SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
DEMAND FINANCIAL, INC.
(Exact Name of Small Business Issuer in its Charter)
NEVADA 91-1997728
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
141 ADELAIDE STREET WEST, STE 1004, TORONTO, ONTARIO M5H 3L5
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (416) 428-5647
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Securities registered pursuant to section 12(b) of the Act:
TITLE OF CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
NONE NONE
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TABLE OF CONTENTS
ITEM NUMBER AND CAPTION PAGE
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PART I
ITEM 1. DESCRIPTION OF BUSINESS 3
ITEM 2. MANAGEMENT'S DISCUSSION AND PLAN OF OPERATIONS 5
ITEM 3. DESCRIPTION OF PROPERTIES 7
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL 7
OWNERS AND MANAGEMENT
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS 8
AND CONTROL PERSONS
ITEM 6. EXECUTIVE COMPENSATION 8
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 9
ITEM 8. DESCRIPTION OF SECURITIES 9
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S 10
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS
ITEM 2. LEGAL PROCEEDINGS 10
ITEM 3. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS 10
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES 10
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS 10
PART F/S
ITEM 1. FINANCIAL STATEMENTS 11
PART III
ITEM 1. INDEX TO EXHIBITS 21
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Demand Financial International, Ltd., intends to develop a caviar lounge, restaurant and piano bar business situated high a-top famous skylines in North America. Demand Financial is a company in the development stage. Demand Financial was incorporated in the State of Nevada on December 31, 1996. From incorporation until December 31, 2000, Demand Financial had no business operations of any kind.
We currently do not have capital to implement the business plan and must obtain funding. If we do not receive funding, we will have to discontinue our business plan. The independent auditors of Demand Financial have qualified their opinion as to our ability to continue as a going concern. To fund our operations, we intend to seek either debt or equity capital or both, or the possibility of a merger with a business with ongoing profitable operations, among other things. Until such time as Demand Financial has adequate funding, the stockholders, officers and directors have committed to advance the operating expenses of the company.
Demand Financial has no commitments for funding from unrelated parties or any other agreements that will provide working capital. We cannot give any assurance that Demand Financial will locate any funding or enter into any agreements that will provide the required operating capital.
BUSINESS STRATEGY
Our plan is to design and operate a successful, high-end food and entertainment chain which combines a caviar lounge, restaurant and piano bar. We intend to focus on the creation of a sophisticated and relaxed atmosphere within well-known high-rise towers in major cosmopolitan areas, catering to the dining and entertainment enjoyment of professionals from businesses and high-end social communities. We are presently searching for a suitable location for our Toronto-based flagship operation. We intend to find a location in close proximity to the financial community. If our initial operation is successful, we plan to expand into cities such as New York City, Los Angeles, Chicago and Houston. The goal of our establishments will be the creation of a mood and atmosphere that lends itself to an exclusive environment in which our patrons may conduct business meetings or simply relax. We intend for the setting to be upscale, the products of the highest quality, and the service exemplary.
The product focus will be on a selection of high quality caviar, fresh seafood, vintage wines, quality liquors and liqueurs, a skyline view and piano bar. We believe there is an increasing demand for high quality and attention to detail in today's hospitality industry and we will strive to earn a reputation as a premier cosmopolitan restaurant and lounge.
Our sources of revenues principally will be from food and beverage sales. We anticipate that of our revenues in the first year 65% will be generated from food sales and 35% from beverage sales. We anticipate food cost to be approximately 37% and beverage 29% of their respective sales.
PRODUCTS
We plan to offer caviar as our featured item. In addition our menu will also include a high-quality selection of fresh shellfish and seafood, gourmet sandwiches, salads, hors de oeuvres, and a fine array of meals with a light, healthy appeal. Our beverages will include an extensive wine list and a collection of fine cognac, scotch and exclusive liqueurs.
We believe that featuring caviar is ideal for many reasons. First, caviar appeals to many up-scale consumers who appreciate its quality and enjoy the social status it has acquired. Second, caviar has gained significant exposure in recent years and is rapidly becoming a popular and much sought-after consumer product. Third, caviar can be enjoyed alone as light fare and can also be incorporated into a fine meal. Finally, a large percentage of today's consumers have moved well away from large-portioned heavy dining to a preference for lighter, healthy foods. We believe that for today's consumer, it is quality, as opposed to quantity, that drives a great restaurant to success.
Our management and staff will be committed to providing our clientele with an exceptional level of service and professionalism.
We believe that there will be an ample supply of the products we plan to offer in each of the cities that we have targeted for expansion.
MARKETING
Our overall marketing program will be designed to generate consumer awareness of our establishments. We will focus on a clientele with a preference for an upscale social environment, and quality products and services. We intend to devote a great deal of attention to the atmosphere and the decor of the lounge facilities. Paying particular attention to detail, including the style of furniture, the artwork, the interior design and the indoor waterfall, our goal is to create an overall relaxing environment for our customers.
We intend for the main attraction of our restaurant/lounge to be the experience and prestige it offers; extraordinary views of the city, ambience, and unique trendy cuisine. We believe that the location will naturally attract the clientele we are seeking.
Our marketing program will initially be based on a significant amount of advertising. Initially, the advertising will be oriented to the greater metropolitan area in which the lounge is located. Thereafter, we plan to expand the awareness marketing to defined segments such as business travelers and high-end vacationers. We plan to use radio, television, print, bulk mailings and any other form of advertising that we believe will create consumer awareness. We also will initiate a program of contacting magazines, newspapers, television programs and travel guides to obtain exposure through food and restaurant reviews and write-ups and new location/business articles.
Although many of our marketing plans have been successfully used in the past by different restaurant/lounge establishments, there is no assurance that we will be able to use them successfully to create the consumer base we seek. Moreover, because the consumer is increasingly sophisticated and exposed to a myriad of marketing programs, we will have to constantly appraise our strategies and seek out ways to change and improve them so as to remain fresh and competitive. No assurance can be given that we will successfully change and update our marketing in a way that continues to generate positive consumer reaction to our establishments.
COMPETITION
The hospitality industry is very competitive. There are over 6,000 restaurants from fast food to fine dining in the Toronto area alone. All over North America new restaurants open up on a daily basis. Our goal is to offer something new and exciting for up-scale consumers. There are several factors that will allow us to obtain our goal. The first factor will be the extraordinary view each restaurant will offer. Situated high a-top office towers should be an attraction to many potential consumers. This offers an advantage, as 99% of restaurants are located on ground level. The second factor is the food we are offering on our menu. Our food is meant to be exhilarating, unique and refreshing. The third factor is our service. As a high-end restaurant, service must be of the utmost importance. From the maitre'd to the wait-staff and wine steward, knowledgeable friendly staff must treat the guest with hospitality. The fourth key factor is the atmosphere. Our piano will be the focal point of attention. Offering entertainment that is both inspiring and calming to the clientele. From classical to jazz greats, we believe live music will lift the atmosphere of the restaurant. Other atmosphere enhancements will include an indoor waterfall, comfortable seating, specialized lighting, and intriguing art. The fifth factor that will allow us to reach our goal is our desire to be a market leader. Setting a new trend for the high-end niche market will allow us to differentiate ourselves from other high-end restaurants.
Our ability to compete will be dependant on the level of quality and service we provide for our consumers. There can be no assurances that we will be able to accomplish our goals or compete on a profitable basis within our target market.
