet Corporation
(GolfNet), a California corporation, for a business combination with the
Registrant. GolfNet was engaged in the distribution of golf related merchandise,
primarily through golf course pro shops. The Registrant entered into an
Agreement with GolfNet on August 10, 1993. In connection with the proposed
transaction, on August 10, 1993 the Board of Directors authorized a one (1) for
two hundred (200) reverse stock split of its common stock, which became
effective August 19, 1993.
For various reasons, the Registrant and GolfNet determined not to proceed
to complete the transactions contemplated by the August 10, 1993 Agreement. As a
result of the conclusion of the relationship with GolfNet, the Registration was
left with virtually no funds and no pending prospects for developing business
relationships with other companies. The Registrant did not file any periodic
reports with the Securities and Exchange Commission subsequent to the Form 10-Q
filed for the quarter ended December 31, 1989 and a Form 8-K on May 10, 1990.
In August 1997, John Venette and Sheryl Allen were appointed to the Board
of Directors by the Registrant's then sole director, Robert Hirsekorn. In
September 1997, the Registrant completed a private placement of 11,236,651
shares of its common stock for a total purchase price of $33,434.66.
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(b) Narrative Description of Business.
The Registrant has insufficient capital with which to finance cash
acquisitions of other business entities. Accordingly, the Registrant will be
incapable of acquiring the assets or business of other entities except in those
instances where the Registrant exchanges its common stock with those held by the
target company and/or the target company's shareholders. Another possibility,
although less likely, is that the Registrant may give its common stock to a
target in exchange for the target's assets. Management expects that an exchange
of the Registrant's Common Stock in a merger or acquisition, if ever, would
require the Registrant to issue a substantial number of shares of its common
stock. Accordingly, the percentage of common stock held by the Registrant's then
current shareholders would be reduced as a result of the increased number of
shares of common stock issued and outstanding following any such merger or
acquisition.
The Registrant expects to continue to concentrate primarily on the
identification and evaluation of prospective merger or acquisition "target"
entities. The Registrant does not intend to act as a general or limited partner
in connection with partnerships it may merge with or acquire. Management has not
identified any particular area of interest within which the Registrant will
continue its efforts. The Registrant's officers and directors will devote only
such time as is necessary to seek out a suitable opportunity.
Management contemplates that the Registrant will seek to merge with or
acquire a target company with either assets or earnings, or both, and that
preliminary evaluations undertaken by the Registrant will assist in identifying
possible target companies. The Registrant has not established a specific level
of earnings or assets below which the Registrant would not consider a merger or
acquisition with a target company. Moreover, Management may identify a target
company generating losses which the Registrant will seek to acquire or merge
with the Registrant. There is no assurance that if the Registrant acquires a
target company with assets or earnings, or both, that the price of the
Registrant's common stock will increase.
Plan of Acquisition
In evaluating target companies, Management intends to concentrate on
identifying any number of preliminary prospects which may be brought to the
attention of management through present associations or otherwise. Management
will then apply certain of its broad criteria to the preliminary prospects.
Essentially, this will entail a determination by Management as to whether or not
the prospects are in an industry which appears promising and whether or not the
prospects themselves have potential within their own industries. During this
initial screening process, Management will ask and receive answers to questions
framed to provide appropriate threshold information, depending upon the nature
of the prospect's business. If a prospect is selected for an in-depth review,
Management will review in detail the prospect's business activities, including
its audited financial statements, if any.
Management expects to enter into further negotiations with target company
management following successful conclusion of financial and evaluation studies.
Negotiations with target company management will be expected to focus on the
percentage of the Registrant which target company shareholders would acquire in
exchange for their shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities, the Registrant's
shareholders will in all likelihood hold a lesser percentage ownership interest
in the Registrant following any merger or acquisition. The percentage ownership
may be subject to significant reduction in the event the Registrant acquires a
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target company with substantial assets. Any merger or acquisition effected by
the Registrant can be expected to have a significant dilutive effect on the
percentage of shares held by the Registrant's then current shareholders.
The final stage of any merger or acquisition to be effected by the
Registrant will require the Registrant to retain the services of its counsel and
a qualified accounting firm in order to properly effect the merger or
acquisition. The Registrant would incur significant legal fees and accounting
costs during the final stages of a merger or acquisition. Also, if the merger or
acquisition is successfully completed, Management anticipates that certain costs
will be incurred for public relations, such as the dissemination of information
to the public, to the shareholders and to the financial community. If the
Registrant is unable to complete the merger or acquisition for any reason, the
Registrant's then supply of capital may be substantially depleted if legal fees
and accounting costs have been incurred. Management intends to retain legal and
accounting services only on an as-needed basis in the latter stages of a
proposed merger or acquisition. It is likely that the Registrant will seek to
accomplish any business combination in a manner which will not require
shareholder approval.
The Registrant may be required to seek additional financing in order to
proceed with any proposed transaction with a target company, which could be
accomplished by either the sale of common stock, the issuance of debt, or both.
Competition
The Registrant will remain an insignificant participant among the firms
which engage in mergers with and acquisitions of privately-financed entities.
There are many established venture capital and financial concerns which have
significantly greater financial and personnel resources and technical expertise
than the Registrant. In view of the Registrant's limited financial resources and
limited management availability, the Registrant will continue to be at a
significant competitive disadvantage compared to the Registrant's competitors.
Employees
The Registrant does not have any employees, and did not have any during the
fiscal year ended September 30, 1997.
Item 2. Properties.
The Registrant does not own or lease any property. The Registrant's
President provides any office space required by the Registrant at no cost.
Item 3. Legal Proceedings.
There are no pending legal proceedings involving the Registrant and the
Registrant is not aware of any proceeding that any governmental authority or any
other party is contemplating.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Registrant's shareholders during
the fiscal year ended September 30, 1997.
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PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
(a) Market Information.
During the fiscal year ended September 30, 1997, and during the preceding
two fiscal years, there has been no established market for the Registrant's
common stock and to the best of the Registrant's knowledge there has been no
trading. There are no outstanding options or warrants to purchase any Common
Stock, as all previously issued warrants have expired by their terms.
In September 1997, the Registrant completed a private placement of
11,236,651 shares of its Common Stock to nine accredited investors for a total
purchase price of $33,434.66. No underwriter was used and there were no
commissions paid. The private placement was exempt from registration under
applicable securities laws under Sections 4(2) and 4(6) of the Securities Act of
1933, as amended.
All of the Registrant's Common Stock except for the shares sold in the
foregoing private placement have been held in excess of one year and therefore
are eligible for sale pursuant to Rule 144 under the Securities Act of 1933, as
amended.
(b) Holders.
The approximate number of holders of record of the Registrant's Common
Stock as of April 8, 1998, was 996.
(c) Dividends.
Holders of common stock are entitled to receive such dividends as may be
declared by the Registrant's Board of Directors. No dividends have been paid
with respect to the Registrant's common stock and no dividends are anticipated
to be paid in the foreseeable future.
Item 6. Plan of Operation.
During the last two fiscal years, the Registrant has not had revenues from
operations. Rather, the Registrant's plan of operation for the next twelve (12)
months is described in the Section above in Item 1(b) entitled "Business -
Narrative Description of Business". In the event that the Registrant contacts or
is contacted by a private company or other entity which may be considering a
merger with or into the Registrant, it is possible that the Registrant would be
required to raise additional funds in order to accomplish the transaction.
Otherwise, and even though the Registrant only possesses nominal funds, as the
Registrant does not engage in any ongoing business which requires the routine
expenditure of funds, the Registrant would not be required to raise additional
funds during the next twelve months. The Registrant does not routinely expend
any funds for the ownership or lease of property, as any routine activities are
being conducted out of an office made available by the Registrant's President.
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Item 7. Financial Statements.
The following financial statements are filed as part of this Form 10-KSB:
consolidated balance sheets as of September 30, 1997 and September 30, 1996;
consolidated statements of operations for the years ended September 30, 1997 and
1996 and cumulative since October 1, 1990 (inception of development stage);
consolidated statements of changes in stockholders' equity (deficit) for the
years ended September 30, 1997 and September 30, 1996; consolidated statements
of cash flows for the years ended September 30, 1997 and 1996 and cumulative
since October 1, 1990 (inception of development stage); independent auditor's
report.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
On December 5, 1996, Gordon, Hughes & Banks, LLP, Certified Public
Accountants, was engaged by the Registrant as the principal accountant to the
Registrant. There were no disagreements with former accountants on accounting
principles or on any other matter.
PART III
Item 9. Identification of Directors and Executive Officers.
The following persons served as the directors and officers of the
Registrant.
Robert D. Hirsekorn, age 48, has served as a director of the Registrant
since 1992. He has served as the Registrant's president since 1993. During the
past five years, Mr. Hirsekorn has been self-employed as a management consultant
to companies in health care services, health care product manufacturing,
computer software development, and other areas. In addition, in March, 1997, Mr.
Hirsekorn was hired as Vice President Finance of Duplication Technology, Inc., a
company engaged in the business of Software Duplication Services. This position
terminates at the end of April 1998. Mr. Hirsekorn does not serve as a director
of any other publicly held company.
John H. Venette, age 33, is a director of the Registrant and also serves as
the treasurer and chief financial officer. He joined the Board of Directors in
August 1997. For the past one and one-half (1-1/2) years, Mr. Venette has been
employed by Creative Business Strategies Inc., a business consulting firm, as
director of research. Prior thereto he was a student at the University of
Colorado. He does not serve as a director of any other publicly held company.
Sheryl E. Allen, age 36, served as a director and as the secretary of the
Registrant from August 1997 through March 31, 1998. In 1992 and 1993, Ms. Allen
was employed as the assistant to the Vice-President, Planning and Development,
by Cowles Business Media of Stamford, Connecticut. Thereafter through March
1998, she was the Office Manager for Creative Business Strategies, Inc., a
business consulting firm. She does not serve as a director of any other publicly
held company.
The Registrant's directors hold office until the next annual meeting of the
Registrant's shareholders, and officers of the Registrant hold office until
removed or replaced by the directors of the Registrant. There is no arrangement
or understanding between any director and any other person pursuant to which he
or she was selected as a director and officer of the Registrant.
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(b) No Significant Employees.
The Registrant does not employ any person who is expected to make
significant contributions to the business of the Registrant and who is not an
executive officer.
(c) No Family Relationships.
There are no family relationships between any director and any person who
may be nominated or chosen to be a director or executive officer.
(d) Involvement in Certain Legal Proceedings.
No event or legal proceeding occurred during the past five years which is
material to an evaluation of the ability or integrity of any of the directors.
Item 10. Executive Compensation.
The only compensation of any kind paid to any director or officer of the
Registrant during the fiscal year ended September 30, 1997 or during either of
the preceding two fiscal years was the issuance of 35,620 shares of Common Stock
to Robert Hirsekorn. Of the shares issued, 12,000 shares had been authorized for
issuance in 1991 and 1993 but had never been issued, and 23,620 shares were
authorized in August 1997 for services performed for the Company since 1993.
There are no standard or other arrangements for the payment of any compensation
to directors of the Registrant. There are no employment contracts to which the
Registrant is a party.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners.
The following table sets forth the number of shares of the Registrant's
Common Stock owned by each person who, as of April 8, 1998 was known by the
Registrant to own beneficially more than five percent (5%) of the Registrant's
outstanding Common Stock.
