U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended April 30, 1999
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 33-30158-A
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The Theme Factory, Inc.
----------------------
(Name of Small Business Issuer in its Charter)
NEVADA 62-1386351
- ------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
9005 Cobble Canyon Lane
Sandy, Utah 84093
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 942-0555
4700 Wissahickon Avenue
Philadelphia, PA 19111
----------------------
(Former name and former address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None.
Securities Registered under Section 12(g) of the Exchange Act: None.
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes No X (2) Yes No X
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of 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. [ ]
State Issuer's revenues for its most recent fiscal year: April 30, 1999 - $0
For the Exhibit Index, see Part III, Item 13.
State the aggregate market value of the common 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.
October 14, 1999 - $59. There are approximately 58,831 shares of common
voting stock of the Registrant held by non-affiliates. During the past five
years, there has been no "public market" for shares of common stock of the
Registrant, so the Registrant has arbitrarily valued these shares on the basis
of par value per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Not Applicable.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
October 14, 1999
1,418,831
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
See Part III, Item 13
Transitional Small Business Issuer Format Yes X No ___
PART I
Item 1. Description of Business.
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Business Development.
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Corporate Developments.
----------------------
The Theme Factory, Inc. (the "Company") was organized under the
laws of the State of Nevada on February 1, 1989, under the name "East End
Investment, Inc." The Company was formed for the purpose of engaging in the
business of investing and all other lawful businesses. The Company's initial
authorized capital consisted of 25,000,000 shares of $0.001 par value common
voting stock.
On November 13, 1989, the Company's name was changed to "The Theme
Factory, Inc."
In April, 1991, the Company approved a reverse spilt whereby the
outstanding common stock was reverse split on a basis of one share for 2.5
shares. Effective June 16, 1997, and in accordance with the Nevada Revised
Statutes, the Board of Directors of the Company, with the written consent of
persons owning a majority of its outstanding voting securities, unanimously
resolved to reverse split its outstanding shares of common stock on a basis of
one for 100, while retaining its authorized capital at 25,000,000 shares of
common stock, $0.001 par value per share, with appropriate adjustments to the
capital accounts of the Company. On October 8, 1999, this reverse split was
adjusted by an amendment to the Articles of Incorporation of the Company to
provide that no stockholder currently owning 100 or more shares shall be
reduced to less than 100 shares as a result of the reverse split and that no
stockholder, on a per stock certificate of record basis, currently owning less
than 100 shares, shall be affected by the reverse split. The purpose of the
revised reverse split was to increase the "round lot" holders of post-reverse
split shares of the Company's common stock; shares issued subsequent to the
initial one for 100 reverse split effected on June 16, 1997, were not affected
by the revised reverse split because initial reverse split was taken into
consideration on the issuance of these shares. All computations hereinafter
take into account this reverse split.
Copies of the initial Articles of Incorporation, as amended are
attached hereto and incorporated herein by reference. See Part III, Item 13.
Public Offering.
---------------
The Company effected a public offering of units consisting of
common stock and warrants in early 1990. By this reference, the Company's
Registration Statement on Form S-18 of the Securities and Exchange Commission
and its related Prospectus are incorporated herein by reference. See Part
III, Item 13.
Sales of Unregistered Securities During the Past Five Years.
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Date Number of Aggregate
Name Acquired Shares Consideration(1)
---- -------- --------- -------------
Leonard W. Burningham, 10/17/97 30,000 Services
Esq.
Chiricahua Company, LLC(2)
10/17/97 1,300,000 Services
Corrie Merrell 10/17/97 30,000 Services
Todd D. Ross 10/17/97 30,000 Services
(1) See the Statements of Stockholders Equity
contained in the accompanying financial statements,
Part II, Item 7.
(2) David C. Merrell is the sole owner of Chiricahua
Company, LLC ("Chiricahua Company").
Business.
- --------
The Company has not engaged in any material business operations
since 1989. Its only activities since that time have consisted of restoring
and maintaining its good standing in the State of Nevada. The Company has no
material tangible property or assets.
The Company intends to seek out the acquisition of assets,
property or business that may be beneficial to it and its stockholders. In
considering whether to complete any such acquisition, the Board of Directors
shall make the final determination, and the approval of stockholders will not
be sought unless required by applicable law, the Company's Articles of
Incorporation or Bylaws or contract. The Company can give no assurance that
any such endeavor will be successful or profitable.
The Company is not currently engaging in any substantive business
activity and has no plans to engage in any such activity in the foreseeable
future. In its present form, the Company may be deemed to be a "shell" and
will be a vehicle to acquire or merge with an operating business or company.
The Company does not intend to restrict its search to any
particular business or industry, and the areas in which it will seek out
acquisitions, reorganizations or mergers may include, but will not be limited
to, the fields of high technology, manufacturing, natural resources, service,
research and development, communications, transportation, insurance,
brokerage, finance and all medically related fields, among others.
The Company recognizes that because of its lack of resources, the
number of suitable potential business ventures which may be available to it
will be extremely limited, and may be restricted to entities who desire to
avoid what these entities may deem to be the adverse factors related to an
initial public offering ("IPO"). The most prevalent of these factors include
substantial time requirements, legal and accounting costs, the inability to
obtain an underwriter who is willing to publicly offer and sell shares, the
lack of or the inability to obtain the required financial statements for such
an undertaking, limitations on the amount of dilution public investors will
suffer to the benefit of the stockholders of any such entities, along with
other conditions or requirements imposed by various federal and state
securities laws, rules and regulations.
Any of these types of entities, regardless of their prospects,
would require the Company to issue a substantial number of shares of its
common stock to complete any such acquisition, reorganization or merger,
usually amounting to between 80% and 95% of the outstanding shares of the
Company following the completion of any such transaction; accordingly,
investments in any such private entity, if available, would be much more
favorable than any investment in the Company.
Management intends to consider a number of factors prior to making
any decision as to whether to participate in any specific business endeavor,
none of which may be determinative or provide any assurance of success. These
may include, but will not be limited to an analysis of the quality of the
entity's management personnel; the anticipated acceptability of any new
products or marketing concepts; the merit of technological changes; its
present financial condition, projected growth potential and available
technical, financial and managerial resources; its working capital, history of
operations and future prospects; the nature of its present and expected
competition; the quality and experience of its management services and the
depth of its management; its potential for further research, development or
exploration; risk factors specifically related to its business operations; its
potential for growth, expansion and profit; the perceived public recognition
or acceptance of its products, services, trademarks and name identification;
and numerous other factors which are difficult, if not impossible, to properly
analyze without referring to any objective criteria.
Regardless, the results of operations of any specific entity may
not necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development mode, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products
or services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, since the Company has extremely limited current assets
and cash reserves, these activities may be limited, and if undertaken, the
cost and expense thereof will be advanced by management, and may further
dilute the interest of the stockholders of the Company.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker dealers in securities, venture
capital personnel, members of the financial community and others who may
present unsolicited proposals. In certain cases, the Company may agree to pay
a finder's fee or to otherwise compensate the persons who submit a potential
business endeavor in which the Company eventually participates. Such persons
may include the Company's directors, executive officers, beneficial owners or
their affiliates. In this event, such fees may become a factor in
negotiations regarding a potential acquisition and, accordingly, may present a
conflict of interest for such individuals.
Because the Company has extremely limited assets, management
anticipates that any finder's fees would be paid in the form of common stock
of the Company, rather than cash. This would have the effect of further
diluting the shares of current stockholders. In the event that funds become
available from a company that is a candidate for a merger or acquisition
transaction, such fees may be paid in cash. Whether paid in the form of
common stock or cash, and whether paid to members of management, beneficial
owners or their affiliates, or unaffiliated third parties, the amount of such
finder's fees will not exceed the amount that the Company would pay to an
unaffiliated third party in an arm's length transaction.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. Such fees may become a factor in negotiations regarding any potential
acquisition by the Company and, accordingly, may present a conflict of
interest for such individuals.
None of the Company's directors, executive officers or promoters,
or their affiliates or associates, has had any negotiations with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction with the Company. Nor are
there any present plans, proposals, arrangements or understandings with any
such persons regarding the possibility of any acquisition or merger involving
the Company.
Risk Factors.
------------
In any business venture, there are substantial risks specific to
the particular enterprise and which cannot be ascertained until a potential
acquisition, reorganization or merger candidate has been identified; however,
at a minimum, the Company's present and proposed business operations will be
highly speculative and subject to the same types of risks inherent in any new
or unproven venture, and will include those types of risk factors outlined
below.
Limited Assets; No Source of Revenue. The Company has no assets
and has had no revenues since 1989. Nor, will the Company receive any
revenues until it completes an acquisition, reorganization or merger, at the
earliest. The Company can provide no assurance that any acquired business
will produce any material revenues for the Company or its stockholders or that
any such business will operate on a profitable basis.
Absence of Substantive Disclosure Relating to Prospective
Acquisitions. Because the Company has not yet identified any assets, property
or business that it may potentially acquire, potential investors in the
Company will have virtually no substantive information upon which to base a
decision whether or not to invest in the Company. Potential investors would
have access to significantly more information if the Company had already
identified a potential acquisition or if the acquisition target had made an
offering of its securities directly to the public. The Company can provide no
assurance that any investment in the Company will not ultimately prove to be
less favorable than such a direct investment.
Unspecified Industry and Acquired Business; Unascertainable Risks.