REGULATION
THE LIQUOR LICENSE PROCESS IN ONTARIO
Obtaining a liquor license in the province of Ontario is relatively easy. The entire process takes between 75 and 100 days at a cost of approximately $2,500 CDN. The provincial liquor board (the "Board") is administered by a branch of the provincial government known as the Alcohol and Gaming Commission of Ontario, or AGCO. The approval process requires a sign to be posted in a conspicuous place within the proposed establishment for 30 days stating the intention to have the premises licensed. As well, an advertisement must run in the local newspaper with the address of the establishment. Within this 30-day period any one in the community who objects to the licensing of alcohol on the specified premises may do so to the Board in writing. All objections must be received within 15 days after the 30th day of posting. Any objectors would then have to defend their position in front of the liquor licensing board with the proposed vendor present. The Board would then decide whether or not to license the premises. In most cases there are no objections and approval is given within 30 days after all mail must be received. Objections usually occur in residential areas where local homeowners have concerns and not within the downtown Toronto business core. There are no restrictions as to the number of licensed premises in an area, nor are their any further costs involved.
HEALTH AND SAFETY REGULATIONS
Operating our facilities will require us to comply with local and state or provincial laws and regulations relating to food preparation, food service, cleanliness and garbage disposal. In addition, we will be subject to various workplace safety regulations.
WORKER REGULATIONS
As with any employer, we will be subject to employment laws, including workman's compensation, hourly scheduling and employment discrimination statutes. We may also be subject to union employee rules in one or more employment categories.
All of these legal impositions are anticipated to vary from location to location. Therefore, we expect to expend a considerable amount of our management time on regulatory and union compliance activities so as to assure the proper operations of each lounge facility.
EMPLOYEES
We currently employ one person as our executive officer. This person is Mr. Mitchell Geisler who devotes approximately one-half of his business time to the affairs of the company. We do not have any other employees at this time.
ITEM 2. MANAGEMENTS'S DISCUSSION AND PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
When used in this Form 10-SB and in future filings by Demand Financial with the Securities and Exchange Commission, the words or phrases "will likely result," "management expects," or we expect," "will continue," "is anticipated," "estimated," or similar expression or use of the future tense, are intended to identify forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speak only as of the date made. These statements are subject to risks and uncertainties, some of which are described below and others are described in other parts of this Form 10-SB. Actual results may differ materially from historical earnings and those presently anticipated or projected. We have no obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect anticipated events or circumstances occurring after the date of such statements.
SELECTED FINANCIAL DATA
Because Demand Financial is a development stage company, selected financial data would not be meaningful. Reference is made to the financial statements of Demand Financial included elsewhere in the document.
OVERALL OPERATING RESULTS
We have had no revenues since our inception (December 31, 1996) through the current reporting period (December 31, 2000).
Operating expenses over that same four-year time frame totaled $5,000. These expenses were incurred on December 31, 1996 for consulting services rendered by our first president and chairman of the board, Mr. Antonio Garcia. Mr. Garcia received 950,000 shares or 9.5% of our current issued and outstanding common stock for these services. On January 17, 2001 (subsequent to the year ended December 31, 2000), we incurred $9,000 for consulting services rendered by our current president and chairman of the board, Mr. Mitchell Geisler. Mr. Geisler received 9,000,000 shares of our common stock (90% of our current issued and outstanding shares) for these services.
We have incurred a cumulative net loss since inception to the date of this filing of $14,000 which was the result of the expenses discussed in the previous paragraph.
LIQUIDITY AND CAPITAL RESOURCES:
We do not currently have any working capital with which we can fund our future operations. Our auditors have issued a going-concern opinion. We cannot assure you that we will be able to continue our operations without adequate funding. We do not have any assets or liabilities as of the date of this filing. Total stockholders' deficit at December 31, 2000 was $0.
PLAN OF OPERATION
We plan to seek capital to fund our operations through a private placement of our securities. We may also seek acquisition or merger opportunities with operating companies. We estimate that we will need approximately $1,000,000 to fund our operations and implement our business plan during the first year. We have no financing commitments or acquisition arrangements or prospects at this time. We anticipate needing capital for the following purposes:
The average start-up costs for a restaurant in today's marketplace ranges from $80 to $125 per square foot. As we are targeting the high-end market, an exclusive location, and classic, upscale decor, we have budgeted start-up costs based on $200 per square foot. Our budget includes all costs associated with the design, architecture, engineering, contracting, legal fees, restaurant equipment, assets, fixtures, initial staff training and salaries, and primary inventory.
Start-up costs (based on a budget of $200 per square foot) $ 600,000
Initial marketing and promotion 50,000
Initial cash outflow (based on 3 pay periods) 115,000
First and last, plus 3 additional months of lease payments* 93,750
Contingency funds for working capital 141,250
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Total $ 1,000,000
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* Property Lease Payments are based on a premium of $75, Gross, per Square Foot
We believe that we will require additional financing (over and above the aforementioned financing) in the future for the funding of expansions into other cities. We cannot assure you that we will be successful in raising any of the capital needed to fund our operations.
Once we open one or more locations, we expect to generate revenues with which we will be able to cover operating costs. To the extent our revenues exceed operating costs, we will use these funds in our business expansion. Many restaurants are not profitable for a considerable time after their opening and many restaurants fail within the first and second year after opening. We cannot give any assurances that our lounge and food format will attract customers who spend an amount that will cover expenses or provide a profit on operations. The owning and operating of restaurants is considered a risky enterprise and investment returns are often significantly less than in other investments.
EMPLOYEES
Currently we employ one person on a part time basis. Mr. Geisler is working on a gratis basis while the company is in the development stage. At the onset of building the restaurant, it is expected Demand Financial will hire two full-time employees. One will help oversee the construction and building phase and initiate pre-employment needs, while the second, a head chef, will begin preparation of the operations menu and recipes. When the restaurant is ready for its grand opening, we expect to employ between 15 and 20 full and part-time hospitality staff and management associates. We believe that there are many persons available with the skills we will require either in the Toronto area or on a telecommuting basis. We believe we will also need accounting and general administrative personnel.
NEW ACCOUNTING PRONOUNCEMENTS
We have adopted FASB Statement 128. It is not expected that we will be impacted by other recently issued standards. FASB Statement 128 presents new standards for computing and presenting earnings per share (EPS). The Statement is effective for financial statements for both interim and annual periods ending after December 15, 1997.
FASB Statement 131 presents news standards for disclosures about segment reporting. We do not believe that this accounting standard applies to us as all of our operations are integrated for financial reporting and decision-making purposes.
ITEM 3. DESCRIPTION OF PROPERTIES
The offices of the company are located at 141 Adelaide Street West, Suite 1004, Toronto, Ontario, M5H 3L5. The telephone number is 416-428-5647.
Pursuant to an oral agreement, we are entitled to use office space otherwise provided to our executive officer. In addition, we are provided office services as may be required from time to time. We do not pay any amount for the office space or services. Any costs of this office are considered immaterial to the financial statements and accordingly are not reflected. We believe that this facility is adequate to meet our corporate needs in the foreseeable future.
We believe each Demand Financial caviar lounge and restaurant will be comprised of approximately 3,000 square feet in a high-rise building with appropriate views, and include a piano bar and indoor waterfall as the main centerpieces as well as an enclosed kitchen and comfortable seating. We cannot assure you that we will be able to locate suitable restaurant space that meets our business plan.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 28, 2001, the name and shareholdings of each person who owns of record, or was known by the us to own beneficially,* 5% or more of the shares of the common stock currently issued and outstanding; the name and shareholdings, including options to acquire the common stock, of each director; and the shareholdings of all executive officers and directors as a group.
