US SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDED FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30,
1998
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from:
Commission file number: 000-29722
AURORA ENERGY, LTD.
(Exact name of small business issuer as specified in
its charter)
NEVADA
State or other jurisdiction of incorporation
91-1780941
(IRS Employer Identification No.)or organization)
3760 North U.S. 31 South, Traverse City, MI 49684
(Address of principal executive offices)
(616) 941-0073
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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.
Yes __X__ No ______
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and
reports required to be filed by Section 12, 13 or
15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.
Yes ____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: 8,691,697
Transitional Small Business Disclosure Format (check
one); Yes __ No X
<PAGE>
Part I - Financial Information
Item 1 - Financial Statements
<TABLE>
AURORA ENERGY, LTD.
(a development stage company)
STATEMENT OF FINANCIAL POSITION
<CAPTION>
(Unaudited) (Unaudited)
Sept. 30, Sept. 30,
ASSETS 1998 1997
<S> <C> <C>
Current assets
Cash and cash equivalents $ 404,665 $ 84,093
Accounts receivable 229,451 474,490
Prepaid expenses 6,194 --
Total current assets 640,310 558,583
Oil and gas properties, not subject to
amortization, using full cost accounting 1,986,273 361,741
Investment in oil and gas partnerships 138,222 143,000
Property and equipment, net 62,975 1,500
Total assets $2,827,780 $1,064,824
See notes to financial statements
</TABLE>
LIABILITIES AND STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Sept. 30, Sept. 30,
1998 1997
<S> <C> <C>
Current liabilities
Accounts payable $ 728,277 $ 223,830
Current portion of capital
lease obligations 10,170 --
Line of credit 490,000 --
Loan from Brittania Holdings -- 500,000
Advances from affiliates -- 125,000
Advances from investors 23,265 69,000
Accrued expenses 22,215 29,195
Total current liabilities 1,273,927 947,025
Capital lease obligations, net of
current portion 26,068 --
Total liabilities 1,299,995 947,025
Stockholders equity
Common stock, $.001 par value;
500,000,000 shares authorized;
8,691,697 shares issued
and outstanding 8,692 6,720
Additional paid-in capital 1,869,073 201,295
Deficit accumulated during
the development Stage (349,980) (90,216)
Total stockholders' equity 1,527,785 117,799
Total liabilities and stockholders' equity $2,827,780 $1,064,824
See notes to financial statements
</TABLE>
<PAGE>
AURORA ENERGY, LTD.
(a development stage company)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the
For the For the period For the
9 months 3 months 3/12/97 3 months
ended ended (inception) ended
9/30/98 9/30/98 to 9/30/97 9/30/97
<S> <C> <C> <C> <C>
Operating revenues $19,606 $12,079 $ -- $ --
Other revenue 6,976 4,885 13,817 13,817
General and
administrative
expenses 381,162 106,103 95,528 87,607
Operating loss (354,580) (89,139) (81,711) (73,790)
Other income (expense)
Equity in loss of
investee
partnerships (43,865) 2,942 -- --
Gain on sale
of assets 300,000 300,000 -- --
Interest income 11,640 597 -- --
Interest expense (12,331) (8,448) (7,990) (7,990)
Other expense, net 255,444 295,091 (7,990) (7,990)
Net loss $(99,136) $205,952 $(89,701) $(81,780)
Net loss per basic
and diluted common
share $ (.011) $.037 $ (.016) $ (.012)
See notes to financial statements
</TABLE>
<PAGE>
AURORA ENERGY, LTD.
(a development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MARCH 12, 1997 (INCEPTION)
THROUGH SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Deficit
Accumulated
Add'l During the
Common Stock Paid in Developmental
Shares Amount Capital Stage Totals
<S> <C> <C> <C> <C> <C>
Common stock issued
for cash at $.001
per share 514,997 $ 515 $ -- $ -- $ 515
Common stock issued
for cash at $.025
per share 580,000 580 13,920 -- 14,500
Common stock issued
in exchange for
interest in oil and
gas partnership 5,575,200 5,575 137,425 -- 143,000
Common stock issued
for cash at $1.00
per share 50,000 50 49,950 -- 50,000
Common stock issued
in exchange for
cancellation of loan
at $.7142857
per share 700,000 700 499,300 -- 500,000
Common stock issued
for cash at $.90
per share 1,191,500 1,192 1,071,158 -- 1,072,350
Common stock options
issued to consultant
and non-employee
director -- -- 17,400 -- 17,400
Common stock issued
in exchange for oil
and gas working
interests 80,000 80 79,920 -- 80,000
Net loss -- -- -- (349,980) (349,980)
Balance at
Sept. 30, 1998 $8,691,697 $8,692 $1,869,073 $(349,980) $1,527,785
See notes to financial statements
</TABLE>
<PAGE>
AURORA ENERGY, LTD.