To date, the Company has not identified any particular industry or business in
which to concentrate its acquisition efforts. Accordingly, prospective
investors currently have no basis to evaluate the comparative risks and merits
of investing in the industry or business in which the Company may invest. To
the extent that the Company may acquire a business in a high risk industry,
the Company will become subject to those risks. Similarly, if the Company
acquires a financially unstable business or a business that is in the early
stages of development, the Company will become subject to the numerous risks
to which such businesses are subject. Although management intends to consider
the risks inherent in any industry and business in which it may become
involved, there can be no assurance that it will correctly assess such risks.
Uncertain Structure of Acquisition. Management has had no
preliminary contact or discussions regarding, and there are no present plans,
proposals or arrangements to acquire any specific assets, property or
business. Accordingly, it is unclear whether such an acquisition would take
the form of an exchange of capital stock, a merger or an asset acquisition.
However, because the Company has virtually no resources as of the date of this
Report, management expects that any such acquisition would take the form of an
exchange of capital stock.
State Restrictions on "Blank Check" Companies. A total of 36
states prohibit or substantially restrict the registration and sale of "blank
check" companies within their borders. Additionally, 36 states use "merit
review powers" to exclude securities offerings from their borders in an effort
to screen out offerings of highly dubious quality. See Paragraph 8221, NASA
Reports, CCH Topical Law Reports, 1990. The Company intends to comply fully
with all state securities laws, and plans to take the steps necessary to
ensure that any future offering of its securities is limited to those states
in which such offerings are allowed. However, these legal restrictions may
have a material adverse impact on the Company's ability to raise capital
because potential purchasers of the Company's securities must be residents of
states that permit the purchase of such securities. These restrictions may
also limit or prohibit stockholders from reselling shares of the Company's
common stock within the borders of regulating states.
By regulation or policy statement, eight states (Idaho, Maryland,
Missouri, Nevada, New Mexico, Pennsylvania, Utah and Washington) place various
restrictions on the sale or resale of equity securities of "blank check" or
"blind pool" companies. These restrictions include, but are not limited to,
heightened disclosure requirements, exclusion from "manual listing"
registration exemptions for secondary trading privileges and outright
prohibition of public offerings of such companies.
Further, all states (with the exception of Alabama, Delaware,
Hawaii, Minnesota, Nebraska and New York) have adopted some form of the Small
Corporate Offering Registration Exemption ("SCORE") program, which permits an
issuer to notify the Securities and Exchange Commission of certain offerings
registered in such states by filing a Form D under Regulation D of the
Securities and Exchange Commission. States participating in the SCORE program
also allow applications for registration of securities by qualification by
filing a Form U-7 with the states' securities commissions. In most
jurisdictions, "blank check" and "blind pool" companies are not eligible for
participation in the SCORE program.
Management to Devote Insignificant Time to Activities of the
Company. Members of the Company's management are not required to devote their
full time to the affairs of the Company. Because of their time commitments,
as well as the fact that the Company has no business operations the members of
management anticipate that they will devote an insignificant amount of time to
the activities of the Company, at least until such time as the Company has
identified a suitable acquisition target.
Voting Control. Due to the ownership of a majority of the
Company's outstanding voting securities, Chiricahua Company, which is wholly
owned by David C. Merrell, and Corie Merrell, have the ability to elect all of
the Company's directors, who in turn elect all executive officers, without
regard to the votes of other stockholders. Accordingly, these persons may be
deemed to have absolute control of the Company. See the caption "Security
Ownership of Certain Beneficial Owners and Management," Part III, Item 11.
No Market for Common Stock; No Market for Shares. Although the
Company intends to submit for listing of its common stock on the OTC Bulletin
Board of the National Association of Securities Dealers, Inc. (the "NASD"),
there is currently no market for such shares; there can be no assurance that
such a market will ever develop or be maintained. Any market price for shares
of common stock of the Company is likely to be very volatile, and numerous
factors beyond the control of the Company may have a significant effect. In
addition, the stock markets generally have experienced, and continue to
experience, extreme price and volume fluctuations which have affected the
market price of many small capital companies and which have often been
unrelated to the operating performance of these companies. These broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Company's common stock in any market
that may develop. See Part II, Item 5.
Conflicts of Interest; Related Party Transactions. Although the
Company has not identified any potential acquisition target, the possibility
exists that the Company may acquire or merge with a business or company in
which the Company's directors, executive officers, principal stockholders or
their affiliates may have an ownership interest. Such a transaction may occur
if management deems it to be in the best interests of the Company and its
stockholders, after consideration of the above referenced factors. A
transaction of this nature would present a conflict of interest to those
parties with a managerial position and/or an ownership interest in both the
Company and the acquired entity, and may compromise management's fiduciary
duties to the Company's stockholders. If management's fiduciary duties become
compromised, any remedy available under state corporate law will most likely
be prohibitively expensive and time consuming.
An independent appraisal of the acquired company may or may not be
obtained in the event a related party transaction is contemplated.
Furthermore, because management may be eligible for finder's fees or other
compensation related to potential acquisitions by the Company, such
compensation may become a factor in negotiations regarding such potential
acquisitions.
Chiricahua Company, David C. Merrell and Corie Merrell may
actively negotiate or otherwise consent to the purchase of all or any portion
of their common stock as a condition to or in connection with any proposed
merger or acquisition transaction, which may present a further conflict of
interest. The Company's other stockholders may not be afforded an opportunity
to approve or consent to any particular stock buyout transaction.
Risks of "Penny Stock." The Company's common stock may be deemed
to be "penny stock" as that term is defined in Reg. Section 240.3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks (i) with a price
of less than five dollars per share; (ii) that are not traded on a
"recognized" national exchange; (iii) whose prices are not quoted on the
NASDAQ automated quotation system (NASDAQ-listed stocks must still meet
requirement (i) above); or (iv) is an issuer with net tangible assets less
than $2,000,000 (if the issuer has been in continuous operation for at least
three years) or $5,000,000 (if in continuous operation for less than three
years), or with average revenues of less than $6,000,000 for the last three
years.
There has never been any "established public market" for the
Company's common stock. At such time as the Company completes a merger or
acquisition transaction, if at all, it may attempt to qualify for listing on
either NASDAQ or a national securities exchange. However, at least initially,
any trading in its common stock will most likely be conducted in the over-the-
counter market in the "pink sheets" or the "Electronic Bulletin Board" of the
National Association of Securities Dealers, Inc. (the "NASD").
There are presently no market makers for the Company's common
stock. In the event that it is unsuccessful, after completing a merger or
acquisition transaction, in obtaining a listing on NASDAQ or a national
securities exchange, it will seek a securities firm to make a market in its
securities. If there is only one market maker in the Company's securities,
there is a risk that the market maker will dominate the market and set prices
that are not based on competitive forces.
Section 15(g) of the Securities Exchange Act of 1934, as amended,
and Reg. Section 240.15g-2 of the Securities and Exchange Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in
a penny stock for the investor's account. Potential investors in the
Company's common stock are urged to obtain and read such disclosure carefully
before purchasing any shares that are deemed to be "penny stock."
Moreover, Reg. Section 240.15g-9 of the Securities and Exchange
Commission requires broker-dealers in penny stocks to approve the account of
any investor for transactions in such stocks before selling any penny stock to
that investor. This procedure requires the broker-dealer to (i) obtain from
the investor information concerning his or her financial situation, investment
experience and investment objectives; (ii) reasonably determine, based on that
information, that transactions in penny stocks are suitable for the investor
and that the investor has sufficient knowledge and experience as to be
reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in (ii) above; and (iv) receive a
signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it
more difficult for investors in the Company's common stock to resell their
shares to third parties or to otherwise dispose of them.
Item 2. Description of Property.
- --------------------------------
The Company has no property or assets; its principal executive
office address and telephone number are the business office address and
telephone number of David C. Merrell, which are provided at no cost. See Part
I, Item 1.
Item 3. Legal Proceedings.
- --------------------------
The Company is not the subject of any pending legal proceedings;
and to the knowledge of management, no proceedings are presently contemplated
against the Company by any federal, state or local governmental agency.
Further, to the knowledge of management, no director or executive
officer is party to any action in which any has an interest adverse to the
Company.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
No matter was submitted to a vote of the Company's security
holders during the fourth quarter of the period covered by this Report or
during the previous two fiscal years.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
- -----------------------------------------------------------------
Market Information.
- -------------------
There has never been any established "public market" for shares of
common stock of the Company. Their have been no quotations for common stock
of the Company according to The National Quotations Bureau, LLC ("NQB") for at
least five years. have been no quotations for common stock of the Company
according to The National Quotations Bureau, LLC ("NQB"). Company intends to
submit for listing on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. ("NASD"); however, management does not expect any
public market to develop unless and until its operations are successful or the
Company completes an acquisition or merger. In any event, no assurance can be
given that any market for the Company's common stock will develop or be
maintained. If a public market ever develops in the future, the sale of
"unregistered" and "restricted" shares of common stock pursuant to Rule 144 of
the Securities and Exchange Commission by members of management or others may
have a substantial adverse impact on any such public market; and all of these
persons have satisfied the "holding period" under Rule 144. See the heading
"Sales of Unregistered Securities During the Past Five Years," of Part I, Item
1, and the caption "Security Ownership of Certain Beneficial Owners and
Management, " Part III, Item 11.
Holders.
- --------
The number of record holders of the Company's common stock as of
the fiscal year ended April 30, 1998, was approximately 68; and as of the
fiscal year ended April 30, 1999, was 73; these numbers do not include an
indeterminate number of stockholders whose shares are held by brokers in
street name. As of October 14, 1999, there were also approximately 73
stockholders.
Dividends.
