SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM SB-2
Registration Statement
Under the Securities Act of 1933
MailTec, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 561499 20-0754724
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
W. Ross C. Corace
469 S. Cherry Street, #207 469 S. Cherry Street, #207
Denver, CO 80246 Denver, CO 80246
(303) 753-6512 (303) 753-6512
(Address, and telephone number (Name, address and telephone number
of principal executive offices) of agent for service)
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Copies to:
Ms. Jody Walker ESQ.
7841 South Garfield Way
Littleton, CO 80122
Phone 303-850-7637 Fax 303-220-9902
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes
effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box [x]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF AMOUNT PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE BEING MAXIMUM MAXIMUM REGISTRATION
REGISTERED REGISTERED OFFER PRICE AGGREGATE FEE
PER SHARE OFFER PRICE (4)
(4)
Common Stock(1) 1,250,000 $2.50 $3,125,000 $367.81
Common Stock(2) 73,064 $2.50 182,660 21.50
Common Stock(3) 150,000 $2.50 375,000 44.14
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Total $3,682,660 $433.45
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(1) Represents common stock being sold in this offering.
(2) Represents common stock to be distributed to shareholders of
Oakwood Enterprises, Inc., an unaffiliated corporation.
(3) Represents common stock being registered on behalf of selling
security holder.
(4)(5) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(a), (c) and (g) under the Securities Act of
1933, as amended.
The registrant amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the SEC, acting in accordance with Section 8(a), may determine.
Preliminary Prospectus Dated August 4, 2005. SUBJECT TO COMPLETION
Up to a Maximum of 1,250,000 Common Shares,
73,064 Common Shares to be distributed
to Shareholders of Oakwood Enterprises, Inc. and
150,000 Common Shares on behalf of Selling Security Holder
$3,125,000
MailTec, Inc.
MailTec is registering 1,250,000 common shares for the aggregate offering price of $3,125,000 or $2.50 per common share.
As more fully set forth herein, Oakwood Enterprises, Inc., an unaffiliated corporation, proposes to distribute as soon as practicable after the effective date of this registration statement as a dividend to its shareholders of record at the close of business on May 31, 2005, one common share for each 7.23 Oakwood common share held by each Oakwood shareholder on the record date. This distribution was agreed to based on arms length negotiations between the directors and principal shareholders of Oakwood and MailTec. Oakwood will distribute 73,064 common shares owned by Oakwood, which represents 4.43% of MailTec's outstanding common shares on the record date. The distribution will be made by Oakwood without the payment of any consideration by its shareholders. The expenses of the distribution are estimated to be $25,933 and are to be paid by MailTec.
Oakwood may be deemed to be an underwriter under the Securities Act of 1933.
The offering will commence on the effective date of this prospectus and will terminate on or before December 31, 2006.
The selling security holder offering will commence on the termination of the primary offering and will terminate on or before December 31, 2007. The selling shareholders will sell their common shares at $2.50 per common share until our common shares are quoted on the OTC Electronic Bulletin Board. Thereafter, the common shares may be priced at prevailing market prices or privately negotiated prices.
We will not receive any proceeds from the sale of any of these common shares.
Prior to the date hereof, there has been no trading market for our common shares.
We will sell the common shares ourselves and do not plan to use underwriters or pay any commissions. We will be selling our common shares using our best efforts and no one has agreed to buy any of our common shares. There is no minimum amount of common shares we must sell so no money raised from the sale of such common shares will go into escrow, trust or another similar arrangement.
Consider carefully the risk factors beginning on page 8 in this prospectus.
Neither the SEC nor any state securities commission has approved these common shares or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Proceeds of the Offering
Per Common Share Total
Offering Price $2.50 $3,125,000
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Proceeds to MailTec, before expenses $2.50 $3,125,000
The amount as shown in the preceding table does not reflect the deductions of (1) general expenses payable by MailTec and (2) fees payable in connection with legal and accounting expenses incurred in this offering. These expenses are estimated to be $25,933 if the total offering amount is obtained.
TABLE OF CONTENTS
Prospectus Summary 7
Risk Factors 8
- We cannot offer any assurance as to our future financial results
- Our auditors have expressed a going concern issue
- We do not have an active market for our securities
- We do not meet the requirements for our stock to be
quoted on NASDAQ, AMEX, or any other senior exchange
- Our cash balances held with certain banks may exceed the
insurance limits
- We are dependent on W. Ross C. Corace and key management personnel
- We are in an intensely competitive industry
- Your vote may not affect the outcome of any shareholder vote
- Strikes, work stoppages and slowdowns by our employees can
negatively affect our results of operations
- Our failure to comply with applicable government regulation
- Economic and other conditions of our business, and a major target
for our future growth
- Increases in aviation and motor fuel prices can negatively affect
- Our operating results are subject to cyclical and seasonal
fluctuations
Forward Looking Statements 12
The Distribution 13
Selling Security Holder 14
Business Operations 15
Use of Proceeds 21
Dilution 22
Dividend Policy 23
Determination of Offering Price 23
Management's Discussion and Analysis of Financial
Condition and Results of Operations 23
Management 25
Security Ownership of Certain Beneficial Owners
and Management 28
Certain Relationships and Related Transactions 29
Description of Capital Stock 29
Shares Eligible for Future Sale 30
Plan of Distribution 31
Disclosure of Commission Position on Indemnification 33
for Securities Act liabilities
Market for Common Stock and Related Stockholder Matters 33
Experts 33
Legal Proceedings 34
Legal Matters 34
Where You Can Find More Information 34
Financial Statements 34
Prospectus Cover Page 49
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Information Not Required in Prospectus 61 Exhibits 64 Undertakings 65 Signatures 67 |
PROSPECTUS SUMMARY
To understand this offering fully, you should read the entire prospectus carefully, including the risk factors beginning on page 8 and the financial statements beginning on page 34.
Operations. MailTec will provide bulk mail expediting
to a number of established businesses
that utilize bulk mailings in their
operations such as financial
institutions, health organizations and
government.
MailTec offers a combined service whereby
MailTec picks up, sorts and transports
mail into the United States Postal
Service Sectional Center Facility closest
to the ultimate delivery point.
MailTec will maintain a secured mailing
facility in Denver, Colorado that is
prepared to handle flat mail drop
shipping in the Rocky Mountain region.
The Offering MailTec hereby offers up to 1,250,000 common shares at $2.50 per common share.
There is no minimum investment and no
minimum offering amount.
Common stock
Outstanding 1,651,064
Common shares to be
Outstanding after
Offering 2,901,064
Percent of common shares
owned by current
shareholders after
maximum offering 57%
Gross Proceeds After
Maximum Offering $3,125,000
Use of Net Proceeds The net proceeds, if the total offering
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amount is obtained, would be $3,099,111 and will be used for corporate operations and possible expansion as follows:
Officer Salaries $ 90,000 Non-Affiliate Salaries 36,000 Office Expense 20,000 Legal and Accounting 20,000 |
Rent 36,000
Workman's Compensation 36,852
Liability Insurance 12,000
License & Fees 4,000
Trade Organizations 5,000
Vans 60,000
Sorting Machines 360,000
Postal Software 150,000
Expansion Capital 1,662,500
Working Capital 606,759
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Total Net Proceeds $ 3,099,111
The Distribution
Distributing Corporation Oakwood Enterprises, Inc., a Nevada
corporation
Securities Being Distributed
By Oakwood 73,064 common shares
Purpose of Oakwood
Distribution To enhance MailTec's ability to raise
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additional capital, if necessary, in the future
Oakwood Distribution
Ratio One common share for approximately every
7.23 shares of Oakwood common stock owned
of record on May 31, 2005, the record
date.
Use of Proceeds from
Oakwood Distribution The securities are being distributed to
holders of Oakwood common stock as a
dividend and neither MailTec nor Oakwood
will receive any cash or other proceeds
in connection with the Distribution
Market for our
common stock There is no market for our common stock
RISK FACTORS
MailTec's business is subject to numerous risk factors, including the following.
1. We cannot offer any assurance as to our future financial results. You may lose your entire investment.
We have not received substantial income from operations to date and future financial results are uncertain. We cannot assure you that MailTec can operate in a profitable manner. We have an accumulated
deficit of $(180,414) as of March 31, 2005. Even if we obtain future revenues sufficient to expand operations, increased production or marketing expenses would adversely affect liquidity of MailTec.
2. Our auditors have expressed a going concern issue that notes our need for capital and/or revenues to survive as a business. You may lose your entire investment.
Our auditors have expressed reservations concerning our ability to continue as a going concern. We have not yet received any substantial revenues and will continue to incur losses. You may lose your entire investment.
3. We do not have an active market in our securities. If our common stock has no active trading market, you may not be able to sell your common shares at all.
We do not have an active public market for our common shares. We cannot assure you that an active public market will ever develop. Consequently, you may not be able to liquidate your investment in the event of an emergency or for any other reason.
4. We do not meet the requirements for our stock to be quoted on NASDAQ, American Stock Exchange or any other senior exchange and even though our stock is quoted on the OTC Bulletin Board, the tradability in our stock will be limited under the penny stock regulation.
The liquidity of our common stock would be restricted even after public listing if MailTec's common stock falls within the definition of a penny stock.
Under the rules of the Securities and Exchange Commission, if the price of MailTec's common stock on the OTC Bulletin Board is below $5.00 per share, MailTec's common stock will come within the definition of a "penny stock." As a result, it is possible that MailTec's common stock may become subject to the "penny stock" rules and regulations. Broker- dealers who sell penny stocks to certain types of investors are required to comply with the Commission's regulations concerning the transfer of penny stock. These regulations require broker-dealers to:
- Make a suitability determination prior to selling penny stock to
the purchaser;
- Receive the purchaser's written consent to the transaction; and
- Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker/dealers to sell MailTec's common stock, and may affect the ability to resell MailTec's common stock.
5. Our cash balances held with certain banks may exceed the insurance limits. Our liquidity may be negatively affected if these institutions should fail.
At March 31, 2005, we maintained cash balances with U.S. Bank. Balances are insured up to $100,000 by the Federal Deposit Insurance Corporation. At times, balances may exceed such insurance limits. Our liquidity may be negatively affected if these institutions should fail.
6. We are dependent on our officers. The failure to attract and retain the necessary personnel could have a materially adverse effect on our business, operations and financial condition.
Our success is dependent upon, among other things, the services of W. Ross C. Corace, CEO, president and director and Steven S. Martella, an officer and director. The loss of their services, for any reason, could have a material adverse effect on our business, operations and financial condition. We do not have key-man life insurance policy for Messrs. Corace or Martella. The expansion of our business will place further demands on existing management and future growth. Profitability will depend, in part, on our ability to hire and retain the necessary personnel to operate our business. There is no certainty that we will be able to identify, attract, hire, train, retain and motivate other highly skilled technical, administrative, managerial, marketing and customer service personnel. Competition for such personnel is intense and there is no certainty that we will be able to successfully attract, integrate or retain sufficiently qualified personnel. The failure to attract and retain the necessary personnel could have a materially adverse effect on our business, operations and financial condition.
7. We are in an intensely competitive industry. There are numerous competitors. We may not be able to compete on price with these competitors.
We compete with many companies and services on a local, regional and national basis. Our competitors include the postal services of the U.S., various motor carriers, express companies, freight forwarders, air couriers and others. Postal services may be able to obtain government subsidies or to subsidize operating costs through profits from their monopoly operations. Our industry is undergoing rapid consolidation, and the combining entities are competing aggressively for business at low rates. If we are unable to compete on price with these competitors as they attempt to increase their market share, our business will be materially adversely affected.
We will compete primarily in the United States. As our domestic competitors grow and consolidate, we will face more significant competitive challenges.
8. Your vote may not affect the outcome of any shareholder vote since our principal stockholder will retain approximately 46.53% of our outstanding stock.
Upon the completion of this offering, W. Ross C. Corace, an officer, director and principal shareholder, will retain approximately 46.53% of our outstanding stock, assuming all of the 150,000 common shares being registered on his behalf are sold in this offering. For instance, Mr.
Corace may be able to control the outcome of all stockholder votes, including votes concerning director elections, charter and by-law amendments and possible mergers, corporate control contests and other significant corporate transactions.
9. Strikes, work stoppages and slowdowns by our employees can negatively affect our results of operations
Our business depends to a significant degree on our ability to avoid strikes and other work stoppages by our employees. As our competitors have grown in size and strength, we face permanent loss of customers if we are unable to provide uninterrupted service.
We cannot assure you as to the results of a future unionization or negotiations of future collective bargaining agreements, whether future collective bargaining agreements will be negotiated without service interruptions or the possible impact of future collective bargaining agreements on our financial condition and results of operations. We cannot assure you that strikes will not occur in the future in connection with labor negotiations or otherwise. Any prolonged strike or work stoppage could have a material adverse effect on our results of operations and financial condition.
10. Our failure to comply with applicable government regulation could result in substantial fines or possible revocation of our authority to conduct operations.
Our operations are subject to a number of complex and stringent aviation, transportation, environmental, labor, employment and other laws and regulations. These laws and regulations generally require us to maintain and comply with a wide variety of certificates, permits, licenses and other approvals. Our failure to maintain required certificates, permits or licenses, or to comply with applicable laws, ordinances or regulations, could result in substantial fines or possible revocation of our authority to conduct our operations.
We cannot assure you that existing laws or regulations will not be revised or that new laws or regulations, which could have an adverse impact on our operations, will not be adopted or become applicable to us. We also cannot assure you that we will be able to recover any or all increased costs of compliance from our customers or that our business and financial condition will not be materially and adversely affected by future changes in applicable laws and regulations.
11. Economic and other conditions in the international markets in which we operate can affect demand for our services and our results of operations
A key future component of our business, and a major target for our future growth, will be our operations outside of the United States. If we are unable to compete successfully in these markets, our results of operations will be adversely affected.
In many countries, we face vigorous competition from government-owned or sponsored postal services that are able to price their services extremely competitively due to their ability to obtain government subsidies or to subsidize operating costs through profits from their monopoly operations.
Operations in international markets also present currency exchange and inflation risks. In some countries where we operate, economic and monetary conditions could affect our ability to convert our earnings to United States dollars or to remove funds from those countries. We may experience adverse tax consequences as we attempt to repatriate funds to the United States from other countries.
12. Increases in aviation and motor fuel prices can negatively affect our results of operations
The entities that we utilize to forward our mail to zip codes out of our region require significant quantities of gasoline, diesel fuel and jet fuel for our aircraft and delivery vehicles. We therefore are exposed to commodity price risk associated with variations in the market price for petroleum products. Competitive and other pressures may prevent us from passing these costs on to our customers. We cannot assure you that our supply of these products will continue uninterrupted, that rationing will not be imposed or that the prices of, or taxes on, these products will not increase significantly in the future. Increases in prices that we are unable to pass on to our customers will adversely affect our results of operations.