Name and Address Amount and Nature
of Beneficial Owner 0f Beneficial Ownership Percent of Class(1)
------------------- ----------------------- -------------------
Michael Friess 1,137,222 shares; Direct 9.6
1120 Linden Avenue
Boulder, Colorado 80304
Sanford Schwartz 1,231,421 shares; Direct 10.4
1010 Orange Place
Boulder, Colorado 80304
Allen R. Goldstone 1,231,420 shares; Direct 10.4
2495 Agate Road
Boulder, Colorado 80304
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Name and Address Amount and Nature
of Beneficial Owner 0f Beneficial Ownership Percent of Class(1)
------------------- ----------------------- -------------------
Ted Bodensteiner 960,000 shares; Direct 8.1
1440 S.W. 19th Street
Boca Raton, Florida 33486
Mark DePew 960,000 shares; Direct 8.1
851 Windmill Place
Highlands Ranch, Colorado 80126
Wei Ying Wong 2,136,588 shares; Direct 18.1
2 East End Avenue
New York, New York 10021
Chunyian Geng 1,000,000 shares; Direct 8.5
375 Park Avenue, Suite 3407
New York, New York 10152
D.C. Group, Inc. 1,290,000 shares; Direct 10.9
375 Park Avenue, Suite 3407
New York, New York 10152
JK Global Corp. 1,290,000 shares; Direct 10.9
375 Park Avenue, Suite 3407
New York, New York 10152
1 Based upon 11,820,000 shares of Common Stock outstanding on April 8, 1998.
(b) Security Ownership of Management.
The following table sets forth, as of April 8, 1998 the total number of
shares of Common Stock owned by Robert D. Hirsekorn. No other director or
officer beneficially owns any securities of the Registrant.
Name and Address Amount and Nature
of Beneficial Owner of Beneficial Ownership Percent of Class(2)
------------------- ----------------------- -------------------
Robert D. Hirsekorn, President, 38,120 shares; Direct Less than one percent
Director
8891 East Easter Place
Englewood, Colorado 80112
2 Based upon 11,820,010 shares of Common Stock outstanding on April 8, 1998.
(c) Changes in Control.
There are no arrangements which may result in a change in control of the
Registrant.
11
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Item 12. Certain Relationships and Related Transactions.
There have not been any reportable transactions during the last two years,
and there are no proposed reportable transactions, to which the Registrant was
or is to be a party, in which any of the following persons had or is to have a
direct or indirect material interest: any director or executive officer of the
Registrant, any nominee for election as a director, any security holder owning
more than five percent (5%) of the Common Stock, or any member of the immediate
family of any of the foregoing group.
Item 13. Exhibits and Reports on Form 8-K.
(a) The financial statements described in Item 7 of this Form 10-KSB follow the
signature page of this Form. The following exhibits are also filed as part of
this Form.
3(i) Articles of Incorporation of Registrant as amended
3(ii) Bylaws of Registrant
4 Specimen certificate for common stock
27 Financial Data Schedule
(b) There were no reports on Form 8-K filed during the fiscal year ended
September 30, 1997, or at any time since then through the filing of this Form
10-K.
12
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
(Registrant) CONDOR CAPITAL, INC.
By:/s/ Robert D. Hirsekorn By:/s/ John H. Venette
------------------------------ ---------------------------------
Robert D. Hirsekorn, President John H. Venette, Chief Financial
Officer
Date:April 30, 1998 Date: April 30, 1998
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature and Title Date
- - ------------------- ----
/s/ Robert D. Hirsekorn April 30, 1998
- - ---------------------------------
Robert D. Hirsekorn
President, Director
/s/ John H. Venette April 30, 1998
- - ---------------------------------
John H. Venette
Director, Treasurer, Chief
Financial Officer
Supplemental information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Exchange Act by Non-Reporting Issuers
No annual report or proxy material covering the registrant's last fiscal year
has been sent to security holders. If such annual report or proxy material is to
be furnished to security holders, the registrant shall furnish copies of such
material to the Commission when it is sent to security holders.
13
<PAGE>
CONDOR CAPITAL, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
<PAGE>
CONTENTS
Page
----
Independent auditors' report 1
Financial statements:
Balance sheets 2
Statements of operations 3
Statements of stockholders' equity (deficit) 4 - 5
Statements of cash flows 6
Notes to financial statements 7 - 12
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Condor Capital, Inc.
Denver, Colorado
We have audited the accompanying balance sheets of Condor Capital, Inc. (a
development stage company) as of September 30, 1997 and 1996, and the
related consolidated statements of operations, changes in stockholders'
equity (deficit) and cash flows for each of the years then ended and for
the cumulative period October 1, 1992 to September 30, 1997. 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. The financial statements for the cumulative period
October 1, 1990 (Inception of the development stage) to September 30, 1992
were audited by other auditors, whose report dated May 4, 1993, expressed
an opinion that contained a paragraph that indicated substantial doubt
about the Company's ability to continue as a going concern.
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 Condor Capital, Inc. as
of September 30, 1997 and 1996, and the results of its operations and cash
flows for each of the years then ended and for the cumulative period
October 1, 1992 to September 30, 1997, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1, the
Company does not have ongoing operations and its ability to establish
itself as a going concern is dependent upon the Company obtaining
sufficient financing to develop viable business operations and, ultimately,
to achieve profitable operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Gordon, Hughes & Banks, LLP
Gordon, Hughes & Banks, LLP
December 23, 1997,
Englewood, Colorado
<PAGE>
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
BALANCE SHEETS
SEPTEMBER 30, 1997 AND 1996
Assets
1997 1996
--------- ---------
<S> <C> <C>
Current Assets, cash $ 11,731 $ 0
--------- ---------
Total Assets $ 11,731 $ 0
========= =========
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities, accounts payable $ 4,941 $ 22,194
--------- ---------
Stockholder's Equity (Deficit):
Preferred stock: no par value, 10,000,000
shares authorized:
Series A convertible preferred stock:
Liquidation preference $.01 per share, 141,000
shares authorized, none issued 0 0
Series B convertible preferred stock:
Liquidation preference $.01 per share, 140,000
shares authorized, none issued or
outstanding for 1997 and 140,000 shares issued
and outstanding for 1996 0 0
Common stock: no par value, 800,000,000 shares authorized,
11,820,010 shares issued and outstanding for 1997,
1,150,739 shares issued and 653,139 shares outstanding
for 1996 314,916 277,481
(Deficit) accumulated prior to the development stage (172,222) (172,222)
(Deficit) accumulated during the development stage (135,904) (127,453)
--------- ---------
Total Stockholders' Equity (Deficit) 6,790 (22,194)
--------- ---------
Total Liabilities and Stockholders' Equity (Deficit) $ 11,731 $ 0
========= =========
See notes to financial statements Page 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 1997 AND 1996
AND CUMULATIVE SINCE OCTOBER 1, 1990 (INCEPTION OF DEVELOPMENT STAGE)
Cumulative
During
Development 1997 1996
Stage
----------- ----------- -----------
Operations:
<S> <C> <C> <C>
General and administrative expenses $ 144,065 $ 16,141 $ 7,542
----------- ----------- -----------
(Loss) from operations (144,065) (16,141) (7,542)
Other income, interest income 471 0 0
----------- ----------- -----------
(Loss) before extraordinary item (143,594) (16,141) (7,542)
Extraordinary item,
forgiveness of debt (Note 7) 7,690 7,690 0
=========== =========== ===========
Net (Loss) (135,904) (8,451) (7,542)
=========== =========== ===========
Income (loss) per share of common stock:
(Loss) before extraordinary item $ (0.09) $ (0.00) $ (0.01)
Extraordinary item 0.00 0.00 0
----------- ----------- -----------
Net (loss) $ (0.09) $ (0.00) $ (0.01)
=========== =========== ===========
Weighted average number of common
shares outstanding 1,562,028 6,572,061 653,139
=========== =========== ===========
See notes to financial statements Page 3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED SEPTEMBER 30, 1997 AND 1996
(Deficit)
Series B Accumulated
Preferred Stock Common Stock During
--------------------------- -------------------------- Development
Shares Amount Shares Amount Stage
------------ ----------- ----------- ----------- ------------
Balances,
<S> <C> <C> <C> <C> <C>
September 30, 1995 140,000 $ 0 1,150,739 $ 273,481 $ (119,911)
Management services
contributed by officers 0 0 0 4,000 0
Net (Loss) 0 0 0 0 (7,542)
----------- ----------- ----------- ----------- -----------
Balances,
September 30, 1996 140,000 0 1,150,739 277,481 (127,453)
----------- ----------- ----------- ----------- -----------
Management services
contributed by officers 0 0 0 3,900 0
Issuance of common stock
to officer for services
($.0042 per share) 0 0 23,620 100 0
Sale of common stock
for cash ($.0024 per share) 0 0 2,462,841 5,835 0
Sale of common stock
for cash ($.0028 per share) 0 0 3,273,810 9,167 0
Sale of common stock
for cash ($.0034 per share) 0 0 1,920,000 6,500 0
Sale of common stock
for cash ($.0033 per share) 0 0 3,580,000 11,933 0
Return and cancellation
of preferred shares (140,000) 0 0 0 0
Return and cancellation
of common stock from
former officer 0 0 (93,400) 0 0
Cancellation of common
stock held in escrow
and in treasury 0 0 (497,600) 0 0
Net (Loss) 0 0 0 0 (8,451)
----------- ----------- ----------- ----------- -----------
Balances,
September 30, 1997 0 $ 0 11,820,010 $ 314,916 $ (135,904)
=========== =========== =========== =========== ===========
(Statement continues)
See notes to financial statements Page 4
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED SEPTEMBER 30, 1997 AND 1996
(Continued)
(Deficit)
Accumulated
Prior to Treasury Stock
Development ----------------------------------------
Stage Shares Amount Total
Balances, ------------ ----------- ----------- -----------
September 30, 1995 $ (172,222) 497,600 $ 0 $ (18,652)
Management services
contributed by officers 0 0 0 4,000
Net (Loss) 0 0 0 (7,542)
----------- ----------- ----------- -----------
Balances,
September 30, 1996 (172,222) 497,600 0 (22,194)
----------- ----------- ----------- -----------
Management services
contributed by officers 0 0 0 3,900
Issuance of common stock
to officer for services
($.0042 per share) 0 0 0 100
Sale of common stock
for cash ($.0024 per share) 0 0 0 5,835
Sale of common stock
for cash ($.0028 per share) 0 0 0 9,167
Sale of common stock
for cash ($.0034 per share) 0 0 0 6,500
Sale of common stock
for cash ($.0033 per share) 0 0 0 11,933
Return and cancellation
of preferred shares 0 0 0 0
Return and cancellation
of common stock from
former officer 0 0 0 0
Cancellation of common
stock held in escrow
and in treasury 0 (497,600) 0 0
Net (Loss) 0 0 0 (8,451)
----------- ----------- ----------- -----------
Balances,
September 30, 1997 $ (172,222) 0 $ 0 $ 6,790
=========== =========== =========== ===========
See notes to financial statements Page 5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1997 AND 1996
AND CUMULATIVE SINCE OCTOBER 1, 1990 (INCEPTION OF DEVELOPMENT STAGE)
Cumulative
During
Development
Stage 1997 1996
--------- --------- ---------
Cash flows from operating activities:
<S> <C> <C> <C>
Net (loss) $(135,904) $ (8,451) $ (7,542)
Adjustments to reconcile net (loss)
to cash used by operating activities:
Loss on disposal of assets 20,169 0 0
Issuance of stock for services 6,100 100 0
Management services contributed 23,900 3,900 4,000
Changes in assets and liabilities:
Decrease in prepaid expenses 3,634 0 0
Increase (decrease)
in accounts payable 3,802 (17,253) 3,542
--------- --------- ---------
Net cash (used) by operating activities (78,299) (21,704) 0
--------- --------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock 33,435 33,435 0
Contributions to capital 14,000 0 0
--------- --------- ---------
Net cash provided by financing activities 47,435 33,435 0
--------- --------- ---------
Net (decrease) increase in cash (30,864) 11,731 0
Cash, beginning of period 42,595 0 0
--------- --------- ---------
Cash, end of period $ 11,731 $ 11,731 $ 0
========= ========= =========
See notes to financial statements Page 6
</TABLE>
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
Note 1 - Operations and Summary of Significant Accounting Policies
Organization
------------
Condor Capital, Inc. (the "Company") was incorporated in Colorado on
December 22, 1987. As further discussed in Note 2, in January 1990
Condor Capital, Inc. acquired all of the outstanding common stock of
Aviation Management Group, Inc. ("AMG" and also referred to as the
"Company"). For accounting purposes, the acquisition was treated as a
recapitalization of the Company with AMG being treated as the acquirer
(in a reverse acquisition).