- ----------
There are no present material restrictions that limit the ability
of the Company to pay dividends on common stock or that are likely to do so in
the future. The Company has not paid any dividends with respect to its common
stock, and does not intend to pay dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
- ------------------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations during the
years end April 30, 1999 and 1998, or since 1989. The Company intends to
continue to seek out the acquisition of assets, property or business that may
be beneficial to the Company and its stockholders.
The Company's only foreseeable cash requirements during the next
12 months will relate to maintaining the Company in good standing in the State
of Nevada. Management does not anticipate that the Company will have to raise
additional funds during the next 12 months.
Results of Operations.
- ----------------------
There were no revenues during the years ended April 30, 1999 or
1998, and expenses were 45,678 and $14,124 respectively; and losses were
($14,359) and ($28,160), respectively. These losses were primarily the result
of general and administrative expenses in reviving the Company and the
issuance of common stock for services.
Liquidity.
- ----------
The Company had no cash at April 30, 1999 or 1998. Expenses
totaling $7,219 were paid by Chiricahua Company during these years and are
carried as accounts payable on the Company's financial statements.
Year 2000.
- ----------
The Company presently has no material operations, and is seeking a
suitable candidate for a merger or acquisition transaction. Due to its very
limited activities and assets, management does not believe that the change of
year to the year 2000 will have any material effect on its business, results
of operations or financial condition.
In seeking out a merger or acquisition target, the Company will
take into account the ways in which the Year 2000 may materially affect the
operations of any such target. However, until such an entity has been
identified, management can not accurately predict how (if at all) the Year
2000 issues may affect the operations of the reorganized Company. At such
time as the Company completes such a reorganization, it will timely disclose
all material Year 2000 issues in the appropriate filing with the Securities
and Exchange Commission.
For the foregoing reasons, the Company has determined that the
potential consequences of the Year 2000 would not have a present material
effect on its business, results of operations or financial condition.
Item 7. Financial Statements.
- -----------------------------
For the periods ended April 30, 1999 and 1998.
Independent Auditors' Report
Balance Sheets
Statements of Operations
Statements of Stockholders' Equity (Deficit)
Statements of Cash Flows
Notes to the Financial Statements
<PAGE>
THE THEME FACTORY, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
April 30, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
The Theme Factory, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheets of The Theme
Factory, Inc. (a development stage company), as of April 30, 1999 and the
related statements of operations, stockholders' equity (deficit), and cash
flows for the years ended April 30, 1999 and 1998 and for the period
from inception on November 13, 1989 through April 30, 1999. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of The Theme
Factory, Inc. (a development stage company) as of April 30, 1999 and 1998
and the results of its operations and its cash flows for the years ended
April 30, 1999 and 1998 and for the period from inception on November 13,
1989 through April 30, 1999 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 3 to the
financial statements, the Company is a development stage company with
no significant operating results to date, which raises substantial doubt
about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
September 15, 1999
<TABLE>
THE THEME FACTORY, INC.
(A Development Stage Company)
Balance Sheet
<CAPTION>
ASSETS
April 30,
1999
<S> <C>
CURRENT ASSETS
Cash $ -
Total current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable (See Note 2) $ 8,969
Taxes payable 86,810
Accrued interest payable 72,567
Total Liabilities 168,346
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock; authorized 25,000,000 common
shares at $0.001 par value; 1,417,493 shares
issued and outstanding 1,417
Additional paid-in capital 99,871
Deficit accumulated during the development stage (269,634)
Total Stockholders' Equity (Deficit) (168,346)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ -
</TABLE>
<TABLE>
THE THEME FACTORY, INC.
(A Development Stage Company)
Statements of Operations
<CAPTION>
From
Inception on
November 13,
For the Years Ended 1989 Through
April 30, April 30,
1999 1998 1999
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES
General and administrative 5,678 14,125 19,803
Total Expenses 5,678 14,125 19,803
LOSS FROM OPERATIONS (5,678) (14,125) (19,803)
OTHER EXPENSES
Interest expense 8,681 14,035 103,301
Total Other Expenses (8,681) (14,035) (103,301)
LOSS FROM DISCONTINUED
OPERATIONS - - (146,530)
NET LOSS $ (14,359) $ (28,160)$ (269,634)
BASIC LOSS PER SHARE $ (0.01) $ (0.02)
</TABLE>
<TABLE>
THE THEME FACTORY, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
Balance on inception - $ - $ - $ -
Issuance of common stock from
inception on November 13, 1989
to April 30, 1994 22,155 22 90,432 -
Net loss from inception on
November 13, 1989 through
April 30, 1994 - - - (191,656)
Balance, April 30, 1994 22,155 22 90,432 (191,656)
Net loss for the year ended
April 30, 1995 - - - (11,713)
Balance, April 30, 1995 22,155 22 90,432 (203,369)
Net loss for the year ended
April 30, 1996 - - - (11,322)
Balance, April 30, 1996 22,155 22 90,432 (214,691)
Net loss for the year ended
April 30, 1997 - - - (12,424)
Balance, April 30, 1997 22,155 22 90,432 (227,115)
Issuance of common stock
at $0.10 per share 20,338 20 2,014 -
Issuance of common stock for
services at $0.10 per share 75,000 75 7,425 -
Issuance of common stock for
services at $0.001 per share 1,300,000 1,300 - -
Net loss for the year ended
April 30, 1998 - - - (28,160)
Balance, April 30, 1998 1,417,493 1,417 99,871 (255,275)
Net loss for the year ended
April 30, 1999 - - - (14,359)
Balance, April 30, 1999 1,417,493 $ 1,417 $ 99,871 $(269,634)
</TABLE>
<TABLE>
THE THEME FACTORY, INC.
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
From
Inception on
November 13,
For the Years Ended 1989 Through
April 30, April 30,
1999 1998 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (14,359) $ (28,160) $ (269,634)
Adjustments to reconcile net loss
in operating activities:
Common stock issued for services - 10,834 10,834
Changes in assets and liabilities:
Increase (decrease) in accrued
expenses 8,681 15,385 160,727
Increase (decrease) in accounts
payable 5,678 1,941 8,784
Net Cash Used by Operating Activities - - (89,289)
CASH FLOWS FROM INVESTING ACTIVITIES - - -
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock - - 89,289
Net Cash Provided by Financing
Activities - - 89,289
NET INCREASE (DECREASE) IN CASH - - -
CASH AT BEGINNING OF PERIOD - - -
CASH AT END OF PERIOD $ - $ - $ -
CASH PAID DURING THE YEAR FOR:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
</TABLE>
THE THEME FACTORY, INC.
(A Development Stage Company)
Notes to the Financial Statements
April 30, 1999 and 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of The Theme Factory,
Inc., (a development stage company). The Company was incorporated in
the State of Nevada on November 13, 1989. The Company was
incorporated for the purpose of specializing in theme parties and
special events.
In April 1991, the Company's shareholders approved a reverse split
agreement, whereby the outstanding common shares were exchanged at a
rate of 1 share for every 2.5 shares outstanding. In June 1997, the
Company's shareholders approved a reverse split agreement, whereby
the outstanding shares were exchanged at a rate of 1 share for every
100 shares outstanding. All references to shares outstanding and
loss per share have been retroactively restated to restate the
reverse stock splits.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected an April 30 year end.
c. Basic Loss Per Share
The computation of basic loss per share of common stock is based on
the weighted average number of shares outstanding during the period
of the financial statements.
d. Provision for Taxes
At April 30, 1999, the Company had net operating loss carryforwards
of approximately $270,000 that may be offset against future taxable
income from the year 1998 through 2014. No tax benefit has been
reported in the financial statements because the Company believes
that there is a 50% chance or greater the net operating loss
carryforwards will expire unused, therefore the potential tax
benefits of the loss carryforwards are offset by a valuation
allowance of the same amount.
e. Cash Equivalents
The Company considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
f. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reported period. Actual results
could differ from those estimates.
NOTE 2 - ACCOUNTS PAYABLE
$7,269 of accounts payable is due to a related party for expenses
paid on behalf of the Company.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. It is the
intent of the Company to seek a merger with an existing, operating
company. Until that time, the stockholders have committed to
covering the operating costs of the Company.
NOTE 4 - SUBSEQUENT EVENTS
On October 8, 1999, the Company effected a reverse split on a basis of
1 for 100 of the Company's outstanding common shares. According to the
provisions of the reverse stock split, no shareholder owning greater
than 100 shares of common stock at the time of the split shall be
reduced to less than 100 shares as a result of the reverse split.
Further, all shareholders owning less than 100 shares of common stock
at the time of the split shall receive additional shares to meet the
100 share minimum adopted by the Company in conjunction with the split.
All adjustments for the reverse stock split are on a per stock
certificate basis and all fractional shares shall be rounded up to the
nearest whole share. The provisions of this reverse stock split retain
the authorized shares at 25,000,000 and the par value of $0.001 per
share.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- --------------------
No independent accountant of the Company has resigned, declined to
stand for re-election or was dismissed during the Company's two most recent
fiscal years or any interim period. Due to the Company's lack of significant
business operations since approximately 1989, present management deemed it to
be in the best interests of the Company to appoint a new independent
accountant to audit its financial statements. Accordingly, the Board of
Directors unanimously resolved to retain the services of Jones, Jensen &
Company, Certified Public Accountants in 1998.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
- -------------------------------------------------
Identification of Directors and Executive Officers.
- ---------------------------------------------------
The following table sets forth, in alphabetical order, the names
and the nature of all positions and offices held by all directors and
executive officers of the Company for the fiscal years ending April 30, 1999
and 1998, and to the date hereof, and the period or periods during which each
such director or executive officer served in his respective positions.