13. Our operating results are subject to cyclical and seasonal fluctuations
We serve numerous industries and customers that experience significant fluctuations in demand based on economic conditions and other factors beyond our control. Demand for our services could be materially adversely affected by downturns in the businesses of our customers.
Based on in-house research, we will experience our best operating results in the second and fourth quarters of each year. Shipping activity is generally lowest during the first quarter and weather conditions also can adversely affect first quarter operating results. Shipping activity is generally highest in the fourth quarter as a result of the holiday season.
FORWARD LOOKING STATEMENTS
The statements contained in this prospectus that are not historical fact are forward-looking statements which can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. We have made the forward-looking statements with management's best estimates prepared in good faith.
Because of the number and range of the assumptions underlying our projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond our reasonable control, some of the assumptions inevitably will not materialize and unanticipated events and circumstances may occur subsequent to the date of this prospectus.
These forward-looking statements are based on current expectations, and we will not update this information other than required by law. Therefore, the actual experience of MailTec, and results achieved during the period covered by any particular projections and other forward-looking statements should not be regarded as a representation by MailTec, or any other person, that we will realize these estimates and projections, and actual results may vary materially. We cannot assure you that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate.
THE DISTRIBUTION
Oakwood Enterprises, Inc. On February 10, 2004, MailTec entered into a one-year verbal consulting agreement with Oakwood to assist MailTec in its organizational formation, identification of management and other consulting necessary to commence operations. Pursuant to the consulting agreement, Oakwood received 73,064 MailTec common shares.
After careful study and review, the board of directors of Oakwood determined that it would be in the best interests of Oakwood and its shareholders to distribute all of MailTec's common shares held by Oakwood to its shareholders. In addition, MailTec and Oakwood determined that such a distribution would be in the best interests of MailTec. Oakwood shareholders may realize economic benefits from the sale of any common shares obtained in the distribution if a market for MailTec's common stock develops, although there can be no assurances that any such market will result.
Oakwood and MailTec believe that the distribution to Oakwood's shareholders, which will result in an increased shareholder base of MailTec, will be an advantage to MailTec at such time as MailTec may require additional capital and/or make application to NASDAQ. The increased shareholder base of approximately 490 shareholders represents an increase in potential future purchasers of additional stock in any subsequent offering or in the stock market if these individuals are satisfied with the performance of MailTec's operations.
The estimated cost of the distribution is $25,933 that will be paid by MailTec. Accordingly, after obtaining the approval of the independent directors on Oakwood's Board of Directors, the Board of Directors of Oakwood declared a dividend pursuant to which, as soon as practicable after the effective date of this registration statement 73,064 common shares of MailTec, constituting all of the common shares owned by Oakwood, will be distributed to the shareholders of record of Oakwood as of May 31, 2005 on the basis of one common share for each 7.23 shares of Oakwood common stock held.
The common shares are being distributed by Oakwood as a dividend to holders of Oakwood common stock and neither MailTec nor Oakwood will receive any cash or other proceeds in connection with the distribution. No fractional common shares will be issued. Oakwood had approximately 490 shareholders of record on the record date.
In order to comply with certain provisions of Nevada corporate law, on June 15, 2005, the payment date, Oakwood deposited the common shares to be distributed with Corporate Stock Transfer. Corporate Stock will hold such common shares for the benefit of Oakwood shareholders on the record date. The terms of the agreement with Corporate Stock provides that the common shares will be released promptly after the registration statement to which this prospectus relates is declared effective by the Commission. However, if the registration statement is not declared effective prior to July 31, 2006, then, unless such date is changed by notice to Corporate Stock from MailTec, Corporate Stock shall return all common shares to Oakwood without effecting the distribution.
SELLING SECURITY HOLDER
In addition to the primary offering 14by MailTec and registration of common shares being distributed by Oakwood, this prospectus relates to the resale of 150,000 shares of common stock by the selling security holder.
The selling security holder will sell his common share at $2.50 per common share until our common shares are quoted on the OTC bulletin board. Thereafter, the common shares may be priced at prevailing market prices or privately negotiated prices.
If the selling security holder engages in short selling activities, he must comply with the prospectus delivery requirements of Section 5(b)(2) of the Securities Act.
Pursuant to Regulation M of the Securities Act, the selling security holder will not, directly or indirectly, bid for, purchase, or attempt to induce any person to bid for or purchase their common shares during the offering except for offers to sell or the solicitation of offers to buy and unsolicited purchases that are not effected from or through a broker or dealer, on a securities exchange or through an inter-dealer quotation system or electronic communications network.
The table below sets forth information with respect to the resale of shares of common stock by the selling security holder. We will not receive any proceeds from the resale of common stock by the selling security holder for common shares currently outstanding.
The amount and percentage owned after the offering assumes the sale of all of the common shares being registered on behalf of the selling security holder.
Name Amount Total Shares % Owned Number of % Owned
Being Owned Prior to Shares Owned After
Registered Currently offering After offering offering
W. Ross C. Corace 150,000 1,500,000 92.25% 1,350,000 46.94%
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W. Ross C. Corace is an officer and director of MailTec.
BUSINESS OPERATIONS
Operations.
MailTec will provide bulk mail expediting to a number of established businesses that utilize bulk mailings in their operations such as financial institutions, health organization and government.
MailTec's core business will offer a method of flat mail drop shipping, which is an alternative to traditional First-Class mailing methods and an enhancement to Pre-Sort standard class mail. Due to lengthy transit times, traditional First-Class mailing methods have been used to replace bulk mailings. Although First-Class mail meets more service requirements, it also results in high postage costs, whereas MailTec's similar services will result in savings of up to 30% off First-Class postage.
We will use all options provided by the U.S. Postal Service to expedite customer mailings. We use presort standard - drop shipments. We will deliver our mail to the Denver Sectional Center Facility and, for a discounted price, the USPS will forward our priority bagged mail to the post office facility that will deliver. The USPS offers further discounts due to volume, weight and sorting. The standard presort rate discount begins with a minimum of 200 pieces or fifty pounds of presorted flats. The weight classes are broken down into two main categories - 3.3 ounces or less and more than 3.3 ounces. Management estimates that the bulk of our business will consist of handling basic irregular sized flats defined as no larger than 15 3/4" x 12" x 1 1/4" weighing 3 to 16 ounces. The USPS offers further discounts as volume increases for both basic presorted flats and for automated presorted flats. Within the next twelve months, MailTec has no plans to become automated.
Our revenue will be based on difference between the amount paid by the customer and our actual cost. The greater the discounts we receive due to volume, weight and sorting, the higher profit percentage we will obtain. Prices charged to our customers will be separately negotiated and will vary based on their volume and their actual cost to mail each piece calculated as postage plus overhead.
Services.
MailTec offers a combined service whereby MailTec picks up, sorts and transports mail into the destination United States Postal Service facility closest to the ultimate delivery point. The USPS receives and delivers the mail to the end user through its local carrier network. The customer experiences First-Class comparable transit times at a savings of up to 30% off First-Class postage.
MailTec focuses on three types of mail that qualify for its services:
- Flat Mail: weight 3.3 ounces to 15.99 ounces
- Bound Printed matter: weight 16 ounces to 15 pounds
- Irregulars: weight 3.3 ounces to 15.99 ounces
Qualification of the mail is key to utilizing the MailTec Service to its fullest potential. As a result, MailTec will employ certified mailing professionals to assist in identifying customer opportunities.
The types of flat mail that qualify for MailTec's services are annual reports, booklets, brochures, CD's, course materials, college correspondence, directories, enrollment packets, financial-aid information, insurance benefits, license plates, media quides, t-shirts and videos.
MailTec will offer a highly secure solution for sensitive mailing materials. MailTec's expedited mail service includes bonded drivers, and sealed, security-tagged containers. Each flat receives its own identification number and does not enter a US Postal Facility until the end of the process, when MailTec can provide confirmation of induction and final delivery.
We intend for the savings in postage costs to the customer to only begin the list of benefits offered through MailTec expedited services. Accountability of business communication remains the first priority for the customer and MailTec is committed to the continuous development of value-added services not available through traditional mailing methods.
Other benefits will include:
- Flexible pick-up schedules
- Bonded transportation professionals
- Address verification and correction
- Secured processing environment
- Flats automation
- Progressive tracking to USPS destination facilities
- Return Endorsements
- Transportation networks
- Enhanced disaster recovery capabilities
- Proprietary manifest software
- Advanced technology
- Customized reporting
- Coast-centered billing
- Web access to shipping data
MailTec will have a web-based management and tracking reporting system providing the customer quick access to their shipment data, allowing them to access the reports necessary for high volume distribution management. Samples of available data include processing dates, piece counts, weights, postage, savings, distribution type, and destination locations. These reports are available in both summary and detail formats. Our ability to track an individual piece of mail by a unique identification number serves as a powerful tool for customer service departments, allowing for immediate access to the status of a current shipment, eliminating costly duplicate mailings.
MailTec intends to place its highest priority on the development of an extensive regional ground transportation network, ensuring the customer the most direct induction into the USPS destination facility. MailTec intends to become a recognized "National Account" of the United States Postal Service, Business Partner Segment. This status is maintained under strict USPS requirements and each year of renewal solidifies the intent of the USPS to continue to develop joint marketing programs and offer new products.
MailTec Process.
MailTec will offer flexible and multiple pick-up schedules to accommodate the customer's daily work-shift requirements. A team of drivers will be compelled to adhere to a high level of service standards and operating procedures.
MailTec will receive its product in a secured mailing facility located in Denver, Colorado. Upon induction, the mail is staged and segregated for immediate processing. Each piece is weighted, addresses are verified, assigned a company tracking number through a proprietary manifest system and the indicia are applied. Once the mail enters MailTec's system, the primary sort segregates the mail according to zip codes and is then prepared for USPS induction.
MailTec will utilize the air network of regional airlines, UPS, Federal Express and Airborne Express. After initial processing and sorting at MailTec's processing facility, mail for distribution is inventoried, containerized and sealed in specially designed MailTec transportation containers. At this point, each container is assigned a tracking number from the entity (UPS, FedEx, etc) transporting to the nearest USPS facility as well the status of the product may be monitored at any time. MailTec's regional ground network ensures that the mail received at the facility is transported and inducted into the appropriate USPS destination facility within 12 to 24 hours. As part of the USPS program, MailTec will be subject to stringent requirements, which are audited at the site of sorting and verified at each USPS Destination Facility.
As part of MailTec's service, security measures have been developed by team experts and will remain standard operating procedure relative to the transport of products via ground and air cargo services.
For highly sensitive material, MailTec will provide bonded drivers and containers that can be sealed and security tagged; ensuring that products inbound to MailTec's facility will not be disturbed and that any tampering will be immediately detected. MailTec will assign an identification number to each individual piece entering the system. Once accumulated, mail is securely containerized, sealed and assigned a tracking number in the transport system before delivery to MailTec's facility. All personnel who have contact with MailTec's processed products will have been subject to rigorous screening that includes background and criminal checks.
Location and Facility.
MailTec's facility will be located within Metro-Denver. The facility has not yet been identified. The facility will consist of a building of approximately 4,000 square feet, which will be needed for mail sorting. The facility will be filled with different sorting bins that will be differentiated by the last three digits of zip codes. The location, to be determined, will not affect the amount of business as long as the facility is established within the metro vicinity.
Equipment and Software.
Until MailTec's mail handling exceeds 2,000 pieces per day, MailTec will only need two personal computers, a scale and a small printer. The software that MailTec will purchase will provide address verification and correction, tracking and on-line reporting.
Market Overview and Strategy.
The flat mail market segment continues to be a main revenue contributor within the mail industry. According to the USPS Flats Summit, flat mail represents 25% of total mail volume. Flats amounted to 51.6 billion pieces delivered last year worth $14.6 billion to the USPS in revenue. (USPS Annual Report).
Management is of the opinion that society has become very centered upon
speed, accountability and affordability, which is also evident in the
business world. Based on in-house study, management believes that
without the mail industry, millions of customers would not be reached
and would ultimately be lost. However, obtaining market share will be
difficult because MailTec must prove that we are timely, accountable
and affordable customers may be hesitant to initially try a new
company. Therefore, MailTec must prove to customers through
consistent measures that we will
- deliver in 2 to 5 days nationwide,
- save customers up to 30% off First-Class postage,
- provide flexible pick up schedules,
- have thorough customer tracking,
- have content assurance using variable weight manifesting to
weigh each piece individually, and
- perform custom mail prep at our processing center locally
located in Denver, Colorado.
MailTec marketing strategy will be to obtain the highest standards of customer satisfaction, and as a result will gain customer confidence and loyalty.
Customer Profile
MailTec's customers will consist of anyone who desires the need for
reliable and affordable mail expediting. The majority of the business
will come from:
- large companies,
- financial institutions,
- colleges,
- government agencies,
- insurance companies,
- travel agencies,
- doctors' offices etc.;
whom may need to mail material such as:
- annual reports,
- booklets,
- brochures,
- CD's,
- course materials,
- correspondence,
- directories,
- enrollment packets,
- license plates,
- media guides,
- t-shirts, and
- videos, etc.
As of the date of this prospectus, MailTec will be the city's only local processing facility. The major benefit of this is that MailTec will essentially have a one to two-day head start over its competition that may need up to two days to reach their processing facilities.
According to the demographics provided by the Colorado Demography
Section (2003), the average annual population percent change for
Colorado from 2000 to 2005 is projected at 1.6%. The 2000 state
population for Colorado was 4,335,540 of which the County of Denver
consisted of 555,782.
Advertising & Promotion
MailTec will establish itself in the Denver market by using a variety of marketing programs to successfully introduce MailTec to customers. The primary marketing tool will be the development of our Website. The Website will allow customers to visit with MailTec and learn about the services, prices, benefits, and operating procedures. The Website will also inform customers how to contact MailTec.
Other forms of marketing will be established through promotional brochures, which again will introduce MailTec and explain the services and benefits offered. MailTec will also pursue direct mailing to
viable businesses that may use MailTec's services. Another marketing tool will be the visibility of MailTec's delivery trucks that will increase customer awareness.
Competition
MailTec has several main competitors. These competitors include United States Postal Service, UPS/RMX, Federal Express Corporation, SmartMail Holdings LLC and Airborne Express. However, none of these competitors have a processing facility located in Denver, Colorado.
In order to compete effectively, we may need to expend significant internal resources for marketing to increase our market share.
The above-described companies may have a competitive advantage because they have greater access to content, maintain billing relationships with more customers and have access to established distribution networks.
These companies have an established customer base and instant market recognition. These competitors have greater access to the consumer. For the year ended February 28, 2004, Federal Express had revenues of $17,383,000,000. For the year ended December 31, 2004, United Parcel Service had total revenue of $36,582,000,000. We have not yet generated any revenue from our business model compared to significant revenue generated by these competitors.