After the acquisition, AMG conducted business as Condor Capital, Inc.
AMG was incorporated January 5, 1987 under the name Spectrum
Publications, Inc. ("Spectrum") as a Colorado corporation. In November
1989, Spectrum amended its Articles of Incorporation and changed its
name to Aviation Management Group, Inc. The Company had no operations
prior to October 1989. In October 1989, the Company entered the
insurance and printing business.
Later in 1990, all of the Company's insurance and printing operations
were terminated. Therefore, effective October 1, 1990, the Company
reentered the development stage as defined in Statement of Financial
Accounting Standards No. 7, "Accounting and Reporting by Development
Stage Enterprises." Since entering the development stage, the Company
has had a number of acquisition negotiations with other companies,
none of which have resulted in an acquisition. In the future, the
Company intends to evaluate, structure and complete a merger with, or
acquisition of, prospects consisting of private companies,
partnerships or sole proprietorships. The Company may seek to acquire
a controlling interest in such entities in contemplation of later
completing an acquisition.
Effective January 1, 1995, AMG was administratively dissolved by the
office of the Colorado Secretary of State. As a result, Condor
Capital, Inc. (the former legal acquirer) ceased to have a subsidiary
and became the sole surviving entity.
Basis of Presentation and Going Concern
---------------------------------------
The accompanying consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business.
The consolidated financial statements do not include any adjustments
relating to the amount and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern.
The Company's continuation as a going concern is dependent upon its
ability to obtain additional financing as may be required and to
develop viable business operations that will generate sufficient cash
flow to meet its obligations on a timely basis. If the Company cannot
raise additional capital or debt financing, it may not be able to
continue as a going concern.
Page 7
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(CONTINUED)
Note 1 - Operations and Summary of Significant Accounting Principles (Continued)
Net (Loss) Per Share of Common Stock
------------------------------------
Net (loss) per share of common stock is based on the weighted average
number of shares of common stock outstanding during each year and for
the cumulative period in development stage.
Cash Equivalents
----------------
For statement of cash flows purposes, the Company considers any
short-term investments with original maturities 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 affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Significant estimates have been made with regards to estimates of
contributed services.
Reverse Stock Split
-------------------
Effective August 19, 1993, the Company approved a one for two hundred
reverse stock split of all outstanding common shares and common stock
purchase warrants. All share amounts, warrant amounts and (losses) per
share amounts have been retroactively restated for the reverse stock
split.
Presentation of treasury stock
------------------------------
Colorado state law was revised in 1995 to eliminate the concept of
treasury stock. As a result, the outstanding shares on the balance
sheets are presented net of treasury stock. However, for explanatory
purposes, the Statement of Changes in Stockholders' Equity (Deficit)
presents the treasury stock until canceled in 1997.
Note 2 - Business Combination
Condor Capital, Inc. ("Condor") was formed on December 22, 1987 and
completed a public offering in 1988.
Effective January 22, 1990, Condor acquired 100% of the issued and
outstanding common stock of AMG in exchange for 800,000 shares of its
common stock and 140,000 shares of its series B convertible preferred
Page 8
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(CONTINUED)
Note 2 - Business Combination (Continued)
stock. Of the 800,000 shares of common stock, 300,000 shares were
placed in escrow to be released if the Company became listed on NASDAQ
by a specified date. Since the Company did not become listed on NASDAQ
by the specified date, the 300,000 shares, along with other shares as
described below, were presented in the Statement of Changes in
Stockholders' Equity (Deficit) as treasury stock until cancellation in
1997.
In March 1990, the Company formed Condor Printing and Publishing, Inc.
("Condor Printing") and Condor Insurance Services, Inc. ("Condor
Insurance") as wholly owned subsidiaries. Condor Printing acquired a
printing shop and Condor Insurance acquired an insurance agency.
Subsequently, these businesses were determined by management to be
unsuccessful and were returned to their original owners in exchange
for 597,600 shares (which included the 300,000 shares held in
treasury) that the owners had received in the business combination
between the Company (AMG) and Condor. The 597,600 shares were
presented as held in treasury since 1991, but were recorded in
treasury without value since the investment in Condor Printing and
Condor Insurance had been written off earlier. In 1997, all treasury
shares were canceled.
Condor has had no operations; however, Condor had net assets of
approximately $171,000 when it acquired AMG in 1990. As a result of
this transaction, the previous owners of AMG obtained 71% of the
outstanding common stock of Condor. Accordingly, this acquisition was
accounted for using the purchase method and as a recapitalization of
AMG whereby AMG was the acquiror for accounting purposes. For legal
purposes, Condor was considered the acquiring company; hence, the
Company prior to the acquisition was AMG and after the acquisition was
the consolidated entity.
Under reverse acquisition accounting, the capital structure of Condor
carries forward in the consolidated entity and an adjustment to
transfer Condor's cumulative losses from accumulated (deficit) to
common stock was made in the amount of $96,289. The adjustment
effectively eliminated Condor's cumulative losses prior to the merger
with AMG. The primary components of Condor's cumulative (losses) of
$96,289 at the time of acquisition consisted of cumulative interest
income ($16,902), cumulative operating expenses ($63,376) and a write
off of the investment in an attempted acquisition ($49,815).
From the date of the business combination to January 1, 1995, the
Company operated as a consolidated entity. However, effective January
1, 1995, AMG was administratively dissolved by the office of the
Colorado Secretary of State. As a result, Condor Capital, Inc. (the
former legal acquirer) ceased to have a subsidiary and became the sole
surviving entity. For accounting purposes, the accounting in earlier
years for the reverse acquisition and historical status of AMG remains
unchanged. The dissolution of AMG does not cause any accounting
adjustment to the financial statements.
Note 3 - Common and Preferred stock
As described in Note 1, the Company reentered the development stage on
October 1, 1990. The following information describes the changes in
Page 9
<PAGE>
components of the Company's stockholders' equity (deficit) from the
date of reentering the development stage on October 1, 1990 to
September 30, 1995.
<TABLE>
<CAPTION>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(CONTINUED)
Note 3 - Common and Preferred stock (Continued)
Series B
Preferred Stock Common Stock
-------------------------- -------------------------- Cumulative
Shares Amount Shares Amount (Deficit)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balances, October 1, 1990 140,000 $ 0 1,135,280 $ 237,481 $(172,222)
Cash contributed to capital 0 0 0 14,000 0
Issuance of common stock to
shareholder for services 0 0 15,000 6,000 0
Shares issued in stock split 0 0 459 0 0
Management services contributed
by shareholders 0 0 0 16,000 0
Net (losses) from October 1, 1990
to September 30, 1995 0 0 0 0 (119,911)
--------- --------- --------- --------- ---------
Balances, September 30, 1995 140,000 $ 0 1,150,739 $ 273,481 $(292,133)
========= ========= ========= ========= =========
</TABLE>
In January 1990 and in conjunction with the acquisition of AMG, the
Company had established a series B convertible preferred stock with
140,000 shares authorized. The 140,000 shares of preferred stock were
issued to former AMG stockholders . The preferred stock was
convertible into common stock under certain conditions. Those
conditions were never attained and no preferred shares were ever
converted into common stock. The preferred shares were returned to the
Company and canceled in 1997 along with the shares of common stock, as
described below.
In fiscal 1991 and 1993, the Company issued 15,000 shares of common
stock to the Company's management for services valued at $6,000.
In 1993 and 1994, the Company conducted merger negotiations with
Golfnet Corporation ("Golfnet"). At that time, Golfnet paid a total of
$14,000 for legal and accounting services provided to the Company in
connection with the merger. To facilitate the merger, the Board of
Directors of the Company enacted a 200 for 1 reverse split of the
Company's common stock and negotiated with former AMG shareholders to
retrieve and cancel 497,600 common shares and 140,000 preferred shares
originally issued to them. However, the negotiations with Golfnet
terminated. The Company retained those shares and canceled them, along
with an additional 93,400 shares returned by AMG shareholders, in
1997.
Page 10
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(CONTINUED)
Note 3 - Common and Preferred stock (Continued)
During the year ended September 30, 1997, the Company awarded 23,620
shares of common stock to the Company's president and valued the
transaction at $100. Management services during the year valued at
$3,900 were contributed by officers and certain shareholders. The
Company sold 2,462,841 shares, 3,273,810 shares and 1,920,000 shares
to current stockholders for $5,835, $9,167 and $6,500, respectively.
In addition, the Company sold 3,580,000 shares to outside investors
for $11,993.
Note 4 - Related Party Transactions
From 1993 to the present time, management has contributed services
without compensation. The services have been valued and expensed at a
range of $4,000 to $8,000 per year for a total of $23,900.
The Company currently utilizes office space provided free by the
Company's President. In addition, shareholders have contributed
management services to the Company (Note 3).
Note 5 - Incentive Stock Option Plan
In February 1988, the Company's Board of Directors authorized an
Incentive Stock Option Plan and reserved 10,000,000 shares of the
Company's no par value common stock for issuance to key employees. The
Board of Directors is authorized to determine the exercise price, time
period, number of shares subject to the option, and the identity of
those persons receiving the options. As of September 30, 1997, no
options have been granted pursuant to the plan.
Note 6 - Income Taxes
At September 30, 1997, the Company has a net operating loss (NOL)
carry-forward for tax purposes of approximately $309,000 (expiring in
the years 2004 to 2011).
Deferred tax assets at September 30, 1997 and 1996 are as follows:
1997 1996
Deferred tax assets due to: --------- ---------
Net operating loss carry-forward $ 114,155 $ 111,619
Valuation allowance for deferred
tax asset (114,155) (111,619)
--------- ---------
Net deferred tax asset $ 0 $ 0
========= =========
Page 11
<PAGE>
CONDOR CAPITAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(CONTINUED)
Note 6 - Income Taxes (Continued)
Deferred income taxes are recorded to reflect the tax consequences on
future years of differences between the tax basis of assets and
liabilities and their financial reporting amounts at each year end.
Deferred income tax assets are recorded to reflect the tax
consequences on future years of income tax carry-forward benefits,
reduced by benefit amounts not expected to be realized by the Company.
There was no income tax provision or benefit for the years ended
September 30, 1997 and 1996.
Note 7 - Extraordinary Item
During the year ended September 30, 1997, the Company settled $13,690
of their accounts payable for $6,000. In accordance with Statement of
Financial Standards ("SFAS") No.15, "Accounting by Debtors and
Creditors for Troubled Debt Restructurings", Company has treated the
gain of $7,690 as an extraordinary item in the statement of
operations.
Page 12
<PAGE>
EXHIBIT INDEX
Exhibit No
----------
3(i) Articles of Incorporation of Registrant as amended
3(ii) Bylaws of Registrant
4 Specimen certificate for common stock
27 Financial Data Schedule
Exhibit 3.i
ARTICLES OF INCORPORATION
OF
CONDOR FUND, INC.
KNOW ALL MEN BY THESE PRESENTS: That the undersigned incorporator being a
natural person of the age of eighteen years or more and desiring to form a body
corporate under the laws of the State of Colorado does hereby sign, verify and
deliver in duplicate to the Secretary of State of the State of Colorado, these
Articles of Incorporation:
ARTICLE I
NAME
The name of the Corporation shall be: Condor Fund, Inc.
ARTICLE II
PERIOD OF DURATION
The Corporation shall exist in perpetuity, from and after the date of
filing these Articles of Incorporation with the Secretary of State of the State
of Colorado unless dissolved according to law.
