U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
Registration Statement on Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS
SEC FILE No.
COLORADO 84-1044583
------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. incorporation or
organization) Employer I.D. No.)
|
DOCUMENTS INCORPORATED BY REFERENCE: See the Exhibit Index herein.
PART I
Cardiff International, Inc., (the "Company") was incorporated under the laws of the State of Colorado under the name "Cardiff Financial, Inc.", on October 14, 1986. The purposes for which the corporation was organized were: (1) To engage in the transaction of all lawful business or pursue any other lawful purpose or purposes for which a corporation may be organized under the laws of the State of Colorado; (2) To have, enjoy and exercise all of the rights, powers and privileges conferred upon corporations organized under the laws of the state of Colorado, whether now or hereafter in effect, and whether or not herein specifically mentioned.
The Company had an initial authorized capital consisting of 300,000,000 shares of no par value common stock.
Effective April 1989, the Company completed a merger with United American, Inc., a Washington Corporation ("United") and changed its name to "United American, Inc". A copy of the Articles of Amendment to the Articles of Incorporation is attached hereto and is incorporated herein by reference. See Part III, Item 1. United failed to carry out obligations required of it pursuant to the merger and the merger was cancelled by the Company on a unilateral basis on July 3, 1989.
Effective December 4, 1989, the Company changed its name from United American, Inc., to Cardiff International, Inc. A copy of the Articles of Amendment to the Articles of Incorporation is attached hereto and is incorporated herein by reference. See Part III, Item 1.
On April 27, 1998, the Board of Directors and shareholders holding 201,770,900 of the 300,000,000 or approximately 67% of the Company's issued and outstanding common voting stock authorized a reverse split of the 300,000,000 shares of the Company's outstanding common voting stock on a basis of one for one thousand (1:1,000); thus, the shares of common voting stock outstanding were reduced from 300,000,000 to 300,000. Appropriate adjustments were made to the paid in capital and capital surplus accounts of the Company. In addition, the shares authorized for issuance were reduced from 300,000,000 to 30,000,000. A copy of the Articles of Amendment to the Articles of Incorporation is attached hereto and is incorporated herein by reference. See Part III, Item 1.
In April 1989, the Company entered into an agreement with United, whereby the Company agreed to acquire 100% of the outstanding shares of common stock of United, in exchange for 123,000,000 shares of common stock of the Company. After the closing of this business combination, the Company rescinded the transaction on July 3, 1989 due to the inability of United, to raise $2,000,000 in funding by the agreed deadline of July 1, 1989. The 123,000,000 shares of common stock of the Company were voided and returned to authorized but unissued stock after the combination was terminated.
On December 30, 1996, the Board of Directors of the Company authorized the issuance of 156,000,000 "unregistered" and "restricted" shares of the Company's common voting stock to Mr. Art Beroff, a consultant to the Company. The shares and services were recorded in the financial statement at $.001 per share. The issuance of these shares increased the total number of shares outstanding from 144,000,000 to 300,000,000.
On April 27, 1998, the Board of Directors and shareholders holding 201,770,900 of the 300,000,000 or approximately 67% of the Company's issued and outstanding common voting stock authorized a reverse split of the 300,000,000 shares of the Company's outstanding common voting stock on a basis of one for one thousand (1:1,000); thus, the shares of common voting stock outstanding were reduced from 300,000,000 to 300,000. Appropriate adjustments were made to the paid in capital and capital surplus accounts of the Company. In addition, the shares authorized for issuance were reduced from 300,000,000 to 30,000,000. A copy of the Articles of Amendment to the Articles of Incorporation is attached hereto and is incorporated herein by reference. See Part III, Item 1.
Other than the above-referenced matters and seeking and investigating potential assets, property or businesses to acquire, the Company has had no material business operations for over five years. To the extent that the Company intends to continue to seek the acquisition of assets, property or business that may benefit the Company and its stockholders, it is essentially a "blank check" company. Because the Company has limited assets and conducts no material business, management anticipates that any such venture would require it to issue shares of its common stock as the sole consideration to acquire the venture. This may result in substantial dilution of the shares of current stockholders. The Company's Board of Directors shall make the final determination whether to complete any such venture; the approval of stockholders will not be sought unless required by applicable laws, rules and regulations, its Articles of Incorporation or Bylaws, or contract. The Company makes no assurance that any future enterprise will be profitable or successful.
The Company is not currently engaging in any substantive business activity and has no plans to engage in any such activity in the foreseeable future. In its present form, the Company may be deemed to be a vehicle to acquire or merge with a business or company. The Company does not intend to restrict its search to any particular business or industry, and the areas in which it will seek out acquisitions, reorganizations or mergers may include, but will not be limited to, the fields of high technology, manufacturing, natural resources, service, research and development, communications, transportation, insurance, brokerage, finance and all medically related fields, among others. The Company recognizes that the number of suitable potential business ventures that may be available to it may be extremely limited, and may be restricted to entities who desire to avoid what these entities may deem to be the adverse factors related to an initial public offering ("IPO"). The most prevalent of these factors include substantial time requirements, legal and accounting costs, the inability to obtain an underwriter who is willing to publicly offer and sell shares, the lack of or the inability to obtain the required financial statements for such an undertaking, limitations on the amount of dilution to public investors in comparison to the stockholders of any such entities, along with other conditions or requirements imposed by various federal and state securities laws, rules and regulations. Any of these types of entities, regardless of their prospects, would require the Company to issue a substantial number of shares of its common stock to complete any such acquisition, reorganization or merger, usually amounting to between 80% and 95% of the outstanding shares of the Company following the completion of any such transaction; accordingly, investments in any such private entity, if available, would be much more favorable than any investment in the Company.
Although the Company has not communicated with any other entity with respect to any potential merger or acquisition transaction, management has determined to file this Registration Statement on a voluntary basis. In order to have stock quotations for its common stock on the National Association of Securities Dealers' Automated Quotation System ("NASDAQ"), an issuer must have such securities registered under the Securities and Exchange Act of 1934, as amended (the "1934 Act"). Upon the effective date of this Registration Statement, the Company's common stock will become registered for purposes of the 1934 Act. Management believes that this will make the Company more desirable for entities that may be interested in engaging in a merger or acquisition transaction. To the extent that management deems it advisable or necessary to maintain a quotation of its common stock on any securities market, the Company will voluntarily file periodic reports in the event its obligation to file such reports is terminated under the 1934 Act. Further, in January 1999, the Securities and Exchange Commission began requiring that all companies for which stock quotations are maintained on the OTC Bulletin Board of the National Assocation of Securities Dealers, Inc. ("NASD"), must be subject to and in compliance with the reporting requirements on the 1934 Act. See the heading "Risk Factors," specifically "No Market for Common Stock, No Market for Shares," herein.
In the event that the Company engages in any transaction resulting in a change of control of the Company and/or the acquisition of a business, the Company will be required to file with the Commission a Current Report on Form 8-K within 15 days of such transaction. A filing on Form 8-K also requires the filing of audited financial statements of the business acquired, as well as pro forma financial information consisting of a pro forma condensed balance sheet, pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any decision as to whether to participate in any specific business endeavor, none of which may be determinative or provide any assurance of success. These may include, but will not be limited to an analysis of the quality of the entity's management personnel; the anticipated acceptability of any new products or marketing concepts; the merit of technological changes; its present financial condition, projected growth potential and available technical, financial and managerial resources; its working capital, history of operations and future prospects; the nature of its present and expected competition; the quality and experience of its management services and the depth of its management; its potential for further research, development or exploration; risk factors specifically related to its business operations; its potential for growth, expansion and profit; the perceived public recognition or acceptance of its products, services, trademarks and name identification; and numerous other factors which are difficult, if not impossible, to properly or accurately analyze, let alone describe or identify, without referring to specific objective criteria.
Regardless, the results of operations of any specific entity may not necessarily be indicative of what may occur in the future, by reason of changing market strategies, plant or product expansion, changes in product emphasis, future management personnel and changes in innumerable other factors. Further, in the case of a new business venture or one that is in a research and development mode, the risks will be substantial, and there will be no objective criteria to examine the effectiveness or the abilities of its management or its business objectives. Also, a firm market for its products or services may yet need to be established, and with no past track record, the profitability of any such entity will be unproven and cannot be predicted with any certainty.
Management will attempt to meet personally with management and key personnel of the entity sponsoring any business opportunity afforded to the Company, visit and inspect material facilities, obtain independent analysis or verification of information provided and gathered, check references of management and key personnel and conduct other reasonably prudent measures calculated to ensure a reasonably thorough review of any particular business opportunity; however, due to time constraints of management, these activities may be limited.