If new competitors seized our product ideas and e-commerce business model and produced competing web sites with similar product matrixes, our ability to generate revenue would be negatively affected. Additionally, these new competitors could be better capitalized and capture a larger market share of our intended market.
Employees
W. Ross C. Corace, an officer and director is currently our only employee. Additionally employees will be hired as funds allow. In the immediate future, MailTec will hire a general manager and a sorter.
Reports to Security Holders
After this offering, we will become a fully reporting company under the requirements of the Exchange Act, and we will file the necessary quarterly and other reports with the Securities and Exchange Commission. Although we will not be required to deliver our annual or quarterly reports to security holders, we would be pleased to forward this information to security holders upon receiving a written request to receive such information. The reports and other information filed by us will be available for inspection and copying at the public reference facilities of the Securities and Exchange Commission located at 450 Fifth Street, N. W., Washington, D.C. 20549.
Copies of such material may be obtained by mail from the Public Reference Section of the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 1-800-SEC-0330. In addition, the
Commission maintains a World Wide Website on the Internet at:
http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission.
Properties
We lease our office space at 469 S. Cherry Street, #207, Denver, Colorado 80246 on a month to month basis at a monthly rate of $437.50. Our office space consists of 560 square feet.
Upon successful completion of this offering, we will maintain a secured mailing facility in Denver, CO. MailTec is currently in the beginning stages of identifying appropriate space.
The real property utilized by MailTec is in good condition, adequate for present operations and adequately covered by insurance. We also maintain insurance coverage for commercial general liability including blanket contractual liability, tenant's legal liability, non-owned automobile, and cross liability coverage.
USE OF PROCEEDS
If the maximum offering amount is reached, MailTec shall receive gross proceeds of $3,125,000. Based on MailTec's present plans, which represent the existing and anticipated business conditions, MailTec intends to apply the estimated net proceeds of the maximum offering and at intervals less than $3,125,000 over the next twelve months as follows:
Gross proceeds $ 3,125,000 $ 2,000,000 $ 1,000,000 $ 500,000
Offering expense 25,933 25,933 25,933 25,933
----------- ----------- ----------- ---------
Net proceeds $ 3,099,067 $1,974,067 $ 974,067 $ 474,067
Officer Salaries $ 90,000 $ 90,000 $ 90,000 $ 90,000
Non-Affiliate Salaries 36,000 36,000 36,000 36,000
Office Expense 20,000 20,000 20,000 20,000
Legal and Accounting 20,000 20,000 20,000 20,000
Rent 36,000 36,000 36,000 36,000
Workman's Compensation 36,852 36,852 36,852 36,852
Liability Insurance 12,000 12,000 12,000 12,000
License & Fees 4,000 4,000 4,000 4,000
Trade Organizations 5,000 5,000 5,000 5,000
Vans 60,000 48,000 36,000 24,000
Sorting Machines 360,000 240,000 120,000 120,000
Postal Software 50,000 50,000 - -
|
USPS Deposit 100,000 100,000 50,000 50,000
Expansion Capital 1,662,500 900,000 375,000 -
Working Capital 606,759 376,259 133,259 20,259
----------- ---------- ----------- ---------
Total Net Proceeds $ 3,099,067 $1,974,067 $ 974,067 $ 474,067
|
*If the offering is conducted through a National Association of Securities Dealers, Inc. member firm, standard NASD commissions will be paid.
The foregoing use of proceeds is a good faith estimate and is not conclusive. If the board of directors of MailTec deems it necessary and in MailTec's best interest to modify the use of the proceeds at a later time, it will do so.
Dilution
Assuming completion of the offering, there will be up to 2,901,064 common shares outstanding. The following table illustrates the per common share dilution as of March 31, 2005 that may be experienced by investors at various funding levels.
Funding Level $3,125,000 $2,000,000 $1,000,000 $500,000
----------- ----------- ----------- ----------
Offering price $2.50 $2.50 $2.50 $2.50
Net tangible book
value per common
share before offering (.03) (.03) (.03) (.03)
Increase per common
share attributable to
investors 1.08 .82 .48 .26
------ ------ ------ ------
Pro forma net tangible
book value per
common share after
offering 1.05 .79 .45 .23
------ ------ ------ ------
Dilution to investors 1.45 1.71 2.05 2.27
Dilution as a
percentage of
offering price 58% 68% 82% 91%
|
Based on 1,651,064 common shares outstanding as of March 31, 2005 and total stockholder's deficit of $(44,530) utilizing audited March 31, 2005 financial statements.
Further Dilution
In the future, MailTec may issue equity and debt securities: Any sales of additional common shares may have a depressive effect upon the market price of MailTec's common shares and investors in this offering.
DIVIDEND POLICY
We have never declared or paid any dividends. In addition, we anticipate that we will not declare dividends at any time in the foreseeable future.
Instead, we will retain any earnings for use in our business. This policy will be reviewed by our board of directors from time to time in light of, among other things, our earnings and financial position.
DETERMINATION OF OFFERING PRICE
The offering price of the common shares were arbitrarily determined by MailTec based on the financial needs of MailTec without regard to the book value or market value, if any, of our common shares.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Trends and Uncertainities
The demand for our services would be negatively affected by any reduction in the discounts provided by the USPS for volume, weight and sorting of mail. Additionally, increased costs of carriers such as Federal Express and UPS could negatively affect our operations.
Investing Activities
Other than the purchase of fixed assets for $400 for the year ended March 31, 2005, MailTec has not pursued any investing activities since inception.
Financing Activities
For the year ended March 31, 2005, MailTec has received proceeds of $33,000 from the subscription and sale of its common and preferred stock. Comparatively, MailTec received proceeds of $1,000 and $2,000 from the sale of its preferred stock for the period from February 9, 2004 to March 31, 2004 and the year ended March 31, 2005, respectively.
During the year ended March 31, 2005, MailTec executed a United States Small Business Administration loan agreement. The SBA agreement provides for a $100,000 loan with a maturity of March 8, 2012, with interest at Wall Street Journal Prime Rate plus 1.75 percent
Our cash flow will be reduced by the payments of principal and interest of $1,596 per month for 84 months. The loan is secured by a $50,000 certificated of deposit.
During the year ended March 31, 2005, MailTec entered into a $138,000 line of credit. The agreement provides for a $138,000 loan with a maturity of February 1, 2010, with interest at Wall Street Journal Prime Rate plus 1.75 percent. Our cash flow will be reduced by the payments of principal and interest of $2,941 per month for 58 months, commencing May 1, 2005. The loan is secured by the assets of MailTec and is guaranteed by W. Ross C. Corace, an officer and director.
Results of Operations
We are a development stage company and have not yet commenced operations. For the year ended March 31, 2005, we did not receive any revenue and had selling, general and administrative expenses of $133,891 which consisted of basis operating expenses spent to set up business operations and the administrative, legal and accounting expenses necessary to proceed with this registration statement.
For the year ended March 31, 2005, we had a stock compensation expense of $45,109. These expenses were due to the payment of financial services and administrative services in common stock in an attempt to conserve the limited capital of MailTec. These increases in stock compensation through the issuance of stock are not expected to continue. Future payments for services, if any, will be made in cash as much as possible.
For the period from February 9, 2004 to March 31, 2004, we had selling, general and administrative expenses of only $160 as we were newly incorporated and had not yet pursued any operations.
Plan of Operation
Milestones: Steps Timeline
1. Assemble a sales staff Identify candidates 3-6 months
Train selected candidates
2. Create sales material Research competitors sales material 6 months
and marketing campaign Identify key marketing strategy
Create, print and distribute
sales materials
Identify prospects
|
3. Bring in customers sufficient Develop relationships with 6-12 months
to process 4,000 pieces of bulk identified prospects
mail a day
|
No one milestone needs to be complete to pursue any other milestone.
1. MailTec currently has sufficient working capital to defray the cost of hiring and training the sales candidates until the commission based pay commences.
Going Concern. The accompanying financial statements have been prepared assuming that MailTec will continue as a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. MailTec is in the development stage and has incurred ($180,414) losses since inception and has negative cash flows from operations. For the year ended March 31, 2005, MailTec had incurred a net loss available to common stockholders of $(180,479). The future of MailTec is dependent upon our ability to reach our milestones, obtain additional equity financing and upon future successful development and marketing of MailTec's services.
Failure to reach the milestones discussed above or secure additional financing, if any, may result in MailTec's inability to continue as a going concern.
Controls and Procedures. The chief executive officer and chief financial officer of MailTec has made an evaluation of the disclosure controls and procedures relating to the financial statements of MailTec for the three months ended March 31, 2005 and have judged such controls and procedures to be effective as of March 31, 2005 (the evaluation date).
There have not been any significant changes in the internal controls of MailTec or other factors that could significantly affect internal controls relating to MailTec since the evaluation date.
MANAGEMENT
Our bylaws provide that the number of directors who shall constitute the whole board shall be such number as the board of directors shall at the time have designated. We confirm that the number of authorized directors has been set at five pursuant to our bylaws. Each director shall be selected for a term of one year and until his successor is elected and qualified. Vacancies are filled by a majority vote of the remaining directors then in office with the successor elected for the unexpired term and until the successor is elected and qualified.
The directors, executive officers and significant employees are as follows:
NAME AGE POSITIONS HELD SINCE
W. Ross C. Corace 64 President, CEO, CFO Inception
Director to present
Steven S. Martella 43 Secretary/Director June 23, 2005
to present
Kenneth D. Barrett 46 Director June 23, 2005
to present
|
W. Ross C. Corace. Mr. Corace has been an officer and director of MailTec since inception. Mr. Corace was semi-retired from September 2000 until February 2004. Mr. Corace was an officer and director of Makepeace Capital Corp., a publicly held company engaged in home improvement sales from 1997 until its change of control in August 2000. Mr. Corace was an officer and director of RC Capital, Inc., a construction products company from July 1997 until it merged into Makepeace in July 1998. Mr. Corace was an officer of Foxmoor Industries, Ltd., a publicly held corporation in the business of purchasing and selling home improvement contracts from December 1981 until it was purchased by General Pacific Corp. in June 1997. Mr. Corace received a BBA degree in business administration from Ohio University in 1963.
Steven S. Martella. Steven S. Martella has been secretary and a director of MailTec since June 15, 2005. In 1981, Mr. Martella joined the U.S. Postal Service as a management trainee and received his On- The-Job Instructor Certification. Over a 17-year period of time through 1998, Mr. Martella held several management positions with the U.S. Postal Service. In the position of supervisor, Mr. Martella managed the operations at the U.S. Postal Service Airline Mail Handling Facility at Stapleton Airport and DIA preparing shipments to be placed on domestic airlines. In that capacity, Mr. Martella trained personnel in equipment and computer operations and in construction of containers for shipping. Mr. Martella coordinated the movement of mail with the airlines. While with the U.S. Postal Service, Mr. Martella obtained his real estate broker's license. From 1998 to present, Mr. Martella has been with Ultimate Realty responsible for sales and administrative operations.
Kenneth D. Barrett. Mr. Barrett has been a director of MailTec since June 15, 2005. From December 2000 to October 2004, Mr. Barrett was employed by General Motors Saturn Division as a sales/leasing consultant. Mr. Barrett was employed by the U.S. Postal Service in numerous capacities from June 1982 to December 2000. During his tenure at the U.S. Postal Service, Mr. Barrett occupied numerous management positions such as supervisor, mails and delivery; superintendent station/branch operations; superintendent, support services, manager, customer services and operations support specialist.
Among Mr. Barrett's duties, were included special assignments in training and auditing. From October 2003 to present, Mr. Barrett has also worked as a mail carrier for the U.S. Postal Service.
The above named directors will serve in their capacity as director until our next annual shareholder meeting to be held within six months of our fiscal year's close. Directors are elected for one-year terms.
Executive Officer Compensation
We may elect to award a cash bonus to key employees, directors, officers and consultants based on meeting individual and corporate planned objectives.
The following shows the annual salaries, bonuses and stock options for our executive officers for the year ended March 31, 2005:
-------------------------------------------------------------------------------------------------------------------------+
SUMMARY COMPENSATION TABLE
+----------------------------------------------------------------+--------------------------------------------------------+
| | Long-Term Compensation |
+----------------------+-----------------------------------------+------------------------------+-------------------------+
| | Annual Compensation | Awards | Payouts |
+----------------------+---------+-----------+-------------------+-----------+------------------+-------------------------+
|(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) (i) |
+-----------+----------+---------+-----------+-------------------+-----------+------------------+----------+--------------
| | | | | Other |Restricted | Securities | | |
|Name and | | Annual | Annual | Annual |Stock | Underlying |LTIP | All Other |
|Principal | Fiscal | Salary | Bonus | Compensation |Awards | Options/SARs |Payouts | Compensation |
|Position | Year | ($) | ($) | ($) |($) | (#) |($) | ($) |
+-----------+----------+---------+-----------+-------------------+-----------+------------------+----------+--------------+
|W. Ross
C. Corace| 2005 $97,135 - - - - - -
| (1)
|CEO, CFO
+-----------+----------+---------+-----------+-------------------+-----------+------------------+----------+--------------+
|Steven S. | 2005 na na na na na na na
|Martella,(2)
|CFO
+-----------+----------+---------+-----------+-------------------+-----------+------------------+----------+--------------+
|
(1) Mr. Corace's aggregate restricted stock holdings at the end of the last completed fiscal year were 1,500,000 common shares with a value of $10,000. All 1,500,000 common shares have a rule 144 restrictive legend.
(2) Mr. Martella's aggregate restricted stock holdings at the end of the last completed fiscal year were 0 common shares with no value.
Option/SAR Grants in Last Three Fiscal Years
Individual Grants
---------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of
Securities % of Total
Underlying Options/SARs
Options/ Granted to
SARs Employees in Exercise or Base Expiration
Name Granted(#) Fiscal Year Price ($/Sh) Date
W. Ross C.
Corace - - - -
Steven S. Martella - - - -
|
(1)All of the above options/SARs granted were exercisable based on 50% of such options exercisable after the first anniversary date in which they were awarded with the balance exercisable after the second anniversary date.
Option/SAR Grants in Last Fiscal Year
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
FY-End(#) FY-End($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercised(#) Value Realized($) Unexercisable Unexercisable
---------------------------------------------------------------------------------------
W. Ross C.
Corace - - - -
Steven S. Martella - - - -
|
We do not have any standard arrangements by which directors are compensated for any services provided as a director. No cash has been paid to the directors in their capacity as such.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 31, 2005, the number and percentage of outstanding shares of MailTec common stock owned by (i) each person known to us to beneficially own more than 5% of its outstanding common stock, (ii) each director, (iii) each named executive officer, and (iv) all officers and directors as a group.