NUMBER OF PERCENTAGE
SHARES OF
NAME OF PERSON OR GROUP OWNED OWNERSHIP
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Mitchell Geisler(1)............. 9,000,000 90.0%
Antonio Garcia(2) .............. 950,000 9.5%
All executive officers and
directors as a group (one person) 9,000,000 90.0%
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(1) Mr. Geisler's address is 141 Adelaide Street West, Suite 1004, Toronto, Ontario, M5H 3L5.
(2) Mr. Garcia's address is 2828 West Lincoln, Anaheim, California 92806.
There are currently no outstanding options or warrants to purchase shares of our stock.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Mr. Mitchell Geisler, 30, has been the president, treasurer and secretary and a director of the company since January 2001. Mr. Geisler has more than 15 years of experience in the hospitality industry, and will lead and manage the planning, start-up and operation of the business. He has been an active member of the Toronto business and tourist district in a variety of capacities, and has worked with many international corporations including, Prime Restaurants, The Keg Restaurants, Cara Foods, and Sire Corp Restaurants. Most recently, during the period 1998 to 2001, Mr. Geisler was president and operator of the Toronto-based 52 Restaurants Inc. Mr. Geisler is a graduate of Toronto's York University in Toronto, and also studied at the University of Tel Aviv. Mr. Geisler is a director and president of LRS Capital, Inc. and a director of Uranium Strategies, Inc. Both of these companies are engaged in mineral exploration activities.
ITEM 6. EXECUTIVE COMPENSATION
The following table reflects compensation paid to the mostly highly compensated executive officer of Demand Financial at the end of the fiscal year 2000.
LONG TERM COMPENSATION AWARDS
--------------------------------
PAYOUTS
ANNUAL COMPENSATION -------
--------------------------------- RESTRICTED SECURITIES
STOCK UNDERLYING LTIP ALL OTHER
SALARY BONUS OTHER AWARD OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) SARS(#) ($) ($)
------------------------------------ ------ --------- ----------- ----------- ---------- ---------- ------- ------------
Chrystel Maedche
President & Chairman of the
Board............................... 2000 $ 0 $ 0 $ 0 $ 0 0 0 $ 0
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Ms. Maedche resigned her position as president, secretary, treasurer and sole director on January 5, 2001 and Mr. Geisler was appointed to fill these positions. Ms. Maedche did not receive any compensation for her services.
On January 17, 2001, Mr. Geisler received 9,000,000 shares of our common stock valued at $.001 per share for consulting services rendered. These services were valued at $9,000. He does not currently receive any salary.
Until we have sufficient capital or revenues, Mr. Geisler will not be provided cash remuneration. At such time as we are able to provide a regular salary, it is our intention that Mr. Geisler will become employed pursuant to an executive employment agreement, at an annual salary to be determined based on his then level of time devoted to the Company and the scope of his responsibilities. Until we enter into an employment agreement, we may use shares of common stock to compensate Mr. Geisler. In addition, we may use common stock to compensate others for services to the Company.
DIRECTOR COMPENSATION
Persons who are directors and employees will not be additionally compensated for their services as a director. There is no plan in place for compensation of persons who are directors who are not employees of the Company, but it is expected that in the future we will create a remuneration and reimbursement plan.
OTHER COMPENSATION ARRANGEMENTS
Although we do not have any formal equity-based compensation plan, we do have the ability to enter into options and similar equity-based agreements with employees, consultants and others. In the future, we may enter into these types of agreements as the sole means or as part of the overall compensation of someone working for the company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capital stock consists of 100,000,000 shares of capital stock, all of which is designated common stock, $.001 par value. As of March 28, 2001, there were 10,000,000 shares of common stock issued and outstanding.
COMMON STOCK DESCRIPTION
The holders of common stock are entitled to one vote per share on all matters submitted to a vote of the shareholders. In addition, the holders are entitled to receive dividends ratably, if any, as may be declared from time to time by the board of directors out of legally available funds. In the event of our dissolution, liquidation or winding-up, the holders of common stock are entitled to share ratably in all the assets remaining after payment of all our liabilities and subject to the prior distribution to any senior securities that may be outstanding at that time. The holders of common stock do not have cumulative voting rights or preemptive or other rights to acquire or subscribe for additional, unissued or treasury shares. The holders of more than 50% of such outstanding shares, voting at an election of directors can elect all the directors on the board of directors if they so choose and, in such event, the holders of the remaining shares will not be able to elect any of the directors. All outstanding shares of common stock are, when issued, the shares of common stock offered hereby, are paid in full and non-assessable.
STOCK TRANSFER AGENT
The stock transfer agent for the common stock is Executive Registrar, 3118 West Thomas Road, Suite 707, Phoenix, Arizona 85017.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The common stock is not traded in any market or electronic medium. We intend to seek inclusion in the Over-the-Counter Bulletin Board and are in the process of implementing steps to that end. There can be no assurance given that the common stock will be traded in any public market. Moreover, if our common stock is traded, there can be no assurance given that there will be active trades in the security or at all. Therefore, holders of our common stock may not be able to sell it from time to time.
HOLDERS
As of March 28, 2001, there were 27 holders of record of the common stock.
DIVIDENDS
We have never paid any dividends. For the foreseeable future, we anticipate that we will use any funds available to the company to finance the growth of our operations and that we will not pay cash dividends to holders of common stock. The payment of dividends, if any, in the future is within the discretion of the board of directors and will depend on our earnings, capital requirements, restrictions imposed by lenders and on our financial condition, having funds legally available to pay dividends and other relevant factors.
ITEM 2. LEGAL PROCEEDINGS
None.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On January 17, 2001, we issued 9,000,000 shares of common stock to Mr. Mitchell Geisler, the President of the Company, in payment of his services as a consultant in the preparation of our business plan. We have expensed $9,000 for these services in January 2001. The issuance was made under Section 4(2) of the Securities Act of 1933 on the basis that Mr. Geisler is a sophisticated investor. Mr. Geisler is a director or has been an employee/consultant of several companies, most of which operate in the area of hospitality services.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada Business Corporation Act permits Nevada corporations such as ours to include in the articles of incorporation a provision eliminating or limiting directors' exposure to liability for monetary damages for breaches of their duty of care as directors, if the director acted in good faith and with ordinary care. The act does not eliminate the directors' liability for monetary damages for acts or omissions not in good faith or involving the intentional violations of law, the improper purchase or redemption of stock, payment of improper dividends or any transaction from which the director received an improper personal benefit.
The act also permits Nevada corporations to include in the articles of incorporation a provision to indemnify any and all persons it has the power to indemnity. The act provides that a Nevada corporation may indemnify a person who was, is or is threatened to be made, a named party in a proceeding because the person is or was acting on behalf of the corporation. The indemnification by the corporation may be made if it is determined that the person conducted himself in good faith, reasonably believed that the conduct was in the corporation's best interests if the indemnitee is a director, or was at least not opposed to the corporations' best interests if the person was someone other than a
director. Directors may not be indemnified if the person improperly benefited personally or the person is found liable to the corporation. The indemnification may be in respect of judgments, penalties, fines, settlements and reasonable expenses actually incurred.