The Company is unable to predict the time as to when and if it may actually participate in any specific business endeavor. The Company anticipates that proposed business ventures will be made available to it through personal contacts of directors, executive officers and principal stockholders, professional advisors, broker dealers in securities, venture capital personnel, members of the financial community and others who may present unsolicited proposals. In certain cases, the Company may agree to pay a finder's fee or to otherwisecompensate the persons who submit a potential business endeavor in which the Company eventually participates. Such persons may include the Company's directors, executive officers, beneficial owners or their affiliates. In this event, such fees may become a factor in negotiations regarding a potential acquisition and, accordingly, may present a conflict of interest for such individuals.
Although the Company has not identified any potential acquisition target, the possibility exists that the Company may acquire or merge with a business or company in which the Company's executive officers, directors, beneficial owners or their affiliates may have an ownership interest; a transaction of this type would create a conflict of interest for such a person. Current Company policy does not prohibit such transactions. Because no such transaction is currently contemplated, it is impossible to estimate the potential pecuniary benefits to these persons.
Further, substantial fees are often paid in connection with the completion of these types of acquisitions, reorganizations or mergers, ranging from a small amount to as much as $250,000. These fees are usually divided among promoters or founders, after deduction of legal, accounting and other related expenses, and it is not unusual for a portion of these fees to be paid to members of management or to principal stockholders as consideration for their agreement to retire a portion of the shares of common stock owned by them. In the event that such fees are paid, they may become a factor in negotiations regarding any potential acquisition by the Company and, accordingly, may present a conflict of interest for such individuals.
Any finder's fee would be negotiated once a prospective merger candidate has been identified. Typically, a finder's fee is based upon a percentage, ranging from 5% to 15% of the fees discribed above.
None of the Company's directors, executive officers or promoters, or their affiliates or associates, has had any negotiations with any representatives of the owners of any business or company regarding the possibility of an acquisition or merger transaction with the Company. Nor are there any present plans, proposals, arrangements or understandings with any such persons regarding the possibility of any acquisition or merger involving the Company.
In any business venture, there are substantial risks specific to the particular enterprise which cannot be ascertained until a potential acquisition, reorganization or merger candidate has been identified; however, at a minimum, the Company's present and proposed business operations will be highly speculative and be subject to the same types of risks inherent in any new or unproven venture, and will include those types of risk factors outlined below.
The auditor's discussion on the Company's Basis of Presentation - Going Concern, Note 2 of the audited financial statements herein, is as follows:
"The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplates continuation of the Company as a going concern. However, the Company has sustained operating losses since its inception and has a net capital deficiency. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management is attempting to locate a business combination candidate.
In view of these matters, continuing as a going concern is dependent upon the Company's ability to meet its financing requirements, raise additional capital, and the success of its future operations or completion of successful business combination. Management believes that actions planned and presently being taken to revise the Company' s operating and financial requirements provide the opportunity for the Company to continue as a going concern."
The Company has no assets and has had no revenue for over five years or to the date hereof. Nor will the Company receive any revenues until it completes an acquisition, reorganization or merger, at the earliest. The Company can provide no assurance that any acquired business will produce any material revenues for the Company or its stockholders or that any such business will operate on a profitable basis.
Because the Company is not currently engaged in any substantive business activities, as well as management's broad discretion with respect to the acquisition of assets, property or business, the Company may be deemed to be a "blank check" company. Although management intends to apply any proceeds it may receive through the issuance of stock or debt to a suitable acquisition, subject to the criteria identified above, such proceeds will not otherwise be designated for any more specific purpose. The Company can provide no assurance that any use or allocation of such proceeds will allow it to achieve its business objectives.
Because the Company has not yet identified any assets, property or business that it may acquire, potential investors in the Company will have virtually no substantive information upon which to base a decision whether to invest in the Company. Potential investors would have access to significantly more information if the Company had already identified a potential acquisition or if the acquisition target had made an offering of its securities directly to the public. The Company can provide no assurance that any investment in the Company will not ultimately prove to be less favorable than such a direct investment.
To date, the Company has not identified any particular industry or business in which to concentrate its acquisition efforts. Accordingly, prospective investors currently have no basis to evaluate the comparative risks and merits of investing in the industry or business in which the Company may acquire. To the extent that the Company may acquire a business in a high risk industry, the Company will become subject to those risks. Similarly, if the Company acquires a financially unstable business or a business that is in the early stages of development, the Company will become subject to the numerous risks to which such businesses are subject. Although management intends to consider the risks inherent in any industry and business in which it may become involved, there can be no assurance that it will correctly assess such risks.
Management has had no preliminary contact or discussions regarding, and there are no present plans, proposals or arrangements to acquire any specific assets, property or business. Accordingly, it is unclear whether such an acquisition would take the form of an exchange of capital stock, a merger or an asset acquisition. However, because the Company has virtually no resources as of the date of this Registration Statement, management expects that any such acquisition would take the form of an exchange of capital stock. See Part I, Item 2.
The Company is authorized to issue 30,000,000 shares of common stock. As of March 6, 2001, only 675,290 shares were issued and outstanding. The issuance of additional shares in connection with any reorganization transaction or the raising of capital may result in substantial dilution of the holdings of current stockholders.
The Company currently has no assets. As a result, all funding necessary to meet the Company's operating expenses in the next 12 months will likely be advanced by management or principal stockholders as loans to the Company. See the heading "Plan of Operation" of the caption "Management's Discussion and Analysis or Plan of Operation," Part I, Item 2.
As of the date of this Registration Statement, the Company has not identified any potential merger or acquisition candidate. The Company does not intend to limit its search to any particular business or industry. Stockholders will not have access to any information about any such candidate until such time as a transaction is completed and the Company files a Current Report on Form 8-K disclosing the nature of such transaction.
A total of 36 states prohibit or substantially restrict the registration and sale of "blank check" companies within their borders. Additionally, 36 states use "merit review powers" to exclude securities offerings from their borders in an effort to screen out offerings of highly dubious quality. See paragraph 8221, NASAA Reports, CCH Topical Law Reports, 1990. Although it has no present plans to register or qualify its securities in any state, the Company intends to comply fully with all state securities laws, and plans to take the steps necessary to ensure that any future offering of its securities is limited to those states in which such offerings are allowed. However, while the Company has no substantive business operations and is deemed to a "blank check" Company, these legal restrictions may have a material adverse impact on the Company's ability to raise capital because potential purchasers of the Company's securities must be residents of states that permit the purchase of such securities. These restrictions may also limit or prohibit stockholders from reselling shares of the Company's common stock within the borders of regulating states.
By regulation or policy statement, several states place various restrictions on the sale or resale of equity securities of "blank check" or "blind pool" companies. These restrictions include, but are not limited to, heightened disclosure requirements, exclusion from "manual listing" registration exemptions for secondary trading privileges and outright prohibition of public offerings of such companies.
In most jurisdictions, "blank check" and "blind pool" companies are not eligible for participation in the Small Corporate Offering Registration ("SCOR") program, which permits an issuer to notify the Securities and Exchange Commission of certain offerings registered in such states by filing a Form D under Regulation D of the Commission. The majority of states have adopted some form of SCOR. States participating in the SCOR program also allow applications for registration of securities by qualification by filing a Form U-7 with the states' securities commissions. Nevertheless, the Company does not anticipate making any SCOR offering or other public offering in the foreseeable future, even in any jurisdiction where it may be eligible for participation in SCOR, despite its status as a "blank check" or "blind pool" company.
The net effect of the above-referenced laws, rules and regulations will be to place significant restrictions on the Company's ability to register, offer and sell and/or to develop a secondary market for shares of the Company's common stock in virtually every jurisdiction in the United States. These restrictions should cease once and if the Company acquires a venture by purchase, reorganization or merger, so long as the business operations succeeded to involve sufficient activities of a specific nature.
Members of the Company's management are not required to devote their full time to the affairs of the Company. Because of their time commitments, as well as the fact that the Company has no business operations, the members of management anticipate that they will devote an insignificant amount of time to the activities of the Company, at least until such time as the Company has identified a suitable acquisition target.
Although the Company has not identified any potential acquisition target, the possibility exists that the Company may acquire or merge with a business or company in which the Company's executive officers, directors, beneficial owners or their affiliates may have an ownership interest. Such a transaction may occur if management deems it to be in the best interests of the Company and its stockholders, after consideration of the above referenced factors. A transaction of this nature would present a conflict of interest to those parties with a managerial position and/or an ownership interest in both the Company and the acquired entity, and may compromise management's fiduciary duties to the Company's stockholders. An independent appraisal of the acquired company may or may not be obtained in the event a related party transaction is contemplated. Furthermore, because management and/or beneficial owners of the Company's common stock may be eligible for finder's fees or other compensation related to potential acquisitions by the Company, such compensation may become a factor in negotiations regarding such potential acquisitions.