(a development stage company)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM MARCH 12, 1997 (INCEPTION)
THROUGH SEPTEMBER 30, 1997 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (99,136) $ (89,701)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 6,279 --
Equity in loss of investee
partnership 43,865 --
Services received in exchange
for stock options -- --
Changes in operating assets and
liabilities which provided
(used) cash:
Accounts receivable 74,719 (474,490)
Prepaid expenses (1,244) --
Accounts payable 542,125 223,830
Accrued expense (1,087) 29,195
Net cash used in operating activities 565,521 (311,166)
Cash flows from investing activities
Acquisition of interests in oil
and gas properties (1,205,423) (361,741)
Acquisition of interests in
investee partnerships (82,773) --
Capital expenditures for property
and equipment (6,950) (1,500)
Net cash used in investing activities (1,295,146) (363,241)
Cash flows from financing activities
Proceeds from the sale of common stock 198,450 64,500
Proceeds of loan from financial
institution 490,000 500,000
Advances from affiliate -- 125,000
Repayment of advancement from
affiliate -- --
Advances from investors 23,265 69,000
Payments to investors (89,000) --
Payments made to reduce capital
lease obligations (6,833) --
Net cash provided by financing activities 615,882 758,500
Net increase in cash and cash equivalents (113,743) 84,093
Cash and cash equivalents, beginning
of period 518,408 --
Cash and cash equivalents, end of period $404,665 $84,093
See notes to financial statements
</TABLE>
<PAGE>
AURORA ENERGY, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited condensed financial
statements have been prepared in accordance with
generally accepted accounting principles for interim
financial information and with the instructions to
form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the
information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all
adjustments (consisting only of normal recurring
accruals and recognition of equity in the results of
operations of affiliates) considered necessary for a
fair presentation have been included. Operating
results for the nine-month period ended September 30,
1998 are not necessarily indicative of the results
that may be expected for the year ended December 31,
1998. For further information, refer to the financial
statements and footnotes thereto included in the
Company's annual report for the period March 12, 1997
(inception) through December 31, 1997.
NOTE 2 COMPUTATION OF LOSS PER SHARE
Loss per share is computed for the nine months ended
September 30, 1998 and for the period March 12, 1997
to September 30, 1997, using the weighted average
number of common shares outstanding during the period
(8,654,822 and 5,584,764 respectively) determined
pursuant to Statement of Financial Accounting
Standards (SFAS) No. 128, "Earnings Per Share".
This Statement requires a dual presentation and
reconciliation of "basic" and "diluted" per share
amounts. Diluted reflects the potential dilution of
all common stock equivalents. Since the assumed
exercise of common stock options would be anti-
dilutive for all periods presented, such exercise is
not assumed for purposes of determining diluted loss
per share. Accordingly, diluted and basic per share
amounts are equal.
Item 2 Plan of Operations
The Company seeks to maximize stock price and
shareholder value through exploration in lower risk
shale natural gas plays and through the acquisition of
properties with proven production and positive cash
flow. The Company's short-term goal (the next 12
months) is to acquire or to find through exploration
and bring on line enough production and positive cash
flows to cover its general and administrative
expenses. The Company's long term goals include
continued building of reserves and cash flows from
production to allow for further development of
existing properties, mortgaging proved developed
reserves to finance continued exploration and growth
in value through development of untapped Antrim Shale,
New Albany Shale or other formations.
The Company should be able to meet its cash
requirements for the rest of the 1998 calendar year.
It will be necessary to raise additional funds for
operations into 1999. These funds may be raised in
part by selling additional shares of the Company's
common stock through a private placement, and in part,
by the sale of undeveloped or incomplete oil and gas
properties and projects. The Company is also
attempting to obtain recourse financing for the
acquisition of productive properties capable of adding
positive cash flows after servicing the related debts.
The Company anticipates no change in the number of
employees.