We have implemented the above-described provisions in our articles of incorporation. In addition, our by-laws provide for similar provisions. We do not have separate agreements of indemnification or advancement of expenses. We do not have directors and officers insurance.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC, indemnification is against public policy and is therefore unenforceable. In the event that a claim for indemnification against liabilities, other than the payment by us of expenses incurred by a director, officer or controlling person in successful defense of any action, suit or proceedings, is asserted by such director, officer or controlling person in connection with the securities being offered or sold by us, we will, unless in the opinion of its counsel that the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the federal securities law, and will be governed by the final adjudication of such case.
PART F/S
Our financial statements are included in this report beginning on page F-1, immediately following this section.
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE
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Report of Simon Krowitz Bolin & Associates, P.A. independent accountants F-2
Balance Sheet for the years ended December 31, 2000 and December 31, 1999 F-3
Statements of Loss and Retained Earnings for the years ended December 31, 2000
and December 31, 1999 and inception to December 31, 2000 F-4
Statements of Cash Flows for the years ended
December 31, 2000 and December 31, 1999 and inception
to December 31, 2000 F-5
Statement of Changes in Shareholders' Equity for the period
December 31, 1996 (inception) through December 31, 2000 F-6
Notes to Financial Statements F-7
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SIMON KROWITZ BOLIN & ASSOCIATES, P.A.
11300 ROCKVILLE PIKE, SUITE 800
ROCKVILLE, MARYLAND 20852
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Demand Financial International, Ltd.
Toronto, Ontario
CANADA
We have audited the accompanying balance sheet of Demand Financial International, Ltd. (a development stage company) as of December 31, 2000 and 1999 and the related statements of income and retained earnings and cash flows for the years then ended. These financial statements are the responsibility of Demand Financial International's management. Our responsibility is to express an opinion on these financial statements based on our audit.
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 audit provides 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 Demand Financial International, Ltd. as of December 31, 2000 and the results of its operations and cash flows for the year then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been presented assuming that the Company will continue as a going concern. As discussed in Note 7 to the financial statements, the Company has no established source of income and this raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Simon Krowitz Bolin & Associates, P.A. April 3, 2001 |
DEMAND FINANCIAL INTERNATIONAL, LTD.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
2000 1999
---------- ----------
ASSETS
CURRENT ASSETS $ 0 $ 0
---------- ----------
TOTAL ASSETS $ 0 $ 0
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $ 0 $ 0
LONG-TERM LIABILITIES 0 0
---------- ----------
TOTAL LIABILITIES 0 0
---------- ----------
STOCKHOLDERS' EQUITY
Common Stock - $0.001 par value; 5,000,000 shares
authorized, 1,000,000 shares issued and outstanding 1,000 1,000
Additional Paid in Capital 4,000 4,000
Retained Earnings (Deficit) (5,000) (5,000)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 0 0
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 0 $ 0
========== ==========
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SEE AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
DEMAND FINANCIAL INTERNATIONAL, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF LOSS AND RETAINED EARNINGS
December 31,
January 1, January 1, 1996
2000 to 1999 to (inception)
December 31, December 31, to December 31,
2000 1999 2000
------------ ------------ ---------------
REVENUES $ 0 $ 0 $ 0
------------ ------------ ------------
GENERAL AND ADMINISTRATIVE EXPENSES
Operating Expenses 0 0 5,000
------------ ------------ ------------
NET (LOSS) 0 0 (5,000)
RETAINED EARNINGS (DEFICIT) - BEGINNING (5,000) (5,000) 0
------------ ------------ ------------
RETAINED EARNINGS - ENDING $ (5,000) $ (5,000) $ (5,000)
============ ============ ============
NET (LOSS) PER SHARE - BASIC $ 0 $ 0 $ 0
WEIGHTED AVERAGE SHARES USED IN PER
SHARE CALCULATION - BASIC 1,000,000 1,000,000 1,000,000
============ ============ ============
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SEE AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
DEMAND FINANCIAL INTERNATIONAL, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
December 31,
January 1, January 1, 1996
2000 to 1999 to (inception)
December 31, December 31, to December 31,
2000 1999 2000
------------ ------------ ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) $ 0 $ 0 $ (5,000)
Adjustments to reconcile net income to net cash (used) by
operating activities:
------------ ------------ ---------------
NET CASH (USED) BY OPERATING ACTIVITIES 0 0 (5,000)
------------ ------------ ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 0 0 5,000
------------ ------------ ---------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 0 0 0
NET INCREASE IN CASH 0 0 0
CASH - BEGINNING 0 0 0
------------ ------------ ---------------
CASH - ENDING $ 0 $ 0 $ 0
============ ============ ===============
|
SEE AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
DEMAND FINANCIAL INTERNATIONAL, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES OF SHAREHOLDERS' EQUITY
ADDITIONAL
PAID IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
---------- ---------- ---------- -----------
BALANCE AT DECEMBER 31, 1996
(INCEPTION) 0 $ 0 $ 0 $ 0
ISSUANCE OF COMMON STOCK FOR
SERVICES RENDERED @ 1.00 PER SHARE 5,000 5,000 0 0
NET LOSS 0 0 0 (5,000)
---------- ---------- ---------- -----------
BALANCE - DECEMBER 31, 1996 5,000 5,000 0 (5,000)
NET LOSS - YEAR ENDED DECEMBER
31, 1997 0 0 0 0
---------- ---------- ---------- -----------
BALANCE - DECEMBER 31, 1997 5,000 5,000 0 (5,000)
NET LOSS - YEAR ENDED DECEMBER 31,
1998 0 0 0 0
---------- ---------- ---------- -----------
BALANCE - DECEMBER 31, 1998 5,000 5,000 0 (5,000)
ON MARCH 10, 1999:
- CHANGED VALUE OF STOCK FROM NO
PAR VALUE TO 0.001 PER SHARE 0 (4,000) 4,000 0
- FORWARD SPLIT 200:1 RESULTED IN
ADDITIONAL ISSUANCE 995,000 0 0 0
NET LOSS - YEAR ENDED DECEMBER
31, 1999 0 0 0 0
---------- ---------- ---------- -----------
BALANCE - DECEMBER 31, 1999 1,000,000 1,000 4,000 (5,000)
NET LOSS - YEAR ENDED DECEMBER
31, 2000 0 0 0 0
---------- ---------- ---------- -----------
BALANCE - DECEMBER 31, 2000 10,000,000 $ 1,000 $ 4,000 $ (5,000)
========== ========== ========== ===========
|
SEE AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
DEMAND FINANCIAL INTERNATIONAL, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
On December 31, 1996 Demand Financial International, Ltd. (the "Company") was incorporated under the laws of the State of Nevada. The Company currently has no operations and in accordance with SFAS #7, is considered a development stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method - The Company records income and expenses using the accrual method of accounting.
Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates.
Cash Equivalents - For the purposes of the statement of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents. There are no cash equivalents as of December 31, 2000 and 1999.
Income Taxes - Income taxes are provided for using the liability method of accounting in accordance with Statement of Financial Accounting Standards No. 109 (SFAS #109) "Accounting for Income Taxes." A deferred tax asset or liability is recorded for all temporary difference between financial and tax reporting. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
Organization Costs - Costs incurred to organize the Company will be amortized on a straight line basis over a sixty month period.
Loss Per Share - Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS #128), "Earnings Per Share." Basis loss per share is computed by dividing losses available to common stockholders' by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects per share amounts that would have resulted if dilutive common stock equivalents had been converted to common stock. As of December 31, 2000 and the Company had no dilutive common stock equivalents such as stock options.
Year End - The Company has selected December 31 as its year end.