Due to Jenson Services, Inc., Mr. Beroff's and Mr. Calello's collective ownership of a majority of the shares of the Company's outstanding common stock (approximately 83.3% of the outstanding voting securities of the Company are owned by the aforementioned stockholder's), these stockholder's have the ability to elect all of the Company's directors, who in turn elect all executive officers, without regard to the votes of other stockholders. See the caption "Security Ownership of Certain Beneficial Owners and Management", Part I, Item 4.
Although the Company intends to submit for listing of its common stock on the OTC Bulletin Board of the National Association of Securities Dealers, Inc. (the "NASD"), there is currently no market for such shares; and there can be no assurance that any such market will ever develop or be maintained. Any market price for shares of common stock of the Company is likely to be very volatile, and numerous factors beyond the control of the Company may have a significant effect. In addition, the stock markets generally have experienced, and continue to experience, extreme price and volume fluctuations which have affected the market price of many small capital companies and which have often been unrelated to the operating performance of these companies. These broad market fluctuations, as well as general economic and political conditions, may adversely affect the market price of the Company's common stock in any market that may develop. Sales of "restricted securities" under Rule 144 may also have an adverse effect on any market that may develop. See the caption "Recent Sales of Unregistered Securities," Part II, Item 4.
In addition to the foregoing, in order to obtain a listing for its securities on the OTC Bulletin Board, the Company will need to retain a broker-dealer that is willing to act as a "market maker."
Only companies that report their current financial information to the Securities and Exchange Commission may have their securities quoted on the OTC Bulletin Board. Therefore, upon the effective date of this Registration Statement, the Company may apply to have its securities quoted on the OTC Bulletin Board. However, in the event that the Company loses this status as a "reporting issuer," any future quotation of its common stock on the OTC Bulletin Board may be jeopardized.
If it is able to obtain quotation of its comon stock on the OTC Bulletin
Board, the Company's common stock will likely be deemed to be "penny stock" as
that term is defined in Rule 3a51-1 of the Securities and Exchange Commission.
Penny stocks are stocks (i) with a price of less than five dollars per share;
(ii) that are not traded on a "recognized" national exchange; (iii) whose prices
are not quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks
must still meet requirement (i) above); or (iv) in issuers with net tangible
assets less than $2,000,000 (if the issuer has been in continuous operation for
at least three years) or $5,000,000 (if in continuous operation for less than
three years), or with average revenues of less than $6,000,000 for the last
three years.
There has been no "established public market" for the Company's common stock during the last five years. At such time as the Company completes a merger or acquisition transaction, if at all, it may attempt to qualify for listing on either NASDAQ or a national securities exchange. However, at least initially, any trading in its common stock will most likely be conducted in the over-the-counter market in the "pink sheets" or the OTC Bulletin Board of the NASD.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 of the Securities and Exchange Commission require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account. Potential investors in the Company's common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be "penny stock."
Moreover, Rule 15g-9 of the Securities and Exchange Commission requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for investors in the Company's common stock to resell their shares to third parties or to otherwise dispose of them.
The limited business operations of the Company, as now contemplated, involve those of a "blank check" company. The only activities to be conducted by the Company are to maintain its good standing in teh State of Colorado and to seek out and investigate the acquisition of any viable business opportunity by purchase and exchange for securities of the Company or pursuant to a reorganization or merger through which securities of the Company will be issued or exchanged.
Management will seek out and investigate business opportunities through every reasonably available fashion, including personal contacts, professionals, securities broker-dealers, venture capital personnel, members of the financial community and others who may present unsolicited proposals; the Company may also advertise its availability as a vehicle to bring a company to the public market through a "reverse" reorganization or merger.
None; not applicable.
None; not applicable.
None; not applicable.
None; not applicable.
None; not applicable.
None.
The Company has not engaged in any material operations or had any revenues from operations during the last five fiscal years. The Company's plan of operation for the next 12 months is to continue to seek the acquisition of assets, property or business that may benefit the Company and its stockholders. Because the Company has no resources, management anticipates that to achieve any such acquisition, the Company will be required to issue shares of its common stock as the sole consideration for such venture.
During the next 12 months, the Company's only foreseeable cash requirements will relate to maintaining the Company in good standing or the payment of expenses associated with reviewing or investigating any potential business venture, which may be advanced by management or principal stockholders as loans to the Company. Because the Company has not identified any such venture as of the date of this Registration Statement, it is impossible to predict the amount of any such loan. However, any such loan will not exceed $25,000 and will be on terms no less favorable to the Company than would be available from a commercial lender in an arm's length transaction. As of the date of this Registration Statement, the Company has not actively begun to seek any such venture.
The Company has had no material operations for over five years. It has incurred losses of ($4,190) and ($4,492), for the years ended September 30, 2001 and 2000, respectively. The Company incurred losses of ($6) and ($45), for the three month period ended December 31, 2001 and 2000, respectively.
The Company had no assets during the years ended September 30, 2001 and 2000. No contributions were made during the three month period ended December 31, 2001.
The Company has no assets, property or business; its principal executive office address and telephone number are the address and telephone number of Jenson Services, Inc., and are provided at no cost. Because the Company has no current business operations, its activities have been limited to keeping itself in good standing in the State of Colorado, and with preparing this Registration Statement and the accompanying financial statements. These activities have consumed an insignificant amount of management's time; accordingly, the costs to Jenson Services, Inc. of providing the use their office and telephone have been minimal.
The following table sets forth the shareholdings of those persons who beneficially own more than five percent of the Company's common stock as of the date of this Report, with the computations being based upon 675,290 shares of common stock being outstanding.
Number of Shares Percentage
Name and Address Beneficially Owned of Class (1)
---------------- ------------------ --------
Art Beroff 156,000 23.1%
156-34 88th Street
Howard Beach, NY 11414
Jenson Services, Inc. 250,000 37.0%
5525 S. 900 E. #110
Salt Lake City, UT
84117
Charles Calello 156,625* 23.2%
23368 Mirabello Circle
Boca Raton, FL 33433
------- ----
562,625 83.3%
|
*Clay Calello may be deemed beneficial owner of these shares due to her relationship with Charles Calello. Mrs. Calello is the wife of Charles Calello.
The following table sets forth the shareholdings of the Company's directors and executive officers as of the date of this Report:
Number of Percentage of
Name and Address Shares Beneficially Owned of Class *
---------------- ------------------------- --------
Charles Calello 156,625* 23.2%
23368 Mirabello Circle
Boca Raton, FL 33433
Clay Calello 0 0
23368 Mirabello Circle
Boca Raton, FL 33433
Kathleen Morrison 0 0
9352 Sterling Dr.
Sandy, UT 84093
------- ------
All directors and executive
officers as a group 156,625 23.2%%
(3 persons)
|
*Mrs. Clay Calello may be deemed beneficial owner of these shares due to her relationship with Charles Calello. Mrs. Calello is the wife of Charles Calello.
There are no present arrangements or pledges of the Company's securities which may result in a change in control of the Company.
The following table sets forth the names of all current directors and executive officers of the Company. These persons will serve until the next annual meeting of the stockholders or until their successors are elected or appointed and qualified, or their prior resignation or termination.
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- ---- ----------- --------------
Charles Calello President 07/89 *
Director 10/86 *
Kathleen L. Morrison Secretary 03/99 *
Director 03/99 *
Clay Calello Secretary 07/89 03/99
Vice President 07/89 *
Director 07/89 *
|
* These persons presently serve in the capacities indicated.
Charles Calello. President and Director. Mr. Calello has served as a Director and Chairman of the Board of Directors of the Company since January, 1987. Mr. Calello has been directly involved in the music business since 1962. He has been self-employed or President of privately held companies such as Charles Calello Productions, Space Cowboy Music, and Calello Music. Mr. Calello has published, arranged, produced, co-produced, composed, or orchestrated music, scores, songs, or albums for groups and individuals such as Gladys Knight, Bill Medley, Juice Newton, Eddie Rabbit, Deborah Allen, Barbara Streisand, Englebert Humperdinck, Barry Manilow, Glen Campbell, Bruce Springsteen, Neil Diamond, Lou Christie, The Four Seasons, and Frank Sinatra.