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- ----------- ----------- --------------
David C. Merrell President 1/97 *
Director
Todd D. Ross Director 1/97 *
Secretary/ 1/97 *
Treasurer
* These persons presently serve in the capacities
indicated opposite their respective names.
Term of Office.
- ---------------
The term of office of the current directors shall continue until
the annual meeting of stockholders, which has been scheduled by the Board of
Directors to be held in September of each year. The annual meeting of the
Board of Directors immediately follows the annual meeting of stockholders, at
which officers for the coming year are elected.
Business Experience.
- --------------------
David C. Merrell is 41 years of age and since 1989, he has been
the owner of DCM Finance, a Salt Lake City based finance company which makes
and brokers real estate loans. Mr. Merrell received his Bachelor of Science
degree in Economics from the University of Utah in 1981.
Todd D. Ross is 37 years of age, and since 1995, he has been
a partner in DCM Finance, a Salt Lake City Based finance company. Mr. Ross
developed and manages DCM's Internet site. He also reviews and submits
venture capital proposals for funding. Since 1991, Mr. Ross has also been the
Lighting Director for the Utah Shakespearean Festival.
Family Relationships.
- ---------------------
David C. Merrell and Corie Merrell are husband and wife.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
Except as indicated below and to the knowledge of management,
during the past five years, no present or former director, person nominated to
become a director, executive officer, promoter or control person of the
Company:
(1) Was a general partner or executive officer of any business
by or against which any bankruptcy petition was filed,
whether at the time of such filing or two years prior
thereto;
(2) Was convicted in a criminal proceeding or named the subject
of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining
him from or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant,
associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or
employee of any investment company, bank, savings and
loan association or insurance company, or engaging in
or continuing any conduct or practice in connection
with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the
purchase or sale of any security or commodity or
in connection with any violation of federal or
state securities laws or federal commodities
laws;
(4) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting
for more than 60 days the right of such person to engage in
any activity described above under this Item, or to be
associated with persons engaged in any such activity;
(5) Was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the
judgment in such civil action or finding by the Securities
and Exchange Commission has not been subsequently reversed,
suspended, or vacated; or
(6) Was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to
have violated any federal commodities law, and the judgment
in such civil action or finding by the Commodity Futures
Trading Commission has not been subsequently reversed,
suspended or vacated.
Compliance with Section 16(a) of the Exchange Act.
- --------------------------------------------------
No securities of the Company are registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, and the Company files reports
under Section 15(d) of the Securities Exchange Act of 1934; accordingly,
directors, executive officers and 10% stockholders are not required to make
filings under Section 16 of the Securities Exchange Act of 1934.
Item 10. Executive Compensation.
- -------------------------------
Cash Compensation.
- ------------------
The following table sets forth the aggregate executive
compensation paid by the Company for services rendered during the periods
indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Years or Other All
principal periods Annual Restricted Option/ LTIP Other
position Ended $ $ Compen- Stock SAR's Payouts Compen-
Salary Bonus sation Awards$ # $ sation
- ------------------------------------------------------------------------------
David C. 04/30/99 0 0 0 0 0 0 0
Merrell 04/30/98 0 0 0 1,300,000 0 0 0
President
Director
Todd D. Ross 04/30/99 0 0 0 0 0 0 0
Secretary 04/30/98 0 0 0 30,000 0 0 0
Treasurer and
Director
No cash compensation, deferred compensation or long-term incentive
plan awards were issued or granted to the Company's management during the
fiscal years ended April 30, 1999, or 1998, or the period ending on the date
of this Report. Further, no member of the Company's management has been
granted any option or stock appreciation right; accordingly, no tables
relating to such items have been included within this Item. See the Summary
Compensation Table of this Item.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No
additional amounts are payable to the Company's directors for committee
participation or special assignments.
There are no arrangements pursuant to which any of the Company's
directors was compensated during the Company's last completed fiscal year or
the previous two fiscal years for any service provided as director. See the
Summary Compensation Table of this Item.
Termination of Employment and Change of Control Arrangement.
- ------------------------------------------------------------
There are no compensatory plans or arrangements, including
payments to be received from the Company, with respect to any person named in
the Summary Compensation Table set out above which would in any way result in
payments to any such person because of his or her resignation, retirement or
other termination of such person's employment with the Company or its
subsidiaries, or any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
- -----------------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the share holdings of those persons
who own more than 5% of the Company's common stock as of April 30, 1999 and
1998, and to the date hereof:
Number and Percentage
of Shares Beneficially Owned
----------------------------
Name and Address 04/30/98 04/30/99 and Currently
- ---------------- -------- ----------------------
Chiricahua Company* 1,300,000 91.7% 1,300,000 91.7%
9005 Cobble Lane
Sandy, Utah 84093
TOTALS 1,300,000 91.7% 1,300,000 91.7%
* David C. Merrell is the sole owner of Chiricahua
Company, and is deemed to be the beneficial owner of
these shares.
Security Ownership of Management.
- ---------------------------------
The following table sets forth the share holdings of the Company's
directors and executive officers as of April 30, 1999 and 1998, and to the
date hereof:
Number and Percentage
of Shares Beneficially Owned
----------------------------
Name and Address 04/30/98 04/30/99 and currently
- ---------------- -------- ----------------------
David C. Merrell* 1,330,000 93.7% 1,330,000 93.7%
9005 Canyon Road
Sandy, Utah 84093
Todd D. Ross 30,000 2.1% 30,000 2.1%
38 South 1650 West
Cedar City, Utah 84702
Sandy, Utah 84093
TOTALS 1,360,000 95.8% 1,360,000 95.8%
* David C. Merrell is the sole owner of Chiricahua
Company, and is deemed to be the beneficial owner of
these shares; Corie Merrell, his wife, owns 30,000
shares of the Company's common stock, which are
included in Mr. Merrell's ownership computations.
Changes in Control.
- -------------------
To the knowledge of management, there are no present arrangements
or pledges of the Company's securities which may result in a change in its
control.
Item 12. Certain Relationships and Related Transactions.
- -------------------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
Except as indicated below, or under the heading "Sales of
Unregistered Securities During the Past Five Years," of Part I, Item 1, there
were no material transactions, or series of similar transactions, during the
Company's last two fiscal years, or any currently proposed transactions, or
series of similar transactions, to which the Company or any of its
subsidiaries was or is to be a party, in which the amount involved exceeded
$60,000 and in which any director, executive officer or any security holder
who is known to the Company to own of record or beneficially more than 5% of
any class of the Company's common stock, or any member of the immediate family
of any of the foregoing persons, had an interest.
Certain Business Relationships.
- -------------------------------
Except as indicated under the heading "Transactions with
Management and Others" above, there were no material transactions, or series
of similar transactions, during the Company's last two fiscal years, or any
currently proposed transactions, or series of similar transactions, to which
it or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director, executive officer or any
security holder who is known to the Company to own of record or beneficially
more than 5% of any class of its common stock, or any member of the immediate
family of any of the foregoing persons, had an interest.
Indebtedness of Management.
- ---------------------------
Except as indicated under the heading "Transactions with
Management and Others" above, there were no material transactions, or series
of similar transactions, during the Company's last two fiscal years, or any
currently proposed transactions, or series of similar transactions, to which
it or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director, executive officer or any
security holder who is known to the Company to own of record or beneficially
more than 5% of any class of its common stock, or any member of the immediate
family of any of the foregoing persons, had an interest.
Transactions with Promoters.
- ----------------------------
Except as indicated under the heading "Transactions with
Management and Others" above, there were no material transactions, or series
of similar transactions, during the Company's last two fiscal years, or any
currently proposed transactions, or series of similar transactions, to which
it or any of its subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any promoter or founder or any member
of the immediate family of any of the foregoing persons, had an interest.
Item 13. Exhibits and Reports on Form 8-K.
- -----------------------------------------
Reports on Form 8-K.
- --------------------
None.
Exhibit
Exhibits* Number
Number -------
- ------
(i)
Articles of Incorporation of East End Investment, Inc.
dated February 1, 1989 3.1
Certificate of Amendment to Articles of Incorporation
of East End Investment, Inc. dated November 13, 1989 3.2
Certificate of Amendment reflecting a one for 100 3.3
reverse split.
Bylaws. 3.4
Financial Data Schedule. 27
(ii) Where Incorporated
In This Report
------------------
Registration Statement on Form S-18. Part I, Item 1
* A summary of any Exhibit is modified in its entirety by
reference to the actual Exhibit.
** These documents and related exhibits have
previously been filed with the Securities and Exchange
Commission and are incorporated herein by this
reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, hereunto duly authorized.
THE THEME FACTORY, INC.
Date: 10/25/99 By/s/David C. Merrell
David C. Merrell, President and Director
Date: 10/25/99 By/s/Todd D. Ross
Todd D. Ross, Secretary/Treasurer and
Director
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this Report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated:
THE THEME FACTORY, INC.
Date: 10/25/99 By/s/David C. Merrell
David C. Merrell, President and Director
Date: 10/25/99 By/s/Todd D. Ross
Todd D. Ross, Secretary/Treasurer and
Director
CERTIFICATE OF INCORPORATION
OF
EAST END INVESTMENT, INC.
The Undersigned, being 4 person of full age, do hereby makes and
acknowledge this Certificate of Incorporation for the purpose of forming a
corporation under the General Corporation Law of the State of Nevada.
ARTICLE I
The name of the corporation shall be East End Investment, Inc.
ARTICLE II
The purposes for which the corporation is organized are:
(a) to engage in acquisitions or the acquisition of suitable
enterprises; and
(b) to engage in any other lawful enterprise, service or activity for
which corporations may be organized under the General Corporation Law of the
State of Nevada, in addition to or In lieu of the purposes hereinabove set
forth in paragraph (a) of this article.