Name of Common Stock % Class Owned % Class Owned Beneficial Owner Beneficially Owned before offering after offering W. Ross C. Corace 1,500,000 92.25% 46.94% 1570 South York Street Denver, Colorado 80210 Steven S. Martella 0 0.00% 0.00% 7268 Secrest Court Arvada, Colorado 80007 Kenneth D. Barrett 0 0.00% 0.00% 8965 S. Holland Way, #104 Littleton, Colorado 80128 Officers & Directors As a Group (3 Persons) 1,500,000 92.25% 51.71% |
Percentages are based upon 1,651,064 issued and outstanding as of July 31, 2005.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Loan Guarantee. During the year ended March 31, 2005, MailTec entered into a $138,000 loan agreement. The agreement provides for a $138,000 loan with a maturity of February 1, 2010, with interest at Wall Street Journal Prime Rate plus 1.75 percent. Payments of principal and interest are $2,941 per month for 58 months, commencing May 1, 2005. The loan is secured by the assets of MailTec and is guaranteed by W. Ross C. Corace, an officer and director.
During the year ended March 31, 2005, W. Ross C. Corace, an officer and director of MailTec advanced $36,375 to MailTec and was repaid $36,375. Mr. Corace received $97,135 in the form of compensation.
DESCRIPTION OF CAPITAL STOCK
The following statements constitute brief summaries of MailTec's certificate of incorporation and bylaws, as amended.
Common Shares. MailTec's articles of incorporation authorize it to issue up to 10,000,000 common shares and 4,000,000 preferred shares, $0.001 par value per common and preferred share.
Liquidation Rights. Upon liquidation or dissolution, each outstanding common share will be entitled to share equally in the assets of MailTec legally available for distribution to shareholders after the payment of all debts and other liabilities.
Dividend Rights. There are no limitations or restrictions upon the rights of the board of directors to declare dividends out of any funds legally available therefore. MailTec has not paid dividends to date and
it is not anticipated that any dividends will be paid in the foreseeable future. The board of directors initially may follow a policy of retaining earnings, if any, to finance the future growth of MailTec. Accordingly, future dividends, if any, will depend upon, among other considerations, MailTec's need for working capital and its financial conditions at the time.
Voting Rights. Holders of common shares of MailTec are entitled to voting rights of one hundred percent. Holders may cast one vote for each share held at all shareholders meetings for all purposes.
Other Rights. Common shares are not redeemable, have no conversion rights and carry no preemptive or other rights to subscribe to or purchase additional common shares in the event of a subsequent offering. Common Shares do not have cumulative voting features. Our bylaws allow action to be taken by written consent rather than at a meeting of stockholders with the consent of the holders of a majority of shares entitled to vote.
The authorized preferred stock may be issued from time to time in series. The board of directors is authorized to establish such series, to fix and determine the variations and the relative rights and preferences as between series, and to thereafter issue such stock from time to time. The board of directors is also authorized to allow for conversion of the preferred stock to common stock under terms and conditions as determined by the board of directors.
Transfer Agent. Corporate Stock Transfer, Inc., Denver Colorado acts as MailTec's transfer agent.
SHARES ELIGIBLE FOR FUTURE SALE
Upon the date of this prospectus, there are 1,651,064 shares of our common stock outstanding of which no common shares may be freely traded without restriction. Selling shareholders are registering 150,000 common shares in this offering. Additionally, 73,064 common shares are being registered to be distributed to Oakwood shareholders. The 1,651,064 common shares were issued pursuant to an exemption from registration under Section 4(2) and/or Rule 504 of the Securities Act of 1933.
Upon the effectiveness of this registration statement, up to an additional 1,250,000 common shares may be sold pursuant to this prospectus and will be eligible for immediate resale in the public market if and when any market for the common stock develops. The remaining common shares will be restricted within the meaning of Rule 144 under the Securities Act, and are subject to the resale provisions of Rule 144.
In general, under Rule 144, a person who has beneficially owned, for at least one year, shares of common stock that have not been registered under the Securities Act or that were acquired from an affiliate of MailTec is entitled to sell within any three-month period the number of shares of common stock that does not exceed the greater of:
- one percent of the number of then outstanding shares of common stock, or
- the average weekly reported trading volume during the four calendar weeks preceding the sale.
Sales under Rule 144 are also subject to notice and manner of sale requirements and to the availability of current public information and must be made in unsolicited brokers' transactions or to a market maker. A person who is not an affiliate of MailTec under the Securities Act during the three months preceding a sale and who has beneficially owned such shares for at least two years is entitled to sell the shares under Rule 144 without regard to the volume, notice, information and manner of sale provisions. Affiliates must comply with the restrictions and requirements of Rule 144 when transferring restricted shares even after the two year holding period has expired and must comply with the restrictions and requirements of Rule 144 in order to sell unrestricted shares.
No predictions can be made of the effect, if any, that market sales of shares of common stock or the availability of such shares for sale will have on the market price prevailing from time to time. Nevertheless, sales of significant amounts of our common stock could adversely affect the prevailing market price of the common stock, as well as impair our ability to raise capital through the issuance of additional equity securities.
PLAN OF DISTRIBUTION
This prospectus relates to the sale of 1,250,000 common shares to the public, 73,064 common shares to be distributed to the Oakwood shareholders and 150,000 common shares being registered on behalf of a selling security holder.
We will sell the common shares ourselves and do not plan to use underwriters or pay any commissions. We will be selling our shares using our best efforts and no one has agreed to buy any of our shares. There is no minimum amount of shares we must sell so no money raised from the sale of our stock will go into escrow, trust or another similar arrangement.
The common shares are being offered by W. Ross C. Corace, an officer and director. Mr. Corace will be relying on the safe harbor in Rule 3a4-1 of the Securities Exchange Act of 1934 to sell the common shares. No sales commission will be paid for common shares sold by Mr. Corace. Mr. Corace is not subject to a statutory disqualification and is not an associated person of a broker or dealer. Additionally, Mr. Corace primarily performs substantial duties on behalf of MailTec otherwise
than in connection with transactions in securities. Mr. Corace has not been a broker or dealer or an associated person of a broker or dealer within the preceding 12 months and he has not participated in selling an offering of securities for any issuer more than once every 12 months other than in reliance on paragraph (a)4(i) or (a)4(iii) of Rule 3a4-1 of the Securities Exchange Act of 1934.
The offering shall terminate on December 31, 2006.
Our common stock is not traded over the counter. We intend to apply for the listing of our common stock on the Over The Counter Bulletin Board. The selling security holder may sell his common shares in one or more transactions. These may include "block" transactions in the over-the- counter market, in negotiated transactions or in a combination of such methods of sales, at prevailing market prices.
The selling security holder may effect such transactions by selling the common shares directly to purchasers, or may sell to or through agents, dealers or underwriters designated from time to time, and such agents, dealers or underwriters may receive compensation in the form of discounts, concessions or commissions from the selling security holder and/or the purchaser(s) of the common shares for whom they may act as agent.
The selling security holder and any agents, dealers or underwriters that act in connection with the sale of the common shares might be deemed to be underwriters within the meaning of Section 2(11) of the Securities Act, and any discount or commission received by them and any profit on the resale of the common shares might be deemed to be underwriting discounts or commissions under the Securities Act.
MailTec is not aware of any current or future plans, proposals, arrangements or understandings by any selling security holders to distribute their registered shares of common stock of MailTec to their respective outstanding shareholders or partners.
MailTec is not aware of any plans, arrangements or understandings by any selling security holders to sell their registered shares of common stock to any particular individual(s) or to use such registered shares to satisfy contractual obligations.
MailTec will receive no portion of the proceeds from the sale of the common shares by the selling security holder and will bear all of the costs relating to the registration of this offering, other than any fees and expenses of counsel for the selling security holder. Any commissions, discounts or other fees payable to a broker, dealer, underwriter, agent or market maker in connection with the sale of any of the common shares will be borne by the selling security holder.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the small business issuer as provided in the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is not traded over the counter. We intend to apply for the listing of our common stock on the Over The Counter Bulletin Board.
Holders
As of July 31, 2005, the approximate number of shareholders of common stock of MailTec was 6.
Dividends
We have not declared any cash dividends on our common stock since our inception and do not anticipate paying any dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payment of dividends will depend on our earnings and financial position and such other factors as the board of directors deems relevant.
EXPERTS
The financial statements of MailTec appearing in this registration statement have been audited by Stark Winter Schenkein & Co., LLP, independent auditors and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.
LEGAL PROCEEDINGS
There are no legal proceedings, pending or threatened, against MailTec or its officers or directors in their capacity with MailTec at this time.
LEGAL MATTERS
Certain legal matters with respect to the issuance of shares of common stock offered by this prospectus will be passed upon by Jody M. Walker, Centennial, Colorado.
WHERE YOU CAN FIND MORE INFORMATION
At your request, we will provide you, without charge, a copy of any document filed as exhibits in this prospectus. If you want more information, write or call us at:
MailTec, Inc.
469 South Cherry Street, #207
Denver, CO 80246
303-753-6512
Attention: W. Ross C. Corace, Chief Executive Officer and Chief Financial Officer
Our fiscal year ends on March 31, 2005. We are a reporting company and file annual, quarterly and current reports with the SEC. You may read and copy any reports, statements, or other information we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee by writing to the SEC. Please call the SEC at 1-800- SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public on the SEC Internet site at http:\\www.sec.gov.
FINANCIAL STATEMENTS
The following financial statements required by Item 310 of Regulation S-B are furnished below:
Independent Auditor's Report dated July 25, 2005.
Balance Sheet - March 31, 2005
Statement of Operations for the year ended March 31, 2005, for the
period from inception (February 9, 2004) to March 31, 2004, and the
period from inception to March 31, 2005.
Statement of Changes in Stockholders' Equity for the period from
inception (February 9, 2004) to March 31, 2005.
Statement of Cash Flows for the year ended March 31, 2005, for the
period from inception (February 9, 2004) to March 31, 2004, and the
period from inception to March 31, 2005.
Notes to Financial Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
MailTec, Inc.
We have audited the accompanying balance sheet of MailTec, Inc. (a development stage company) as of March 31, 2005, and the related statements of operations, stockholders' (deficit), and cash flows from inception (February 9, 2004) to March 31, 2004, the year ended March 31, 2005, and the period inception (February 9, 2004) to March 31, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). 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 by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MailTec, Inc. (a development stage company) as of March 31, 2005, and the results of its operations, and its cash flows from inception (February 9, 2004) to March 31, 2004, the year ended March 31, 2005 and from inception (February 9, 2004) to March 31, 2005 , in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a stockholders' deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Stark Winter Schenkein & Co., LLP Denver, Colorado July 25, 2005 |
MAILTEC INC.
(A Development Stage Company)
Balance Sheet
March 31, 2005
Assets
Current Assets
Cash $ 188,949
Accounts receivable 1,500
----------
Total current assets 190,449
----------
Property and equipment, net 4,275
----------
$ 194,724
==========
Liabilities & Stockholders' (Deficit)
Current Liabilities
Accounts payable and accrued expenses $ 1,254
Current portion of long term debt 32,157
----------
Total current liabilities 33,411
----------
Long term debt 205,843
----------
Stockholders' (Deficit)
Preferred stock, $.001 par value, 4,000,000 shares
authorized, none issued or outstanding -
Common Stock, $.001 par value; 10,000,000 shares
authorized, 1,651,064 issued and outstanding 1,651
Additional paid in capital 134,233
(Deficit) accumulated in the development stage (180,414)
----------
(44,530)
----------
$ 194,724
==========
|
The accompanying notes are an integral part of the financial statements.
MAILTEC INC.
(A Development Stage Company)
Statements of Operations
Year Ended March 31, 2005, February 9, 2004 (Inception) to March 31, 2004, and February 9, 2004 (Inception) to March 31, 2005
Year Ended Inception to
March 31, March 31, March 31,
2005 2004 2005
---------- ---------- ----------
Revenues $ - $ - $ -
---------- ---------- ----------
Cost of Sales - - -
---------- ---------- ----------
Gross Profit - - -
---------- ---------- ----------
Operating Expenses
Stock compensation expense -
general and administrative 45,109 - 45,109
Selling, general and
Administrative 133,891 160 134,051
---------- ---------- ----------
179,000 160 179,160
---------- ---------- ----------
Operating (loss) (179,000) (160) (179,160)
---------- ---------- ----------
Other income (expense)
Interest expense (1,254) - (1,254)
---------- ---------- ----------
(1,254) - (1,254)
---------- ---------- ----------
Net (loss) (180,254) (160) (180,414)
Preferred stock dividends paid (225) - (225)
---------- ---------- ----------
Net (loss) available to common
stockholders $ (180,479) $ (160) $ (180,639)
========== ========== ==========
|
Per share information - basic and diluted:
Weighted Average Number of Common
Shares Outstanding 1,546,086 1,500,080 1,540,148
========== ========== ==========
Net(loss) per share $ (.12) $ (.00) $ (.12)
========== ========== ==========
|
The accompanying notes are an integral part of the financial statements.
MAILTEC INC.
(A Development Stage Company)
Statement of Stockholders' (Deficit) February 9, 2004 (Inception) to March 31, 2005
Common Stock Preferred Stock
Shares Amount Shares Amount
---------- ---------- ---------- ----------
Balance, February 9, 2004 (Inception) - $ - - $ -
Shares subscribed by founder at
inception at $.007 per share 1,500,000 1,500 - -
Fixed assets contributed to capital - - - -
Preferred stock issued for cash
at $1.00 per share - - 1,000 1
Common stock subscribed
at $.75 per share 20,000 20 - -
Net (loss) - - - -
---------- ---------- ---------- ----------
Balance, March 31, 2004 1,520,000 1,520 1,000 1
Preferred stock issued for cash
at $1.00 per share - - 2,000 2
Cash received for common stock
subscriptions - - - -
Dividends paid on preferred stock - - - -
Common stock issued for cash
at $.32 per share 30,000 30 - -
Conversion of preferred stock to common
stock 3,000 3 (3,000) (3)
Shares issued for financial services
at $.46 per share 25,000 25 - -
Shares issued for administrative
services at $.46 per share 73,064 73 - -
Contribution of certificate of deposit
to capital - - - -
Net (loss) - - - -
---------- ---------- ---------- ----------
Balance, March 31, 2005 1,651,064 $ 1,651 - $ -
========== ========== ========== ==========
The accompanying notes are an integral part of the financial statements.
|
MAILTEC INC.