YEAR 2000 DISCLOSURES:
Background
The Year 2000 Issue is a result of computer programs
being written to recognize two digits instead of four
to identify the applicable year. Date sensitive
computer programs may then interpret dates using "00"
as the year 1900 rather than the year 2000. This
could cause system failures, miscalculations or other
system disruptions, which might temporarily interrupt
the Company's ability to engage in normal business
activities.
Plan And State Of Readiness
The Company has addressed the most direct problems
associated with the Year 2000 Issue. The Company has
obtained written assurances from the appropriate
vendors and manufacturers that 100% of the Company's
computer hardware, and that 100% of all date sensitive
software currently in use by the Company, are Year
2000 compliant. Consequently, the Company anticipates
no expenditures will be required to bring
administrative software and hardware in compliance
with Year 2000 requirements.
The Company has only just begun communicating with
third parties and examining non-information-technology
systems to determine their state of readiness. The
Company anticipates that by mid-1999 its survey of
material vendors and partners and the inspection of
non-information-technology systems will be complete.
The Company has only a few non-information-technology
systems and does not expect the costs of remediation
to be material. The Company estimates that the survey
of non-information-technology systems and third
parties whose lack of readiness for the Year 2000
could materially affect the Company's ability to
conduct normal day-to-day operations is 5% complete.
The costs to the Company for a lack of readiness on
the part of vendors, customers and partners are
limited to whatever the temporary interruption of
business functions would total. The major risks would
be interruptions in communications, banking, and cash
flows if the pipelines and final purchasers of the
Company's gas and oil production are not in
compliance. Cash flow could also be impacted if
industry partners who operate oil and gas properties
in which the Company is invested suffer business
interruptions due to their own lack of readiness, or
due to third party vendors' and/or customers' lack of
readiness for the Year 2000 problem.
Contingency Plans
Temporary interruptions in the Company's cash flows
due to Year 2000 Issue problems affecting purchasers
of the Company's oil and gas production are not
expected to present material difficulties. If, for
the same reasons, more protracted cash flow
interruptions are encountered, the Company plans to
access unused lines of credit and/or borrow from
affiliated entities to cover the most necessary
disbursements until such time as the normal order of
business is restored.
Part II
Item 4. Submission of Matters to a Vote of Security
Holders
The annual meeting of the shareholders was conducted
on September 30, 1998. The Board of Directors was
elected in its entirety. Thomas W. Tucker, William W.
Deneau, John V. Miller, Jr., and Gary J. Myles were
elected for terms extending until the next annual
meeting of the shareholders. Each director was
elected on a vote of 7,850,192 shares in favor and 11
shares against.
Rehmann Robson, P.C. of Traverse City, Michigan, was
appointed to continue to serve as the Company's
independent auditors, with a vote of 7,300,192 shares
in favor and 550,011 shares abstaining.
An amendment to the Company's Bylaws was approved,
moving the date for the annual meeting from September
30 to May 15 of each year. The vote was 7,300,137
shares in favor, with 550,066 shares abstaining.
An amendment to the Company's Bylaws was approved,
deleting a provision that permitted amendment of the
bylaws only by the shareholders, and substituting the
following provision:
These Bylaws may be amended or repealed, or new bylaws
may be adopted, by vote of a majority of the directors
then in office or by the affirmative vote of a
majority of the shares entitled to vote at any regular
or special meeting of the stockholders. The
stockholders may specify particular provisions of
these Bylaws which shall not be altered or repealed by
the Board of Directors.
The vote was 6,545,137 shares in favor, 755,000 shares
opposed, and 550,066 shares abstaining.
<PAGE>
<TABLE>
Item 6 Index to Exhibits
<S> <C> <C> <C>
(2) Plan of acquisition None
(3) (i) Restated Articles of Incorporation
(ii) Bylaws
(4) Instruments defining the Incorporated by reference
rights of security holders from Form 10-SB
(10) Material contracts Incorporated by reference
from Form 10-SB
P Bank Loan Documents Incorporated by reference
From Form 10-QSB,
Second Quarter 1998
(11) Statement regarding computation of per
share earnings None
(15) Letter on unaudited interim
financial information None
(18) Letter on change in accounting
principles None
(22) Published report regarding matters
submitted to vote None
(24) Power of Attorney None
(27) Financial Data Schedule
(99) Additional Exhibits None
</TABLE>
SIGNATURES
In accordance with the requirements on the Exchange
Act, the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly
authorized.