DEMAND FINANCIAL INTERNATIONAL, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the years December 31, 2000 and 1999 to the net loss and the fact that there is no state income tax in the state of the Company's domicile and operations; Nevada. The Company's total deferred tax asset as of December 31, 2000 and 1999 is as follows:
Net operating loss carryforward $ 5,000
Valuation Allowance (5,000)
-------
Net Deferred Tax Asset $ 0
=======
|
The federal net operating loss carryforward will expire in various amounts from 2016 to 2017. This carryforward may be limited upon the consummation of a business combination under IRS Section 381.
NOTE 4 - SHAREHOLDERS EQUITY
Common Stock - The initial authorized common stock of Demand Financial International, Ltd. consists of 25,000 shares with no par value.
On March 10, 1999 the State of Nevada approved the Company's restated articles of incorporation which increased the authorized shares of common stock from 25,000 common shares to 5,000,000 common shares. The par value was changed from no par to $.001.
On March 10, 1999 the Board of Directors authorized the forward split on a 200:1 ratio, of the outstanding common shares of the company, thus increasing its number of outstanding shares from 5,000 to 1,000,000.
On March 10, 1999 the Board of Directors authorized a stock issuance totaling 995,000 common shares of the company to reflect the change above.
Preferred Stock - Demand Financial International, Ltd. has no preferred stock.
DEMAND FINANCIAL INTERNATIONAL, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future. If a specific business opportunity becomes available, such persons may face a conflict of interest. A Company policy for handling such a conflict has not yet been formulated.
NOTE 6 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire additional shares of common stock.
NOTE 7 - 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 the liquidation of liabilities in the normal course of business. The Company has not established revenues sufficient to cover its operating costs and 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/ officers and/or directors have committed to advancing the operating costs of the Company interest free.
PART III
ITEM 1. INDEX TO EXHIBITS
Exhibit Number Name of Exhibit
3.01 Articles of Incorporation of Demand
Financial International, Ltd.*
3.02 Amendment to Articles of Incorporation of Demand
Financial International, Ltd.*
3.03 By-laws of Demand Financial International, Ltd.*
4.1 Form of Stock Certificate*
|
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
DEMAND FINANCIAL INTERNATIONAL, LTD.
By /s/ Mitchell Geisler
------------------------------------
Mitchell Geisler, President, Secretary,
Treasurer
& Chief Financial Officer
Dated: April 30, 2001
--------------
|
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.01 Articles of Incorporation of Demand
Financial International, Ltd.*
3.02 Amendment to Articles of Incorporation of Demand
Financial International, Ltd.*
3.03 By-laws of Demand Financial International, Ltd.*
4.1 Form of Stock Certificate*
|
EXHIBIT 3.01
ARTICLES OF INCORPORATION
OF
DEMAND FINANCIAL INTERNATIONAL, LTD.
FIRST. The name of the corporation is: DEMAND FINANCIAL INTERNATIONAL,
LTD.
SECOND. Its registered office in the State of Nevada is located at 2533 North Carson Street, Carson City, Nevada 89706 that this Corporation may maintain an office, or offices, in such other place within or without the State of Nevada as may be from time to time designated by the Board of Directors, or by the By-Laws of said Corporation, and that this Corporation may conduct all Corporation business of every kind and nature, including the holding of all meetings of Directors and Stockholders, outside the State of Nevada as well as within the state of Nevada.
THIRD. The objects for which this Corporation is formed are: To engage in any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers, when not inconsistent with the purposes and objects for which this corporation is organized.
(C) Shall have power to have succession by its corporate name for the period limited in its certificate or articles of incorporation, and when no period is limited, perpetually, or until dissolved and its affairs wound up according to law.
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal estate and to mortgage or lease any such real and personal estate with its franchises. The power to hold real and personal estate shall include the power to take the same by devise or bequest in the State of Nevada, or in any other state, territory or country.
(G) Shall have power to appoint such officers and agents as the affairs of the corporation shall require, and to allow them suitable compensation.
(H) Shall have power to make By-Laws not inconsistent with the constitution or laws of the United States, or of the State of Nevada, for the management, regulation and government of its affairs and property, the transfer of its stock, the transaction of its business, and the calling and holding of meetings of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or dissolved.
(J) Shall have power to adopt and use a common seal of stamp, and alter the same at pleasure. The use of a seal or stamp by the corporation on any corporate documents is not necessary. The corporation may use a seal or stamp, if it desires, but such use or nonuse shall not in any way affect the legality of the document.
(K) Shall have power to borrow money and contract debts when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable at a specified time or times, or payable upon the happening of a specified event or events, whether secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the shares of the capital stock of, or any bonds, securities or evidences of the indebtedness created by, any other corporation or corporations of the State of Nevada, or any other state or government, and, while owners of such stock, bonds, securities or evidences of indebtedness, to exercise all the rights, powers and privileges of ownership, including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its own capital stock, and use therefore its capital, capital surplus, surplus, or other property or fund.
(N) Shall have power to conduct business, have one or more offices, and hold, purchase, mortgage and convey real and personal property in the State of Nevada, and in any of the several states, territories, possessions and dependencies of the United States, the District of Columbia, and any foreign countries.
(O) Shall have power to do all and everything necessary and proper for the accomplishment of the objects enumerated in its certificate or articles of incorporation, or any amendment thereof, or necessary
or
incidental to the protection and benefit of the corporation, and, in general, to carry on any lawful business necessary or incidental to the attainment of the objects of the corporation, whether or not such business is similar in nature to the objects set forth in the certificate or articles of incorporation of the corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare or for charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited, or joint ventures, in connection with any lawful activities, as may be allowed by law.
FOURTH. That the total number of common stock authorized that may be issued by the Corporation is TWENTY FIVE THOUSAND (25,000) shares of stock without nominal par value and no other class of stock shall be authorized. Said shares may be issued by the corporation from time to time for such considerations as may be fixed by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the By-Laws of this Corporation, providing that the number of directors shall not be reduced to fewer than one (1).
The name and post office address of the first board of Directors shall be one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
---- -------------------
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
|
SIXTH. The capital stock, after the amount of the subscription price, or par value, has been paid in, shall not be subject to assessment to pay the debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
---- -------------------
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
|
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make, alter or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above its capital stock paid in; to authorize and cause to be executed, mortgages and liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one
(1) or more committees, each committee to consist of one or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
Corporation. Such committee, or committees, shall have such name, or names, as
may be stated in the By-Laws of the Corporation, or as may be determined from
time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the Stockholders holding stock entitling them to exercise at least a majority of the voting power given at a Stockholders meeting called for that purpose, or when authorized by the written consent of the holders of at least a majority of the voting stock issued and outstanding, the Board of Directors shall have power and authority at any meeting to sell, lease or exchange all of the property and assets of the Corporation, including its good will and its corporate franchises, upon such terms and conditions as its board of Directors deems expedient and for the best interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to subscribe for or receive additional shares of any class of stock of the Corporation, whether now or hereafter authorized, or any bonds, debentures or securities convertible into stock, but such additional shares of stock or other securities convertible into stock may be issued or disposed of by the Board of Directors to such persons and on such terms as in its discretion it shall deem advisable.
TWELFTH. No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer involving any act of omission of any such director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability
of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of this Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change or repeal any provision contained in the Articles of Incorporation, in the manner now or hereafter prescribed by statute, or by the Articles of Incorporation, and all rights conferred upon Stockholders herein are granted subject to this reservation.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the purpose of forming a Corporation pursuant to the General Corporation Law of the State of Nevada, do make and file these Articles of Incorporation, hereby declaring and certifying that the facts herein stated are true, and accordingly have hereunto set my hand this 11th day of December, 1996.