(A Development Stage Company)
Statement of Stockholders' (Deficit) CONTINUED
For the Period February 9, 2004 (Inception) to March 31, 2005
(Deficit) Total
Additional accumulated in Stock-
Subscription Paid-In the development holders'
Receivable Capital stage (Deficit)
---------- ---------- ---------- ----------
Balance, February 9, 2004 (Inception) $ - $ - $ - $ -
Shares subscribed by founder at
inception at $.007 per share (10,000) 8,500 - -
Fixed assets contributed to capital - 5,000 - 5,000
Preferred stock issued for cash - 999 - 1,000
Common stock subscribed
at $.75 per share (15,000) 14,980 - -
Net (loss) - - (160) (160)
---------- ---------- ---------- ----------
Balance, March 31, 2004 (25,000) 29,479 (160) 5,840
Preferred stock issued for cash
at $1.00 per share - 1,998 - 2,000
Cash received for common stock
subscriptions 25,000 - - 25,000
Dividends paid on preferred stock - (225) - (225)
Common stock issued for cash
at $.32 per share - 7,970 - 8,000
Conversion of preferred stock to common
stock - - - -
Shares issued for financial services
at $.46 per share - 11,475 - 11,500
Shares issued for administrative services
at $.46 per share - 33,536 - 33,609
Contribution of certificate of deposit
to capital - 50,000 - 50,000
Net (loss) - - (180,254) (180,254)
---------- ---------- ---------- ----------
Balance, March 31, 2005 $ - $ 134,233 $ (180,414) $ (44,530)
========== ========== ========== ==========
|
The accompanying notes are an integral part of the financial statements.
MAILTEC INC.
(A Development Stage Company)
Statements of Cash Flows
Year Ended March 31, 2005, February 9, 2004 (Inception) to March 31, 2004, and February 9, 2004 (Inception) to March 31, 2005
Year Ended Inception to
March 31, March 31, March 31,
2005 2004 2005
---------- ---------- ----------
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) $ (180,254) $ (160) $ (180,414)
Adjustments to reconcile net (loss)
to net cash (used in) operating activities:
Depreciation and amortization 965 160 1,125
Non-cash stock compensation 45,109 - 45,109
Changes in:
Accounts receivable (1,500) - (1,500)
Accrued interest 1,254 - 1,254
---------- ---------- ----------
Net cash (used in) operating activities (134,426) - (134,426)
---------- ---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets (400) - (400)
---------- ---------- ----------
Net cash (used in) investing activities (400) - (400)
---------- ---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of Common Stock 8,000 - 8,000
Proceeds from issuance of Preferred Stock 2,000 1,000 3,000
Payment of dividend on preferred stock (225) - (225)
Contribution of certificate of deposit to capital 50,000 - 50,000
Proceeds from officer/director's advances 36,735 - 36,735
Payments on officer/director's advances (36,735) - (36,735)
Proceeds from line of credit 138,000 - 138,000
Proceeds from note payable 100,000 - 100,000
Proceeds from subscriptions receivable 25,000 - 25,000
---------- ---------- ----------
Net cash provided by investing activities 322,775 1,000 323,775
---------- ---------- ----------
Net increase in cash 187,949 1,000 188,949
Cash - beginning of period 1,000 - -
---------- ---------- ----------
Cash - end of period $ 188,949 $ 1,000 $ 188,949
========== ========== ==========
|
The accompanying notes are an integral part of the financial statements.
MAILTEC INC.
(A Development Stage Company)
Statements of Cash Flows CONTINUED Year Ended March 31, 2005, February 9, 2004 (Inception) to March 31, 2004, and February 9, 2004 (Inception) to March 31, 2005
Inception to
March 31, March 31, March 31,
2005 2004 2005
---------- ---------- ----------
SUPPLEMENTAL DISCLOSURES
Interest paid $ - $ - $ -
========== ========== ==========
Income taxes paid $ - $ - $ -
========== ========== ==========
Non-cash Investing and Financing Activities
Contribution of fixed assets to capital $ - $ 5,000 $ 5,000
========== ========== ==========
Common stock subscriptions $ - $ 25,000 $ 25,000
========== ========== ==========
Conversion of preferred stock to common stock $ 3,000 $ - $ 3,000
========== ========== ==========
|
The accompanying notes are an integral part of the financial statements.
MAILTEC, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2005
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
MailTec, Inc. (the Company) was incorporated in the State of Nevada on
February 9, 2004 and has been in the development stage since its
inception. The Company purpose is to raise capital and debt to develop a
mail services business. The Company has selected March 31 as its fiscal
year end.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual
results could differ from those estimates. On an ongoing basis,
management reviews those estimates.
Cash and Cash Equivalents
For purposes of balance sheet classification and the statements of cash
flows, the Company considers all highly liquid investments purchased with
an original maturity of three months or less to be cash equivalents.
Property and Equipment
Furniture, fixtures and equipment are stated at cost and are being
depreciated using the straight-line method over the assets' estimated
economic lives of 5 to 7 years. Property and equipment consists of
office furniture and equipment with a cost of $5,400 less accumulated
depreciation of $1,125.
Financial Instruments
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of March
31, 2005. The respective carrying value of certain on-balance-sheet
financial instruments approximated their fair values. These financial
instruments include cash, accounts receivable, accounts payable and
accrued expenses, and notes payable. Fair values are assumed to
approximate carrying values for these financial instruments because they
are short term in nature, or are receivable or payable on demand, and
their carrying amounts approximate fair value. The carrying value of
long term debt approximates its fair value based on current market
conditions for similar debt instruments.
Impairment of Long-Lived Assets
The Company periodically reviews the carrying amount of property and
equipment and its identifiable intangible assets to determine whether
current events or circumstances warrant adjustments to such carrying
amounts. If an impairment adjustment is deemed necessary, such loss is measured by the amount that the carrying value of such assets exceeds their fair value. Considerable management judgment is necessary to estimate the fair value of assets; accordingly, actual results could vary significantly from such estimates. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. As of March 31, 2005, management believes that there is no impairment of long-lived assets.
Revenue Recognition
Revenue from product sales are recognized when delivery has occurred,
persuasive evidence of an agreement exists, the vendor fee is fixed or
determinable, no further obligation exists and collectability is probable.
Generally, title for these shipments passes on the date of shipment. Cost
of products sold consists of the cost of raw materials and labor related
to the corresponding sales transaction. When a right of return exists,
the Company defers revenues until the right of return expires.
Revenue from services is recognized when service is completed.
Segment Information
The Company follows Statement of Financial Accounting Standards (SFAS)
131, "Disclosure about Segments of an Enterprise and Related Information".
Certain information is disclosed, per SFAS 131, based on the way
management organizes financial information for making operating decisions
and assessing performance. The Company currently operates in one business
segment and will evaluate additional segment disclosure requirements if it
expands operations.
Net (Loss) Per Common Share
The Company follows SFAS 128, "Earnings Per Share". Basic earnings (loss)
per common share calculations are determined by dividing net income (loss)
by the weighted average number of shares of common stock outstanding
during the year. Diluted earnings (loss) per common share calculations
are determined by dividing net income (loss) by the weighted average
number of common shares and dilutive common share equivalents outstanding.
During the periods when they are anti-dilutive, common stock equivalents,
if any, are not considered in the computation.
Stock-Based Compensation
The Company accounts for stock based compensation in accordance with SFAS
123, "Accounting for Stock-Based Compensation." The provisions of
SFAS 123 allow companies to either expense the estimated fair value of
stock options or to continue to follow the intrinsic value method set
forth in APB Opinion 25, "Accounting for Stock Issued to Employees" (APB
25) but disclose the pro forma effects on net income (loss) had the fair
value of the options been expensed. The Company has elected to continue to
apply APB 25 in accounting for stock options.
The Company has issued its common stock as compensation to non-employees. The Company measures the amount of stock-based compensation based on the fair value of the equity instrument issued or the services or goods provided as of the earlier of (1) the date at which an agreement is reached with the non-employee as to the number of shares to be issued for performance, or (2) the date at which the non-employees' performance is complete.
Recent Pronouncements
In December 2003, the Financial Accounting Standards Board issued FASB Interpretation Number 46-R "Consolidation of Variable Interest Entities." FIN 46-R, which modifies certain provisions and effective dates of FIN 46, sets forth the criteria to be used in determining whether an investment is a variable interest entity that should be consolidated. These provisions are based on the general premise that if a company controls another entity through interests other than voting interests, that company should consolidate the controlled entity. The Company believes that currently, it does not have any material arrangements that meet the definition of a variable interest entity, which would require consolidation.
In November 2004, the FASB issued SFAS 151, "Inventory Costs." SFAS 151 amends the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) under the guidance in ARB 43, Chapter 4, "Inventory Pricing." Paragraph 5 of ARB 43, Chapter 4, previously stated, that ".under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges.." This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal." In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not expect adoption of SFAS 151 to have a material impact on the Company's financial statements.
In December 2004, the FASB issued SFAS 152, "Accounting for Real Estate Time-Sharing Transactions." The FASB issued this Statement as a result of the guidance provided in AICPA Statement of Position (SOP) 04-2, "Accounting for Real Estate Time-Sharing Transactions." SOP 04-2 applies to all real estate time-sharing transactions. Among other items, the SOP provides guidance on the recording of credit losses and the treatment of selling costs, but does not change the revenue recognition guidance in SFAS 66, "Accounting for Sales of Real Estate," for real estate time- sharing transactions. SFAS 152 amends Statement 66 to reference the guidance provided in SOP 04-2. SFAS 152 also amends SFAS 67, "Accounting for Costs and Initial Rental Operations of Real Estate Projects", to state that SOP 04-2 provides the relevant guidance on accounting for incidental operations and costs related to the sale of real estate time- sharing transactions. SFAS 152 is effective for years beginning after
June 15, 2005, with restatements of previously issued financial statements prohibited. Management does not expect adoption of SFAS 152 to have a material impact on the Company's financial statements.
In December 2004, the FASB issued SFAS 153, "Exchanges of Nonmonetary Assets," an amendment to Opinion No. 29, "Accounting for Nonmonetary Transactions." Statement 153 eliminates certain differences in the guidance in Opinion No. 29 as compared to the guidance contained in standards issued by the International Accounting Standards Board. The amendment to Opinion No. 29 eliminates the fair value exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. Such an exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for nonmonetary asset exchanges occurring in periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in periods beginning after December 16, 2004. Management does not expect adoption of SFAS 153 to have a material impact on the Company's financial statements.
In December 2004, the FASB issued SFAS 123(R), "Share-Based Payment." SFAS 123(R) amends SFAS 123, "Accounting for Stock-Based Compensation," and APB Opinion 25, "Accounting for Stock Issued to Employees." SFAS 123(R) requires that the cost of share-based payment transactions (including those with employees and non-employees) be recognized in the financial statements. SFAS 123(R) applies to all share-based payment transactions in which an entity acquires goods or services by issuing (or offering to issue) its shares, share options, or other equity instruments (except for those held by an ESOP) or by incurring liabilities (1) in amounts based (even in part) on the price of the entity's shares or other equity instruments, or (2)that require (or may require) settlement by the issuance of an entity's shares or other equity instruments. This statement is effective (1) for public companies qualifying as SEC small business issuers, as of the first interim period or fiscal year beginning after December 15, 2005, or (2) for all other public companies, as of the first interim period or fiscal year beginning after June 15, 2005, or (3) for all nonpublic entities, as of the first fiscal year beginning after December 15, 2005. Management is currently assessing the effect of SFAS No. 123(R) on the Company's financial statements.
NOTE 2. GOING CONCERN
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.
The Company has experienced losses from operations as a result of its
investment necessary to achieve its operating plan, which is long-range in
nature. For the year ended March 31, 2005, the Company incurred a net
(loss) of ($180,254). At March 31, 2005, the Company has a stockholders'
(deficit) of ($44,530).
The Company's ability to continue as a going concern is contingent upon its ability to obtain capital or be party to an acquisition agreement. The Company is reliant on advances from related parties to maintain operations and is currently seeking acquisition candidates and capital.
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
NOTE 3. NOTES PAYABLE
During the year ended March 31, 2005, the Company executed a United States Small Business Administration loan agreement ("SBA"). The SBA agreement provides for a $100,000 loan with a maturity of March 8, 2012, with interest at Wall Street Journal Prime Rate plus 1.75 percent
Payments of principal and interest are $1,596 per month for 84 months. The loan is secured by a $50,000 certificated of deposit.
During the year ended March 31, 2005, the Company entered into a $138,000 loan agreement. The agreement provides for a $138,000 loan with a maturity of February 1, 2010, with interest at Wall Street Journal Prime Rate plus 1.75 percent. Payments of principal and interest are $2,941 per month for 58 months, commencing May 1, 2005. The loan is secured by the assets of the Company and is guaranteed by the founder.
The two loans have the following maturities:
Year Amount
---------- ----------
2006 $ 32,157
2007 37,933
2008 41,389
2009 45,160
2010 46,333
Thereafter 35,028
----------
$238,000
==========
|
NOTE 4. STOCKHOLDERS' (DEFICIT)
Preferred Stock
The Company's Board of Directors has the authority to issue 4,000,000
shares of $0.001 par value preferred stock, in one or more series, with
such voting powers, designations, preferences and rights or
qualifications, limitations or restrictions as shall be stated in the
resolution or resolutions. In the period inception to March 31, 2004,
1,000 share of 10 percent convertible preferred stock were issued for
$1,000. During the year ended March 31, 2005, an additional 2,000
shares were issued for $2,000. The combined 3,000 shares subsequently
received dividend payments of $225. In January 2005, the 3,000 shares
were converted into 3,000 shares of the Company's common stock. No
preferred stock is outstanding at March 31, 2005.
Common Stock
The Company's Board of Directors has the authority to issue 10,000,000
shares of $0.001 par value common stock. At inception 1,500,000 shares of
common stock were subscribed for by the Company's founder for $10,000.
During the period inception to March 31, 2004, an investor subscribed for
20,000 shares for $15,000. During the year ended March 31, 2005, cash of
$25,000 was received for these two subscriptions.
During the year ended March 31, 2005, 30,000 shares of commons stock were issued for cash of $8,000. 25,000 shares were issued for financial services valued at fair market value of $0.46 per share, $11,500. An additional 73,064 shares were issued for administrative services valued at fair market value of $0.46 per share, $33,609. The total stock based compensation of $45,109 is reflected on the statement of operations.
Contributions to Capital
During the period inception to March 31, 2004, the Company's founder
contributed $5,000 of furniture, fixtures and equipment to the Company.
During the year ended March 31, 2005, the Company's founder contributed a $50,000 certificate of deposit to the Company to secure a loan.
NOTE 5. INCOME TAXES
The Company accounts for income taxes under SFAS 109, "Accounting for Income Taxes", which requires use of the liability method. SFAS 109 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.
The tax effects of temporary differences and net operating losses that give rise to significant portions of deferred tax assets and liabilities consisted of the following:
Fiscal Year Ended
March 31, 2005
------------------
Deferred tax assets (liabilities)
Net operating loss carry forward $ 46,000
Less valuation allowance (46,000)
----------
Net deferred tax asset $ -
==========
|
The net operating loss carryforward will expire through 2025. The deferred tax asset has been fully reserved as of March 31, 2005. The primary difference between book and tax loss is stock compensation of $45,109. The change in the valuation allowance for the deferred tax asset during the year ended March 31, 2005 was $46,000.