Clay Calello, Director and Vice President. Mrs. Calello has served as a Director and Vice President since July 1989. Mrs Calello is the wife of Mr. Charles Calello. Mrs. Calello has been involved in the fashion industry since 1974, first as clothing designer in Chicago and later as a fashion consultant/trouble shooter in Beverly Hills California. In 1981, Mrs. Calello started the music company Shem Production, Inc. The company specialized in producing music packages for television commercials, television shows and records. Her company produced the music for such products as Coors Beer, McDonald's, Coca Cola, Nescafe and Oldsmobile. Her Company provided music for the hit TV series Crime Story as well as 9 top ten records. Since 1992, Mrs. Calello has been involved in various cultural and non profit organizations including Boca Pops and the Florida Atlantic University.
Kathleen L. Morrison, Director and Secretary. Mrs. Morrison is 45 years old. For the past 6 years, she has been the office manager for two persons, one of which is Jenson Services, Inc., which is a consultant to and a majority stockholder of the Company. For seven years, she was the editor of "Super Group" a vertical market computer magazine targeting HP3000 users. Mrs. Morrison received a B.A. degree from Colorado State University in 1978.
The officers and directors of Cardiff hold no other directorship in any other reporting corporation, except for Kathleen L. Morrison who has served since March, 2000, as director and secretary of Source Energy, Inc., a Utah corporation, and since June, 2001, as secretary and director of Brenex Oil Corporation, a Utah corporation. All directors hold offices until the next annual meeting of stockholders and until their successors are duly elected and qualified.
The Company has no employees who are not executive officers.
Charles Calello, President and Director and Clay Calello, Vice President and Director are husband and wife. Other than the aforementioned, there are no additional family relationships between the officers and directors.
During the past five years, no present or former director, executive officer or person nominated to become a director or an executive officer of the Company:
(1) was a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
(4) was found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
The following table sets forth the aggregate compensation paid by the Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricted lying Pay- Comp-
Position Ended ($) ($) Compen- Stock Options outs ensat'n
-----------------------------------------------------------------
Charles J.
Calello 9/30/01 0 0 0 0 0 0 0
President, 9/30/00 0 0 0 0 0 0 0
Director 9/30/99 0 0 0 0 0 0 0
9/30/98 0 0 0 125,000* 0 0 0
Kathleen L.
Morrison 9/30/01 0 0 0 0 0 0 0
Secretary, 9/30/00 0 0 0 0 0 0 0
Director 9/30/99 0 0 0 0 0 0 0
9/30/98 0 0 0 0 0 0 0
Clay Calello 9/30/01 0 0 0 0 0 0 0
Vice President 9/30/00 0 0 0 0 0 0 0
and Director 9/30/99 0 0 0 0 0 0 0
Director 9/30/98 0 0 0 0 0 0 0
|
No cash compensation, deferred compensation or long-term incentive plan awards were issued or granted to the Company's management during the fiscal years ending September 30, 2001, 2000, 1999, or 1998, or the period ending on the date of this Registration Statement. Mr. Charles Calello, President and Director was issued 125,000 shares of the Company's "unregistered" and "restricted" common stock on December 15, 1998. These shares and services were recorded in the financial statements at $.001 per shares.
*Mrs Calello may be deemed beneficial owner of these shares due to her relationship with Charles Calello. Mrs. Calello is the wife of Charles Calello.
Other than the aforementioned, there has been no executive compensation paid by the Company to officers and director for services rendered in the last four years.
There are no conditions relating to payment of compensation to officers and directors that a target company must comply with and loans made by shareholders to the Company will most likely be forgiven with no recourse upon closing of a transaction. No loans have been made or are anticipated to be made to officers, directors, affiliates, or lending institutions.
There are no standard arrangements pursuant to which the Company's directors are compensated for any services provided as director. No additional amounts are payable to the Company's directors for committee participation or special assignments.
There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company, with respect to any director or executive officer of the Company which would in any way result in payments to any such person because of his or her resignation, retirement or other termination of employment with the Company or its subsidiaries, any change in control of the Company, or a change in the person's responsibilities following a change in control of the Company.
For a description of transactions between members of management, five percent stockholders, "affiliates", promoters and finders, see the caption "Recent Sales of Unregistered Securities" of Part II, Item 4. of Item I.
There have been no material transactions, series of similar transactions, currently proposed transactions, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeded $60,000 and in which any director or executive officer, or any security holder who is known to the Company to own of record or beneficially more than five percent of the Company's common stock, or any member of the immediate family of any of the foregoing persons, had a material interest.
For a description of transactions between members of management, five percent stockholders, "affiliates", promoters and finders, see the caption "Recent Sales of Unregistered Securities" of Part II, Item 4.
There have been no material transactions, series of similar transactions, currently proposed transactions, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeded $60,000 and in which any director or executive officer, or any security holder who is known to the Company to own of record or beneficially more than five percent of the Company's common stock, or any member of the immediate family of any of the foregoing persons, had a material interest.
The Company has no parents. For a list of 10% beneficial owners and management, please see the caption "Security Ownership of Certain Beneficial Owners and Management" Part I, Item 4.
There have been no material transactions, series of similar transactions, currently proposed transactions, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeded $60,000 and in which any promoter or founder, or any member of the immediate family of any of the foregoing persons, had a material interest.
The Company has one class of securities authorized, consisting of 30,000,000 shares of no par value common voting stock. The holders of the Company's common stock are entitled to one vote per share on each matter submitted to a vote at a meeting of stockholders. The shares of common stock do not carry cumulative voting rights in the election of directors.
Stockholders of the Company have no pre-emptive rights to acquire additional shares of common stock or other securities. The common stock is not subject to redemption rights and carries no subscription or conversion rights. All shares of the common stock now outstanding are fully paid and non-assessable.
There are no outstanding options, warrants or calls to purchase any of the authorized securities of the Company.
There is no provision in the Company's Articles of Incorporation, as amended, or Bylaws, that would delay, defer, or prevent a change in control of the Company.
PART II
The Company's common stock was previously listed on the OTC- Bulletin Board under the symbol "UAMI". However, there is currently no market nor has there been a market for the Company's common stock since June, 1996. In order to establish a market for the Company's common stock, the Company will have to apply for a new trading symbol with the NASD.
In any event, no assurance can be given that any market for the Company's common stock will develop or be maintained. If a public market ever develops in the future, the sale of "unregistered" and "restricted" shares of common stock pursuant to Rule 144 of the Commission by members of management may have a substantial adverse impact on any such public market, and all of the current and former members of management have already satisfied the one-year holding period requirement of Rule 144. See the caption "Recent Sales of Unregistered Securities," Part II, Item 4.
The number of record holders of the Company's common stock as of the date of this Registration Statement is approximately 694. This figure does not include or indicate the number of shareholders who may hold eheir shares in "street name".
The Company has not declared any cash dividends with respect to its common stock, and does not intend to declare dividends in the foreseeable future. The future dividend policy of the Company cannot be ascertained with any certainty, and if and until the Company completes any acquisition, reorganization or merger, no such policy will be formulated. There are no material restrictions limiting, or that are likely to limit, the Company's ability to pay dividends on its securities.
The Company is not a party to any pending legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.
There have been no changes in the Company's principal independent accountant in the past two fiscal years or as of the date of this Registration Statement. The current accountant for the Company audited its last financial statements for the fiscal year ended September 30, 2001.
Name and Address Date Number of Shares Consideration ---------------- ---- ---------------- ------------- Art Beroff* 12/30/96 156,000 $156 Charles Calello* 12/15/98 125,000 $125 Jenson Services, Inc.* 7/19/99 250,000 $250 |
*See Part I, Items 4 and 6 for information regarding executive compensation and stock ownership.
Section 7-109-102 of the Colorado Corporations Code (the "Colorado Code") authorizes a Colorado corporation to indemnify any director against liability incurred in any proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Unless limited by the Articles of Incorporation, Section 7-109-105 authorizes a director to apply for indemnification to the court conducting the proceeding or another court of competent jurisdiction. Section 7-109-107 extends this right to officers of a corporation as well.
Unless limited by the Articles of Incorporation, Section 7-109-103 requires that a corporation indemnify a director who was wholly successful in defending any proceeding to which he or she was a party against reasonable expenses incurred in connection therewith. Unless limited by the Articles of Incorporation, Section 7-109-107 extends this protection to officers of a corporation as well.
Pursuant to Section 7-109-104, the corporation may advance a director's expenses incurred in defending any action or proceeding upon receipt of an undertaking and a written affirmation of his or her good faith belief that he or she has met the standard of conduct specified in Section 7-109-102. Unless limited by the Articles of Incorporation, Section 7-109-107 extends this protection to officers of a corporation as well.