/s/ Robert Seligman ------------------- Robert Seligman |
STATE OF NEVADA )
) SS:
CARSON CITY )
|
On this 11th day of December, 1996 in Carson City, Nevada, before me, the undersigned, a Notary Public in and for Carson City, State of Nevada, personally appeared:
Robert Seligman
Known to me to be the person whose name is subscribed to the foregoing document and acknowledged to me that he executed the same.
/s/ Lisa Marie Vannucci
-----------------------
Notary Public
|
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the previously named Corporation.
December 11, 1996 /s/ Robert Seligman ----------------- ------------------- Date Executive Vice President |
EXHIBIT 3.02
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
DEMAND FINANCIAL INTERNATIONAL, LTD.
I, the undersigned, Antonio O. Garcia, President and
Secretary of Demand Financial International, Ltd., does hereby certify:
That the Board of Directors of said corporation at a meeting duly convened, held on the 10th day of March, 1999, adopted a Resolution to amend the original Articles of Incorporation as follows:
RESOLVED: That the number of shares of the corporation outstanding and
entitled to vote on an amendment to the Articles of
Incorporation is 1,000,000;
RESOLVED: That the authorized stock of the company be and hereby
amended as follows: 100,000,000 shares of Common Stock with
a par value of .001 per share;
RESOLVED: That the said changes(s) and amendment have been consented
to and approved by a majority vote of the stockholders
holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ Antonio O. Garcia
---------------------
President
/s/ Antonio O. Garcia
---------------------
Secretary
|
State of California
County of Orange
On this 11th day of May, 1999, personally appeared before me, a Notary Public, the following named individual, Antonio O. Garcia, President and Secretary of Demand Financial International, Ltd., who acknowledge that he executed the above instrument.
/s/ David C. Lauritzen
----------------------
Notary Public
|
EXHIBIT 3.03
ADOPTED: MARCH 13, 2001
BY-LAWS
OF
DEMAND FINANCIAL INTERNATIONAL, LTD.
ARTICLE I
OFFICES
1.1 Offices: The corporation may have other offices, either within or without the State of Nevada, at such place or places as the Board of Directors may from time to time appoint or the business of the corporation may require.
ARTICLE II
STOCKHOLDERS
2.1 Place of Stockholders' Meetings. All meetings of the stockholders of the corporation shall be held at such place or places, within or outside the State of Nevada as may be fixed by the Board of Directors from time to time or as shall be specified in the respective notices thereof.
2.2 Date and Hour of Annual Meetings of Stockholders. An annual meeting of stockholders shall be held each year at such place, either within or without the State of Nevada, and at such time and date as the Board of Directors, by resolution, shall determine and as set forth in the notice of the meeting. In the event the Board of Directors fails to so determine the time, date and place of meeting, the annual meeting of stockholders shall be held at the main headquarters of the corporation on a day in the month of May as shall be determined by the Board of Directors. If the date of the annual meeting shall fall upon a legal holiday, the meeting shall be held on the next succeeding business day.
2.3 Purposes of Annual Meetings. At each annual meeting, the stockholders shall elect the members of the Board of Directors for the succeeding year. At any such annual meeting any further proper business may be transacted.
2.4 Special Meetings of Stockholders. Special meetings of the stockholders or of any class or series thereof entitled to vote may be called by the President or by the Board of Directors, or at the request in writing by stockholders of record owning a majority of the issued and outstanding shares of Common Stock of the corporation, which request shall state the purpose of the proposed meeting, and may be held at such time and place, within or without the State of Nevada, as shall be stated in the notice of meeting.
2.5 Notice of Meetings of Stockholders. Except as otherwise expressly required or permitted by law, not less than ten days nor more than sixty days before the date of every stockholders' meeting the Secretary shall give to each stockholder of record entitled to vote at such meeting, written notice, served personally, by mail or by telegram, stating 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. Such notice, if mailed, shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the stockholder at his address for notices to such stockholder as it appears on the records of the corporation.
2.6 Quorum of Stockholders.
(a) Unless otherwise provided by the Articles of Incorporation or by law, at any meeting of the stockholders, the presence in person or by proxy of stockholders entitled to cast a majority of the votes thereat shall constitute a quorum.
(b) At any meeting of the stockholders at which a quorum shall be present, a majority of those present in person or by proxy may adjourn the meeting from time to time without notice other than announcement at the meeting. In the absence of a quorum, the officer presiding thereat shall have power to adjourn the meeting from time to time until a quorum shall be present. Notice of any adjourned meeting, other than announcement at the meeting, shall not be required to be given, except as provided in paragraph (d) below and except where expressly required by law.
(c) At any adjourned session at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting originally called but only those stockholders entitled to vote at the meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof, unless a new record date is fixed by the Board of Directors.
(d) If an adjournment is for more than sixty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
2.7 Chairman and Secretary of Meeting. The President, or, in his absence, a Vice President, shall preside at meetings of the stockholders. The Secretary or, in his absence, an Assistant Secretary, shall act as secretary of the meeting, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.
2.8 Voting by Stockholders. Except as may be otherwise provided by the Articles of Incorporation or these by-laws, at every meeting of the stockholders each stockholder shall be entitled to one vote for each share of stock standing in his name on the books of the corporation on the record date for the meeting. All elections and questions shall be decided by the vote of a majority in interest of the stockholders present in person or represented by proxy and entitled to vote at the meeting.
2.9 Proxies. Any stockholder entitled to vote at any meeting of stockholders may vote either in person or by proxy. Every proxy shall be in writing, subscribed by the stockholder or his duly authorized attorney-in-fact, but need not be dated, sealed, witnessed or acknowledged.
2.10 Inspectors. The election of directors and any other vote by ballot at any meeting of the stockholders shall be supervised by at least one inspector. Such inspectors shall be appointed by the Board of Directors in advance of the meeting. If the inspector so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.
2.11 List of Stockholders.
(a) For every meeting of stockholders' the Secretary shall prepare and make a complete list of the 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. The list shall also be produced and kept at the time and place of the meeting during the whole time of the meeting, and it may be inspected by any stockholder who is present.
(b) The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this Section 2.11 or the books of the corporation, or to vote in person or by proxy at any meeting of stockholders.
2.12 Procedure at Stockholders' Meetings. Except as otherwise provided by these by-laws or any resolutions adopted by the stockholders or Board of Directors, the order of business and all other matters of procedure at every meeting of stockholders shall be determined by the presiding officer. Not less than 15 minutes following the presentation of any resolution to any meeting of stockholders, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes. After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.
2.13 Action By Consent Without Meeting. Unless otherwise provided by the Articles of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting, 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 the minimum 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.
ARTICLE III
DIRECTORS
3.1 Powers of Directors. The property, business and affairs of the corporation shall be managed by its Board of Directors which may exercise all the powers of the corporation except such as are by the law of the State of Nevada or the Articles of Incorporation or these by-laws required to be exercised or done by the stockholders.
3.2 Number, Method of Election, Terms of Office of Directors. The number of directors shall be fixed from time to time by the Board of Directors but shall not be less than one or more than seven, such number to be fixed by resolution of the Board of Directors. Each Director shall hold office until the next annual meeting of stockholders and until his successor is elected and qualified, provided, however, that a director may resign at any time. Directors need not be stockholders.