Date: February 22, 1999
AURORA ENERGY, LTD.
By: //William W. Deneau, President//
<PAGE>
RESTATED ARTICLES OF INCORPORATION
OF
AURORA ENERGY, LTD.
KNOW ALL MEN BY THESE PRESENTS:
That we the undersigned, having this day associated
ourselves together for the purpose of forming a
corporation under and by virtue of the laws of the
State of Nevada, hereby adopt the following Articles
of Incorporation:
ARTICLE I
The name of the corporation is Aurora Energy, Ltd.
ARTICLE II
The principal place of business of the corporation
located within the State of Nevada shall be 825 N.
Lamb, No. 77, Las Vegas, Nevada. Corporate mail to be
directed to: P. O. Box 70011, Las Vegas, Nevada 89170-
0011, in Clark County. The Board of Directors may
establish from time to time other offices within and
without the State of Nevada.
ARTICLE III
The nature of the business or purposes proposed to be
transacted or carried on by the corporation shall be
to engage in any lawful activity.
ARTICLE IV
The total authorized capital stock of the corporation
is the amount of Five Hundred Million shares of common
stock having a par value of $.001 per share.
ARTICLE V
The names and post office addresses of the Board of
Directors of Aurora Energy, Ltd. are as follows:
William W. Deneau
President and Director
2533 N. Carson Street
Carson City, NV 89706
Barbara J. Johnson
Secretary
2533 N. Carson Street
Carson City, NV 89706
Thomas W. Tucker
Treasurer and Director
2533 N. Carson Street
Carson City, NV 89706
John V. Miller
Director and Vice President
2533 N. Carson Street
Carson City, NV 89706
Gary J. Myles
Director
2533 N. Carson Street
Carson City, NV 89706
The business and affairs of the Corporation shall be
conducted by a board of directors of such number as
the By-laws may provide: but the directors may not be
less than three. A governing board of directors may
elect to increase the number of directors by a vote of
the board.
ARTICLE VI
Consideration for issuance of shares may be paid in
whole or in part, in money, labor, property, or other
things of value to the Corporation. When payment of
the consideration for which said shares are to be
issued shall have been received by the Corporation,
such shares shall be deemed to be fully paid and non-
assessable. In absence of fraud in the transaction,
the judgment of the Board of Directors as to the value
of the consideration for shares shall be conclusive.
ARTICLE VII
The Board of Directors shall have the power to
authorize from time to time, other classifications of
stock, such as preferred, special, or additional
common, and to designate the number of said shares and
shall fix and determine the designations, rights,
preferences or other variations of each class or
series of stock. The Board of Directors shall also
have the power to authorize the issuance of bonds, and
variations of same for any purpose determined by the
Board, to be in the best interests of the Corporation,
and its shareholders.
ARTICLE VIII
The Corporation shall have perpetual existence.
ARTICLE IX
Any one or more of the directors may be removed, with
or without cause, at any time by a vote or written
consent of the stockholders representing a majority of
the issued and outstanding capital stock of the
Corporation entitled to voting power.
ARTICLE X
The Board of Directors shall elect or appoint
officers: president, secretary, treasurer, etc., a
resident agent, and such other officers, agents,
advisors or others for the administration of the
business of the Corporation as it shall from time to
time determine. Officers of the Corporation need not
be members of the Board of Directors.
ARTICLE XI
In furtherance and not in limitation of the powers
vested by law, the Board of Directors is expressly
authorized:
A. To hold meetings within or without the State of
Nevada.
B. If the By-laws so provide, to designate two or
more of its number to constitute an Executive
Committee, which Committee shall have and
exercise any or all of the powers of the Board
of Directors in the management of the business
and affairs of the Corporation.
C. Subject to the Bylaws: to make, alter, amend or
change the By-laws of the Corporation.
D. Subject to the By-laws, to appoint a resident
agent of the state of domicile; to dismiss the
registrant agent and file an appointment of
another resident agent, for any valid reason
what-so-ever.
ARTICLE XII
To the extent permitted by law, the private property
of each and every stockholder, officer and director of
the Corporation, real or personal, tangible or
intangible, now owned or hereafter acquired by any of
them, is and shall be forever exempt from all debts
and obligations of the Corporation, of any type what-
so-ever.