<PAGE>
ARTICLE III
PURPOSES AND POWERS
1. PurPoses. Except as restricted by these Articles of Incorporation, the
Corporation is organized for the purpose of transacting all lawful business for
which corporations may be incorporated pursuant to the Colorado Corporation
Code.
2. General Powers. Except as restricted by these Articles of Incorporation,
the Corporation shall have and may exercise all powers and rights which a
corporation may exercise legally pursuant to the Colorado Corporation Code.
3. Issuance of Shares. The board of directors of the Corporation may divide
and issue any class of stock of the Corporation in series pursuant to a
resolution properly filed with the Secretary of State of the State of Colorado.
ARTICLE IV
CAPITAL STOCK
The aggregate number of shares which this Corporation shall have authority
to issue is Eight Hundred Million (800,000,000) shares of no par value each,
which shares shall be designated "Common Stock"; and Ten Million (10,000,000)
shares of no par value each, which shares shall be designated "Preferred Stock"
and which may be issued in one or more series at the discretion of the Board of
Directors. In establishing a series the Board of Directors shall give to it a
-2-
<PAGE>
distinctive designation so as to distinguish it from the shares of all other
series and classes, shall fix the number of shares in such series, and the
preferences, rights and restrictions thereof. All shares of any one series shall
be alike in every particular except as otherwise provided by these Articles of
Incorporation or the Colorado Corporation Code.
1. Dividends. Dividends in cash, property or shares shall be paid upon the
Preferred Stock for any year on a cumulative or noncumulative basis as
determined by a resolution of the Board of Directors prior to the issuance of
such Preferred Stock, to the extent earned surplus for each such year is
available, in an amount as determined by a resolution of the Board of Directors.
Such Preferred Stock dividends shall be paid pro rata to holders of Preferred
Stock in any amount not less than nor more than the rate as determined by a
resolution of the Board of Directors prior to the issuance of such Preferred
Stock. No other dividend shall be paid on the Preferred Stock.
Dividends in cash, property or shares of the Corporation may be paid upon
the Common Stock, as and when declared by the Board of Directors, out of funds
of the Corporation to the extent and in the manner permitted by law, except that
no Common Stock dividend shall be paid for any year unless the holders of
Preferred Stock, if any, shall receive the maximum allowable Preferred Stock
dividend for such year.
-3-
<PAGE>
2. Distribution in Liquidation. Upon any liquidation, dissolution or
winding up of the Corporation, and after paying or adequately providing for the
payment of all its obligations, the remainder of the assets of the Corporation
shall be distributed, either in cash or in kind, first pro rata to the holders
of the Preferred Stock until an amount to be determined by a resolution of the
Board of Directors prior to issuance of such Preferred Stock, has been
distributed per share, and, then, the remainder pro rata to the holders of the
Common Stock.
3. Redemption. The Preferred Stock may be redeemed in whole or in part as
determined by a resolution of the Board of Directors prior to the issuance of
such Preferred Stock, upon prior notice to the holders of record of the
Preferred Stock, published, mailed and given in such manner and form and on such
other terms and conditions as may be prescribed by the Bylaws or by resolution
of the Board of Directors, by payment in cash or Common Stock for each share of
the Preferred Stock to be redeemed, as determined by a resolution of the Board
of Directors prior to the issuance of such Preferred Stock. Common Stock used to
redeem Preferred Stock shall be valued as determined by a resolution of the
Board of Directors prior to the issuance of such Preferred Stock. Any rights to
or arising from fractional shares shall be treated as rights to or arising from
one share. No such purchase or retirement shall be made if the capital of the
Corporation would be impaired thereby.
-4-
<PAGE>
If less than all the outstanding shares are to be redeemed, such redemption
may be made by lot or pro rata as may be prescribed by resolution of the Board
of Directors; provided, however, that the Board of Directors may alternatively
invite from shareholders offers to the Corporation of Preferred Stock at less
than an amount to be determined by a resolution of the Board of Directors prior
to issuance of such Preferred Stock, and when such offers are invited, the Board
of Directors shall then be required to buy at the lowest price or prices
offered, up to the amount to be purchased.
From and after the date fixed in any such notice as the date of redemption
(unless default shall be made by the Corporation in the payment of the
redemption price), all dividends on the Preferred Stock thereby called for
redemption shall cease to accrue and all rights of the holders thereof as
stockholders of the Corporation, except the right to receive the redemption
price, shall cease and terminate.
Any purchase by the Corporation of the shares of its Preferred Stock shall
not be made at prices in excess of said redemption price.
4. Voting Rights; Cumulative Voting. Each outstanding share of Common Stock
shall be entitled to one vote and each fractional share of Common Stock shall be
entitled to a corresponding fractional vote on each matter submitted to a vote
of shareholders. A majority of the shares of Common Stock entitled to vote,
-5-
<PAGE>
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Except as otherwise provided by these Articles of Incorporation or
the Colorado Corporation Code, if a quorum is present, the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders. When, with respect to any
action to be taken by shareholders of this Corporation, the laws of Colorado
require the vote or concurrence of the holders of two-thirds of the outstanding
shares, of the shares entitled to vote thereon, or of any class or series, such
action may be taken by the vote or concurrence of a majority of such shares or
class or series thereof. Cumulative voting shall not be allowed in the election
of directors of this Corporation.
Shares of Preferred Stock shall only be entitled to such vote as is
determined by the Board of Directors prior to the issuance of such stock, except
as required by law, in which case each share of Preferred Stock shall be
entitled to one vote.
5. Denial of Preemptive Rights. No holder of any shares of the Corporation,
whether now or hereafter authorized, shall have any preemptive or preferential
right to acquire any shares or securities of the Corporation, including shares
or securities held in the treasury of the Corporation.
-6-
<PAGE>
6. Conversion Rights. Holders of shares of Preferred Stock may be granted
the right to convert such Preferred Stock to Common Stock of the Corporation on
such terms as may be determined by the Board of Directors prior to issuance of
such Preferred Stock.
ARTICLE V
TRANSACTIONS WITH INTERESTED DIRECTORS
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 void or 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 purpose 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 purpose without
counting the votes or consents of such interested directors; or
-7-
<PAGE>
(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 VI
CORPORATE OPPORTUNITY
The officers, directors and other members of management of this Corporation
shall be subject to the doctrine of "corporate opportunities" only insofar as it
applies to business opportunities in which this Corporation has expressed an
interest as determined from time to time by this Corporation's board of
directors as evidenced by resolutions appearing in the Corporation's minutes.
Once such areas of interest are delineated, all such business opportunities
within such areas of interest which come to the attention of the officers,
directors, and other members of management of this Corporation shall be
disclosed promptly to this Corporation and made available to it. The board of
directors may reject any business opportunity presented to it and thereafter any
officer, director or other member of management may avail himself of such
opportunity. Until such time as this Corporation, through its board of
directors, has designated an area of interest, the officers, directors and other
members of management of this Corporation shall be free to engage in such areas
of interest on their own and this doctrine shall not limit the rights of any
officer, director or other member of management of this Corporation to continue
a business existing prior to the time that such area of interest is designated
by the Corporation. This provision shall not be construed to release any
employee of this Corporation (other than an officer, director or member of
management) from any duties which he may have to this Corporation.
-8-
<PAGE>
ARTICLE VII
INDEMNIFICATION
The Corporation may indemnify any director, officer, employee, fiduciary,
or agent of the Corporation to the full extent permitted by the Colorado
Corporation Code as in effect at the time of the conduct by such person.
ARTICLE VIII
AMENDMENTS
The Corporation reserves the right to amend its Articles of Incorporation
from time to time in accordance with the Colorado Corporation Code.
ARTICLE IX
ADOPTION AND AMENDMENT OF BYLAWS
The initial Bylaws of the Corporation shall be adopted by its board of
directors. Subject to repeal or change by action of the shareholders, the power
to alter, amend or repeal the Bylaws or adopt new Bylaws shall be vested in the
board of directors. The Bylaws may contain any provisions for the regulation and
management of the affairs of the Corporation not inconsistent with law or these
Articles of Incorporation.
-9-
<PAGE>
ARTICLE X
REGISTERED OFFICE AND REGISTERED AGENT
The address of the initial registered office of the Corporation is 325
Canyon Boulevard, Boulder, Colorado 80302, and the name of the initial
registered agent at such address is Allen R. Goldstone. Either the registered
office or the registered agent may be changed in the manner permitted by law.
ARTICLE XI
INITIAL BOARD OF DIRECTORS
The number of directors of the Corporation shall be fixed by the Bylaws of
the Corporation, with the provision that there need be only as many directors as
there are shareholders in the event that the outstanding shares are held of
record by fewer than three shareholders. The initial board of directors of the
Corporation shall consist of three (3) directors. The names and addresses of the
persons who shall serve as directors until the first annual meeting of
shareholders and until their successors are elected and shall qualify are as
follows:
Name Address
---- -------
Allen R. Goldstone 325 Canyon Blvd.
Boulder, CO 80302
Sanford L. Schwartz 1720 Fourteenth St.
Boulder, CO 80302
Robert M. Geller 1720 Fourteenth St.
Boulder, CO 80302
-10-
<PAGE>
ARTICLE XII
LIMITATION OF LIABILITY OF
DIRECTORS TO CORPORATIONS AND SHAREHOLDERS
No director shall be liable to the Corporation or any shareholder fo
monetary damages for breach of fiduciary duty as a director, except for any
matter in respect of which such director (a) shall be liable under C.R.S.
Section 7-5-114 or any amendment thereto or successor provision thereto; (b)
shall have breached the director's duty of loyalty to the Corporation or its
shareholders; (c) shall have not acted in good faith or, in failing to act,
shall not have acted in good faith; (d) shall have acted or failed to act in a
manner involving intentional misconduct or a knowing violation of law; or (e)
shall have derived an improper personal benefit. Neither the amendment nor
repeal of this Article, nor the adoption of any provision in the Articles of
Incorporation inconsistent with this Article, shall eliminate or reduce the
effect of this Article in respect of any matter occurring prior to such
amendment, repeal or adoption of an inconsistent provision. This Article shall
apply to the full extent now permitted by Colorado law or as may be permitted in
the future by changes or enactments in Colorado law, including without
limitation C.R.S. Section 7-2-102 and/or C.R.S. Section 7-3-101.
-11-
<PAGE>
ARTICLE XIII
INCORPORATOR
The name and address of the incorporator is as follows:
Name Address
---- -------
Jon D. Sawyer 511 16th St., #400
Denver, CO 80202
<PAGE>
IN WITNESS WHEREOF, the above-named incorporator has signed these Articles
of Incorporation this 22nd day of December, 1987.
/s/ Jon D. Sawyer
-----------------------------
Jon D. Sawyer
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF CONDOR FUND, INC.
Pursuant to the provisions of the Colorado Corporation Act, the undersigned
Corporation adopts the following articles of amendment to its Articles of
Incorporation.
FIRST: The name of the Corporation is Condor Fund, Inc.
SECOND: The following amendment was adopted by the Board of Directors and
Shareholders of the Corporation effective April 18, 1988 in the manner
prescribed by the Colorado Corporation Code:
RESOLVED: That Articles I of the Articles of Incorporation of the
Corporation be, and it hereby is, changed to read as follows:
ARTICLE I
NAME
The name of the Corporation shall be Condor Capital, Inc.
THIRD: The number of shares voting for the amendment was sufficient for
approval.
<PAGE>
FOURTH: The manner, if not set forth in the amendments, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendments shall be effected, are as follows. Not Applicable.
FIFTH: The manner in which the amendments effect a change in the amount of
stated capital as changed by the amendments are as follows: No Change.
CONDOR FUND, INC.