Regardless of whether a director, officer, employee or agent has the right to indemnity under the Colorado Code, Section 7-109-108 allows the corporation to purchase and maintain insurance on his or her behalf against liability resulting from his or her corporate role.
Additionally, Article X of the Company's Articles of Incorporation provide the following indemnification:
l. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a director, officers employee or agent of the corporation or is or was serving at the request of the corporation, is a director, officer, employee, or agent of another corporation partnership, joint ventures trusts or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner be reasonably believed to be in the best interests of the corporation and with, respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that a person did not act in good faith and in a manner which he reasonably believed to be in the best interests of the corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
2. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint ventures, trusts or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in the best interests of the corporation; but no indemnification shall be made in respect of any claim, issue, or matter as to which such person has been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court in which such action or suit was brought determines upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which such court deems proper.
3. To the extent that a director, officer, employee, or agent of the corporation has been successful on the merits in defense of any action, suit or proceeding referred to in paragraph 1 or 2 of this Article XII or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.
4. Any indemnification under Paragraph 1 or 2 of this Article XII (unless ordered by a Court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in said paragraph 1 or 2. Such determination shall be made by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, or, if such a quorum is not obtainable or even if obtainable a quorum of disinterested directors so directed by independent legal counsel in a written opinion, or by the shareholders.
5. Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit, or proceeding may be paid by the corporation in advance of the final disposition of such action suit, or proceeding as authorized in paragraph 4 of this Article XII upon receipt of an undertaking by or on behalf the director, officer, employee or agent to repay such amount unless it is ultimately determined that he is entitled to be indemnified by the corporation as authorized in this Article XII.
6. The indemnification provided by this Article XII shall not be deemed exclusive of any other rights to which those indemnified may be entitled under the articles of incorporation, any bylaws, agreement, vote of shareholders or disinterested directors, or otherwise, and any procedure provided for by any of the foregoing, both as to action in his 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 heirs, executors, and administrators of such a person.
7. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employees or agent of the corporation or who is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article XII.
PART F/S
Independent Auditors' Report
Balance Sheet - September 30, 2001
Balance Sheet - September 30, 2000
Statements of Operations for the years ended
September 30, 2001 and 2000 and for the period from June 19, 1996 (date of reinstatement) through September 30, 2001.
Statements of changes in Stockholders' (Deficit) from September 30, 1996 through September 30, 2001
Statements of Cash Flows for the years ended September 30, 2001 and 2000 and for the period from June 19, 1996 (date of reinstatement) through September 30, 2001
Notes to the Financial Statements
INDEX TO FINANCIAL STATEMENTS
CARDIFF INTERNATIONAL, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
With
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
September 30, 2001 and 2000
Report of Independent Certified Public Accountants F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations F-4
Statement of Changes in Stockholders' (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
|
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Cardiff International, Inc.
Salt Lake City, UT 84117
We have audited the accompanying balance sheets of Cardiff International, Inc. as of September 30, 2001 and 2000, and the related statements of operations, stockholders' (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in all material respects, the financial position of Cardiff International, Inc. (A Development Stage Company) as of September 30, 2001 and 2000, and the results of its operations, changes in its stockholders' (deficit) and its cash flows for the years then ended, in conformity with generally accepted accounting principles in the United States of America.
The accompanying balance sheets have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubts about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Schumacher & Associates, Inc. Certified Public Accountants 2525 Fifteenth Street, Suite 3H Denver, Colorado 80211
November 19, 2001
CARDIFF INTERNATIONAL, INC.
(A Development Stage Company)
BALANCE SHEET
September 30, 2001
ASSETS
------
Current Assets: $ -
----------
TOTAL ASSETS $ -
==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 2,250
Accounts payable, stockholder 21,903
----------
Total Current Liabilities 24,153
----------
TOTAL LIABILITIES 24,153
----------
Stockholders' (Deficit):
Common Stock, no par value
30,000,000 shares authorized
675,000 shares issued and outstanding 320,314
Additional paid-in capital 225,345
Accumulated (deficit) (559,821)
----------
TOTAL STOCKHOLDERS' (DEFICIT) (24,153)
----------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ -
==========
|
The accompanying notes are an integral part of the financial statements.
CARDIFF INTERNATIONAL, INC.
(A development Stage Company)
BALANCE SHEET
September 30, 2000
ASSETS
Current Assets: $ -
----------
TOTAL ASSETS $ -
==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 2,275
Accounts payable, stockholders 17,687
----------
Total Current Liabilities 19,962
----------
TOTAL LIABILITIES 19,962
----------
Stockholders' (Deficit):
Common Stock, no par value
30,000,000 shares authorized
675,000 shares issued and outstanding 320,314
Additional paid-in capital 225,345
Accumulated (deficit) (565,612)
----------
TOTAL STOCKHOLDERS' (DEFICIT) (19,962)
----------
TOTAL LIABILITES AND STOCKHOLDERS' (DEFICIT) $ -
==========
The accompanying notes are an integral part of the financial statements.
|
CARDIFFF INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the period
from June 19
1996 (date of
Years Ended reinstatement)
September 30, through
September 20,
2001 2000 2001
Revenue ................................ $ -- $ -- $ --
---------- ---------- ----------
Expenses:
Accounting and auditing ......... 3,250 3,200 6,450
Stock Issued for Services ....... - - 375
Other ........................... 941 1,292 18,303
---------- ---------- ----------
Total .......................... 4,191 4,492 25,128
---------- ---------- ----------
Net (Loss) ............................. $ (4,191) $ (4,492) $(25,128)
========== ========== ==========
(Loss) Per Share ....................... $ (.01) $ (.01) $ (.05)
Weighted Average Shares Outstanding .... 675,000 675,000 461,500
========== ========== =========
|
The accompanying notes are an integral part of the financial statements.
CARDIFF INTERNATIONAL , INC
(A Development Stage Company)
STATEMENT OF CHANGES OF STOCKHOLDERS' (DEFICT)
From September 30, 1996 through September 30, 2001
Additional
Common Stock Paid-In Accumulated
No./Shares Amount Capital Deficit Total
---------- ------ ------- ------- -----
Balance at
September 30,
1996 144,000 $ 319,783 $223,401 $(544,684) $ (1,500)
Common Stock
Issued 156,000 156 1,944 - 2,100
Net (Loss)
For the year
Ended
September 30,
1997 - - - (7,543) (7,543)
------- ------- ------- ------- -------
Balance at
September 30,
1997 300,000 319,939 225,345 (552,912) (6,943)
Net (Loss) for
Year ended
September 30,
1998 - - - (685) (685)
------- ------- ------- ------- -------
Balance at
September 30,
1998 300,000 319,939 225,345 (552,912) (7,628)
Common stock
issued 375,000 375 - - 375
Net (Loss) for
Year ended
September 30,
1999 - - - (8,217) (8,217)
------- ------- ------- ------- -------
Balance at
September 30,
1999 675,000 320,314 225,345 (561,129) (15,470)
Net Loss for
The year
ended
September 30,
2000 - - - (4,492) (4,492)
------- ------- ------- ------- -------
Balance at
September 30,
2000
675,000 $ 320,314 $ 225,345 $(565,621) $ (19,962)
Net Loss) for
the year ended
September 30,
2001 - - - (4,191) (4,191)
------- ------- ------- ------- -------
Balance at
September 30,
2001 675,000 $ 320,314 $ 225,345 $(569,812) $ (24,153)
======= ======= ======= ========== ==========
|
The accompanying notes are an integral part of the financial statements.
CARDIFF INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS For the period
from June 19,
1996 (date of
reinstatement)
through
Years Ended September 30, September 30,
2001 2000 2001
---- ---- ----
Cash Flows Operating Activities:
Net (loss) $ (4,191) $ (4,492) $ (25,128)
Stock issued for services - - 375
Increase (decrease) in accounts payable (25) 1,275 750
--------- --------- --------
Net Cash (used in) Operating Activities (4,216) (3,217) (24,003)
--------- --------- --------
Cash Flows from Investing Activities - - -
--------- --------- --------
Cash Flows from Financing Activity:
Common Stock Issued and
additional paid-in capital - - 2,100
Advances from related parties 4,216 3,217 21,903
--------- --------- --------
Increase in Cash - - -
Cash, Beginning of Year - - -
Cash, Beginning of Year - - -
--------- --------- --------
Cash End of Year $ - $ - $ -
========= ========= ========
Interest Paid $ - $ - $ -
========= ========= ========
Income Taxes Paid $ - $ - $ -
========= ========= ========
|
The accompanying notes are an integral part of the financial statements.