ARTICLE XIII
The Corporation shall indemnify all of its officers
and directors, present and future, against any and all
expenses incurred by them, and each of them including,
but not limited to, legal fees, judgments, and
penalties which may be incurred, rendered, or levied
in any legal action brought against any or all of them
for or on account of any act or omission alleged to
have been committed while acting within the scope of
their duties as officers or directors of this
Corporation.
ARTICLE XIV
The names and post office addresses of the
incorporators are as follows:
Name Post Office Address
H. Eugene Gerke P.O. Box 70011, Las Vegas, NV 89170
Nicky R. Vaughn P.O. Box 390, Brisbane, CA 94005
Harold D. Blethen P.O. Box 6175, San Jose, CA 95150
ARTICLE XV
The Corporation's shareholders do not have a
preemptive right to acquire the Corporation's unissued
shares.
ARTICLE XVI
A director or officer is not liable for damages for
breach of fiduciary duty as a director or officer
except for: (a) acts or omissions which involve
intentional misconduct, fraud or a knowing violation
of the law; or (b) the payment of a distribution in
violation of NRC 78.300.
<PAGE>
BY-LAWS
OF
AURORA ENERGY, LTD.
(A corporation whose domicile is the State of Nevada)
ARTICLE I - OFFICES
Section 1. The registered office of the Corporation
in the State of Nevada shall be at 2533 N. Carson
Street, Carson City, Nevada 89706.
The registered agent in charge thereof shall be:
LAUGHLIN & ASSOCIATES OF CARSON CITY, NEVADA.
Section 2. The Corporation may also have offices at
such other places as the Board of Directors may from
time to time appoint or the business of the
Corporation may require.
ARTICLE II - SEAL
Section 1. The Corporate Seal shall have inscribed
thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal", NEVADA.
However, a Corporate Seal shall not be a requirement.
ARTICLE III - STOCKHOLDERS' MEETING
Section 1. The meetings of stockholders shall be held
at the registered office of the Corporation in the
State of Michigan or such place, either within or
without this State, as may be selected from time to
time by the Board of Directors.
Section 2. ANNUAL MEETINGS: The annual meeting of the
stockholders shall be held on May 15 of each year if
not a Saturday, Sunday or legal holiday, and if a
Saturday, Sunday or legal holiday, then on the next
secular day following, at the time and place
designated by the Board. At the annual meeting, the
stockholders shall elect Directors and transact such
other business as may properly be brought before the
meeting.
Section 3. ELECTION OF DIRECTORS: Elections of the
Directors of the Corporation may be by written ballot.
Section 4. SPECIAL MEETINGS; Special meetings of the
stockholders may be called at any time by the
President, or the Board of Directors, or stockholders
entitled to cast at least Twenty-five percent of the
votes which all stockholders are entitled to cast at
the particular meeting. At any time, upon written
request of any person or persons who have duly called
a special meeting, it shall be the duty of the
Secretary to fix the date of the meeting, to be held
not more than sixty days after receipt of the request,
and to give due notice thereof. If the Secretary
shall neglect or refuse to fix the date of the meeting
and give notice thereof, the person or persons calling
the meeting may do so.
Business transacted at all special meetings shall be
confined to the objects stated in the call and matters
germane thereto, unless all stockholders entitled to
vote are present and consent, or such shareholders as
control a majority of votes of all outstanding shares.
Written notice of a special meeting of stockholders
stating the time and place and object thereof, shall
be given to each stockholder entitled to vote thereat
at least ten days before such meeting, unless a
greater period of notice is required by statute in a
particular case.
Section 5. QUORUM: A majority of the outstanding
shares of the Corporation entitled to vote,
represented in person or by proxy, shall constitute a
quorum at a meeting of stockholders. At the 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. If
less than a majority of the outstanding shares
entitled to vote is represented at a meeting, a
majority of the shares so represented may adjourn the
meeting without further notice. The stockholders
present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less
than a quorum.
Section 6. PROXIES: Each Stockholder entitled to vote
at a meeting of stockholders or to express consent or
dissent to Corporate action in writing without a
meeting may authorize another person or persons to act
for him by proxy, but no such proxy shall be voted or
acted upon after three years from its date, unless the
proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it
states that it is irrevocable and if, and only as long
as, it is coupled with interest sufficient to law to
support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with
which it is coupled is an interest in the stock itself
or an interest in the Corporation generally. All
proxies shall be filed with the Secretary of the
meeting before being voted upon.