By /s/ Allen R. Goldstone
-------------------------------------
Allen R. Goldstone, President
A T T E S T
/s/ Sanford L. Schwartz
- - ------------------------------
Sanford L. Schwartz, Secretary
<PAGE>
STATEMENT ESTABLISHING SERIES OF PREFERRED STOCK
OF
CONDOR CAPITAL, INC.
Pursuant to the requirements of Section 7-4-102 of the Colorado Corporation
Code, the undersigned Corporation submits the following Statement Establishing
Series of Preferred Stock.
FIRST: The name of the Corporation is Condor Capital, Inc.
SECOND: A copy of the resolutions establishing and designating the series
and fixing and determining the relative rights and preferences thereof is
attached hereto as Exhibit A.
THIRD: Such resolutions were duly adopted by the Board of Directors of the
Corporation on the 25th day of October, 1989.
IN TESTIMONY WHEREOF, the undersigned Corporation has caused this Statement
to be signed by a duly authorized officer and its corporate seal, duly attested
by another such officer, to be hereunto affixed this 25th day of October, 1989.
CONDOR CAPITAL, INC.
(S E A L)
By /s/ Allen R. Goldstone
-----------------------------------
Allen R. Goldstone, President
ATTEST
/s/ Sanford L. Schwartz
- - ------------------------------
Sanford L. Schwartz, Secretary
<PAGE>
RESOLUTION ESTABLISHING AND DESIGNATING
SERIES A CONVERTIBLE PREFERRED STOCK
WHEREAS, the Articles of Incorporation of the Corporation provides for a
class of shares of stock designated "Preferred Stock," and vests in the Board of
Directors the authority to specify the number of shares of Preferred Stock to be
issued, to divide the Preferred Stock into one or more series within any class
thereof, and to fix the number of Shares in such series, and the preferences,
rights and restrictions thereof.
NOW, THEREFORE, be it resolved that there shall be one series of Preferred
Stock of the Corporation designated "Series A Convertible Preferred Stock." The
number of shares of Series A Convertible Preferred Stock shall be 141,000
shares. The powers, designations, preferences and relative, participating,
optional or other special rights of the shares of this series of Convertible
Preferred Stock and the qualifications, limitations and restrictions of such
preferences and rights shall be as follows:
1. Dividend Provisions
(a) The holders of outstanding shares of Series A Convertible
Preferred Stock shall not be entitled to receive any dividends.
2. Liquidation Preference
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holder of each
share of Series A Convertible Preferred Stock shall be entitled to receive, out
of the assets of the Corporation available for distribution to its stockholders,
before any payment or distribution shall be made on the Common Stock, an amount
per share equal to $.01. If the assets and funds to be distributed among the
holders of the Series A Convertible Preferred Stock shall be insufficient to
permit the payment of the full aforesaid preferential amount to such holders,
then the entire assets and funds of the Corporation legally available for the
distribution shall be distributed among the holders of the Series A Convertible
Preferred Stock in proportion to the aggregate preferential amount of all shares
of Series A Convertible Preferred Stock held by them. After payment has been
made to the holders of the Series A convertible Preferred Stock, the holders of
the Common Stock shall be entitled to share ratably in the remaining assets on
the basis of the number of shares of Common Stock held by them at the time of
such liquidation.
(b) For purposes of this Section 2, a merger or consolidation of the
Corporation with or into any other corporation or corporations, or the merger of
any other corporation or corporations into the Corporation, or the sale or any
other corporate reorganization, in which shareholders of the Corporation receive
distributions as a result of such consolidation, merger, sale of assets or
reorganization, shall be treated as a liquidation, dissolution or winding up of
<PAGE>
the Corporation, unless the stockholders of the corporation held more than fifty
percent (50%) of the voting equity securities of the successor or surviving
corporation immediately following such consolidation, merger, sale of assets or
reorganization in which event such consolidation, merger, sale of assets, or
reorganization shall not be treated as a liquidation, dissolution or winding up.
3. Conversion. The Series A Convertible Preferred Stock shall be
automatically converted into Common Stock upon the following terms and
conditions (the "Conversion Rights").
(a) Incidents Causing Conversion.
(i) Automatic Conversion. Upon the occurrence of the events
specified in subparagraph 3(a)(i)(A) below (the "Conditions to Conversion"), all
of the outstanding shares of Series A convertible Preferred Stock may be
converted into shares of Common Stock in accordance with paragraph 3(b)(i)
hereof.
A. All shares of Series A Convertible Preferred Stock may be
converted into Common Stock once WTVE channel 51 has built a new tower which has
been approved by the F.C.C. and is operating such that the station's broadcast
signal covers substantially all of the Philadelphia metropolitan area.
B. Promptly upon the occurrence of the conditions to Conversion,
the Corporation shall give written notice of such occurrence to each holder of
record of Series A Convertible Preferred Stock.
(b) Mechanics of Conversion
(i) Automatic Conversion. The applicable conversion shall occur
automatically, effective upon the satisfaction of the appropriate Conditions to
Conversion, and upon the election of the holder of the Series A Convertible
Preferred Stock. The holder of the shares of Convertible Preferred Stock which
are converted shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or any authorized transfer agent for
such stock together with a written statement that he elects to convert his
preferred stock to common stock. The Corporation or the transfer agent shall
promptly issue and deliver at such office to such holder of Convertible
Preferred Stock a certificate or certificates for the number of shares of Common
Stock to which such holder is thereby entitled. The effective date of such
conversion shall be the date upon which the holder provides written notice of
his election to convert to the Corporation or transfer agent.
-2-
<PAGE>
(c) Conversion Ratio. Each share of Convertible Preferred Stock will
be converted into one thousand (1,000) fully paid and nonassessable shares of
Common Stock (except as adjusted pursuant to paragraph 3(d) below).
(d) Adjustment of Conversion Rate.
(i) Stock Splits: Stock Dividends. If the Corporation shall at
any time, or from time to time, after the effective date hereof effect a
subdivision of the outstanding Common Stock and not effect a corresponding
subdivision of the Series a convertible Preferred Stock, or if the Corporation
at any time or from time to time after the effective date hereof shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the number of shares of
Common Stock issuable upon conversion of the convertible Preferred Stock shall
be proportionately increased as of the time of such issuance or, in the event
such a record date shall have been fixed, as of the close of business on such
record date.
(e) No Impairment. The Corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance or any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all of the provisions of
this Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Convertible Preferred Stock against impairment.
(f) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series A Convertible Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of Series A Convertible Preferred Stock, and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all outstanding shares of Series A
Convertible Preferred Stock, the Corporation will take such corporate action as
is necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
(g) Notices. Any notice required to be given to holders of shares of
Series A Convertible Preferred Stock shall be deemed given upon deposit in the
United States mail, postage prepaid, addressed to such holder of record at his
address appearing on the books of the Corporation, or upon personal delivery of
the aforementioned address.
-3-
<PAGE>
4. Voting Rights. Each share of Series A Convertible Preferred Stock shall
entitle the holder to one (1) vote and with respect to each such vote, a holder
of shares of Series A convertible Preferred Stock shall have full voting rights
and powers equal to the voting rights and powers of a holder of shares of Common
Stock, share for share, and shall be entitled to notice of any shareholders'
meeting in accordance with the Bylaws of the Corporation, and shall be entitled
to vote with holders of Common Stock together as a single class.
5. Redemption Provisions. The Series A Convertible Preferred Stock may not
be redeemed by the Corporation.
6. Status of Converted or Reacquired Stock. In case any shares of Series A
Convertible Preferred Stock shall be converted pursuant to Section 3 hereof, the
shares so converted shall cease to be a part of the authorized capital stock of
the Corporation.
-4-
<PAGE>
STATEMENT ESTABLISHING SERIES OF PREFERRED STOCK
OF
CONDOR CAPITAL, INC.
Pursuant to the requirements of Section 7-4-102 of the Colorado Corporation
Code, the undersigned Corporation submits the following Statement Establishing
Series of Preferred Stock.
FIRST: The name of the Corporation is Condor Capital, Inc.
SECOND: A copy of the resolutions establishing and designating the series
and fixing and determining the relative rights and preferences thereof is
attached hereto as Exhibit A.
THIRD: Such resolutions were duly adopted by the Board of Directors of the
Corporation on the 22nd day of January, 1990.
IN TESTIMONY WHEREOF, the undersigned Corporation has caused this Statement
to be signed by a duly authorized officer and its corporate seal, duly attested
by another such officer, to be hereunto affixed this 22nd day of January, 1990.
CONDOR CAPITAL, INC.
(S E A L)
By /s/ Allen R. Goldstone
----------------------------------
Allen R. Goldstone, President
ATTEST
/s/ Sanford L. Schwartz
- - ------------------------------
Sanford L. Schwartz, Secretary
<PAGE>
RESOLUTION ESTABLISHING AND DESIGNATING
SERIES B CONVERTIBLE PREFERRED STOCK
WHEREAS, the Articles of Incorporation of the Corporation provides for a
class of shares of stock designated "Preferred Stock," and vests in the Board of
Directors the authority to specify the number of shares of Preferred Stock to be
issued, to divide the Preferred Stock into one or more series within any class
thereof, and to fix the number of Shares in such series, and the preferences,
rights and restrictions thereof.
NOW, THEREFORE, be it resolved that there shall be one series of Preferred
Stock of the Corporation designated "Series B Convertible Preferred Stock." The
number of shares of Series B Convertible Preferred Stock shall be 140,000
shares. The powers, designations, preferences and relative, participating,
optional or other special rights of the shares of this series of Convertible
Preferred Stock and the qualifications, limitations and restrictions of such
preferences and rights shall be as follows:
1. Dividend Provisions
(a) The holders of outstanding shares of Series B Convertible
Preferred Stock shall not be entitled to receive any dividends.
2. Liquidation Preference
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holder of each
share of Series B Convertible Preferred Stock shall be entitled to receive, out
of the assets of the Corporation available for distribution to its stockholders,
before any payment or distribution shall be made on the Common Stock, an amount
per share equal to $.01. If the assets and funds to be distributed among the
holders of the Series B Convertible Preferred Stock shall be insufficient to
permit the payment of the full aforesaid preferential amount to such holders,
then the entire assets and funds of the Corporation legally available for the
distribution shall be distributed among the holders of the Series B Convertible
Preferred Stock in proportion to the aggregate preferential amount of all shares
of Series B Convertible Preferred Stock held by them. After payment has been
made to the holders of the Series B Convertible Preferred Stock, the holders of
the Common Stock shall be entitled to share ratably in the remaining assets on
the basis of the number of shares of Common Stock held by them at the time of
such liquidation.
(b) For purposes of this Section 2, a merger or consolidation of the
Corporation with or into any other corporation or corporations, or the merger of
any other corporation or corporations into the Corporation, or the sale or any
other corporate reorganization, in which shareholders of the Corporation receive
distributions as a result of such consolidation, merger, sale of assets or
reorganization, shall be treated as a liquidation, dissolution or winding up of
<PAGE>
the Corporation, unless the stockholders of the corporation held more than fifty
percent (50%) of the voting equity securities of the successor or surviving
corporation immediately following such consolidation, merger, sale of assets or
reorganization in which event such consolidation, merger, sale of assets, or
reorganization shall not be treated as a liquidation, dissolution or winding up.
3. Conversion. The Series B Convertible Preferred Stock shall be
automatically converted into Common Stock upon the following terms and
conditions (the "Conversion Rights").
(a) Incidents Causing Conversion.
(i) Automatic Conversion. Upon the occurrence of the events
specified in subparagraph 3(a)(i)(A) below (the "Conditions to Conversion"), all
of the outstanding shares of Series B Convertible Preferred Stock may be
converted into shares of Common Stock in accordance with paragraph 3(b)(i)
hereof.
A. 40,000 shares of Series B Convertible Preferred Stock may be
converted into Common Stock once the Corporation's Common Stock is listed for
trading on NASDAQ.