CARDIFF INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2001 and 2000
This summary of significant accounting policies of Cardiff International, Inc. (A Development Stage Company) (Company) is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
Cardiff International, Inc. (Company) was incorporated under the laws of Colorado on October 14, 1986. On June 19, 1995, the Company was reinstated as a corporation in Colorado.The Company is an inactive entity other than it is looking for a business combination candidate.
The Company has selected the last day of September as its year end.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplates continuation of the Company as a going concern. However, the Company has sustained operating losses since its inception and has a net capital deficiency. These matters raise substantial doubt about the Company's ability to continue as going concern. Management is attempting to locate a business combination candidate.
In view of these matters, continuing as a going concern is dependent upon the Company's ability to meet its financing requirements, raise additional capital, and the success of its future operations or completion of a successful business combination. Management believes that actions planned and presently being taken to revise the Company's operating and financial requirements provide the opportunity for the Company to continue as a going concern.
CARDIFF INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2001 and 2000
The Company has net operating loss carryovers of approximately $569,000 but due to the change in ownership of the Company, the loss carryovers have been, in all material respects, eliminated.
As of September 30, 2001 the Company had outstanding accounts payable to stockholders totaling $21,903. The balance payable is uncollateralized, bears no interest and has no written repayment terms.
The Financial Statements of the Registrant required to be filed with this 10-QSB Quarterly Report were prepared by management and commence on the following page, together with related Notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant.
INDEX
Page
Number
Part I. Financial Information
Item I. Financial Statements
Review Report of Independent Certified
Public Accountant 2
Balance Sheets as of December 31, 2001
and September 30, 2001 3
Statements of Operations, Three Months
Ended December 31, 2001 and 2000 4
Statements of Cash Flows, Three Months
Ended December 31, 2001 and 2000 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of
Operations 7
Part II. Other Information 8
|
REVIEW REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors
Cardiff International, Inc.
Salt Lake City, UT 84117
We have reviewed the accompanying balance sheet of Cardiff International, Inc. as of December 31, 2001, and the related statements of operations and cash flows for the three months then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Cardiff International, Inc.
A review of interim financial statements consists principally of inquiries of Company personnel responsible for financial matters and analytical procedures applied to financial data. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles.
As discussed in the notes to the financial statements, certain conditions indicate that the Company may be unable to continue as a going concern. The accompanying financial statements do not include any adjustments to the financial statements that might be necessary should the Company be unable to continue as a going concern.
Schumacher & Associates, Inc. Certified Public Accountants 2525 Fifteenth Street, Suite 3H Denver, Colorado 80211 February 22, 2002
Cardiff International, Inc.
BALANCE SHEETS
(Unaudited)
ASSETS
December 31 September 30
2001 2001
------------ -----------
Current Assets $ - $ -
----------- ----------
Total Current Assets - -
Total Assets $ - $ -
=========== ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable 1,750 2,250
Accounts payable, stockholder 22,409 21,903
----------- ----------
Total Current Liabilities 24,159 24,153
----------- ----------
Stockholders' (Deficit):
Common Stock, no par value,
30,000,000 shares authorized
675,290 shares issued and
outstanding 320,314 320,314
Additional paid-in capital 225,345 225,345
Accumulated (deficit) (569,818) (569,812)
----------- ----------
Total Stockholders' (Deficit) (24,159) (24,153)
----------- ----------
Total Liabilities and Stockholders'
(Deficit) $ - $ -
=========== ==========
|
The accompanying notes are an integral part of the financial statements.
Cardiff International, Inc.
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended
December 31, December 31,
2001 2000
Revenues $ - $ -
------------- -----------
Operating Expenses:
General and administrative expenses 6 45
------------- -----------
Total Operating Expenses 6 45
------------- -----------
Net Loss $ (6) $ (45)
------------- -----------
Per Share $ nil $ nil
============= ===========
Weighted Average Number of Shares Outstanding 675,290 675,290
============= ===========
|
The accompanying notes are an integral part of the financial statements.
Cardiff International, Inc.
STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended
December 31, December 31
2001 2000
Cash Flows from Operating Activities:
Net (loss) $ (6) $ (45)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Increase (decrease) in accounts
payable (500) (525)
Increase in accounts payable,
stockholder 506 570
----------- ----------
Net Cash (Used in) Operating Activities - -
----------- ----------
Cash Flows from Investing Activities: ----------- ----------
- -
----------- ----------
Cash Flows from Financing Activities: ----------- ----------
- -
----------- ----------
Increase in Cash - -
Cash, Beginning of Period - -
----------- ----------
Cash, End of Period $ - $ -
=========== ==========
Interest Paid $ - $ -
=========== ==========
Income Taxes Paid $ - $ -
=========== ==========
|
The accompanying notes are an integral part of the financial statements.
Cardiff International, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 (Unaudited)
(1) Condensed Financial Statements
The financial statements included herein have been prepared by Cardiff International, Inc. without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and Cardiff International, Inc. believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the September 30, 2001 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respect's dependent upon the facts that will exist, and procedures that will be accomplished by Cardiff International, Inc. later in the year.
The management of Cardiff International, Inc. believes that the accompanying unaudited condensed financial statements contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations and cash flows for the periods presented.
(2) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplates continuation of the Company as a going concern. However, the Company has sustained operating losses since its inception and has a net capital deficiency. This fact raises substantial doubt about the Company's ability to continue as a going concern. Management is attempting to raise additional capital.
In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financial requirements, raise additional capital, and the success of its future operations.
Management is in the process of attempting to raise additional capital and reduce operating expenses. Management believes that its ability to raise additional capital and reduce operating expenses provide an opportunity for the Company to continue as a going concern.
PART III
The following exhibits are filed as a part of this Registration Statement:
Exhibit
Number Description
------ -----------
3.(1) Initial Articles of Incorporation,
as filed October 14, 1986.
99 Articles of Amendment to the
Articles of Incorporation, as filed on
April 14, 1989
99 Articles of Amendment to the Articles of Incorporation,
as filed on January 14, 1990
99 Articles of Amendment to the Articles of Incorporation,
as filed on September 16, 1998.
3.(11) By-Laws
|
* Summaries of all exhibits contained within this Registration Statement are modified in their entirety by reference to these Exhibits.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.
CARDIFF INTERNATIONAL, INC.
Date: 3-21-02 By/S/Charles Calello
-----------------------------
Charles Calello, Director and President
Date: 3-21-02 By/S/Clay Calello
-----------------------------
Clay Calello, Director and Vice President
|
ARTICLES OF INCORPORATION
OF
CARDIFF FINANCIAL, INC.
ARTICLE I
The name of the Corporation is CARDIFF FINANCIAL, INC.
ARTICLE II
This corporation is organized under the laws of the State of Colorado.
ARTICLE III
The period of duration of the corporation shall be perpetual.
ARTICLE IV
The nature of the business of the corporation, the purposes for which it is organized and its powers are an follows:
1. To engage in the transaction of all lawful business or pursue any other lawful purpose or purposes for which a corporation may be organized under the laws of the State of Colorado.
2. To have, enjoy and exercise all of the rights, powers and privileges conferred upon corporations organized under the laws of the State of Colorado, whether now or hereafter in effect, and whether or not herein specifically mentioned.
The foregoing enumeration of purposes and powers shall not limit or restrict in any manner the exercise of other and further rights and powers which may now or hereafter be allowed or permitted by law,
ARTICLE V
1. The total number of shares which the corporation shall have authority to issue is 300,0000,000, which shall consist of one class only, designated "common stock". Each of such shares shall have no par value.
2. The corporation shall have the right to impose restrictions on the transfer of all, or any part of its shares and may become party to agreements entered into by any of its shareholders restricting transfer or encumbrance of any of its shares, or subjecting any of its shares to repurchase or resale obligations. ARTICLE VI
Shareholders shall have no preemptive rights to acquire additional or treasury shares of the corporation or securities convertible into shares or carrying stock purchase warrants or privileges or stock lights or options.
ARTICLE VII
The shareholders, by vote or concurrence of a majority of the outstanding shares of the corporation or any class or series thereof, entitled to vote on the subject matter, may take any action which, except for this Article would require a two-thirds vote under the Colorado Corporation Code, as amended.