ARTICLE III
Duration of the corporation shall be perpetual.
ARTICLE IV
The corporation shall have authority to issue 25,O00,000 shares of
capital stock at a par value of $0.001 per share.
ARTICLE V
The minimum amount of consideration to be received by the corporation
for it's shares before it shall commence business is $1000.00 in cash or
property of equivalent value.
ARTICLE VI
The address of the Initial registered office of rho corporation is:
Laughlin Associates
Capital Plaza, Suite 100
1000 E. William Street
Carson City, Nevada 89701
The name of the initial registered agent of the corporation at such
address is Laughlin Associates, Inc.
ARTICLE VII
The number of directors constituting the initial board of directors
shall be one (1) and the name and address of the person who is to serve as
director until the first meeting of shareholders, or until his successor is
elected and qualified is:
Deborah A. Salerno
1449-3A Lexington Avenue
New York, New York 10128
ARTICLE VIII
The name and address of the incorporator is:
Charles W. Barkley
Barkley & Barkley
914 Cameron Brown Building
Charlotte, Mecklenburg County, North Carolina 28204
ARTICLE IX
The Shareholders shall not have pre-emptive rights in any subsequent
issues of capital stock and shall not have cumulative voting rights.
IN WITNESS WHEREOF, the undersigned, being all of the incorporators
herein above named, does hereby make this certificate for the purpose of
forming a corporation pursuant to the General Corporation Laws of the State of
Nevada and does hereby certify that the facts herein above set forth are true
and correct and have accordingly set hereunto my hand and seal this 26th day
of January, 1989.
/s/Charles W. Barkley
Incorporator
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, Jane S. Barkley, a Notary Public in and for Mecklenburg County and
State aforesaid, do hereby certify that Charles W. Barkley personally appeared
before me this day and acknowledged the due execution of the foregoing
Articles of Incorporation.
WITNESS my hand and notarial seal, this 26 day of January, 1989.
/s/Jane S. Barkely
Notary Public
My Commission Expires:
1-22-91
(NOTARIAL SEAL)
ARTICLES OF AMENDMENT TO THE CHARTER OF
EAST END INVESTMENT, INC.
The undersigned corporation hereby executes these Articles of Amendment
pursuant to the General Corporation Law of the State of Nevada for the purpose
of amending its Charter as follows:
1. The name of the corporation is East End Investment, Inc.
2. The corporation hereby amends its name from East End
Investment, Inc. to The Theme Factory, Inc.
3. The date of the adoption of this amendment is October 16,
1989.
4. The number of shares outstanding and the number of shares
entitled to vote thereon is 1,034,500.
5. The number of shares voting for the amendment is 1,000,000
and the number against in zero (0).
6. There is only one class of stock, common voting stock,
together with warrants which are exercisable for common voting stock but no
warrants have been exercised.
7. This amendment does not give rise to dissenters' rights
or other shareholder's rights in that the only amendment is the change of
name.
S. Notice was given to all shareholders of the proposed
change by notice dated October 4, 1989 and a shareholder's resolution was
adopted at a duly convened shareholder's meeting on October 16, 1989, at which
all shareholders in attendance unanimously approved the amendment.
In WITNESS WHEREOF, these Articles are signed by the President and
Secretary of the corporation this 16th day of October, 1989.
East End Investment, Inc.
By:/s/Charles S. Barkley
Secretary
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
THE THEME FACTORY, INC.
We, the undersigned, David C. Merrell, President, and Todd R.
Ross, Secretary, of The Theme Factory, Inc., a Nevada corporation (the
"Corporation"), do hereby certify:
I
Pursuant to Section 78.390 of the Nevada Revised Statutes, the
Articles of Incorporation of the Corporation shall be amended as follows:
The outstanding common stock of the Corporation shall be reverse
split on a basis of one for 100, subject to resolutions of the Board of
Directors outlined in Article III hereof.
II
The foregoing amendment was adopted by Unanimous Consent of the
Board of Directors pursuant to Section 78.315 of the Nevada Revised Statutes,
and by Consent of Majority Stockholders pursuant to Section 78.320 of the
Nevada Revised Statutes.
III
Pursuant to resolutions adopted by the Board of Directors and the
Majority Stockholders as set forth in Paragraph II above, the 2,244,580
outstanding shares of the Corporation were reverse split on a basis of one for
100, effective on filing with the Secretary of State of Nevada, retaining the
authorized shares at 25,000,000 and the par value at one mill ($0.001) per
share, with appropriate adjustments being made in the additional paid in
capital and stated capital accounts of the Corporation; provided, however,
that no stockholder, on a per stock certificate of record basis, currently
owning 100 or more shares shall be reduced to less than 100 shares as a result
of the reverse split and that no stockholder, on a per stock certificate of
record basis, currently owning less than 100 shares, shall be affected by the
reverse split; such additional shares required to provide the minimum of 100
shares to be issued the Corporation; and provided, further, that all
fractional shares shall be rounded up to the nearest whole share.
IV
The number of shares entitled to vote on the amendment was
2,244,580.
V
The number of shares voted in favor of the amendment was
1,360,000, with none opposing and none abstaining.
/s/David C. Merrell
David C. Merrell, President
/s/Todd R. Ross
Todd R. Ross, Secretary
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On the 8th day of October, 1999, personally appeared before me, a
Notary Public, David C. Merrell and Todd R. Ross, who acknowledged that they
is the President and Secretary, respectively, of The Theme Factory, Inc., and
that they are authorized to and did execute the above instrument.
/s/Sheryl A. Ross
NOTARY PUBLIC
(Notary Seal)
BYLAWS
OF
THE THEME FACTORY, INC.
ARTICLE I
OFFICES
Section 1.01 Location of Offices. The corporation may maintain such
offices within or without the State of Nevada as the Board of Directors may
from time to time designate or require.
Section 1.02 Principal Office. The address of the principal office of
the corporation shall be at the address of the registered office of the
corporation as so designated in the office of the Lieutenant
Governor/Secretary of State of the state of incorporation, or at such other
address as the Board of Directors shall from time to time determine.
ARTICLE II
SHAREHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the shareholders
shall be held in September of each year or at such other time designated by
the Board of Directors and as is provided for in the notice of the meeting,
for the purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the election of directors shall
not be held on the day designated for the annual meeting of the shareholders,
or at any adjournment thereof, 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.
Section 2.02 Special Meetings. Special meetings of the shareholders
may be called at any time by the chairman of the board, the president, or by
the Board of Directors, or in their absence or disability, by any vice
president, and shall be called by the president or, in his or her absence or
disability, by a vice president or by the secretary on the written request of
the holders of not less than one-tenth of all the shares entitled to vote at
the meeting, such written request to state the purpose or purposes of the
meeting and to be delivered to the president, each vice-president, or
secretary. In case of failure to call such meeting within 60 days after such
request, such shareholder or shareholders may call the same.
Section 2.03 Place of Meetings. The Board of Directors may designate
any place, either within or without the state of incorporation, as the place
of meeting for any annual meeting or for any special meeting called by the
Board of Directors. A waiver of notice signed by all shareholders entitled to
vote at a meeting may designate any place, either within or without the state
of incorporation, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be at the principal office of the corporation.
Section 2.04 Notice of Meetings. The secretary or assistant secretary,
if any, shall cause notice of the time, place, and purpose or purposes of all
meetings of the shareholders (whether annual or special), to be mailed at
least ten days, but not more than 50 days, prior to the meeting, to each
shareholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any shareholder may waive notice of any
meeting of shareholders (however called or noticed, whether or not called or
noticed and whether before, during, or after the meeting), by signing a
written waiver of notice or a consent to the holding of such meeting, or an
approval of the minutes thereof. Attendance at a meeting, in person or by
proxy, shall constitute waiver of all defects of call or notice regardless of
whether waiver, consent, or approval is signed or any objections are made.
All such waivers, consents, or approvals shall be made a part of the minutes
of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any annual meeting of
shareholders or any adjournment thereof, or shareholders 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 of the corporation may
provide that the share transfer books shall be closed, for the purpose of
determining shareholders entitled to notice of or to vote at such meeting, but
not for a period exceeding fifty (50) days. If the share transfer books are
closed for the purpose of determining shareholders entitled to notice of or to
vote at such meeting, such books shall be closed for at least ten (10) days
immediately preceding such meeting.
In lieu of closing the share 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 (50) and, in
case of a meeting of shareholders, not less than ten (10) days prior to the
date on which the particular action requiring such determination of
shareholders is to be taken. If the share transfer books are not closed and
no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting or 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. Failure to comply with
this Section shall not affect the validity of any action taken at a meeting of
shareholders.
Section 2.07 Voting Lists. The officer or agent of the corporation
having charge of the share transfer books for shares of the corporation shall
make, at least ten (10) days before each meeting of shareholders, a complete
list of the shareholders entitled to vote at such meeting or any adjournment
thereof, arranged in alphabetical order, with the address of, and the number
of shares held by each, which list, for a period of ten (10) days prior to
such meeting, shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder during the
whole time of the meeting. The original share transfer book shall be prima
facia evidence as to the shareholders who are entitled to examine such list or
transfer books, or to vote at any meeting of shareholders.