B. 100,000 Shares of Series B Convertible Preferred Stock may be
converted into Common Stock once the Corporation has a net worth of at least
$2,000,000 as shown on the Corporation's audited financial statements.
C. Promptly upon the occurrence of either of the Conditions to
Conversion, the Corporation shall give written notice of such occurrence to each
holder of record of Series B Convertible Preferred Stock.
(b) Mechanics of Conversion
(i) Automatic Conversion. The applicable conversion shall occur
automatically, effective upon the satisfaction of the appropriate Conditions to
Conversion, and upon the election of the holder of the Series B Convertible
Preferred Stock. The holder of the shares of Convertible Preferred Stock which
are converted shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or any authorized transfer agent for
such stock together with a written statement that he elects to convert his
preferred stock to common stock. The Corporation or the transfer agent shall
promptly issue and deliver at such office to such holder of Convertible
Preferred Stock a certificate or certificates for the number of shares of Common
Stock to which such holder is thereby entitled. The effective date of such
conversion shall be the date upon which the holder provides written notice of
his election to convert to the Corporation or transfer agent.
-2-
<PAGE>
(c) Conversion Ratio. Each share of Convertible Preferred Stock will
be converted into one thousand (1,000) fully paid and nonassessable shares of
Common Stock (except as adjusted pursuant to paragraph 3(d) below).
(d) Adjustment of Conversion Rate.
(i) Stock Splits: Stock Dividends. If the Corporation shall at
any time, or from time to time, after the effective date hereof effect a
subdivision of the outstanding Common Stock and not effect a corresponding
subdivision of the Series B Convertible Preferred Stock, or if the Corporation
at any time or from time to time after the effective date hereof shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the number of shares of
Common Stock issuable upon conversion of the convertible Preferred Stock shall
be proportionately increased as of the time of such issuance or, in the event
such a record date shall have been fixed, as of the close of business on such
record date.
(e) No Impairment. The Corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance or any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all of the provisions of
this Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Convertible Preferred Stock against impairment.
(f) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series B Convertible Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of Series B Convertible Preferred Stock, and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all outstanding shares of Series B
Convertible Preferred Stock, the Corporation will take such corporate action as
is necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
(g) Notices. Any notice required to be given to holders of shares of
Series B Convertible Preferred Stock shall be deemed given upon deposit in the
United States mail, postage prepaid, addressed to such holder of record at his
address appearing on the books of the Corporation, or upon personal delivery of
the aforementioned address.
-3-
<PAGE>
4. Voting Rights. Each share of Series B Convertible Preferred Stock shall
entitle the holder to one (1) vote and with respect to each such vote, a holder
of shares of Series B convertible Preferred Stock shall have full voting rights
and powers equal to the voting rights and powers of a holder of shares of Common
Stock, share for share, and shall be entitled to notice of any shareholders'
meeting in accordance with the Bylaws of the Corporation, and shall be entitled
to vote with holders of Common Stock together as a single class.
5. Redemption Provisions. The Series B Convertible Preferred Stock may not
be redeemed by the Corporation.
6. Status of Converted or Reacquired Stock. In case any shares of Series B
Convertible Preferred Stock shall be converted pursuant to Section 3 hereof, the
shares so converted shall cease to be a part of the authorized capital stock of
the Corporation.
-4-
Exhibit 3.ii
BYLAWS
OF
CONDOR FUND, INC.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I - OFFICES..................................................... 1
1.1 Business Office ..................................... 1
1.2 Registered Office .................................... 1
ARTICLE II - SHARES AND TRANSFER THEREOF ............................... 1
2.1 Regulation ........................................... 1
2.2 Certificates for Shares .............................. 1
2.3 Cancellation of Certificates ......................... 2
2.4 Lost, Stolen or Destroyed
Certificates ....................... 2
2.5 Transfer of Shares ................................... 2
2.6 Transfer Agent ....................................... 3
2.7 Close of Transfer Book and Record
Date ........................................ 3
ARTICLE III - SHAREHOLDERS AND MEETINGS THEREOF ........................ 4
3.1 Shareholders of Record ............................... 4
3.2 Meetings ............................................. 4
3.3 Annual Meeting ....................................... 4
3.4 Special Meetings ..................................... 4
3.5 Notice ............................................... 5
3.6 Meeting of all Shareholders .......................... 5
3.7 Voting Record ........................................ 5
3.8 Quorum ............................................... 6
3.9 Manner of Acting ..................................... 6
3.10 Proxies .............................................. 6
3.11 Voting of Shares ..................................... 6
3.12 Voting of Shares by Certain Holders .................. 6
3.13 Informal Action by Shareholders ...................... 7
3.14 Voting of Ballot ..................................... 7
3.15 Cumulative Voting .................................... 8
ARTICLE IV - DIRECTORS, POWERS AND MEETINGS ............................ 8
4.1 Board of Directors ................................... 8
4.2 Regular Meetings ..................................... 8
4.3 Special Meetings ..................................... 8
4.4 Notice ............................................... 8
4.5 Participation by Electronic Means .................... 9
4.6 Quorum and Manner of Acting ...........................9
4.7 Organization ......................................... 9
4.8 Presumption of Assent ................................ 9
4.9 Informal Action by Directors .........................10
4.10 Vacancies ............................................10
4.11 Compensation .........................................10
4.12 Removal of Directors .................................10
4.13 Resignations .........................................10
4.14 General Powers .......................................10
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
ARTICLE V - OFFICERS ...................................................11
5.1 Term and Compensation ................................11
5.2 Powers ...............................................11
5.3 Compensation .........................................13
5.4 Delegation of Duties .................................13
5.5 Bonds ................................................13
5.6 Removal ..............................................13
ARTICLE VI - FINANCE ...................................................13
6.1 Reserve Funds ........................................13
6.2 Banking ..............................................13
ARTICLE VII - DIVIDENDS ................................................14
ARTICLE VIII - CONTRACTS, LOANS AND CHECKS .............................14
8.1 Execution of Contract ................................14
8.2 Loans ................................................14
8.3 Checks ...............................................14
8.4 Deposits .............................................14
ARTICLE IX - FISCAL YEAR ...............................................15
ARTICLE X - CORPORATE SEAL .............................................15
ARTICLE XI - AMENDMENTS ................................................15
ARTICLE XII - EXECUTIVE COMMITTEE ......................................15
12.1 Appointment ..........................................15
12.2 Authority ............................................15
12.3 Tenure and Qualifications ............................15
12.4 Meetings .............................................16
12.5 Quorum ...............................................16
12.6 Informal Action by Executive Committee ...............16
12.7 Vacancies ............................................16
12.8 Resignations and Removal .............................16
12.9 Procedure ............................................16
ARTICLE XIII - EMERGENCY BYLAWS ........................................17
CERTIFICATE ............................................................18
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ARTICLE I
OFFICES
1.1 Business Office. The principal office and place of business of the
corporation in the State of Colorado shall be at 325 Canyon Boulevard, Boulder,
Colorado 80309. Other offices and places of business may be established from
time to time by resolution of the Board of Directors or as the business of the
corporation may require.
1.2 Registered Office. The registered office of the corporation, required
by the Colorado Corporation Code to be maintained in the State of Colorado, may
be, but need not be, identical with the principal office in the State of
Colorado, and the address of the registered office may be changed from time to
time by the Board of Directors.
ARTICLE II
SHARES AND TRANSFER THEREOF
2.1 Regulation. The Board of Directors may make such rules and regulations
as it may deem appropriate concerning the issuance, transfer and registration of
certificates for shares of the corporation, including the appointment of
transfer agents and registrars.
2.2 Certificates for Shares. Certificates representing shares of the
corporation shall be respectively numbered serially for each class of shares, or
series thereof, as they are issued, shall be impressed with the corporate seal
or a facsimile thereof, and shall be signed by the Chairman or Vice Chairman of
the Board of Directors or by the President or a Vice-president and by the
Treasurer or an Assistant Treasurer or by the Secretary or an Assistant
Secretary; provided that any or all of the signatures may be facsimiles if the
certificate is countersigned by a transfer agent, or registered by a registrar,
other than the corporation itself or its employee. Each certificate shall state
the name of the corporation, the fact that the corporation is organized or
incorporated under the laws of the State of Colorado, the name of the person to
whom issued, the date of issue, the class (or series of any class), the number
of shares represented thereby and the par value of the shares represented
thereby or a statement that such shares are without par value. A statement of
the designations, preferences, qualifications, limitations, restrictions and
special or relative rights of the shares of each class shall be set forth in
full or summarized on the face or back of the certificates which the corporation
shall issue, or in lieu thereof, the certificate may set forth that such a
statement or summary will be furnished to any shareholder upon request without
charge. Each certificate shall be otherwise in such form as may be prescribed by
the Board of Directors and as shall conform to the rules of any stock exchange
on which the shares may be listed. The corporation shall not issue certificates
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representing fractional shares and shall not be obligated to make any transfers
creating a fractional interest in a share of stock. The corporation may, but
shall not be obligated to, issue scrip in lieu of any fractional shares, such
scrip to have terms and conditions specified by the Board of Directors.
2.3 Cancellation of Certificates. All certificates surrendered to the
corporation for transfer shall be cancelled and no new certificates shall be
issued in lieu thereof until the former certificate for a like number of shares
shall have been surrendered and cancelled, except as herein provided with
respect to lost, stolen or destroyed certificates.
2.4 Lost, Stolen or Destroyed Certificates. Any shareholder claiming that
his certificate for shares is lost, stolen or destroyed may make an affidavit or
affirmation of the fact and lodge the same with the Secretary of the
corporation, accompanied by a signed application for a new certificate.
Thereupon, and upon the giving of a satisfactory bond of indemnity to the
corporation not exceeding an amount double the value of the shares as
represented by such certificate (the necessity for such bond and the amount
required to be determined by the President and Treasurer of the corporation), a
new certificate may be issued of the same tenor and representing the same
number, class and series of shares as were represented by the certificate
alleged to be lost, stolen or destroyed.
2.5 Transfer of Shares. Subject to the terms of any shareholder agreement
relating to the transfer of shares or other transfer restrictions contained in
the Articles of Incorporation or authorized therein, shares of the corporation
shall be transferable on the books of the corporation by the holder thereof in
person or by his duly authorized attorney, upon the surrender and cancellation
of a certificate or certificates for a like number of shares. Upon presentation
and surrender of a certificate for shares properly endorsed and payment of all
taxes therefor, the transferee shall be entitled to a new certificate or
certificates in lieu thereof. As against the corporation, a transfer of shares
can be made only on the books of the corporation and in the manner hereinabove
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provided, and the corporation shall be entitled to treat the holder of record of
any share as the owner thereof and shall not be bound to recognize any equitable
or other claim to or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, save as expressly
provided by the statutes of the State of Colorado.
2.6 Transfer Agent. Unless otherwise specified by the Board of Directors by
resolution, the Secretary of the corporation shall act as transfer agent of the
certificates representing the shares of stock of the corporation. He shall
maintain a stock transfer book, the stubs in which shall set forth among other
things, the names and addresses of the holders of all issued shares of the
corporation, the number of shares held by each, the certificate numbers
representing such shares, the date of issue of the certifi cates representing
such shares, and whether or not such shares originate from original issue or
from transfer. Subject to Section 3.7, the names and addresses of the
shareholders as they appear on the stubs of the stock transfer book shall be
conclusive evidence as to who are the shareholders of record and as such
entitled to receive notice of the meetings of shareholders; to vote at such
meetings; to examine the list of the shareholders entitled to vote at meetings;
to receive dividends; and to own, enjoy and exercise any other property or
rights deriving from such shares against the corporation. Each shareholder shall
be responsible for notifying the Secretary in writing of any change in his name
or address and failure so to do will relieve the corporation, its directors,
officers and agents, from liability for failure to direct notices or other
documents, or pay over or transfer dividends or other property or rights, to a
name or address other than the name and address appearing on the stub of the
stock transfer book.