3.3 Vacancies on Board of Directors; Removal.
(a) Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary. It will take effect at the time specified therein or, if no time is specified, it will be effective at the time of its receipt by the corporation. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.
(b) Any vacancy, or newly created directorship resulting from any increase in the authorized number of directors, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and any director so chosen shall hold office until the next annual election of directors by the stockholders and until his successor is duly elected and qualified or until his earlier resignation or removal.
(c) Removal. Any director may be removed with or without cause at any time by the affirmative vote of stockholders holding of record in the aggregate at least two-thirds of the outstanding shares of stock of the corporation, given at a special meeting of the stockholders called for that purpose.
3.4 Meetings of the Board of Directors.
(a) The Board of Directors may hold their meetings, both regular and special, either within or outside the State of Nevada.
(b) Regular meetings of the Board of Directors may be held at such time and place as shall from time to time be determined by resolution of the Board of Directors. No notice of such regular meetings shall be required. If the date designated for any regular meeting be a legal holiday, then the meeting shall be held on the next day which is not a legal holiday.
(c) The first meeting of each newly elected Board of Directors shall be held immediately following the annual meeting of the stockholders for the election of officers and the transaction of such other business as may come before it. If such meeting is held at the place of the stockholders' meeting, no notice thereof shall be required.
(d) Special meetings of the Board of Directors shall be held whenever called by direction of the President or at the written request of any one director.
(e) The Secretary shall give notice to each director of any special meeting of the Board of Directors by mailing the same at least two days before the meeting or by telegraphing, telexing, or delivering the same not later than the day before the meeting. Unless required by law, such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. Any and all business may be transacted at any meeting of the Board of Directors. No notice of any adjourned meeting need be given. No notice to or waiver by any director shall be required with respect to any meeting at which the director is present.
3.5 Quorum and Action. Unless provided otherwise by law or the Articles of Incorporation, a majority of the whole board shall constitute a quorum for the transaction of business; but if there shall be less than a quorum at any meeting of the Board, a majority of those present may adjourn the meeting from time to time. The vote of a majority of the directors present at any meeting at which a quorum is present shall be necessary to constitute the act of the Board of Directors.
3.6 Presiding Officer and Secretary of Meeting. The President, or, in his absence, any Vice President, or, in their absence a member of the Board of Directors selected by the members present, shall preside at meetings of the Board. The Secretary shall act as secretary of the meeting, but in his absence the presiding officer may appoint a secretary of the meeting.
3.7 Action by Consent Without 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 or proceedings of the Board or committee.
3.8 Action by Telephonic Conference. Members of the Board of Directors, or any committee designated by such board, may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such a meeting shall constitute presence in person at such meeting.
3.9 Committees.
(a) The Board of Directors may, by resolution or resolutions passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any such meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
(b) Any such committee, to the extent provided in the resolution or resolution of the Board of Directors, or in these by-laws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power of authority in reference to amending the Articles of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the by-laws of the corporation; and unless the resolution, these by-laws, or the Articles of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock.
3.10 Compensation of Directors. Directors shall receive such reasonable compensation for their service on the Board of Directors or any committees thereof, whether in the form of salary or a fixed fee for attendance at meetings, or both, with expenses, if any, as the Board of Directors may from time to time determine. Nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor.
3.11 Contracts.
(a) No contract or other transaction between this corporation and any other corporation shall be impaired, affected or invalidated, nor shall any director be liable in any way by reason of the fact that any one or more of the directors of this corporation is or are interested in, or is a director or officer, or are directors or officers of such other corporation, provided that such facts are disclosed or made known to the Board of Directors.
(b) Any director, personally and individually, may be a party to or may be interested in any contract or transaction of this corporation, and no director shall be liable in any way by reason of such interest, provided that the fact of such interest be disclosed or made known to the Board of Directors, and provided that the Board of Directors shall authorize, approve or ratify such contract or transaction by the vote (not counting the vote of any such director) of a majority of a quorum, notwithstanding the presence of any such director at the meeting at which such action is taken. Such director or directors may be counted in determining the presence of a quorum at such meeting. This Section shall not be construed to impair or invalidate or in any way affect any contract or other transaction which would otherwise be valid under the law (common, statutory or otherwise) applicable thereto.
ARTICLE IV
OFFICERS
4.1 Officers, Title, Elections, Terms.
(a) The elected officers of the corporation shall be a President, one or more Vice Presidents, a Treasurer and a Secretary, who shall be elected by the Board of Directors at its annual meeting following the annual meeting of the stockholders, to serve at the pleasure of the Board or otherwise as shall be specified by the Board at the time of such election and until their successors are elected and qualify. The Board of Directors may also elect a Chairman of the Board.
(b) The Board of Directors may elect or appoint at any time, and from time to time, additional officers or agents with such duties as it may deem necessary or desirable. Such additional officers shall serve at the pleasure of the Board or otherwise as shall be specified by the Board at the time of such election or appointment. Two or more offices may be held by the same person.
(c) Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors.
(d) Any officer may resign his office at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the corporation. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.
(e) The salaries of all officers of the corporation shall be fixed by the Board of Directors.
4.2 Removal of Elected Officers. Any elected officer may be removed at any time, either with or without cause, by resolution adopted at any regular or special meeting of the Board of Directors by a majority of the directors then in office.
4.3 Duties.
(a) President. The President shall be the principal executive officer of the Corporation and, subject to the control of the Board of Directors, shall supervise and control all the business and affairs of the Corporation. He shall, when present, preside at all meetings of the stockholders and of the Board of Directors. He shall see that all orders and resolutions of the Board of Directors are carried into effect (unless any such order or resolution shall provide otherwise), and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time.
(b) Vice President. Each Vice President, if any, shall have such powers and perform such duties as the Board of Directors may determine or as may be assigned to him by the President. In the absence of the President or in the event of his death, or inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the President and when so acting, shall have all the powers and be subject to all the restrictions upon the President.
(c) Treasurer. The Treasurer shall (1) have charge and
custody of and be responsible for all funds and securities of the Corporation;
(2) receive and give receipts for moneys due and payable to the Corporation from
any source whatsoever; (3) deposit all such moneys in the name of the
Corporation in such banks, trust companies, or other depositaries as shall be
selected by resolution of the Board of Directors; and (4) in general perform all
duties incident to the office of treasurer and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors. He
shall, if required by the Board of Directors, give a
bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine.
(d) Secretary. The Secretary shall (1) keep the minutes of the meetings of the stockholders, the Board of Directors, the Executive Committee (if designated), and all other committees, if any, of which a secretary shall not have been appointed, in one or more books provided for that purpose; (2) see that all notices are duly given in accordance with the provisions of these by-laws and as required by law; (3) be custodian of the corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all documents, the execution of which on behalf of the Corporation under its seal, is duly authorized; (4) keep a register of the post office address of each stockholder which shall be furnished to the Secretary by such stockholder; (5) have general charge of stock transfer books of the Corporation; and (6) in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the President or by the Board of Directors.
(e) Assistant Secretaries and Assistant Treasurers. At the request of the Secretary or in his absence or disability, one or more Assistant Secretaries designated by him or by the Board of Directors shall have all the powers of the Secretary for such period as he or it may designate or until he or it revokes such designation. At the request of the Treasurer or in his absence or disability, one or more Assistant Treasurers designated by him or by the Board of Directors shall have all the powers of the Treasurer for such period as he or it may designate or until he or it revokes such designation. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors.