Section 7. NOTICE OF MEETINGS: Whenever stockholders
are required or permitted to take any action at a
meeting, a written notice of the meeting shall be
given which shall state the place, date and hour of
the meeting and in the case of a special meeting, the
purpose or purposes for which the meeting is called.
Unless otherwise provided by law, written notice of
any meeting shall be given not less than ten nor more
than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting.
Section 8. CONSENT IN LIEU OF MEETINGS: Any action
required to be taken at any annual or special meeting
of stockholders of the Corporation, or any action
which may be taken at any annual or special meeting of
such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall
be signed by the holders of outstanding stock having
not less than a majority of the number of votes that
would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking
of the Corporate action without a meeting by less than
unanimous written consent shall be given to those
stockholders who have not consented in writing.
Section 9. LIST OF STOCKHOLDERS: The officer who has
charge of the stock ledger of the Corporation shall
prepare and make, at least ten days before every
meeting of stockholders, a complete list of
stockholders entitled to vote at the meeting, arranged
in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the
name of each stockholder. No share of stock upon
which any installment is due and unpaid shall be voted
at any meeting. The list shall be open to the
examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours
for a period of at least ten days prior to the
meeting, which place shall be specified in the notice
of the meeting. The list shall also be produced and
kept at the time and place of the meeting during the
whole time thereof, and be inspected by any
stockholder who is present.
In event the Corporation has become a publicly held
entity whose shares are currently trading in the
public market place, a certified current list of the
Corporation's shareholders in alphabetical order,
shall be acquired from the Corporation's Transfer
Agent, and the Officer or Agent in charge at the
meeting shall determine that no share of stock upon
which any installment is due and unpaid shall be voted
at any meeting. In all events the list of
shareholders shall be open to the examination of any
shareholders, for any reason germane to the meeting.
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this
Corporation shall be managed by its Board of
Directors, number three or more. The Directors need
not be residents of this State or shareholders in the
Corporation. They shall be elected by the
stockholders at the annual meeting of stockholders of
the Corporation, and each Director shall be elected
for a term of: until his successor shall be elected
and shall qualify or until his earlier resignation or
removal. The Board may also increase its own number
of members and a chairman and vice-chairman. In event
of all Board positions being vacated, a majority vote
of the shareholders shall elect a new Board of
Directors.
Section 2. REGULAR MEETINGS: Regular meetings of the
Board shall be held without notice at the Registered
Office of the Corporation, or at such other time and
place as shall be determined by the Board.
Section 3. SPECIAL MEETINGS: Special meetings of the
Board may be called by the President at any time, with
each Director, either personally, by telephone, or by
facsimile transmission, or by mail, or by telegram.
Special meetings shall be called by the President or
Secretary in like manner and on like notice on the
written request of a majority of the Directors in
office.
Section 4. QUORUM: A majority of the total number of
Directors shall constitute a quorum for the
transaction of business.
Section 5. CONSENT IN LIEU OF MEETING: Any action
required or permitted to be taken at any meeting of
the Board of Directors, or of any committee thereof,
may be taken without a meeting if all members of the
Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board or
committee. The Board of Directors may hold its
meetings, and have an office or offices, outside of
this State.
Section 6. CONFERENCE TELEPHONE: One or more
Directors may participate in a meeting of the Board,
of a committee of the Board or of the stockholders, by
means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other;
participation in this manner shall constitute presence
in person at such meeting.
Section 7. COMPENSATION: Directors shall not receive
any stated salary for their services; however by
resolution of the Board, a fixed sum for attendance
and expenses, if any, may be allowed for attendance at
each regular or special meeting of the Board.
Additionally, options for non-employee directors as
provided in a stock option plan is provided for
herein. Nothing herein contained shall be construed
to preclude any director from serving the Corporation
in any other capacity and receiving compensation
thereof.
Section 8. REMOVAL: Any Director or the entire Board
of Directors may be removed, with or without cause, by
holders of a majority of the shares then entitled to
vote at an election of Directors.
ARTICLE V - OFFICERS
Section 1. The executive officers of the Corporation
shall be chosen by the Directors and in event of a
vacancy on the Board the remaining Directors may
appoint a replacement.
The Board of Directors may also choose a President,
one or more Vice Presidents and such other officers as
it shall deem necessary. Any number of offices may be
held by the same person.
Section 2. SALARIES: Salaries of all officers and
agents of the Corporation shall be fixed by the Board
of Directors.