Section 2.08 Quorum. One-half of the total voting power of the
outstanding shares of the corporation entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of the shareholders. If a
quorum is present, the affirmative vote of the majority of the voting power
represented by shares at the meeting and entitled to vote on the subject shall
constitute action by the shareholders, unless the vote of a greater number or
voting by classes is required by the laws of the state of incorporation of the
corporation or the Articles of Incorporation. If less than one-half of the
outstanding voting power is represented at a meeting, a majority of the voting
power represented by shares so present may adjourn the meeting from time to
time 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.
Section 2.09 Voting of Shares. Each outstanding share of the
corporation entitled to vote shall be entitled to one vote on each matter
submitted to vote at a meeting of shareholders, except to the extent that the
voting rights of the shares of any class or series of stock are determined and
specified as greater or lesser than one vote per share in the manner provided
by the Articles of Incorporation.
Section 2.10 Proxies. At each meeting of the shareholders, each
shareholder entitled to vote shall be entitled to vote in person or by proxy;
provided, however, that the right to vote by proxy shall exist only in case
the instrument authorizing such proxy to act shall have been executed in
writing by the registered holder or holders of such shares, as the case may
be, as shown on the share transfer of the corporation or by his or her or her
attorney thereunto duly authorized in writing. Such instrument authorizing a
proxy to act shall be delivered at the beginning of such meeting to the
secretary of the corporation or to such other officer or person who may, in
the absence of the secretary, be acting as secretary of the meeting. In the
event that any such instrument shall designate two or more persons to act as
proxies, a majority of such persons present at the meeting, or if only one be
present, that one shall (unless the instrument shall otherwise provide) have
all of the powers conferred by the instrument on all persons so designated.
Persons holding stock in a fiduciary capacity shall be entitled to vote the
shares so held and the persons whose shares are pledged shall be entitled to
vote, unless in the transfer by the pledge or on the books of the corporation
he or she shall have expressly empowered the pledgee to vote thereon, in which
case the pledgee, or his or her or her proxy, may represent such shares and
vote thereon.
Section 2.11 Written Consent to Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or any other action
which may be taken at a meeting of the shareholders, may be taken without a
meeting, if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the subject
matter thereof.
ARTICLE III
DIRECTORS
Section 3.01 General Powers. The property, affairs, and business of
the corporation shall be managed by its Board of Directors. The Board of
Directors may exercise all the powers of the corporation whether derived from
law or the Articles of Incorporation, except such powers as are by statute, by
the Articles of Incorporation or by these Bylaws, vested solely in the
shareholders of the corporation.
Section 3.02 Number, Term, and Qualifications. The Board of Directors
shall consist of three to nine persons. Increases or decreases to said number
may be made, within the numbers authorized by the Articles of Incorporation,
as the Board of Directors shall from time to time determine by amendment to
these Bylaws. An increase or a decrease in the number of the members of the
Board of Directors may also be had upon amendment to these Bylaws by a
majority vote of all of the shareholders, and the number of directors to be so
increased or decreased shall be fixed upon a majority vote of all of the
shareholders of the corporation. Each director shall hold office until the
next annual meeting of shareholders of the corporation and until his or her
successor shall have been elected and shall have qualified. Directors need
not be residents of the state of incorporation or shareholders of the
corporation.
Section 3.03 Classification of Directors. In lieu of electing the
entire number of directors annually, the Board of Directors may provide that
the directors be divided into either two or three classes, each class to be as
nearly equal in number as possible, the term of office of the directors of the
first class to expire at the first annual meeting of shareholders after their
election, that of the second class to expire at the second annual meeting
after their election, and that of the third class, if any, to expire at the
third annual meeting after their election. At each annual meeting after such
classification, the number of directors equal to the number of the class whose
term expires at the time of such meeting shall be elected to hold office until
the second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting, if there be three classes.
Section 3.04 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately
following, and at the same place as, the annual meeting of shareholders. The
Board of Directors may provide by resolution the time and place, either within
or without the state of incorporation, for the holding of additional regular
meetings without other notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the president, vice president,
or any two directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either within or without
the state of incorporation, as the place for holding any special meeting of
the Board of Directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the
Board of Directors may participate in a meeting of the Board of Directors or a
committee of the Board of Directors by means of conference telephone or
similar communication equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to
this Section shall constitute presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given at
least ten (10) days prior thereto by written notice delivered personally or
mailed to each director at his or her regular business address or residence,
or by telegram. 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. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting solely for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than a majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
Section 3.09 Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors, and the individual directors shall have no power as such.
Section 3.10 Vacancies and Newly Created Directorship. If any
vacancies shall occur in the Board of Directors by reason of death,
resignation or otherwise, or if the number of directors shall be increased,
the directors then in office shall continue to act and such vacancies or newly
created directorships shall be filled by a vote of the directors then in
office, though less than a quorum, in any way approved by the meeting. Any
directorship to be filled by reason of removal of one or more directors by the
shareholders may be filled by election by the shareholders at the meeting at
which the director or directors are removed.
Section 3.11 Compensation. By resolution of the Board of Directors,
the directors may be paid their expenses, if any, of attendance at each
meeting of the Board of Directors, and may be paid a fixed sum for attendance
at each meeting of the Board of Directors or a stated salary as director. No
such payment shall preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
Section 3.12 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 or her or her dissent shall be entered in the minutes of the
meeting, unless he or she shall file his or her or her written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or shall forward such dissent by registered or certified
mail to the secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director who voted in
favor of such action.
Section 3.13 Resignations. A director may resign at any time by
delivering a written resignation to either the president, a vice president,
the secretary, or assistant secretary, if any. The resignation shall become
effective on its acceptance by the Board of Directors; provided, that if the
board has not acted thereon within ten days from the date presented, the
resignation shall be deemed accepted.
Section 3.14 Written Consent to Action by Directors. Any action
required to be taken at a meeting of the directors of the corporation or any
other action which may be taken at a meeting of the directors or of a
committee, may be taken without a meeting, if a consent in writing, setting
forth the action so taken, shall be signed by all of the directors, or all of
the members of the committee, as the case may be. Such consent shall have the
same legal effect as a unanimous vote of all the directors or members of the
committee.
Section 3.15 Removal. At a meeting expressly called for that purpose,
one or more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at an election of
directors.
ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a
president, one or more vice-presidents, as shall be determined by resolution
of the Board of Directors, a secretary, a treasurer, and such other officers
as may be appointed by the Board of Directors. The Board of Directors may
elect, but shall not be required to elect, a chairman of the board and the
Board of Directors may appoint a general manager.
Section 4.02 Election, Term of Office, and Qualifications. The
officers shall be chosen by the Board of Directors annually at its annual
meeting. In the event of failure to choose officers at an annual meeting of
the Board of Directors, officers may be chosen at any regular or special
meeting of the Board of Directors. Each such officer (whether chosen at an
annual meeting of the Board of Directors to fill a vacancy or otherwise) shall
hold his or her office until the next ensuing annual meeting of the Board of
Directors and until his or her successor shall have been chosen and qualified,
or until his or her death, or until his or her resignation or removal in the
manner provided in these Bylaws. Any one person may hold any two or more of
such offices, except that the president shall not also be the secretary. No
person holding two or more offices shall act in or execute any instrument in
the capacity of more than one office. The chairman of the board, if any,
shall be and remain a director of the corporation during the term of his or
her office. No other officer need be a director.
Section 4.03 Subordinate Officers, Etc. The Board of Directors from
time to time may appoint such other officers or agents as it may deem
advisable, each of whom shall have such title, hold office for such period,
have such authority, and perform such duties as the Board of Directors from
time to time may determine. The Board of Directors from time to time may
delegate to any officer or agent the power to appoint any such subordinate
officer or agents and to prescribe their respective titles, terms of office,
authorities, and duties. Subordinate officers need not be shareholders or
directors.
Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the Board of Directors, the president, or
the secretary. Unless otherwise specified therein, such resignation shall
take effect on delivery.
Section 4.05 Removal. Any officer may be removed from office at any
special meeting of the Board of Directors called for that purpose or at a
regular meeting, by vote of a majority of the directors, with or without
cause. Any officer or agent appointed in accordance with the provisions of
Section 4.03 hereof may also be removed, either with or without cause, by any
officer on whom such power of removal shall have been conferred by the Board
of Directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal,
disqualification, or any other cause, or if a new office shall be created,
then such vacancies or new created offices may be filled by the Board of
Directors at any regular or special meeting.
Section 4.07 The Chairman of the Board. The Chairman of the Board, if
there be such an officer, shall have the following powers and duties.
(a) He or she shall preside at all shareholders' meetings;
(b) He or she shall preside at all meetings of the Board of Directors;
and
(c) He or she shall be a member of the executive committee, if any.
Section 4.08 The President. The president shall have the following
powers and duties:
(a) If no general manager has been appointed, he or she shall be the
chief executive officer of the corporation, and, subject to the direction of
the Board of Directors, shall have general charge of the business, affairs,
and property of the corporation and general supervision over its officers,
employees, and agents;
(b) If no chairman of the board has been chosen, or if such officer is
absent or disabled, he or she shall preside at meetings of the shareholders
and Board of Directors;
(c) He or she shall be a member of the executive committee, if any;
(d) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been authorized by
the Board of Directors; and
(e) He or she shall have all power and shall perform all duties
normally incident to the office of a president of a corporation, and shall
exercise such other powers and perform such other duties as from time to time
may be assigned to him or her by the Board of Directors.
Section 4.09 The Vice Presidents. The Board of Directors may, from
time to time, designate and elect one or more vice presidents, one of whom may
be designated to serve as executive vice president. Each vice president shall
have such powers and perform such duties as from time to time may be assigned
to him or her by the Board of Directors or the president. At the request or
in the absence or disability of the president, the executive vice president
or, in the absence or disability of the executive vice president, the vice
president designated by the Board of Directors or (in the absence of such
designation by the Board of Directors) by the president, the senior vice
president, may perform all the duties of the president, and when so acting,
shall have all the powers of, and be subject to all the restrictions upon, the
president.