ARTICLE V
CAPITAL STOCK
5.1 Stock Certificates.
(a) Every holder of stock in the corporation shall be entitled to have a certificate signed by, or in the name of, the corporation by the Chairman or the President or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the number of shares owned by him.
(b) If such certificate is countersigned by a transfer agent other than the corporation or its employee, or by a registrar other than the corporation or its employee, the signatures of the officers of the corporation may be facsimiles, and, if permitted by law, any other signature may be a facsimile.
(c) In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of issue.
(d) Certificates of stock shall be issued in such form not inconsistent with the Articles of Incorporation as shall be approved by the Board of Directors. They shall be numbered and registered in the order in which they are issued.
(e) All certificates surrendered to the corporation shall be canceled with the date of cancellation, and shall be retained by the Secretary, together with the powers of attorney to transfer and the assignments of the shares represented by such certificates, for such period of time as shall be prescribed from time to time by resolution of the Board of Directors.
5.2 Record Ownership. A record of the name and address of the holder of each certificate, the number of shares represented thereby and the date of issue thereof shall be made on the corporation's books. The corporation shall be entitled to treat the holder of any share of stock as the holder in fact thereof, and
accordingly shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as required by law.
5.3 Transfer of Record Ownership. Transfers of stock shall be made on the books of the corporation only by direction of the person named in the certificate or his attorney, lawfully constituted in writing, and only upon the surrender of the certificate therefor and a written assignment of the shares evidenced thereby. Whenever any transfer of stock shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the corporation for transfer, both the transferor and transferee request the corporation to do so.
5.4 Lost, Stolen or Destroyed Certificates. Certificates representing shares of the stock of the corporation shall be issued in place of any certificate alleged to have been lost, stolen or destroyed in such manner and on such terms and conditions as the Board of Directors from time to time may authorize.
5.5 Transfer Agent; Registrar; Rules Respecting Certificates. The corporation may maintain one or more transfer offices or agencies where stock of the corporation shall be transferable. The corporation may also maintain one or more registry offices where such stock shall be registered. The Board of Directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of stock certificates.
5.6 Fixing Record Date for Determination of Stockholders of Record. The Board of Directors may fix, in advance, a date as the record date for the purpose of determining stockholders entitled to notice of, or to vote at, any meeting of the stockholders or any adjournment thereof, or the stockholders entitled to receive payment of any dividend or other distribution or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or to express consent to corporate action in writing without a meeting, or in order to make a determination of the stockholders for the purpose of any other lawful action. Such record date in any case shall be not more than sixty days nor less than ten days before the date of a meeting of the stockholders, nor more than sixty days prior to any other action requiring such determination of the stockholders. A determination of stockholders of record entitled to notice 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 the adjourned meeting.
5.7 Dividends. Subject to the provisions of the Articles of Incorporation and the Nevada General Corporation Law, the Board of Directors may, out of funds legally available therefor at any regular or special meeting, declare dividends upon the capital stock of the corporation as and when they deem expedient. Before declaring any dividend there may be set apart out of any funds of the corporation available for dividends, such sum or sums as the Board of Directors from time to time in their discretion deem proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purposes as the Board of Directors shall deem conducive to the interests of the corporation.
ARTICLE VI
SECURITIES HELD BY THE CORPORATION
6.1 Voting. Unless the Board of Directors shall otherwise order, the President, any Vice President, the Secretary or the Treasurer shall have full power and authority, on behalf of the corporation, to attend, act and vote at any meeting of the stockholders of any corporation in which the corporation may hold stock, and at such meeting to exercise any or all rights and powers incident to the ownership of such stock, and to execute on behalf of the corporation a proxy or proxies empowering another or others to act as aforesaid. The Board of Directors from time to time may confer like powers upon any other person or persons.
6.2 General Authorization to Transfer Securities Held by the Corporation.
(a) Any of the following officers, to wit: the President, any Vice President and the Treasurer shall be, and they hereby are, authorized and empowered to transfer, convert, endorse, sell, assign, set over and deliver any and all shares of stock, bonds, debentures, notes, subscription warrants, stock purchase warrants, evidence of indebtedness, or other securities now or hereafter standing in the name of or owned by the corporation, and to make, execute and deliver, under the seal of the corporation, any and all written instruments of assignment and transfer necessary or proper to effectuate the authority hereby conferred.
(b) Whenever there shall be annexed to any instrument of
assignment and transfer executed pursuant to and in accordance with the
foregoing paragraph (a), a certificate of the Secretary of the corporation in
office at the date of such certificate setting forth the provisions of this
Section 6.2 and stating that they are in full force and effect and setting forth
the names of persons who are then officers of the corporation, then all persons
to whom such instrument and annexed certificate shall thereafter come, shall be
entitled, without further inquiry or investigation and regardless of the date of
such certificate, to assume and to act in reliance upon the assumption that the
shares of stock or other securities named in such instrument were theretofore
duly and properly transferred, endorsed, sold, assigned, set over and delivered
by the corporation, and that with respect to such securities the authority of
these provisions of the by-laws and of such officers is still in full force and
effect.
ARTICLE VII
MISCELLANEOUS
7.1 Signatories. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
7.2 Seal. The seal of the corporation shall be in such form and shall have such content as the Board of Directors shall from time to time determine.
7.3 Notice and Waiver of Notice. Whenever any notice of the time, place or purpose of any meeting of the stockholders, directors or a committee is required to be given under the law of the State of Nevada, the Articles of Incorporation or these by-laws, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the holding thereof, or actual attendance at the meeting in person or, in the case of any stockholder, by his attorney-in-fact, shall be deemed equivalent to the giving of such notice to such persons.
7.4 Amendment of By-Laws.
(a) By Board of Directors. The by-laws of the corporation
may be altered, amended or repealed or new by-laws may be made or adopted by the
Board of Directors at any regular or special meeting of the Board; provided that
paragraph (c) of Section 3.3 and Section 7.4(b) of these By-Laws may be altered,
amended or repealed only by action of the stockholders acting pursuant to
Section 7.4(b) hereof.
(b) By Stockholders. The by-laws of the corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the stockholders represented and entitled to vote upon the election of directors, at any meeting at which a quorum is present.
7.5 Indemnity. The corporation shall indemnify its directors, officers, employees or agents to the fullest extent allowed by law.
7.6 Fiscal Year. Except as from time to time otherwise determined by the Board of Directors, the fiscal year of the corporation shall end on December 31.
EXHIBIT 4.1
COMMON STOCK COMMON STOCK
DEMAND FINANCIAL INTERNATIONAL, INC.
NUMBER NUMBER OF SHARES
---------------- -------------------
|
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
Authorized Common Stock, 25,000,000 $.001 Par Value
CUSIP# 24802P 10 4
THIS CERTIFIES THAT
Is the recordholder of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF $.001 PAR VALUE EACH OF
DEMAND FINANCIAL INTERNATIONAL, INC.
Hereinafter designated the "Corporation", transferable on the books of the Corporation upon surrender of this certificate properly endorsed or assigned. This certificate and the shares represented hereby are subject to the laws of the State of Nevada, and to the Certificate of Incorporation and Bylaws of the Corporation, as now and or hereafter amended. This certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.
A statement of the rights, preferences, privileges and restrictions of each class of stock or series thereof may be obtained upon request without charge, from the Corporation at its principal executive office.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
Dated:
SECRETARY PRESIDENT