Section 3. TERM OF OFFICE: The officers of the
Corporation shall hold office until their successors
are chosen and have qualified. Any officer or agent
elected or, appointed by the Board may be removed by
the Board of Directors whenever in its judgment the
best interest of the Corporation will be served
thereby.
Section 4. PRESIDENT: The President shall be the
Chief Executive Officer of the Corporation; he shall
preside at all meetings of the stockholders and
directors; he shall have general and active management
of the business of the Corporation, shall see that all
orders and resolutions of the Board are carried into
effect, subject, however, to the right of the
directors to delegate any specific powers, except such
as may be by statute exclusively conferred on the
President, to any other officer or officers of the
Corporation. He shall execute bonds, mortgages and
other contracts requiring a seal, under the seal of
the Corporation. He shall be EX-OFFICIO a member of
all committees, and shall have the general power and
duties of supervision and management usually vested in
the office of President of a Corporation.
Section 5. SECRETARY: The Secretary shall attend all
sessions of the Board and all meetings of the
stockholders and act as clerk thereof, and record all
the votes of the Corporation and the minutes of all
its transactions in a book to be kept for that
purpose, and shall perform like duties for all
committees of the Board of Directors when required.
He shall give, or cause to be given, notice of all
meetings of the stockholders and of the Board of
Directors, and shall perform such other duties as may
be prescribed by the Board of Directors or President,
and under whose supervision he shall be. He shall keep
in safe custody the Corporate Seal of the Corporation,
and when authorized by the Board or President, affix
the same to any instrument requiring it.
Section 6. TREASURER: The Treasurer shall have
custody of the Corporate funds and securities and
shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation,
and shall keep the moneys of the Corporation in a
separate account to the credit of the Corporation. He
shall disburse the funds of the Corporation as may be
ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the President and
Directors, at regular meetings of the Board, or
whenever they may require it, an account of all his
transactions as Treasurer and of the financial
condition of the Corporation.
ARTICLE VI - VACANCIES
Section 1. Any vacancies occurring in any office of
the Corporation by death, resignation, removal or
otherwise, shall be filled by the Board of Directors.
Vacancies and newly created Directorships resulting
from any increase in the authorized number of
Directors may be filled by a majority of the Directors
then in office, although less than a quorum, or by a
sole remaining Director. If at any time, by reason of
death or resignation or other cause, the Corporation
should have no Directors in office, then any officer
or stockholder or an executor, administrator, trustee
or guardian of a stockholder, or other fiduciary
entrusted with the responsibility for the person or
estate of a stockholder, may call a special meeting of
stockholders in accordance with the provisions of
these By-Laws.
Section 2. RESIGNATIONS EFFECTIVE AT FUTURE DATE:
When one or more Directors shall resign from the
Board, effective at a future date, a majority of the
Directors then in office, including those who so have
resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
Section 1. Any stockholder of record, in person or by
attorney or other agent, shall, upon written demand
under oath stating the purpose thereof, have the right
during the usual hours for business and with such
advance notice to the Corporation as may be set by the
State of Nevada to inspect for any proper purpose the
Corporation's list of its stockholders, and its other
books and records, and to make copies or extract
therefrom. A proper purpose shall mean a purpose
reasonably related to such person's interest as a
stockholder. In every instance where attorney or
other agent shall be the person who seeks the rights
to inspection, the demand under oath shall be
accompanied by a Power of Attorney or such other
writing which authorizes the attorney or other agent
to so act on behalf of the stockholders. The demand
under oath shall be directed to the Corporation at its
registered office in this State or at its principal
place of business.
ARTICLE VIII - STOCK CERTIFICATES, DIVIDENDS, ETC.
Section 1. The stock certificates of the Corporation
shall be numbered and registered, the transfer books
of the Corporation as they are issued, or by the
Corporation's Registrar. They shall bear the
Corporate Seal and shall be signed by the Corporate
transfer agent.
Section 2. TRANSFERS: Transfers of shares shall be
made on the books of the Corporation by the Registrar
in behalf of the Corporation only upon surrender of
the certificates therefore, endorsed by the person
named in the certificate or by attorney, lawfully
constituted in writing. No transfer shall be made
which is inconsistent with law. A "Do Not Transfer"
demand may be made by the Corporation to its Registrar
if for lawful reasons.