Section 4.10 The Secretary. The secretary shall have the following
powers and duties:
(a) He or she shall keep or cause to be kept a record of all of the
proceedings of the meetings of the shareholders and of the board or directors
in books provided for that purpose;
(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these Bylaws and as required by statute;
(c) He or she shall be the custodian of the records and of the seal of
the corporation, and shall cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the corporation prior to
the issuance thereof and to all instruments, the execution of which on behalf
of the corporation under its seal shall have been duly authorized in
accordance with these Bylaws, and when so affixed, he or she may attest the
same;
(d) He or she shall assume that the books, reports, statements,
certificates, and other documents and records required by statute are properly
kept and filed;
(e) He or she shall have charge of the share books of the corporation
and cause the share transfer books to be kept in such manner as to show at any
time the amount of the shares of the corporation of each class issued and
outstanding, the manner in which and the time when such stock was paid for,
the names alphabetically arranged and the addresses of the holders of record
thereof, the number of shares held by each holder and time when each became
such holder or record; and he or she shall exhibit at all reasonable times to
any director, upon application, the original or duplicate share register. He
or she shall cause the share book referred to in Section 6.04 hereof to be
kept and exhibited at the principal office of the corporation, or at such
other place as the Board of Directors shall determine, in the manner and for
the purposes provided in such Section;
(f) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been authorized by
the Board of Directors; and
(g) He or she shall perform in general all duties incident to the
office of secretary and such other duties as are given to him or her by these
Bylaws or as from time to time may be assigned to him or her by the Board of
Directors or the president.
Section 4.11 The Treasurer. The treasurer shall have the following
powers and duties:
(a) He or she shall have charge and supervision over and be responsible
for the monies, securities, receipts, and disbursements of the corporation;
(b) He or she shall cause the monies and other valuable effects of the
corporation to be
deposited in the name and to the credit of the corporation in such banks or
trust companies or with such banks or other depositories as shall be selected
in accordance with Section 5.03 hereof;
(c) He or she shall cause the monies of the corporation to be disbursed
by checks or drafts (signed as provided in Section 5.04 hereof) drawn on the
authorized depositories of the corporation, and cause to be taken and
preserved property vouchers for all monies disbursed;
(d) He or she shall render to the Board of Directors or the president,
whenever requested, a statement of the financial condition of the corporation
and of all of this transactions as treasurer, and render a full financial
report at the annual meeting of the shareholders, if called upon to do so;
(e) He or she shall cause to be kept correct books of account of all
the business and transactions of the corporation and exhibit such books to any
director on request during business hours;
(f) He or she shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements given such
information as he or she may desire with respect to any and all financial
transactions of the corporation; and
(g) He or she shall perform in general all duties incident to the
office of treasurer and such other duties as are given to him or her by these
Bylaws or as from time to time may be assigned to him or her by the Board of
Directors or the president.
Section 4.12 General Manager. The Board of Directors may employ and
appoint a general manager who may, or may not, be one of the officers or
directors of the corporation. The general manager, if any shall have the
following powers and duties:
(a) He or she shall be the chief executive officer of the corporation
and, subject to the directions of the Board of Directors, shall have general
charge of the business affairs and property of the corporation and general
supervision over its officers, employees, and agents:
(b) He or she shall be charged with the exclusive management of the
business of the corporation and of all of its dealings, but at all times
subject to the control of the Board of Directors;
(c) Subject to the approval of the Board of Directors or the executive
committee, if any, he or she shall employ all employees of the corporation, or
delegate such employment to subordinate officers, and shall have authority to
discharge any person so employed; and
(d) He or she shall make a report to the president and directors as
often as required, setting forth the results of the operations under his or
her charge, together with suggestions looking toward improvement and
betterment of the condition of the corporation, and shall perform such other
duties as the Board of Directors may require.
Section 4.13 Salaries. The salaries and other compensation of the
officers of the corporation shall be fixed from time to time by the Board of
Directors, except that the Board of Directors may delegate to any person or
group of persons the power to fix the salaries or other compensation of any
subordinate officers or agents appointed in accordance with the provisions of
Section 4.03 hereof. No officer shall be prevented from receiving any such
salary or compensation by reason of the fact that he or she is also a director
of the corporation.
Section 4.14 Surety Bonds. In case the Board of Directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the Board
of Directors may direct, conditioned upon the faithful performance of his or
her duties to the corporation, including responsibility for negligence and for
the accounting of all property, monies, or securities of the corporation which
may come into his or her hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation
contained in the Articles of Incorporation or these Bylaws, the president or
any vice president or the general manager, if any, may, in the name and on
behalf of the corporation, execute and deliver any contract or other
instrument authorized in writing by the Board of Directors. The Board of
Directors may, subject to any limitation contained in the Articles of
Incorporation or in these Bylaws, authorize in writing any officer or agent to
execute and delivery any contract or other instrument in the name and on
behalf of the corporation; any such authorization may be general or confined
to specific instances.
Section 5.02 Loans. No loans or advances shall be contracted on behalf
of the corporation, no negotiable paper or other evidence of its obligation
under any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or
conveyed as security for the payment of any loan, advance, indebtedness, or
liability of the corporation, unless and except as authorized by the Board of
Directors. Any such authorization may be general or confined to specific
instances.
Section 5.03 Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such banks and
or trust companies or with such bankers or other depositories as the Board of
Directors may select, or as from time to time may be selected by any officer
or agent authorized to do so by the Board of Directors.
Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances,
checks, endorsements, and, subject to the provisions of these Bylaws,
evidences of indebtedness of the corporation, shall be signed by such officer
or officers or such agent or agents of the corporation and in such manner as
the Board of Directors from time to time may determine. Endorsements for
deposit to the credit of the corporation in any of its duly authorized
depositories shall be in such manner as the Board of Directors from time to
time may determine.
Section 5.05 Bonds and Debentures. Every bond or debenture issued by
the corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or a vice president and by the secretary and sealed
with the seal of the corporation. The seal may be a facsimile, engraved or
printed. Where such bond or debenture is authenticated with the manual
signature of an authorized officer of the corporation or other trustee
designated by the indenture of trust or other agreement under which such
security is issued, the signature of any of the corporation's officers named
thereon may be a facsimile. In case any officer who signed, or whose
facsimile signature has been used on any such bond or debenture, should cease
to be an officer of the corporation for any reason before the same has been
delivered by the corporation, such bond or debenture may nevertheless be
adopted by the corporation and issued and delivered as through the person who
signed it or whose facsimile signature has been used thereon had not ceased to
be such officer.
Section 5.06 Sale, Transfer, Etc. of Securities. Sales, transfers,
endorsements, and assignments of stocks, bonds, and other securities owned by
or standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to
any such sale, transfer, endorsement, or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by any
officer or agent thereunto authorized by the Board of Directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any
vice president and the secretary or assistant secretary of the corporation, or
by any officer or agent thereunder authorized by the Board of Directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of shares in the
corporation shall be entitled to have a certificate, signed by the president
or any vice president and the secretary or assistant secretary, and sealed
with the seal (which may be a facsimile, engraved or printed) of the
corporation, certifying the number and kind, class or series of shares owned
by him or her in the corporation; provided, however, that where such a
certificate is countersigned by (a) a transfer agent or an assistant transfer
agent, or (b) registered by a registrar, the signature of any such president,
vice president, secretary, or assistant secretary may be a facsimile. In case
any officer who shall have signed, or whose facsimile signature or signatures
shall have been used on any such certificate, shall cease to be such officer
of the corporation, for any reason, before the delivery of such certificate by
the corporation, such certificate may nevertheless be adopted by the
corporation and be issued and delivered as though the person who signed it, or
whose facsimile signature or signatures shall have been used thereon, has not
ceased to be such officer. Certificates representing shares of the
corporation shall be in such form as provided by the statutes of the state of
incorporation. There shall be entered on the share books of the corporation
at the time of issuance of each share, the number of the certificate issued,
the name and address of the person owning the shares represented thereby, the
number and kind, class or series of such shares, and the date of issuance
thereof. Every certificate exchanged or returned to the corporation shall be
marked "Canceled" with the date of cancellation.
Section 6.02 Transfer of Shares. Transfers of shares of the
corporation shall be made on the books of the corporation by the holder of
record thereof, or by his or her attorney thereunto duly authorized by a power
of attorney duly executed in writing and filed with the secretary of the
corporation or any of its transfer agents, and on surrender of the certificate
or certificates, properly endorsed or accompanied by proper instruments of
transfer, representing such shares. Except as provided by law, the
corporation and transfer agents and registrars, if any, shall be entitled to
treat the holder of record of any stock as the absolute owner thereof for all
purposes, and accordingly, shall not be bound to recognize any legal,
equitable, or other claim to or interest in such shares on the part of any
other person whether or not it or they shall have express or other notice
thereof.
Section 6.03 Regulations. Subject to the provisions of this Article VI
and of the Articles of Incorporation, the Board of Directors may make such
rules and regulations as they may deem expedient concerning the issuance,
transfer, redemption, and registration of certificates for shares of the
corporation.
Section 6.04 Maintenance of Stock Ledger at Principal Place of
Business. A share book (or books where more than one kind, class, or series
of stock is outstanding) shall be kept at the principal place of business of
the corporation, or at such other place as the Board of Directors shall
determine, containing the names, alphabetically arranged, of original
shareholders of the corporation, their addresses, their interest, the amount
paid on their shares, and all transfers thereof and the number and class of
shares held by each. Such share books shall at all reasonable hours be
subject to inspection by persons entitled by law to inspect the same.