2.7 Close of Transfer Book and Record Date. For the purpose 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 provide that the stock transfer books shall be closed for
a stated period, but not to exceed, in any case, fifty days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of, or to vote at a meeting of shareholders, such books shall
be closed for at least ten days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders, such date in
any case to be not more than fifty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the particular
action requiring such determination of shareholders is to be taken. If the stock
transfer books are not closed and no record date is fixed for the deter mination
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of shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the Board
of Directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof.
ARTICLE III
SHAREHOLDERS AND MEETINGS THEREOF
3.1 Shareholders of Record. Only shareholders of record on the books of the
corporation shall be entitled to be treated by the corporation as holders in
fact of the shares standing in their respective names, and the corporation shall
not be bound to recognize any equitable or other claim to, or interest in, any
shares on the part of any other person, firm or corporation, whether or not it
shall have express or other notice thereof, except as expressly provided by the
laws of Colorado.
3.2 Meetings. Meetings of shareholders shall be held at the principal
office of the corporation, or at such other place as specified from time to time
by the Board of Directors. If the Board of Directors shall specify another
location such change in location shall be recorded on the notice calling such
meeting.
3.3 Annual Meeting. The annual meeting of shareholders of the corporation
for the election of directors, and for the transaction of such other business as
may properly come before the meeting, shall be held at such time as may be
determined by the Board of Directors by resolution in conformance with Colorado
law. If the election of Directors shall not be held on the day designated herein
for any annual meeting of the shareholders, the Board of Directors shall cause
the election to be held at a special meeting of the shareholders as soon
thereafter as may be convenient.
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3.4 Special Meetings. Special meetings of shareholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the
President, the Board of Directors, the holders of not less than one-tenth of all
the shares entitled to vote at the meeting, or legal counsel of the corporation
as last designated by resolution of the Board of Directors.
3.5 Notice. 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 unless otherwise prescribed by statute not less
than ten days nor more than fifty days before the date of the meeting, 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; except that, if the authorized shares are to
be increased, at least thirty days' notice shall be given, and if the sale of
all or substantially all of the corporation's assets is to be voted upon, at
least twenty days' notice shall be given. Any shareholder may waive notice of
any meeting. Notice to shareholders of record, if mailed, shall be deemed given
as to any shareholder of record, when deposited in the United States mail,
addressed to the shareholder at his address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid, but if three successive
letters mailed to the last-known address of any shareholder of record are
returned as undeliverable, no further notices to such shareholder shall be
necessary, until another address for such shareholder is made known to the
corporation.
3.6 Meeting of All Shareholders. If all of the shareholders shall meet at
any time and place, either within or without the State of Colorado, and consent
to the holding of a meeting at such time and place, such meeting shall be valid
without call or notice, and at such meeting any corporate action may be taken.
3.7 Voting Record. The officer or agent having charge of the stock transfer
books for shares of the corporation shall make, at least ten days before such
meeting of shareholders, a complete record of the shareholders entitled to vote
at each meeting of shareholders or any adjournment thereof, arranged in
alphabetical order, with the address and the number of shares held by each. The
record, for a period of ten days prior to such meeting, shall be kept on file at
the principal office of the corporation, whether within or without the State of
Colorado, and shall be subject to inspection by any shareholder for any purpose
germane to the meeting at any time during usual business hours. Such record
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shall be produced and kept open at the time and place of the meeting and shall
be subject to the inspection of any shareholder for any purpose germane to the
meeting during the whole time of the meeting for the purposes thereof. The
original stock transfer books shall be the prima facie evidence as to who are
the shareholders entitled to examine the record or transfer books or to vote at
any meeting of shareholders.
3.8 Quorum. A majority of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at any meeting of shareholders, except as otherwise provided by the Colorado
Corporation Code and the Articles of Incorporation. In the absence of a quorum
at any such meeting, a majority of the shares so represented may adjourn the
meeting from time to time for a period not to exceed sixty days without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
3.9 Manner of Acting. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders, unless the vote of a
greater proportion or number or voting by classes is otherwise required by
statute or by the Articles of Incorporation or these Bylaws.
3.10 Proxies. At all meetings of shareholders a shareholder may vote 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 in the
proxy.
3.11 Voting of Shares. Unless otherwise provided by these Bylaws or the
Articles of Incorporation, each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders, and each fractional share shall be entitled to a corresponding
fractional vote on each such matter.
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3.12 Voting of Shares by Certain Holders. Shares standing in the name of
another corporation may be voted by such officer, agent or proxy as the bylaws
of such corporation may prescribe, or, in the absence of such provision, as the
Board of Directors of such other corporation may determine. Shares standing in
the name of a deceased person, a minor ward or an incompetent person, may be
voted by his administrator, executor, court appointed guardian or conservator,
either in person or by proxy without a transfer of such shares into the name of
such administrator, executor, court appointed guardian or conservator. Shares
standing in the name of a trustee may be voted by him, either in person or by
proxy, but no trustee shall be entitled to vote shares held by him without a
transfer of such shares into his name. Shares standing in the name of a receiver
may be voted by such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer thereof into his
name if authority so to do be contained in an appropriate order of the court by
which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither shares of its own stock belonging to this corporation, nor shares of its
own stock held by it in a fiduciary capacity, nor shares of its own stock held
by another corporation if the majority of shares entitled to vote for the
election of directors of such corporation is held by this corporation may be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time. Redeemable
shares which have been called for redemption shall not be entitled to vote on
any matter and shall not be deemed outstanding shares on and after the date on
which written notice of redemption has been mailed to shareholders and a sum
sufficient to redeem such shares has been deposited with a bank or trust company
with irrevocable instruction and authority to pay the redemption price to the
holders of the shares upon surrender of certificates therefor.
3.13 Informal Action by Shareholders. Any action required or permitted to
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 the subject matter thereof.
3.14 Voting by Ballot. Voting on any question or in any election may be by
voice vote unless the presiding officer shall order or any shareholder shall
demand that voting be by ballot.
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3.15 Cumulative Voting. No shareholder shall be permitted to cumulate his
votes by giving one candidate as many votes as the number of such directors
multiplied by the number of his shares shall equal, or by distributing such
votes on the a principal among any number of candidates.
ARTICLE IV
DIRECTORS, POWERS AND MEETINGS
4.1 Board of Directors. The business and affairs of the corporation
shall be managed by a board of not less than three (3) nor more than seven (7)
directors; except that there shall be only as many directors as there are
shareholders in the event the outstanding shares are held of record by fewer
than three shareholders. Directors need not be shareholders of the corporation
or residents of the State of Colorado and who shall be elected at the annual
meeting of shareholders or some adjournment thereof. Directors shall hold office
until the next succeeding annual meeting of shareholders and until their
successors shall have been elected and shall qualify. The Board of Directors may
increase or decrease, to not less than three (3) nor more than seven (7), the
number of directors by resolution.
4.2 Regular Meetings. A regular, annual meeting of the Board of Directors
shall be held at the same place as, and immediately after, the annual Meeting of
shareholders, and no notice shall be required in connection therewith. The
annual meeting of the Board of Directors shall be for the purpose of electing
officers and the transaction of such other business as may come before the
meeting. The Board of Directors may provide, by resolution, the time and place,
either within or without the State of Colorado, for the holding of additional
regular meetings without other notice than such resolution.
4.3 SPecial Meetings. Special meetings of the Board of Directors may be
called by or at the request of the President or any two directors. The person or
persons authorized to call special meetings of the Board of Directors may fix
any place, either within or without the State of Colorado, as the place for
holding any special meeting of the Board of Directors called by them.
4.4 Notice. Written notice of any sPecial meeting of directors shall be
given as follows:
(a) By mail to each director at his business address at least three
days prior to the meeting; or
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(b) By personal delivery or telegram at least twenty-four hours prior
to the meeting to the business address of each director, or in the event such
notice is given on a Saturday, Sunday or holiday, to the residence address of
each director. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, so addressed, with postage thereon prepaid.
If notice be given by telegram, such notice shall be deemed to be delivered when
the telegram is delivered to the telegraph company. Any director may waive
notice of any meeting. The attendance of a director at any meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of such
meeting.
4.5 Participation by Electronic Means. Except as may be otherwise provide
by the Articles of Incorporation or Bylaws, members of the Board of Directors or
any committee designated by such Board may participate in a meeting of the Board
or committee by means of 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 person at the
meeting.
4.6 Quorum and Manner of Acting. A quorum at all meetings of the Board of
Directors shall consist of a majority of the number of directors then holding
office, but a smaller number may adjourn from time to time without further
notice, until a quorum is secured. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless the act of a greater number is required by the laws of the
State of Colorado or by the Articles of Incorporation or these Bylaws.
4.7 Organization. The Board of Directors shall elect a chairman to preside
at each meeting of the Board of Directors. The Board of Directors shall elect a
Secretary to record the discussions and resolutions of each meeting.
4.8 Presumption of Assent. A director of the corporation who is present at
a meeting of the Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as the Secretary of the
meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
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4.9 Informal Action By Directors. Any action required or permitted to be
taken by the Board of Directors, or a committee thereof, at a meeting may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all the directors or all the committee members
entitled to vote with respect to the subject matter thereof.
4.10 Vacancies. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors. A director elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office,
and shall hold such office until his successor is duly elected and shall
qualify. Any directorship to be filled by reason of an increase in the number of
directors shall be filled by the affirmative vote of a majority of the directors
then in office or by an election at an annual meeting, or at a special meeting
of shareholders called for that purpose. A director chosen to fill a position
resulting from an increase in the number of directors shall hold office only
until the next election of directors by the shareholders.
4.11 ComPensation. By resolution of the Board of Directors and irrespective
of any personal interest of any of the members, each director may be paid his
expenses, if any, of attendance at each meeting of the Board of Directors, and
may be paid a stated salary as director or a fixed sum for attendance at each
meeting of the Board of Directors or both. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor.
4.12 Removal of Directors. Any director or directors of the corporation may
be removed at any time, with or without cause, in the manner provided in the
Colorado Corporation Code.
4.13 Resignations. A director of the corporation may resign at any time by
giving written notice to the Board of Directors, President or Secretary of the
corporation. The resignation shall take effect upon the date of receipt of such
notice, or at any later period of time specified therein. The acceptance of such
resignation shall not be necessary to make it effective, unless the resignation
requires it to be effective as such.
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4.14 General Powers. The business and affairs of the corporation shall be
managed by the Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised or done by the shareholders. The directors shall pass upon any and all
bills or claims of officers for salaries or other compensation and, if deemed
advisable, shall contract with officers, employees, directors, attorneys,
accountants, and other persons to render services to the corporation.
ARTICLE V
OFFICERS
5.1 Term and Compensation. The elective officers of the corporation shall
consist of at least a President, a Secretary and a Treasurer, each of whom shall
be eighteen years or older and who shall be elected by the Board of Directors at
its annual meeting. Unless removed in accordance with procedures established by
law and these Bylaws, the said officers shall serve until the next succeeding
annual meeting of the Board of Directors and until their respective successors
are elected and shall qualify. Any number of offices, but not more than two, may
be held by the same person at the same time, except that one person may not
simultaneously hold the offices of President and Secretary. The Board may elect
or appoint such other officers and agents as it may deem advisable, who shall
hold office during the pleasure of the Board.
5.2 Powers. The officers of the corporation shall exercise and perform the
respective powers, duties and functions as are stated below, and as may be
assigned to them by the Board of Directors.
(a) The President shall be the chief executive officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and officers of the
corporation. Re shall preside, when present, at all meetings of the shareholders
and of the Board of Directors unless a different chairman of such meetings is
elected by the Board of Directors.