ARTICLE VIII
1. The business and affairs of the corporation shall be managed by a board of directors which shall be elected at the annual meeting of the shareholders, or at a special meeting called for that purpose,
2. The initial board of directors shall consist of the following members, who shall serve until the first annual meeting of shareholders and until their successor be elected and qualified:
Director Address
Rafe Cohen
14900 Ventura Blvd., #330
Sherman Oakes, CA 91405
Ron Nadel
6442 Cavaleri Road
Malibu, CA 90265
Charles J. Calello
132 Spalding Drive, #216
Beverly Hills, CA 90212
|
3. The number of directors may be increased or decreased from time to time in the manner provided in the bylaws of the corporation, but no decrease shall have the effect of shortening the term of any incumbent director.
ARTICLE IX
Cumulative voting shall not be permitted in the election of directors.
ARTICLE X
The initial registered office of the corporation shall be 7730 E. Belleview Ave., Suite #301, Englewood, Colorado 80111, and the initial registered agent at such address shall be Marq J. Warner.
ARTICLE XI
No contract or other transaction between the corporation and one or more of
its directors or any other corporation, firm, association, or entity in which
one or more of its directors are directors or officers or are financially
interested shall be either voidable solely because of such relationship or
interest or solely because such directors are present at the meeting of the
board of directors or a committee thereof which authorizes, approves, or
ratifies such contract or transaction or solely because their votes are counted
for such purposes if: (a) the fact of such relationship or interest is disclosed
or known to the board of directors or committee which authorizes, approves, or
ratifies the contract or transaction by a vote or consent sufficient for the
purposes without counting the votes or consents of such interested directors; or
(b) the fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve, or ratify such
contract or transaction by vote or written consent; or (c) the contract or
transaction is fair and reasonable to the corporation. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the board of directors or a committee thereof which authorizes, approves, or
ratifies such contract or transaction.
ARTICLE XII
l. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a director, officers employee or agent of the corporation or is or was serving at the request of the corporation, is a director, officer, employee, or agent of another corporation partnership, joint ventures trusts or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner be reasonably believed to be in the best interests of the corporation and with, respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that a person did not act in good faith and in a manner which he reasonably believed to be in the best interests of the corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
2. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint ventures, trusts or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in the best interests of the corporation; but no indemnification shall be made in respect of any claim, issue, or matter as to which such person has been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court in which such action or suit was brought determines upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which such court deems proper.
3. To the extent that a director, officer, employee, or agent of the corporation has been successful on the merits in defense of any action, suit or proceeding referred to in paragraph 1 or 2 of this Article XII or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.
4. Any indemnification under Paragraph 1 or 2 of this Article XII (unless ordered by a Court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in said paragraph 1 or 2. Such determination shall be made by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, or, if such a quorum is not obtainable or even if obtainable a quorum of disinterested directors so directed by independent legal counsel in a written opinion, or by the shareholders.
5. Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit, or proceeding may be paid by the corporation in advance of the final disposition of such action suit, or proceeding as authorized in paragraph 4 of this Article XII upon receipt of an undertaking by or on behalf the director, officer, employee or agent to repay such amount unless it is ultimately determined that he is entitled to be indemnified by the corporation as authorized in this Article XII.
6. The indemnification provided by this Article XII shall not be deemed exclusive of any other rights to which those indemnified may be entitled under the articles of incorporation, any bylaws, agreement, vote of shareholders or disinterested directors, or otherwise, and any procedure provided for by any of the foregoing, both as to action in his 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 heirs, executors, and administrators of such a person.
7. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employees or agent of the corporation or who is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article XII.
ARTICLE XIII
The name and address of the incorporator is:
Marq J. Warner 7730 E. Belloview, #301 Englewood, CO 80111
Executed this 3rd day of September, 1986.
By/S/ Mark J. Warner ------------------------ |
STATE OF COLORADO )
) ss.
County of )
|
I, Susan E. Reed, a notary public, hereby certify that on the 3rd day of October, 1986, Marq J. Warner personally appeared before me, he, who, being by me first duly sworn, declared that Marq J. Warner is the person who signed the foregoing documents as incorporator and that the statements contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of October, 1986.
My commission expires: My Commission Expires May 20, 1989.
By/S/ Susan E. Reed Notary Public |
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Corporation Code, the undersigned corporation adopts the following Articles or Amendments to its Articles of Incorporation:
FIRST: The name of the corporation is: CARDIFF FINANCIAL, INC.
SECOND: The following amendment to the Articles of Incorporation was adopted on April 14,1989, as prescribed by the Colorado Corporation Code, in the manner marked with an X below:
Such amendment was adopted by the board of directors where no shares have been issued.
X Such amendment was adopted by a vote of the shareholders. The number of shares voted for the amendment was sufficient for approval.
The Articles of Incorporation are amended to provide that the name of the corporation shall be amended to: "United American, Inc.".
THIRD: The manner, if not set forth in such amendment, in which any exchange, reclassification, or cancellation of issued shares provided for in the amendment shall be effected, is as Follows: None
FOURTH: The manner in which such amendment effects a change in the amount of stated capital, and the amount or stated capital as changed by such amendment, are as follows: None
CARDIFF FINANCIAL, INC.
By /S/ Marvin Bechwith Marvin Bechwith By/S/ Arnold Depauw Arnold Depauw |
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Corporation Code, the undersigned corporation adopts the following Articles of Amendments to its Articles of Incorporation:
FIRST: The of name of the corporation is United American, Inc.
SECOND: The following amendment to the Articles of Incorporation was adopted December 4, 1989, as prescribed by the Colorado Corporation Code, and,
Such Amendment was adopted by a vote of the shareholders. The number of shares voted for the amendment was sufficient for approval:
The Articles of Incorporation are amended to provide that the name of the said corporation shall be amended to be:
"CARDIFF INTERNATIONAL INC."
THIRD: That this amendment does not effect any exchange, reclassification, or cancellation of issued shares.
FOURTH: That this amendment does not effect a change in the amount of states capital.
CARDIFF INTERNATIONAL, INC
By/S/ President By/S/ Secretary |
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Business Corporation Act, the undersigned corporation adopts the following Articles of Amendment to Its Articles of Incorporation.
FIRST: The name of the Corporation is: Cardiff International, Inc.
SECOND: The following amendment to the Articles of Incorporation was adopted on April 27, 1998, as prescribed by the Colorado Business Corporation Act, in the manner marked with an X below:
No shares have been issued or Directors Elected Action by Incorporators.
No shares have been issued by Directors Elected Action by Directors.
Such amendment was adopted by the board of directors where shares have been issued and shareholder action was not required.
X Such amendment was adopted by a vote of the shareholders. The number of sharers voted for the amendment was sufficient for approval.
The Articles of incorporation are amended to provide that the total number of shares which the corporation shall have authority to issue is 30,000,000, which shall consist of one class only designated "common stock". Each of such shares shall have no par value.
THIRD: If changing corporate name, the new name of the corporation is:
FOURTH: The manner, if not set forth in such amendment, in which any exchange, reclassification, or cancellation of issued shares provided for in the amendment shall be effected, is as follows:
All issued shares are automatically reversed splitting on a ratio of 1,000 shares to one (1) share
Cardiff International, Inc.
By/S/ Charles Calello
President
|
BYLAWS
OF
CARDIFF FINANCIAL, INC.
ARTICLE I
Offices
1.1 Principal Offices: The principal offices of the corporation shall initially be at 7730 East Belleview Avenue, Suite 301, Englewood, Colorado 80111, but the board of directors, in its discretion, may keep and maintain offices wherever the business of the corporation may require.
1.2 Registered Office and Agent: The corporation shall have and continuously maintain in the State of Colorado a registered office, which may be the same as its principal office, and a registered agent whose business office is identical with such registered office. The initial registered office and the initial registered agent are specified in the Articles of Incorporation. The corporation may change its registered office or change its registered agent, or both, upon filing a statement as specified by law in the office of the Secretary of State of Colorado.
ARTICLE II
Meeting of Shareholders
2.1 Time and Place: Any meeting of the shareholders may be held at such time and place, within or outside of the State of Colorado, as may be fixed by the board of directors or as shall be specified in the notice of the meeting or waiver of notice of the meeting.
2.2 Annual Meeting: The annual meeting of the shareholders shall be held at the principal offices of the corporation on the 2nd Tuesday in August of each year, beginning in the year 1987, or at such other place or date as the board of directors may determine.
2.3 Special Meetings: Special meetings of the shareholders, for any purpose or purposes, may be called by the president, the board of directors, or the holders of not less than one tenth of all of the shares entitled to vote at the meeting.