NOTE 6. RELATED PARTY TRANSACTIONS
During the year ended March 31, 2005, the founder of the Company advanced $36,375 to the Company and was repaid $36,375. $97,135 was taken in the form of compensation.
Up to a Maximum of 1,250,000 Common Shares,
73,064 Common Shares to be distributed
to Shareholders of Oakwood Enterprises, Inc. and
150,000 Common Shares on behalf of Selling Security Holder
Prospectus
MailTec
August 4, 2005
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THE SELLING SECURITY HOLDERS ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF COMMON STOCK.
Until __________________200__, all dealers and selling stockholders that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 25. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses to be incurred in connection with the distribution of the securities being registered. The expenses shall be paid by the registrant.
SEC Registration Fee. . . . . . $ 433.45
Printing and Engraving Expenses 1,500.00
Legal Fees and Expenses . . . . 18,000.00
Accounting Fees and Expenses. . 3,500.00
Miscellaneous . . . . . . . . . 2,500.00
--------
TOTAL . . . . . . . . . . . . . $25,933.45
==========
|
Item 26. Recent Sales of Unregistered Securities
The following information sets forth particular information for all our securities sold for the past three years, without registration under the Securities Act.
On February 10, 2004, W. Ross C. Corace purchased 1,500,000 shares for $.0067 per common share or $10,000.
On April 5, 2004, Trudy D. Drwenski purchased 50,000 common shares for $.46 per common share or $23,000.
On April 10, 2004, Randy Kaulback purchased 1,000 preferred shares for $1.00 per preferred share or $1,000. The preferred shares were converted into 1,000 common shares on March 14, 2005.
On April 15, 2004, Oakwood received 73,064 common shares for financial consulting services valued at $.46 per common share or $33,609.
On May 17, 2004, Edward F. Altman purchased 2,000 preferred shares for $1.00 per preferred share or $2,000. The preferred shares were converted into 2,000 common shares on March 14, 2005.
On March 8, 2005, the board of directors of MailTec issued 25,000 common shares to Richard S. Klingenstein for financial services valued at $11,500 at $.46 per share.
All of the securities issued in 2004 and 2005 were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1934 to sophisticated investors.
Item 27. Exhibits
INDEX TO EXHIBITS
Exhibit Number and Identification of Exhibit
(a) Exhibits
(3) Articles of Incorporation, By-Laws and Stock Option Plan.
(i) Articles of Incorporation.
(ii) By-Laws.
(iv) Instruments defining common stock
(5) Consent and opinion of Jody M. Walker, Attorney At Law.
(11) Statement of Computation of Per Share Earnings
This Computation appears in the Financial Statements.
(23) Consent of Certified Public Accountant.
Item 28. Undertakings
(a) The undersigned registrant undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3) of the Securities Act;
ii. Reflect in the prospectus any facts or events arising after the effective date of which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered, if the total dollar value of securities offered would not exceed that which was registered and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC in accordance with Rule 424(b) of this chapter, if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
iii. Include any additional or changed material on the plan of distribution.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) i. That, for the purpose of determining liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant as provided in Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
ii. For determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant as provided in the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Denver, State of Colorado on the 4th day of August 2005.
MailTec, Inc.
/s/W. Ross C. Corace ------------------------------ By: W. Ross C. Corace, President |
In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
MailTec, Inc.
(Registrant)
By: /s/W. Ross C. Corace Dated: August 4, 2005
-----------------------
W. Ross C. Corace
Director, Chief Executive Officer
Chief Financial Officer, Controller
By: /s/Steven S. Martella Dated: August 4, 2005
-----------------------
Steven S. Martella
Director
By: /s/Kenneth D. Barrett Dated: August 4, 2005
-----------------------
Kenneth D. Barrett
Director
|
ARTICLES OF INCORPORATION
OF
MailTec, Inc.
The undersigned natural person of the age of eighteen years or more, acting as incorporator of a corporation under the provisions of the Nevada Business Act of the State of Nevada, adopts the following Articles of Incorporation for such corporation.
ARTICLE I
NAME
The name of the corporation is MailTec, Inc.
ARTICLE II
EXISTENCE AND DURATION
The period of duration of this corporation is perpetual.
ARTICLE III
PURPOSES AND POWERS
The purpose for which this corporation is organized is to engage in all lawful business for which corporations may be incorporated pursuant to the Nevada Business Corporation Act. In furtherance of its lawful purposes, the corporation shall have and may exercise all rights, powers and privileges not or hereafter exercisable by corporations organized under the laws of Nevada. In addition, it may do everything necessary, suitable, convenient or proper for the accomplishment of any of its corporate purposes.
ARTICLE IV
CAPITALIZATION
(a) Authorized Shares. The aggregate number of shares which the corporation shall have the authority to issue is Fourteen Million (14,000,000 shares). Ten Million (10,000,000) shares shall be designated "Common Stock" and shall have a par value of $.001. Four Million shares shall be designated "Preferred Stock", and shall have a par value of $.001 per share, and shall be issued for such consideration, expressed in dollars, as the Board of Directors may, from time to time, determine.
(b) Consideration for Shares. All shares of Common Stock and Preferred Stock shall be issued by the corporation for cash, property or services actually performed, for no less than the par value of $.001 for Common Stock and $.001 for Preferred Stock. All shares shall be fully paid and non-assessable.
(c) Issuance of Preferred Stock. The Preferred Stock authorized by this Certificate of Incorporation may be issued from time to time in series. The Board of Directors of the corporation is authorized to establish such series, to fix and determine the variations and the relative rights and preferences as between series, and to thereafter issue such stock from time to time. The Board of Directors is also authorized to allow for conversion of the Preferred Stock to Common Stock under terms and conditions as determined by the Board of Directors.
(d) Dividends. Dividends in cash, property or share of the corporation may be paid upon the Common and Preferred Stock, as and when declared by the Board of Directors, out of funds of the corporation to the extent, and in the manner permitted by law.
(e) Voting rights and Cumulative Voting. Each outstanding share of Common Stock shall be entitled to one vote, and each fractional share of Common Stock shall be entitled to a corresponding fractional vote on each matter submitted to a vote of shareholders. The voting rights of Preferred Stock, if any, shall be established by the Board of Directors at the time such stock is issued in series. Cumulative voting shall not be allowed I the election of directors of the corporation.
(f) Denial of preemptive Rights. No holder of any shares of the corporation , whether nor or hereafter authorized, shall have any preemptive or preferential right to acquire any shares or securities of the corporation, including shares or securities held in the treasury of the corporation.
(g) Dissolution or Liquidation. Upon any dissolution or liquidation, whether voluntary or involuntary, the holders of preferred shares shall be entitled to receive out of the assets of the Corporation, whether such assets are capital or surplus, the sum initially paid per share and a further amount equal to any dividend thereon declared and unpaid to the date of such distribution, before any payment shall be made or any assets distributed to the common stock shareholders. Upon any dissolution or liquidation, whether voluntary or involuntary, if the assets thus distributed among the holders of preferred share are insufficient to permit the payment to such shareholder of the full preferential amounts, then the entire assets of the Corporation to be distributed shall be distributed ratably among the holder of preferred shares and after payment to the preferred shareholders of such preferential amounts, the holders of common shares shall be entitled to receive ratably all the remaining assets. A merger or consolidation of this corporation with or into any other corporation or corporations shall not be deemed to be a dissolution or liquidation within the meaning of this provision.
ARTICLE V
INITIAL OFFICE AND AGENT
The address of this corporation's initial registered office is 2533 North Carson Street, Carson City, Nevada 89706 and the name of its initial registered agent is Laughlin International, Inc.
ARTICLE VI
PRINCIPAL OFFICE
The address of the principal office of the corporation is 469 South Cherry Street #207, Denver, Colorado 80126. The corporation may maintain such other offices, either within or out of the State of Nevada, as the Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE VII
INITIAL BOARD OF DIRECTORS
The number of directors constituting the initial board of directors of this corporation is one. The number of directors of this corporation shall be not less than three; except there need by only as many directors as there are shareholders in the event that the outstanding shares are, or initially will be, held of record by fewer than three shareholders. The names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and qualified is:
ARTICLE VIII
INDEMNIFICATION
As the Board of Directors may from time to time provide in the By-Laws or by resolution, the corporation may indemnify its officers, directors, agents and other persons to the full extent permitted by the laws of the State of Nevada.
ARTICLE IX
INCORPORATOR
The name and address of the incorporator is : W. Ross C. Corace, 469 South Cherry Street #207, Denver, Colorado 80246.
Dated this 23rd day of January 2003
/s/ W. Ross C. Corace ------------------------------------ W. Ross C. Corace, Incorporator |
STATE OF COLORADO ) CITY AND )ss. COUNTY OF DENVER ) |
W. Ross C. Corace, known to be to be the person whose name is subscribed to the annexed and foregoing Article of Incorporation, appeared before me this 23rd day of January, 2004, in person and being by me first duly sworn, acknowledged that he signed said Article of Incorporation as his free and voluntary act and deed for the uses and purposes therein set forth and that statements herein contained are true.
My Commission Expires May 9, 2004
/s/ Anna Lee Halsig ---------------------------------- Notary Public |
2421 South University Blvd.
Denver, Colorado 80210
AMENDED AND RESTATED
BY LAWS OF
MAILTEC, INC.
A NEVADA CORPORATION
ARTICLE I
Offices
Section 1.01 Registered Office and Agent. The name of the registered agent and the location of the registered office of the Corporation in the State of Nevada shall be Laughlin and Associates, 2533 North Carson Street, Carson City. Nevada 89710, and such information shall be filed in the appropriate office of the State of Nevada pursuant to applicable provisions of law.
Section 1.02 Corporate Offices. The Corporation may have such corporate offices within and outside the State of Nevada as the Board of Directors may from time to time direct of the Corporation may require. The principal office of the Corporation may be fixed and so designated from time to time by the board of directors, but the location or residence of the Corporation in Colorado shall be deemed for all purposes to be in the county in which its principal office in Colorado is maintained. The location of the principal office of the Corporation shall be 469 S. Cherry Street, #207 Denver, Colorado 80246.
Section 1.03 Records. The Corporation shall keep correct and complete books and records of account, minutes of proceedings of its shareholders and board of directors, and such other or additional records as may be required by law. The Corporation shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, either within or outside Colorado, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each.
ARTICLE II
SHAREHOLDERS' MEETINGS
Section 2.01 Place of Meeting. All meetings of the shareholders shall be held at the principal office of the Corporation, unless the board of directors designates some other place either within or outside the State of Colorado. Unless specifically prohibited by law any meeting may be held at any place and at any time and for any purpose if consented to in writing by a majority of the shareholders entitled to vote at such meeting.
Section 2.02 Annual Meeting. An annual meeting of the shareholders shall be held on the 1st day of September of each year, unless notified of an alternate date in accordance with the provisions of these bylaws, at 3:00 p.m. for the purpose of electing directors and for the transaction of such other business as may properly come before it. If such day is a legal holiday, the meeting shall be on the next business day.
Section 2.03 Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the president, secretary or by the board of directors, and shall be called by the president at the request of holders of not less than 10 percent of all the outstanding shares of the Corporation entitled to vote at the meeting. No business other than that specified in the notice of the meeting shall be transacted at any such special meeting.
Section 2.04 Notice of Meetings. Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose for which the meeting is called, shall be delivered not less than ten days nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the board of directors, the president, the secretary, or the officer or person calling the meeting to each shareholder of record entitled to vote at such meeting; except that, if the authorized shares are to be increased at least thirty days' notice shall be given.
Section 2.05 Fixing Record Date and Closing Transfer Books. The board of directors may fix a date not less than ten nor more than fifty days prior to any meeting as the record date for the purpose of determining shareholders entitled to notice of and to vote at such meetings, of the shareholders. The transfer books may be closed by the board of directors for a stated period not to exceed fifty days for the purpose of determining shareholders entitled to receive payment of any dividend or in order to make a determination of shareholders for any other purpose. In the absence of any action by the board of directors, the date upon which the board of directors adopts the resolution declaring the dividend shall be the record date.
Section 2.06 Voting Lists. The officers or agent having charge of the stock transfer books for shares of the corporation shall make, at least ten days before each meeting of the shareholders, a complete record of the shareholders entitled to vote at the meeting or any adjournment thereof, arranged in alphabetical order with the address of, and the number of shares held by each. The record, for a period of ten days before such meeting, shall be kept on file at the principal office of the Corporation whether within or outside the State of Colorado, and shall be subject to inspection by any shareholder for any purpose germane to the meeting at any time during normal business hours. Such record shall also be produced and kept open at the time and place of any purpose germane to the meeting during the whole time of the meeting. The original stock transfer book shall be prima facie evidence as to the shareholders who are entitled to examine the record or transfer books or to vote any meeting of shareholders.
Section 2.07 Quorum. The holders of a majority of the shares who are entitled to vote at a shareholders meeting and who are present in person or by proxy shall be necessary for and shall constitute a quorum for the transaction of business at such meetings, except as otherwise provided by statute, by the Articles of Incorporation or these Bylaws. If a quorum is not present or represented at a meeting of the shareholders, those present in person or represented by proxy shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At an adjourned meeting where a quorum is present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.
Section 2.08 Majority Vote; Withdrawal of Quorum. When a quorum is present at a meeting, the vote of the holders of a majority of the issued and outstanding shares having voting power, present in person or represented by proxy, shall decide any question brought before the meeting, unless the question is one which, by express provision of the statutes, the Articles of Incorporation or these Bylaws, requires a higher vote in which case the express provision shall govern. The shareholders present at a duly constituted meeting may continue to transact business until adjournment, despite the withdrawal of enough shareholders holding, in the aggregate, issued and outstanding shares having voting power to leave less than a quorum.
Section 2.09 Proxies. At all meetings of shareholders, a shareholder may vote in person or by proxy executed in writing by the shareholder or by his or her duly authorized attorney in fact. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided by the proxy. Each proxy shall be filed with the secretary of the Corporation before or at the time of the meeting.
Section 2.10 Voting. Each issued and outstanding share is entitled to its respective vote and each fractional share is entitled to a corresponding fractional vote on each matter submitted to a vote at a meeting of shareholders. The vote of a majority of the shares voting on any matter at a meeting of shareholders at which a quorum is present shall be the act of the shareholders on that matter, unless the vote of a greater number is required by law, the Articles of Incorporation, or these Bylaws. Voting on all matters except the election of directors shall be by voice or by show of hands, unless the holders of one-tenth of the shares represented at the meeting shall, prior to the voting on any matter, demand a ballot vote on that particular matter.