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(b) In the absence or disability of the President, the Vice-President
or Vice-Presidents, if any, in order of their rank as fixed by the Board of
Directors, and if not ranked, the Vice-Presidents in the order designated by the
Board of Directors, shall perform all the duties of the President, and when so
acting shall have all the powers of, and be subject to all the restrictions on
the President. Each Vice-President shall have such other powers and perform such
other duties as may from time to time be assigned to him by the President or the
Board of Directors.
(c) The Secretary shall keep accurate minutes of all meetings of the
shareholders and the Board of Directors unless a different Secretary of such
meetings is elected by the Board of Directors. He shall keep, or cause to be
kept a record of the shareholders of the corporation and shall be responsible
for the giving of notice of meetings of the shareholders or the Board of
Directors. The Secretary shall be custodian of the records and of the seal of
the corporation and shall attest the affixing of the seal of the corporation
when so authorized. The Secretary or Assistant Secretary may sign all stock
certificates, as described in Section 2.2 hereof. The Secretary shall perform
all duties commonly incident to his office and such other duties as may from
time to time be assigned to him by the President or the Board of Directors.
(d) An Assistant Secretary may, at the request of the Secretary, or in
the absence or disability of the Secretary, perform all of the duties of the
Secretary. Be shall perform such other duties as may be assigned to him by the
President or by the Secretary.
(e) The Treasurer, subject to the order of the Board of Directors,
shall have the care and custody of the money, funds, valuable papers and
documents of the corporation. Re shall keep accurate books of accounts of the
corporation's transactions, which shall be the property of the corporation, and
shall render financial reports and statements of condition of the corporation
when so requested by the Board of Directors or President. The Treasurer shall
perform all duties commonly incident to his office and such other duties as may
from time to time be assigned to him by the President or the Board of Directors.
In the absence or disability of the President and Vice-President or
Vice-Presidents, the Treasurer shall perform the duties of the President.
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(f) An Assistant Treasurer may, at the request of the Treasurer, or in
the absence or disability of the Treasurer, perform all of the duties of the
Treasurer. He shall perform such other duties as may be assigned to him by the
President or by the Treasurer.
5.3 Compensation. All officers of the corporation may receive salaries or
other compensation if so ordered and fixed by the Board of Directors. The Board
of Directors shall have authority to fix salaries in advance for stated periods
or render the same retroactive as the Board may deem advisable.
5.4 Delegation of Duties. In the event of absence or inability of any
officer to act, the Board of Directors may delegate the powers or duties of such
officer to any other officer, director or person whom it may select.
5.5 Bonds. If the Board of Directors by resolution shall so require, any
officer or agent of the corporation shall give bond to the corporation in such
amount and with such surety as the Board of Directors may deem sufficient,
conditioned upon the faithful performance of their respective duties and
offices.
5.6 Removal. Any officer or agent may be removed by the Board of Directors
or by the executive committee, if any, whenever in its judgment the best
interest of the corporation will be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not, of itself, create
contract rights.
ARTICLE VI
FINANCE
6.1 Reserve Funds. The Board of Directors, in its uncontrolled discretion,
may set aside from time to time, out of the net profits or earned surplus of the
corporation, such sum or sums as it deems expedient as a reserve fund to meet
contingencies, for equalizing dividends, for maintaining any property of the
corporation, and for any other purpose.
6.2 Banking. The moneys of the corporation shall be deposited in the name
of the corporation in such bank or banks or trust company or trust companies, as
the Board of Directors shall designate, and may be drawn out only on checks
signed in the name of the corporation by such person or persons as the Board of
Directors, by appropriate resolution, may direct. Notes and commercial paper,
when authorized by the Board, shall be signed in the name of the corporation by
such officer or officers or agent or agents as shall thereunto be authorized
from time to time.
-13-
<PAGE>
ARTICLE VII
DIVIDENDS
Subject to the provisions of the Articles of Incorporation and the laws of
the State of Colorado, the Board of Directors may declare dividends whenever,
and in such amounts, as in the Board's opinion the condition of the affairs of
the corporation shall render such advisable.
ARTICLE VIII
CONTRACTS, LOANS AND CHECKS
8.1 Execution of Contracts. Except as otherwise provided by statute or by
these Bylaws, the Board of Directors may authorize any officer or agent of the
corporation to enter into any contract, or execute and deliver any instrument in
the name of, and on behalf of the corporation. Such authority may be general or
confined to specific instances and, unless so authorized, no officer, agent or
employee shall have any power to bind the corporation for any purpose, except as
may be necessary to enable the corporation to carry on its normal and ordinary
course of business.
8.2 Loans. No loans shall be contracted on behalf of the corporation and no
negotiable paper shall be issued in its name unless authorized by the Board of
Directors. When so authorized, any officer or agent of the corporation may
effect loans and advances at any time for the corporation from any bank, trust
company or institution, firm, corporation or individual. An agent so authorized
may make and deliver promissory notes or other evidence of indebtedness of the
corporation and may mortgage, pledge, hypothecate or transfer any real or
personal property held by the corporation as security for the payment of such
loans. Such authority, in the Board of Directors' discretion, may be general or
confined to specific instances.
8.3 Checks. Checks, notes, drafts and demands for money or other evidence
of indebtedness issued in the name of the corporation shall be signed by such
person or persons as designated by the Board of Directors and in the manner the
Board of Directors prescribes.
8.4 Deposits. All funds of the corporation not otherwise employed shall be
deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositories as the Board of Directors may select.
-14-
<PAGE>
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be the year adopted by resolution
of the Board of Directors.
ARTICLE X
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words "CORPORATE SEAL".
ARTICLE XI
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted by a majority of the Directors present at any meeting of the Board of
Directors of the corporation at which a quorum is present.
ARTICLE XII
EXECUTIVE COMMITTEE
12.1 Appointment. The Board of Directors by resolution adopted by a
maJority of the full Board, may designate two or more of its members to
constitute an executive committee. The designation of such committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors; or any member thereof, of any responsibility imposed by law.
12.2 Authority. The executive committee, when the Board of Directors is not
in session shall have and may exercise all of the authority of the Board of
Directors except to the extent, if any, that such authority shall be limited by
the resolution appointing the executive committee and except also that the
executive committee shall not 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 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 the Bylaws of the corporation.
12.3 Tenure and Qualifications. Each member of the executive committee
shall hold office until the next regular annual meeting of the Board of
Directors following his designation.
-15-
<PAGE>
12.4 Meetings. Regular meetings of the executive committee may be held
without notice at such time and places as the executive committee may fix from
time to time by resolution. Special meetings of the executive committee may be
called by any member thereof upon not less than one day's notice stating the
place, date and hour of the meeting, which notice may be written or oral, and if
mailed, shall be deemed to be delivered when deposited in the United States mail
addressed to the member of the executive committee at his business address. Any
member of the executive committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
12.5 Quorum. A majority of the members of the executive committee shall
constitute a quorum for the transaction of business at any meeting thereof, and
action of the executive committee must be authorized by the affirmative vote of
a majority of the members present at a meeting at which a quorum is present.
12.6 Informal Action by Executive Committee. Any action required or
permitted to be taken by the executive committee at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the members of the committee entitled to vote with
respect to the subject matter thereof.
12.7 Vacancies. Any vacancy in the executive committee may be filled by a
resolution adopted by a majority of the full Board of Directors.
12.8 Resignations and Removal. Any member of the executive committee may be
removed at any time with or without cause by resolution adopted by a majority of
the full Board of Directors. Any member of the executive committee may resign
from the executive committee at any time by giving written notice to the
President or Secretary of the corporation, and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
12.9 Procedure. The executive committee shall elect a presiding officer
from its members and may fix its own rules of procedure which shall not be
inconsistent with these Bylaws. It shall keep regular minutes of its proceedings
and report the same to the Board of Directors for its information at the meeting
thereof held next after the proceedings shall have been taken.
-16-
<PAGE>
ARTICLE XIII
EMERGENCY BYLAWS
The Emergency Bylaws provided for in this Article shall be operative during
any emergency in the conduct of the business of the corporation resulting from
an attack on the United States or any nuclear or atomic disaster,
notwithstanding any different provision in the preceding articles of the Bylaws
or in the Articles of Incorporation of the corporation or in the Colorado
Corporation Code. To the extent not inconsistent with the provisions of this
Article, the Bylaws provided in the preceding articles shall remain in effect
during such emergency and upon its termination the Emergency Bylaws shall cease
to be operative.
During any such emergency:
(a) A meeting of the Board of Directors may be called by any officer
or director of the corporation. Notice of the time and place of the meeting
shall be given by the person calling the meeting to such of the directors as it
may be feasible to reach by any available means of communication. Such notice
shall be given at such time in advance of the meeting as circumstances permit in
the judgment of the person calling the meeting.
(b) At any such meeting of the Board of Directors, a quorum shall
consist of the number of directors in attendance at such meeting.
(c) The Board of Directors, either before or during any such
emergency, may, effective in the emergency, change the principal office or
designate several alternative principal offices or regional offices, or
authorize the officers so to do.
(d) The Board of Directors, either before or during any such
emergency, may provide, and from time to time modify, lines of succession in the
event that during such an emergency any or all officers or agents of the
corporation shall for any reason be rendered incapable of discharging their
duties.
(e) No officer, director or employee acting in accordance with these
Emergency Bylaws shall be liable except for willful misconduct.
-17-
<PAGE>
(f) These Emergency Bylaws shall be subject to repeal or change by
further action of the Board of Directors or by action of the shareholders, but
no such repeal or change shall modify the provisions of the next preceding
paragraph with regard to action taken prior to the time of such repeal or
change. Any amendment of these Emergency Bylaws may make any further or
different provision that may be practical and necessary for the circumstances of
the emergency.
CERTIFICATE
I hereby certify that the foregoing Bylaws, consisting of 18 pages,
including this page, constitute the Bylaws of Condor Fund, Inc. adopted by the
Board of Directors of the corporation as of the 14th day of March, 1988.
/s/ Allen R. Goldstone
-----------------------------------------
President
Exhibit 4
Number Shares
- - ------------------------- ----------------------
CUSIP 206763 30 2
See Reverse
For Certain Definitions
CONDOR CAPITAL, INC.
Incorporated Under The Laws of the State of Colorado
800,000,000 Authorized Shares No Par Value
THIS CERTIFIES THAT
Is The Owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF NO PAR VALUE COMMON STOCK OF
CONDOR CAPITAL, INC.
transferable only on the books of the Company in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed. This Certificate
is not valid unless countersigned by the Transfer Agent and Registrar.
IN WITNESS WHEREOF, the said Company has caused this Certificate to be
executed by tye facsimile signatures of its duly authorized officers and to be
sealed with the facsimile seal of the Company.
Dated:
/s/ Robert D. Hirsekorn
------------------------------
President and Secretary
[SEAL LOGO OMITTED]
Countersigned and Registered:
American Securities Transfer & Trust, Inc.
P.O. Box 1596
Denver, Colorado 80201
By:
--------------------------------------------------
Transfer Agent and Registrar - Authorized Signature
<PAGE>
CONDOR CAPITAL, INC.
TRANSFER FEE: $20.00 PER NEW CERTIFICATE ISSUED
The following abbreviations when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_______________
in common (State)
Additional abbreviations may also be used though not in the above list
- - --------------------------------------------------------------------------------
For Value Received,_____________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
___________________________
___________________________
- - --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - ------------------------------------------------------------------------- Shares
of the Common Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
----------------------------------------------
- - ----------------------------------- attorney-in-fact to transfer the said stock
on the books of the within-named Corporation, with full power of substitution in
the premises
Dated
---------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
NOTICE THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATSOEVER
Signature(s) Guaranteed:
- - ----------------------------------------
The signature(s) must be guaranteed by an eligible guarantor institution (Banks,
Stockbrokers, Savings and Loan Associations and Credit Unions with membership in
an approved signature guarantee Medallion Program), pursuant to S.E.C. Rule
17Ad-15.
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