Section 3. LOST CERTIFICATES: The Corporation may
issue a new certificate of stock in the place of any
certificates theretofore signed by it, alleged to have
been lost, stolen or destroyed, and the Corporation
may require the owner of the lost, stolen or destroyed
certificate, or his legal representative to give the
Corporation a bond sufficient to indemnify it against
any claim that may be made against it on account of
the alleged loss, theft or destruction of any such
certificates or the issuance of such new certificates.
Section 4. RECORD DATE: In order that the
Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to
Corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall not be
more than sixty nor less than ten days before the date
of such meeting, nor more than sixty days prior to any
other action.
If no record date is fixed:
(a) The record date for determining stockholders
entitled to notice or to vote a meeting of
stockholders shall be at the close of business on the
day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is
held.
(b) The record date for determining stockholders
entitled to express consent to Corporate action in
writing without a meeting, when no prior action by the
Board of Directors is necessary, shall be the day
which the first written consent is expressed.
(c) The record date for determining stockholders for
any other purpose shall be at the close of business on
the day on which the Board of Directors adopts the
resolution relating thereto.
(d) A determination of stockholders of record
entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of
Directors may fix a new record date for adjourned
meeting.
Section 5. DIVIDENDS: The Board of Directors may
declare and pay dividends upon the outstanding shares
of the Corporation from time to time and to such
extent as they deem advisable, in the manner and upon
the terms and conditions provided by statute and
Certificate of Incorporation.
Section 6. RESERVES: Before payment of any
dividends there may be set aside out of the net
profits of the Corporation such sum or sums as the
Directors, from time to time, in their absolute
discretion, think proper as a reserve fund to meet
contingencies, or for repairing or maintaining any
property of the Corporation, or for such other
purposes as the Directors think conducive to the
interests of the Corporation, and the Directors may
abolish any such reserve in the manner in which it was
created.
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 1. FISCAL YEAR: The fiscal year shall begin
on the first day of the calendar annually.
Section 2. CHECKS: All checks or demands for money
and notes of the Corporation shall be signed by such
officer or officers as the Board of Directors may from
time to time designate.
Section 3. NOTICE: Whenever written notice is
required to be given to any person, it may be given to
such person, either personally or by sending a copy
thereof through the mail, or by telegram, charges
prepaid, to this address appearing on the books of the
Corporation, or supplied by him to the Corporation for
the purpose of notice. If the notice is sent by mail
or by telegraph, it shall be deemed to have been given
to the person entitled thereto when deposited in the
United States mail or with a telegraph office for
transmission to such person. Such notice shall
specify meeting of stockholders, the general nature of
the business to be transacted.
Section 4. WAIVER OF NOTICE: Whenever any written
notice is required by statute, or by the Certificate
or the By-Laws of this Corporation a waiver thereof in
writing, signed by the person or persons entitled to
such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of
such notice. Except in the case of a special meeting
of stockholders, neither the business to be transacted
at, nor the purpose of the meeting need be specified
in the waiver of notice or such meeting. Attendance
of a person either in person or by proxy, at any
meeting shall constitute a waiver of notice of such a
meeting, except where a person attends a meeting for
the express purpose of objecting to the transaction of
any business because the meeting was not lawfully
called or convened.
Section 5. RESIGNATIONS: Any Director or other
Officer may resign at any time, such resignation to be
in writing, and to take effect from the time of its
receipt by the Corporation, unless some time be fixed
in the resignation and then from that date. The
acceptance of a resignation shall not be required to
make it effective.
Section 6. GENDER NEUTRAL: Wherever from the context
it appears appropriate, each term stated in the
singular or the plural shall include the singular and
the plural, and pronouns stated in either the
masculine, the feminine or the neuter gender shall
include the masculine, feminine and neuter.
ARTICLE X - ANNUAL STATEMENT
Section 1. The President and Board of Directors shall
present at each annual meeting a full and complete
statement of the business and affairs of the
Corporation for the preceding year. Such statement
shall be prepared and presented in whatever manner the
Board of Directors shall deem advisable and need not
be verified by a certified public accountant.
ARTICLE XI - AMENDMENTS
Section 1. These Bylaws may be amended or repealed,
or new bylaws may be adopted, by vote of a majority of
the directors then in office or by the affirmative
vote of a majority of the shares entitled to vote at
any regular or special meeting of the stockholders.
The stockholders may specify particular provisions of
these Bylaws which shall not be altered or repealed by
the Board of Directors.
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Secretary