(A) Neither treasury shares nor shares held by another Corporation if the majority of the shares entitled to vote for the election of directors of such other Corporation is held by the Corporation shall be voted at any meeting or counted in determining the total number of issued and outstanding shares at any given time.
(B) Shares standing in the name of another Corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Bylaws of that Corporation may prescribe, or, in the absence of such provision, as the board of directors of that Corporation may determine.
(C) Shares held by an administrator, executor, guardian, or conservator may be voted by him or her, either in person or by proxy, without the transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him or her, either in person or by proxy, but no trustee shall be entitled to vote shares held by him or her without a transfer of the shares into his or her name.
(D) Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer into his or her name if authority to do so is contained in an appropriate order of the court by which the receiver was appointed.
(E) A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares transferred.
(F) Redeemable shares which have been called for redemption shall not be entitled to vote on any matter and shall not be deemed issued and outstanding shares on and after the date on which written notice of redemption has been mailed to shareholders and a sum sufficient to redeem such shares has been deposited with a bank or trust corporation with irrevocable instruction and authority to pay the redemption price to the holders of the shares upon surrender of their certificates.
Section 2.11 Action Without Meeting. Any action required by statute to be taken at a meeting of the shareholders, or any action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by the holders of a majority of shares entitled to vote with respect to the subject matter thereof and such consent shall have the same force and effect as a unanimous vote of the shareholders. The consent may be in more than one counterpart so long as each shareholder signs one of the counterparts. The signed consent, or a signed copy shall be placed in the minutes book.
Section 2.12 Telephone and Similar Meetings. Shareholders may participate in and hold a meeting 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 such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
Section 2.13 Order of Business at Meetings. The order of business at annual meetings and so far as practicable at other meetings of shareholders shall be as follows unless changed by the board of directors: (a) call to order; (b) proof of due notice of meeting; (c) determination of quorum and examination of proxies; (d) announcement of availability of voting lists; (e) announcement of distribution of annual statement; (f) reading and disposing of minutes of last meeting of shareholders; (g) reports of officers and committees; (h) reports of directors; (l) opening of polls for voting; (m) recess; (n) reconvening, closing of polls; (o) report of voting inspectors; (p) other business; and (q) adjournment.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01 General Powers. The business and affairs of the Corporation shall be managed by its board of directors. The directors shall in all cases act as a board of directors, and they may adopt such rules and regulations for the conduct of their meetings and the management of the Corporation as they deem proper. Such rules and regulations may not be inconsistent with these Bylaws, the Articles of Incorporation, and the laws of Colorado.
Section 3.02 Number, Tenure and Qualifications. The number of directors constituting the board of directors of this Corporation is two. A director shall be elected by the shareholders to serve until the next annual meeting of shareholders, or until his or her death, or resignation and his or her successor is elected. A director must be at least eighteen years of age but need not be a shareholder in the Corporation nor a resident of the State of Nevada.
Section 3.03 Change in Number. The number of directors may be increased or decreased from time to time by amendment to these Bylaws but no decrease shall have the effect of shortening the term of any incumbent director. Any directorship to be filled by reason of an increase in the number of directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose.
Section 3.04 Election of Directors. The directors shall be elected at the annual meeting of shareholders and those persons who receive the highest number of votes shall be deemed to have been elected. Election of directors shall be by ballot.
Section 3.05 Cumulative Voting. Directors shall be elected by majority vote. Cumulative voting shall not be permitted.
Section 3.06 Removal of Directors. A meeting called expressly for the purpose of removing a director, the entire board of directors or any lessor number may be removed, with or without cause, by a vote of the holders of the majority of the shares then entitled to vote at an election of directors. If any directors are so removed, new directors may be elected at the same meeting.
Section 3.07 Resignation. Subject to Section 3.02, a director may resign at any time by giving written notice to the board of directors, the president, or the secretary of the Corporation and unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the board of directors or such officer, and the acceptance of the resignation shall not be necessary to make it effective.
Section 3.08 Vacancies. A vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board of directors remains. A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office. Any directorship to be filled by reason of an increase in the number of directors shall be filled by election at an annual meeting of shareholders or at a special meeting of the shareholders called for that purpose. A director chosen to fill a position resulting from an increase in the number of directors shall hold office until his or her successor(s) shall have been elected.
Section 3.09 Compensation. By resolution of the board of directors, compensation may be paid to directors for their services. Also by resolution of the board of directors, a fixed sum and expenses for actual attendance at each regular or special meeting of the board of directors may also be paid. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore. Members of the executive committee or of special or standing committees may, by resolution of the board of directors, be allowed like compensation for attending committee meetings.
Section 3.10 First Meeting. The first meeting of a newly elected board shall be held without further notice immediately following the annual meeting of shareholders, and it shall be at the same place, unless by unanimous consent of the directors then electing and serving, the time or place is changed.
Section 3.11 Regular Meetings. Regular meetings of the board of directors may be held without notice at such time and place as shall from time to time be determined by the board of directors.
Section 3.12 Special Meetings. Special meetings of the board of directors may be called by the president on three days notice to each director, either personally or by mail or by telegram. Special meetings shall be called in like manner and on like notice on the written request of two directors. Except as otherwise expressly provided by statute, the Articles of Incorporation or these Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting need be specified in a notice or waiver of notice.
Section 3.13 Quorum; Majority Vote. At meetings of the board of directors a majority of the number of directors fixed by these Bylaws shall constitute a quorum for the transaction of business. The act of a majority of the directors present at a meeting at which quorum is not present at a meeting of the board of directors, the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting until a quorum is present.
Section 3.14 Procedure. The board of directors shall keep regular minutes of its proceedings. The minutes shall be placed in the minutes book of the Corporation.
Section 3.15 Action Without Meeting. Any action required or permitted to be taken at a meeting of the board of directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all members of the board of directors. Such consent shall have the same force and effect as a unanimous vote at a meeting. The signed consent, or a signed copy, shall be placed in the minutes book. The consent may be in more than one counterpart so long as each director signs one of the counterparts.
Section 3.16 Telephone and Similar Meetings. Directors may participate in and hold a meeting 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 such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
Section 3.17 Interested Directors and Officers.
(A) No contract or transaction between the Corporation and one or more of its directors or officers, or any other corporation, firm, association, partnership or entity in which one or more of its directors or officers are directors or officers or are financially interested shall be either void or voidable solely because of such relationship or interest or solely because such directors or officers are present at the meeting of the board of directors or a committee thereof which authorizes, approves, or ratifies such contract or transaction or solely because their votes are counted for such purposes if:
(1) the fact of the common directorship or financial interest is
disclosed to or known by the board of directors or committee and noted
in the minutes, and the board or committee which authorizes, approves,
or ratifies the contract or transaction by a vote sufficient for the
purpose without counting the votes or consents of such interested
directors; or
(2) the material facts of such relationship or financial interest
is disclosed to or known by the shareholders entitled to vote thereon
and they authorize, approve or ratify such contract or transaction in
good faith by a majority vote or written consent of shareholders
holding a majority of the shares the votes of the common or interested
directors or officers shall be counted in any such vote of
shareholders; or
(3) the contract or transaction is fair and reasonable to the
Corporation.
(B) Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or a committee thereof which authorizes, approves or ratifies such contract or transaction.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 4.01 Designation. The board of directors may from time to time, by resolution adopted by a majority of the whole board, designate an executive committee.
Section 4.02 Number; Qualification and Term. The executive committee shall consist of one or more directors, one of whom shall be the president of the executive committee. The executive committee shall serve at the pleasure of the board of directors.
Section 4.03 Authority. The executive committee, to the extent
provided in such resolution, shall have and may exercise all of the
authority of the board of directors in the management of the business
and affairs of the Corporation, including authority over the use of the
corporate seal. However, the executive committee shall not have the
authority of the board of directors in reference to: (a) amending the
Articles of Incorporation; (b) approving a plan of merger or
consolidation; (c) recommending to the shareholders the sale, lease or
exchange of all or substantially all of the property and assets for the
corporation other than in the usual and regular course of its business;
(d) recommending to the shareholders a voluntary dissolution of the
Corporation or a revocation thereof; (e) amending, altering, or
repealing these Bylaws or adopting new Bylaws; (f) filling vacancies in
or removing members of the board of directors or of any committee
appointed by the board of directors; (g) electing or removing officers
or members of any such committee; (h) fixing the compensation of any
member of such committee; (i) altering or repealing any resolution of
the board of directors which by its terms provides that it shall not be
so amendable or repealable; (j) declaring a dividend; or (k)
authorizing the issuance of shares of the Corporation.
Section 4.04 Change in Number. The number of executive committee members may be increased or decreased from time to time by resolution adopted by a majority of the board of directors.
Section 4.05 Removal. Any member of the executive committee may be removed by the board of directors by the affirmative vote of the majority of the board of directors, whenever in its judgment the best interests of the Corporation will be served thereby.
Section 4.06 Vacancies. A vacancy occurring in the executive committee (by death, resignation, removal or otherwise) may be filled by the board of directors in the manner providing for original designation in Bylaw Section 4.01.
Section 4.07 Resignation. A committee member may resign by giving written notice to the board of directors, the president or the secretary of the Corporation. The resignation shall take effect at the time specified in it, or immediately if no time is specified. Unless it specifies otherwise, a resignation takes effect without being accepted.
Section 4.08 Meetings. Time, place and notice (if any) of executive committee meetings shall be determined by the executive committee.
Section 4.09 Quorum; Majority Vote. At meetings of the executive committee, a majority of the number of members designated by the board of directors shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of the executive committee, except as otherwise specifically provided by statute, the Articles of Incorporation or these Bylaws. If a quorum is not present at a meeting of the executive committee, the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present.
Section 4.10 Compensation. By resolution of the board of directors, compensation may be paid to members of the executive committee for their services. Also by resolution of the board of directors, a fixed sum and expenses for actual attendance at each regular or special meeting of the executive committee may also be paid.
Section 4.11 Procedure. The executive committee shall keep regular minutes of its proceedings and report the same to the board of directors when required. The minutes of the proceedings of the executive committee shall be placed in the minutes book of the Corporation.
Section 4.12 Action Without Meeting. Any action required or permitted to be taken at a meeting of the executive committee may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all the members of the executive committee. Such consent shall have the same force and effect as a unanimous vote at a meeting. The signed consent, or a signed copy, shall be placed in the minutes book.
Section 4.13 Telephone and Similar Meetings. Members of the executive committee may participate in and hold a meeting 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 such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
Section 4.14 Responsibility. The designation of an executive committee and the delegation of authority to it shall not operate to relieve the board of directors, or any member thereof, of any responsibility imposed upon it, him or her by law.
ARTICLE V
NOTICE
Section 5.01 Method. Whenever by statute, the Articles of Incorporation, these Bylaws or otherwise, notice is required to be given to a shareholder, director or committee member, and no provision is made as to how the notice shall be given, it shall not be construed to mean personal notice, but any such notice may be given: (a) in writing, by United States mail, certified, return receipt requested, postage prepaid, addressed to the shareholder, director or committee member at the address appearing on the books of the Corporation; or (b) in any other method permitted by law. Any notice required or permitted to be given by mail shall be deemed given at the time when the same is deposited in the United States mails.
Section 5.02 Waiver. Whenever by statute, the Articles of Incorporation or these Bylaws, notice is required to be given to a shareholder, committee member or director, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE VI
OFFICERS AND AGENTS
Section 6.01 Number, Qualification; Election; Term.
(A) The Corporation shall have:
(1) a president, a secretary and a treasurer; and
(2) such other officers (including a chairman of the board of directors and vice presidents) and assistant officers and agents as the board of directors may deem necessary.
(B) No officer or agent need be a shareholder, a director or a resident of the state of incorporation.
(C) Officers named in Bylaw Section 6.01(A)(1) shall be elected by the board of directors on the expiration of an officer's term or whenever a vacancy exists. Officers and agents named in Bylaw Section 601(A)(2) may be elected by the Board of Directors at any meeting.
(D) Unless otherwise specified by the board of directors at the time of election or appointment, or in an employment contract approved by the board of directors, each officer's and agent's term shall end at the first meeting of directors held after each annual meeting of the shareholders. He shall serve until the end of his or her term, or if earlier, until his or her death, resignation or removal.
(E) Any two or more offices may be held by the same person, except that the president and the secretary shall not be the same person unless there is only one officer.
Section 6.02 Election and Term of Office. The officers of the Corporation shall be elected annually by the board of directors at the first meeting of the board of directors held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient. Each officer shall hold office until his or her successor shall have been duly elected and shall have qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided.
Section 6.03 Resignation. Any officer may resign at any time by delivering a written resignation either to the board of directors, the president or the secretary of the Corporation. The resignation shall take effect at the time specified therein or immediately if no time is specified. Unless it specifies otherwise, a resignation takes effect without being accepted.
Section 6.04 Removal. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors, whenever, in its judgment, the best interest of the Corporation will be served thereby, but such removal shall be without prejudice to the contractual rights, if any, of the person so removed.
Section 6.05 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, creation of a new office, or otherwise, may be filled by the board of directors for the unexpired portion of the term.
Section 6.06 Salaries and Compensation. The salaries or other compensation of the officers of the Corporation shall be fixed from time to time by the board of directors, except that the board of directors may delegate to any person or group of persons the duty of fixing salaries or other compensation by reason of the fact that he or she is also a director of the Corporation.
Section 6.07 Surety Bonds. In the event the board of directors shall so require, any officer or agent of the Corporation shall execute to the Corporation a bond in such sums and with such surety or sureties as the board of directors may direct, conditioned upon the faithful performance of his or her duties to the Corporation, including responsibility for negligence and for the accounting for all property, monies, or securities of the Corporation which may come into his or her hands.
Section 6.08 President.
(A) The president shall be the chief executive and administrative officer of the Corporation.
(B) The president shall preside at all meetings of the shareholders, and, in the absence of the chairman of the board of directors, at meetings of the board of directors.
(C) The president shall exercise such duties as customarily pertain to the office of the president and shall have general and active supervision over the property, business and affairs of the Corporation and over its several officers.
(D) The president may appoint officers, agents, or employees other than those appointed by the board of directors.
(E) The president may sign, execute and deliver in the name of the Corporation powers of attorney, contracts, bonds and other obligations, and shall perform such other duties as may be prescribed from time to time by the board of directors or by the Bylaws.
Section 6.09 Vice President. The vice president(s) in the order of their seniority, unless otherwise determined by the board of directors, shall, in the absence or disability of the president, perform the duties and have the authority and exercise the powers of the president. They shall perform such other duties and have such other authority and powers as the board of directors may from time to time prescribe or as the president may from time to time delegate.
Section 6.10 Secretary.