Section 6.05 Transfer Agents and Registrars. The Board of Directors
may appoint one or more transfer agents and one or more registrars with
respect to the certificates representing shares of the corporation, and may
require all such certificates to bear the signature of either or both. The
Board of Directors may from time to time define the respective duties of such
transfer agents and registrars. No certificate for shares shall be valid
until countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered by a
registrar, if at such date the corporation had a registrar for such shares.
Section 6.06 Closing of Transfer Books and Fixing of Record Date.
(a) The Board of Directors shall have power to close the share books of
the corporation for a period of not to exceed 50 days preceding the date of
any meeting of shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or capital shares shall go into effect, or a
date in connection with obtaining the consent of shareholders for any purpose.
(b) In lieu of closing the share transfer books as aforesaid, the Board
of Directors may fix in advance a date, not exceeding 50 days preceding the
date of any meeting of shareholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital shares shall go into effect, or a date in
connection with obtaining any such consent, as a record date for the
determination of the shareholders entitled to a notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital stock,
or to give such consent.
(c) If the share transfer books shall be closed or a record date set
for the purpose of determining shareholders entitled to notice of or to vote
at a meeting of shareholders, such books shall be closed for, or such record
date shall be, at least ten (10) days immediately preceding such meeting.
Section 6.07 Lost or Destroyed Certificates. The corporation may issue
a new certificate for shares of the corporation in place of any certificate
theretofore issued by it, alleged to have been lost or destroyed, and the
Board of Directors may, in its discretion, require the owner of the lost or
destroyed certificate or his or her legal representatives, to give the
corporation a bond in such form and amount as the Board of Directors may
direct, and with such surety or sureties as may be satisfactory to the board,
to indemnify the corporation and its transfer agents and registrars, if any,
against any claims that may be made against it or any such transfer agent or
registrar on account of the issuance of such new certificate. A new
certificate may be issued without requiring any bond when, in the judgment of
the Board of Directors, it is proper to do so.
Section 6.08 No Limitation on Voting Rights; Limitation on Dissenter's
Rights. To the extent permissible under the applicable law of any
jurisdiction to which the corporation may become subject by reason of the
conduct of business, the ownership of assets, the residence of shareholders,
the location of offices or facilities, or any other item, the corporation
elects not to be governed by the provisions of any statute that (i) limits,
restricts, modified, suspends, terminates, or otherwise affects the rights of
any shareholder to cast one vote for each share of common stock registered in
the name of such shareholder on the books of the corporation, without regard
to whether such shares were acquired directly from the corporation or from any
other person and without regard to whether such shareholder has the power to
exercise or direct the exercise of voting power over any specific fraction of
the shares of common stock of the corporation issued and outstanding or (ii)
grants to any shareholder the right to have his or her stock redeemed or
purchased by the corporation or any other shareholder on the acquisition by
any person or group of persons of shares of the corporation. In particular,
to the extent permitted under the laws of the state of incorporation, the
corporation elects not to be governed by any such provision, including the
provisions of the Nevada Control Share Acquisitions Act, Sections 78.378 to
78.3793, inclusive, of the Nevada Revised Statutes, or any statute of similar
effect or tenor.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The Board of Directors may designate an
executive committee and such other committees as the Board of Directors may
deem appropriate, each of which committees shall consist of two or more
directors. Members of the executive committee and of any such other
committees shall be designated annually at the annual meeting of the Board of
Directors; provided, however, that at any time the Board of Directors may
abolish or reconstitute the executive committee or any other committee. Each
member of the executive committee and of any other committee shall hold office
until his or her successor shall have been designated or until his or her
resignation or removal in the manner provided in these Bylaws.
Section 7.02 Powers. During the intervals between meetings of the
Board of Directors, the executive committee shall have and may exercise all
powers of the Board of Directors in the management of the business and affairs
of the corporation, except for the power to fill vacancies in the Board of
Directors or to amend these Bylaws, and except for such powers as by law may
not be delegated by the Board of Directors to an executive committee.
Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the Board of Directors, may fix
its own presiding and recording officer or officers, and may meet at such
place or places, at such time or times and on such notice (or without notice)
as it shall determine from time to time. It will keep a record of its
proceedings and shall report such proceedings to the Board of Directors at the
meeting of the Board of Directors next following.
Section 7.04 Quorum and Manner of Acting. At all meeting of the
executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, the presence of members constituting a
majority of the total authorized membership of the committee shall be
necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the members present at any meeting at
which a quorum is present shall be the act of such committee. The members of
the executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, shall act only as a committee and the
individual members thereof shall have no powers as such.
Section 7.05 Resignations. Any member of the executive committee, and
of such other committees as may be designated hereunder by the Board of
Directors, may resign at any time by delivering a written resignation to
either the president, the secretary, or assistant secretary, or to the
presiding officer of the committee of which he or she is a member, if any
shall have been appointed and shall be in office. Unless otherwise specified
herein, such resignation shall take effect on delivery.
Section 7.06 Removal. The Board of Directors may at any time remove
any member of the executive committee or of any other committee designated by
it hereunder either for or without cause.
Section 7.07 Vacancies. If any vacancies shall occur in the executive
committee or of any other committee designated by the Board of Directors
hereunder, by reason of disqualification, death, resignation, removal, or
otherwise, the remaining members shall, until the filling of such vacancy,
constitute the then total authorized membership of the committee and, provided
that two or more members are remaining, continue to act. Such vacancy may be
filled at any meeting of the Board of Directors.
Section 7.08 Compensation. The Board of Directors may allow a fixed
sum and expenses of attendance to any member of the executive committee, or of
any other committee designated by it hereunder, who is not an active salaried
employee of the corporation for attendance at each meeting of said committee.
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
any such action, suit or proceeding, if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he or she reasonably believed to be in
or not opposed to the best interests of the corporation, and with respect to
any criminal action or proceeding, he or she had reasonable cause to believe
that his or her conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him
or her in connection with the defense or settlement of such action or suit, if
he or she acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such a person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the corporation, unless
and only to the extent that the court in which the action or suit was brought
shall determine on application that, despite the adjudication of liability but
in view of all circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in
Sections 8.01 and 8.02 hereof, or in defense of any claim, issue, or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection therewith.
Any other indemnification under Sections 8.01 and 8.02 hereof, shall be made
by the corporation upon a determination that indemnification of the officer,
director, employee, or agent is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Sections 8.01 and 8.02
hereof. Such determination shall be made either (i) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit, or proceeding; or (ii) by independent legal counsel on a
written opinion; or (iii) by the shareholders by a majority vote of a quorum
of shareholders at any meeting duly called for such purpose.
Section 8.04 General Indemnification. The indemnification provided by
this Section shall not be deemed exclusive of any other indemnification
granted under any provision of any statute, in the corporation's Articles of
Incorporation, these Bylaws, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee, or agent,
and shall inure to the benefit of the heirs and legal representatives of such
a person.
Section 8.05 Advances. Expenses incurred in defending a civil or
criminal action, suit, or proceeding as contemplated in this Section may be
paid by the corporation in advance of the final disposition of such action,
suit, or proceeding upon a majority vote of a quorum of the Board of Directors
and upon receipt of an undertaking by or on behalf of the director, officers,
employee, or agent to repay such amount or amounts unless if it is ultimately
determined that he or she is to indemnified by the corporation as authorized
by this Section.
Section 8.06 Scope of Indemnification. The indemnification authorized
by this Section shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who ceases to be directors, officers, employees, or agents of the corporation,
and shall inure to the benefit of the heirs, executors, and administrators of
all such persons and shall be in addition to all other indemnification
permitted by law.
8.07. Insurance. The corporation may purchase and maintain insurance
on behalf of any person who is or was a director, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability asserted
against him or her and incurred by him or her in any such capacity, or arising
out of his or her status as such, whether or not the corporation would have
the power to indemnify him or her against any such liability and under the
laws of the state of incorporation, as the same may hereafter be amended or
modified.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE X
DIVIDENDS
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and on
the terms and conditions provided by the Articles of Incorporation and these
Bylaws.
ARTICLE XI
AMENDMENTS
All Bylaws of the corporation, whether adopted by the Board of Directors
or the shareholders, shall be subject to amendment, alteration, or repeal, and
new Bylaws may be made, except that:
(a) No Bylaws adopted or amended by the shareholders shall be altered
or repealed by the Board of Directors.
(b) No Bylaws shall be adopted by the Board of Directors which shall
require more than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action
by the shareholders, except where higher percentages are required by law;
provided, however that (i) if any Bylaw regulating an impending election of
directors is adopted or amended or repealed by the Board of Directors, there
shall be set forth in the notice of the next meeting of shareholders for the
election of directors, the Bylaws so adopted or amended or repealed, together
with a concise statement of the changes made; and (ii) no amendment,
alteration or repeal of this Article XI shall be made except by the
shareholders.
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that he or she is the secretary of
THE THEME FACTORY, INC., a corporation duly organized and existing under and
by virtue of the laws of the State of Nevada; that the above and foregoing
Bylaws of said corporation were duly and regularly adopted as such by the
Board of Directors of the corporation at a meeting of the Board of Directors,
which was duly and regularly held on the 6th day of October, 1999, and that
the above and foregoing Bylaws are now in full force and effect.
DATED THIS 6th day of October, 1999.
/s/Todd D. Ross
Todd D. Ross, Secretary
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