(A) The secretary shall keep the minutes of all meetings of the shareholders and of the board of directors and, to the extent ordered by the board of directors or the president, the minutes of meetings of all committees.
(B) The secretary shall cause notice to be given of meetings of shareholders, of the board of directors, and of any committee appointed by the board of directors.
(C) The secretary shall have custody of the corporate seal and general charge of the records, documents and papers of the Corporation not pertaining to the performance of the duties vested in other officers, which shall at all reasonable times be open to the examination of any director.
(D) The secretary may sign or execute contracts with the president in the name of the Corporation and affix the seal of the Corporation thereto.
(E) The secretary shall perform such other duties as may be prescribed from time to time by the board of directors or the Bylaws.
Section 6.11 Assistant Secretary. The assistant secretaries in the order of their seniority, unless otherwise determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and have the authority and exercise the powers of the secretary. They shall perform other duties and have such other powers as the board of directors may from time to time prescribe or as the president may from time to time delegate.
Section 6.12 Treasurer.
(A) The treasurer shall have general custody of the collection and disbursements of funds of the Corporation.
(B) The treasurer shall endorse on behalf of the Corporation for collection, checks, notes and other obligations, and shall deposit the same to the credit of the Corporation in such bank or banks or depositories as the board of directors may direct.
(C) The treasurer may sign, for the president and other persons as may be designated for the purpose by the board of directors, all bills of exchange or promissory notes of the Corporation.
(D) The treasurer shall enter or cause to be entered regularly in the books of the Corporation a full and accurate account of all monies received and paid by him or her on account of the Corporation; shall at all times exhibit his or her books and accounts to any director of the Corporation upon application at the office of the Corporation during business hours; and, whenever required by the board of directors or the president, shall render statements of his or her accounts. The treasurer shall perform such other duties as may be prescribed from time to time by the board of directors or by the Bylaws.
(E) If the board of directors require, the treasurer shall give bond for the faithful performance of his or her duties in such sum and with or without such surety as shall be approved by the board of directors.
Section 6.13 Assistant Treasurer. The assistant treasurers in the order of their seniority, unless otherwise determined by the board of directors, shall, in the absence or disability of the treasurer, perform the duties and have the authority and exercise the powers of the treasurer. They shall perform such other duties and have such other powers as the board of directors may from time to time prescribe or the president may from time to time delegate.
Section 6.14 Registered Agent. The Registered Agent shall serve as the agent of the Corporation for purposes of receiving service of process or any demand or notice authorized by law to be served on the Corporation.
Section 6.15 Other Officers. Other officers shall perform such duties and have such powers as may be assigned to them by the board of directors or the president.
Section 6.16 Delegation of Duties. If any officer of the Corporation is absent or unable to act for any other reason the board of directors may deem sufficient, the board of directors may delegate, for a period of time, some or all of the functions, duties, powers and responsibilities of any officer to any other officer, agent or employee of the Corporation or other responsible person, provided a majority of the whole board of directors concurs therein.
ARTICLE VII
CONTRACTS, LOANS, DEPOSITS AND CHECKS
Section 7.01 Contracts. The board of directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances.
Section 7.02 Loans. No loans or advances shall be contracted on behalf of the Corporation; on negotiable paper or other evidence of its obligation under any loan or advance shall be issued in its name, and no property of the Corporation shall be mortgaged, pledged, hypothecated, or transferred as security for the payment of any loan, advance, indebtedness or liability of the Corporation unless and except as authorized by the board of directors. Any such authorization may be general or confined to specific instances.
Section 7.03 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the board of directors may select, or as may be selected by an officer or agent authorized to do so by the board of directors.
Section 7.04 Checks and Drafts. All notes, drafts, acceptances, checks, endorsements, and evidences of indebtedness of the Corporation shall be signed by such officer or officers, or such agent or agents of the Corporation and in such manner as the board of directors from time to time may determine.
ARTICLE VIII
CAPITAL STOCK
Section 8.01 Certificates. Certificates representing shares of the Corporation shall be issued, in such form as the board of directors shall determine, to every shareholder for the fully paid shares owned by him. These certificates shall be signed by the president and the secretary. They shall be consecutively numbered or otherwise identified; and the name and address of the person to whom they are issued, with the number of shares and the date of issue, shall be entered on the stock transfer books of the Corporation.
Section 8.02 Issuance. Shares (both treasury and authorized but unissued) may be issued for such consideration (not less than par value) and to such persons as the board of directors may determine from time to time. Shares may not be issued until the full amount of the consideration, fixed as provided by law, has been paid.
Section 8.03 Payment of Shares.
(A) The consideration for the issuance of shares shall consist of money paid, labor done (including the services actually performed for the Corporation) or property (tangible or intangible) actually received. Neither promissory notes nor the promise of future services shall constitute payment for shares.
(B) In the absence of fraud in the transaction, the judgment of the board of directors as to the value of consideration received shall be conclusive.
(C) When consideration, fixed as provided by law, has been paid, the shares shall be deemed to have been issued and shall be considered fully paid and nonassessable.
(D) The consideration received for shares shall be allocated by the board of directors, in accordance with law, between stated capital and capital surplus accounts.
Section 8.04 Subscriptions. Unless otherwise provided in the subscription agreement, subscriptions for shares, whether made before or after organization of the Corporation, shall be paid in full at such time or in such installments and at such times as shall be determined by the board of directors. Any call made by the board of directors for payment of subscriptions shall be uniform as to all shares of the same series. In case of default in the payment on any installment or call when payment is due, the Corporation may proceed to collect the amount due in the same manner as any debt due the Corporation.
Section 8.05 Lien. For any indebtedness of a shareholder to the Corporation, the Corporation shall have a first and prior lien on all shares of its stock owned by him or her and on all dividends or other distributions declared thereon.
Section 8.06 Lost, Stolen or Destroyed Certificates. The Corporation shall issue a new certificate in place of any certificate for shares previously issued if the registered owner of the certificate: (a) makes proof in affidavit form that it has been lost, destroyed or wrongfully taken; (b) requests the issuance of a new certificate before the Corporation has notice that the certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim; (c) gives a bond in such form, and with such surety or sureties, with fixed or open penalty, as the Corporation may direct, to indemnify the Corporation (and its transfer agent and registrar, if any) against any claim that may be made on account of the alleged loss, destruction or theft of the certificate; and (d) satisfies any other reasonable requirements imposed by the Corporation. When a certificate has been lost, apparently destroyed or wrongfully taken, and the holder of record fails to notify the Corporation within a reasonable time after he or she has notice of it, and the Corporation registers a transfer of the shares represented by the certificate before receiving such notification, the holder of record is precluded from making any claim against the Corporation for the transfer or for a new certificate.
Section 8.07 Registration of Transfer. The Corporation shall register the transfer of a certificate for shares presented to it for transfer if: (a) the certificate is properly endorsed by the registered owner or by his or her duly authorized attorney; (b) the signature of such person has been notarized or has a medallion signature and reasonable assurance is given that such endorsements are effective; (c) the Corporation has no notice of an adverse claim or has discharged any duty to inquire into such a claim; (d) any applicable law relating to the collection of taxes has been complied with; and (e) there is an opinion of counsel satisfactory to counsel of the Corporation that such transfer is made in accordance with all federal and state securities regulations.
Section 8.08 Registered Owner. Prior to due presentment for registration of transfer of a certificate for shares, the Corporation may treat the registered owner as the person exclusively entitled to vote, to receive notices and otherwise to exercise all the rights and powers of a shareholder.
Section 8.09 Transfer of Shares. Transfer of shares of the Corporation shall be made only in the stock transfer books of the Corporation by the holder of record thereof or by his or her legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney therein authorized by power of attorney duly executed and filed with the secretary of the Corporation and on surrender for cancellation of the certificate for such shares. The person in whose name the shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes by the stock transfer books shall be in the possession of the secretary or transfer agent or clerk of the Corporation.
Section 8.10 Transfer Agent and Registrar. By resolution of the board of directors, the Corporation may from time to time appoint a transfer agent, and, if desired, a registrar, who will perform his or her duties in accordance with the terms and conditions the board of directors deems advisable; provided, however, that until and unless the board of directors appoints some other person, firm or Corporation as its transfer agent, the secretary of the Corporation shall act as transfer agent without the necessity of any formal action of the board of directors and he or she shall perform all of the duties thereof.
ARTICLE IX
INDEMNIFICATION
Section 9.01 Indemnification.
(A) No officer or director shall be personally liable for any obligations of the Corporation or for any duties or obligation of the Corporation or for any duties or obligations arising out of any actions or conduct of such officer or director performed for or on behalf of the Corporation.
(B) The Corporation shall and does hereby indemnify and hold harmless each person and his or her heirs and administrators who shall serve at any time hereafter as a director or officer of the Corporation from and against any and all claims, judgments and liabilities to which such person shall become subject by reason of his or her having heretofore or hereafter been a director or officer of the Corporation or by reason of any action alleged to have heretofore or hereafter been taken or admitted to have been taken by him or her as such director or officer, and shall reimburse each such person for all legal and other expenses reasonably incurred by him or her in connection with any such claim or liability, including power to defend such person from all suits or claims as provided for under the laws of the State of Colorado; provided, however, that no such person shall be indemnified against, or be reimbursed for, any expense incurred in connection with any claim or liability arising out of his or her negligence or willful misconduct. The rights accruing to any person under the foregoing provisions of this section shall not exclude any other right to which he or she may lawfully be entitled, nor shall anything herein contained restrict the right of the Corporation to indemnify or reimburse such person in any proper case, even though not specifically herein provided. The Corporation, its directors, officers, employees and agents shall be fully protected in taking any action or making any payment in reliance upon the advice of counsel.
Section 9.02 Other Indemnification. The indemnification herein provided shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any Bylaw, agreement, vote of shareholders, or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such person.
Section 9.03 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation or is or who was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against liability under the provisions of this section or of the laws of the State of Colorado.
Section 9.04 Settlement by Corporation. The right of any person to be indemnified shall be subject always to the right of the Corporation by its board of directors, in lieu of such indemnity, to settle any claim, action, suit or proceeding at the expense of the Corporation by the payment of the amount of such settlement and the cost and expense incurred in connection therewith.
ARTICLE X
GENERAL PROVISIONS
Section 10.01 Dividends and Reserves.
(A) Subject to statute, the Articles of Incorporation and these Bylaws, dividends may be declared by the board of directors at any regular or special meeting and may be paid in cash, in property, or in shares of the Corporation. The declaration and payment shall be at the discretion of the board of directors.
(B) By resolution, the board of directors may create such reserve or reserves out of the earned surplus of the Corporation as the directors from time to time, in their discretion, think proper to provide for contingencies, or to equalize dividends, or to repair or maintain any property of the Corporation, or for any other purpose they think beneficial to the Corporation. The directors may modify or abolish any such reserve in the manner in which it was created.
Section 10.02 Books and Records. The Corporation shall keep correct and complete books and records of account, shall keep minutes of the proceedings of its shareholders and board of directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each.
Section 10.03 Annual Statement. The board of directors shall mail to each shareholder of record, at least ten days before each annual meeting a full and clear statement of the business and condition of the Corporation, including a reasonably detailed balance sheet, income statement, surplus statement, and statement of changes in financial position, for the last fiscal year and for the prior fiscal year, all prepared in conformity with generally accepted accounting principals applied on a consistent basis.
Section 10.04 Checks and Notes. Checks, demands for money and notes of the Corporation shall be signed by officer(s) or other person(s) designated from time to time by the board of directors.
Section 10.05 Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the board of directors.
Section 10.06 Seal. The corporate seal of the Corporation (of which there may be one or more exemplars) shall contain the name of the Corporation and the name of the state of incorporation. The seal may be used by impressing it or reproducing a facsimile of it, or otherwise.
Section 10.07 Amendment of Bylaws.
(A) These Bylaws may be altered, amended or repealed at any meeting of the board of directors at which a quorum is present, by the affirmative vote of a majority of the directors present at such meeting, provided notice of the proposed alteration, amendment, or repeal is contained in the notice of the meeting.
(B) These Bylaws may also be altered, amended or repealed at any meeting of the shareholders at which a quorum is present or represented, by the affirmative vote of the holders of a majority of the shares present or represented at the meeting and entitled to vote thereat, provided notice of the proposed alteration, amendment or repeal is contained in the notice of the meeting.
Section 10.08 Construction. Whenever the context so requires, the masculine shall include the feminine and neuter, and the singular shall include the plural, and conversely. If any portion of these Bylaws shall be invalid or inoperative, then, so far as is reasonable and possible: (a) the remainder of these Bylaws shall be considered valid and operative and (b) effect shall be given to the intent manifested by the portion held invalid or inoperative.
Section 10.09 Table of Contents; Headings. The table of contents and headings are for organization, convenience and clarity. In interpreting these Bylaws, they shall be subordinated in importance to the other written material.
Section 10.10 Relation to Articles of Incorporation. These Bylaws are subject to and governed by the Articles of Incorporation.
Amended and Restated this 13th day of July, 2005,
/s/W. Ross C. Corace /s/Steven S. Martella ------------------------ ----------------------- W. Ross C. Corace Steven S. Martella Director Director /s/Kenneth D. Barrett ------------------------ Kenneth D. Barrett Director |
OPINION OF COUNSEL, JODY M. WALKER
[JODY M. WALKER - LETTERHEAD]
August 6, 2005
U.S. Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington D.C. 20549
Re: MailTec, Inc.
Form SB-2 Registration Statement
I have acted as counsel to MailTec, Inc., a Nevada corporation in connection with the preparation and filing of a Registration Statement on Form SB-2. The registration statement covers the registration under the Securities Act of 1933, as amended, of 1,473,064 common shares. I have examined the registration statement, MailTec's articles of incorporation and bylaws, as amended, and minutes of meetings of its board of directors.
Based upon the foregoing, and assuming that MailTec will fully comply with all applicable securities laws involved under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated pursuant to said Acts, and in those states or foreign jurisdictions in which the common shares may be sold, I am of the opinion that the common shares have been and will be validly issued, fully paid and nonassessable.
This opinion opines upon Nevada law, including the Nevada Revised Statutes, all applicable provisions of the statutory provisions, and reported judicial decisions interpreting those laws.
CONSENT
I consent to the use of this opinion as an exhibit to the registration statement and to the reference to my firm in the prospectus that is made a part of the registration statement.
Sincerely,
/s/ Jody M. Walker ------------------- Jody M. Walker |
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form SB- 2 of our report dated July 25, 2005, relating to the financial statements of MailTec, Inc. as of March 31, 2005, and the year ended March 31, 2005, the period February 9, 2004 (inception) to March 31, 2004, and the period February 9, 2004 (inception) to March 31, 2005 and the reference to our firm as experts in the Registration Statement.
/s/Stark Winter Schenkein & Co., LLP August 6, 2005 Denver, Colorado |