2.4 Record Date: For the purposes of determining shareholders entitled to notice of, or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the board of directors may fix in advance a date as the record date for any such determination of shareholders. The record date may not be fixed more than fifty and, in the case of a meeting of the shareholders, not less than ten days before the date of the proposed action, except when it is proposed that the authorized shares be increased, in which case the record date shall be set not less than thirty days before the date of such action.
2.5 Voting List: At least ten days before each meeting of shareholders, the secretary of the corporation shall make a complete list of the shareholders entitled to vote at such meeting, or any adjournment of such meeting, which list shall be arranged in alphabetic order and shall contain the address of and number of shares held by each shareholder. This list shall be kept on file at the principal office of the corporation for a period of ten days prior to such meeting, shall be produced and kept open at the meeting, and shall be subject to inspection by any shareholder for any purpose germane to the meeting during usual business hours of the corporation and during the whole time of the meeting.
2.6 Notices: Written notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered no less than ten nor more than fifty days before the date of the meeting unless it is proposed that the authorized shares be increased in which case at least thirty days notice shall be given. Notice shall be given either personally or by mail, by or at the direction of the president, the secretary, or the officer or person calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the shareholder at his address as it appears on the stock transfer books of the corporation. If delivered personally, such notice shall be deemed to be delivered when handed to the shareholder or deposited at his address as it appears on the stock transfer books of the corporation.
2.7 Quorum: Except as otherwise provided by law, a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of the shareholders. if a quorum shall not be present or represented, the shareholders present in person or by proxy may adjourn the meeting from time to time, without notice other than announcement at the meeting, for a period not to exceed sixty days at any one adjournment, until the number of shares required for a quorum shall be present. At any such adjourned meeting at which a quorum is represented, any business way be transacted which might have been transacted at the meeting originally called. The shareholders present or represented at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
2.8 Voting: Except as otherwise provided by law, all matters shall be decided by a vote of the majority of the shares represented at the meeting and entitled to vote on the subject matter. Each outstanding share shall be entitled to one vote on such matters submitted to a vote of the shareholders. A shareholder may vote either in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the secretary of the corporation before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided by law, but shall be by written ballot if such written vote is demanded by any shareholder present in person or by proxy and entitled to vote.
2.9 Waiver: Whenever law or these bylaws require a notice of a meeting to be given, a written waiver of notice signed by a shareholder entitled to notice, whether before, at, or after the time stated in the notice, shall be equivalent to the giving of notice. Attendance of a shareholder in person or by proxy at a meeting constitutes a waiver of notice of a meeting, except where a shareholder attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.
2.10 Action by Shareholders Without a Meeting: Any action required to or which may be taken at a meeting of the shareholders may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to such action. Such consent may be executed in counterparts and shall be effective as of the date of the last signature thereon.
ARTICLE III
Directors
3.1 Authority of Board of Directors: The business and affairs of the corporation shall be managed by a board of directors which shall exercise all the powers of the corporation, except as otherwise provided by Colorado law or the Articles of Incorporation of the corporation.
3.1 Number: The number of directors of this corporation shall, in no case, be less than three, except where the number of shareholders is less than three, in which case the number of directors may be the same as the number of shareholders. Subject to such limitation, the number of directors shall be fixed by resolution of the board of directors, and may be increased or decreased by resolution of the board of directors, but no decrease shall have the effect of shortening the term of any incumbent director.
3.3 Qualification: Directors shall be natural persons at the age of eighteen years or older, but need not be residents of the State of Colorado or shareholders of the corporation.
3.4 Election: The board of directors shall be elected at the annual meeting of the shareholders or at a special meeting called for that purpose.
3.5 Term: Each director shall be elected to hold office until the next annual meeting of shareholders or until his successor shall have been elected and qualified.
3.6 Removal and Resignation: Any director may be removed at a meeting expressly called for that purpose, with or without cause, by a vote of the holders of the majority of shares entitled to vote at an election of directors. Any director may resign at any time by giving written notice to the president or to the secretary, and acceptance of such resignation shall not be necessary to make it effective unless the notice so provides.
3.7 Vacancies: Any vacancy occurring on the board of directors and any directorship to be filled by reason of an increase in the size of the board of directors shall be filled by the affirmative vote of a majority, though less than a quorum, of the remaining directors. A director elected to fill a vacancy shall hold office during the unexpired term of his predecessor in office. A director elected to fill a position resulting from an increase in the board of directors shall hold office until the next annual meeting of shareholders and until his successor shall have been elected and qualified.
3.8 Meetings: A regular meeting of the board of directors shall be held immediately after, and at the same place as, the annual meeting of shareholders. No notice of this meeting of the board of directors need be given. The board of directors, or any committee designated by the board of directors may, by resolution, establish a time and place for additional regular meetings which may thereafter be held without further notice. Special meetings of the board of directors, or any committee designated by the board of directors, may be called by the president or any two members of the board of directors or of such committee.
3.9 Notices: Notice of a special meeting stating the date, hour and place of such meeting shall be given to each member of the board of directors, the committee of the board of directors, by the secretary, the president or the members of the board or such committee calling the meeting. The notice may be deposited in the United States mail at least seven days before the meeting addressed to the director at the last address he has furnished to the corporation for this purpose, and any notice so mailed shall be deemed to have been given at the time it is mailed. Notice may also be given at least two days before the meeting in person, or by telephone, prepaid telegram, telex, cablegram or radiogram, and such notice shall be deemed to have been given at the time when the personal or telephone conversation occurs, or when the telegram, telex, cablegram or radiogram is either personally delivered to the director or delivered to the last address of the director furnished to the corporation by him for this purpose.
3.10 Quorum: Except as provided in Section 3.7 of these bylaws, a majority of the number of directors fixed in accordance with these bylaws constitute a quorum for the transaction of business at all meetings of the board of directors. The act of a majority of the directors present at any meeting at which a quorum is present he the act of the board of directors, except as otherwise specifically required by law.
3.11 Waiver: A written waiver of notice signed by a director entitled to, whether before, at or after the time stated thereon, shall be equivalent to the giving of notice. Attendance of a director at a meeting constitutes a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of business because the meeting is not lawfully called or convened.
3.12 Attendance by Telephone: Members of the board of directors or any committee designated by the board of directors may participate in a meeting of the board of directors or committee by means of a conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other at the same time. Such participation shall constitute presence in a person at the meeting.
3.13 Action by Directors Without a Meeting: Any action required to or which may be taken at a meeting of the board of directors, executive committee, or other committee of the directors may be taken without a meeting if a consent in writing setting forth the action so taken, shall be signed by all of the directors, executive or other committee members entitled to vote with respect to the proposed action. Such consent may be executed in counterparts and shall be effective as of the date of the last signature thereon.
ARTICLE IV
Committees
4.1 Executive and Other Committees Authorized: The board of directors by resolution adopted by a majority of the entire board of directors, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in the resolution, shall have all of the authority of the board of directors. The board of directors may provide by resolution such powers, limitations, and procedures for such committees as the board deems advisable. However, no such executive or other committee shall have the authority of the board of directors in reference to amending the articles of incorporation, adopting a plan of merger or consolidation, recommending to the shareholders the sale, lease, exchange, or other disposition of all or substantially all of the property and assets of the corporation otherwise than in the usual and regular course of its business, recommending to the shareholders a voluntary dissolution of the corporation or a revocation thereof, or amending these bylaws.
ARTICLE V
Officers
5.1 Number and Election: The officers of the corporation shall be a president, a secretary and a treasurer, who shall be elected by the board of directors. In addition, the board of directors may elect one or more vice presidents and the board of directors or the president may appoint one or more assistant secretaries or assistant treasurers, and such other subordinate officers as he shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the president. Any two or more offices may be held by the same person, except the offices of the president and secretary. The officers of the corporation shall be natural persons of the age of eighteen years or older.
5.2 President: The president shall be the chief executive officer of the corporation and shall preside at all meetings of shareholders and of the board of directors. Subject to the d-Lrection- and control of the board of directors, he shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect. He may execute contracts, deeds and other instruments on behalf of the corporation as is necessary and appropriate. He shall perform such additional functions and duties as are appropriate and customary for the office of president and as the board of directors may prescribe from, time to time.
5.3 Vice President: The vice president, or, if there shall be more than one, the vice presidents in the order determined by the board of directors, shall be the officers(s) next in seniority after the president. Each vice president shall also perform such duties and exercise such powers as are appropriate and as are prescribed by the board of directors or president. Upon the death, absence or disability of the president, the vice president, or if there shall be more than one, the vice presidents in the order determined by the board of directors, shall perform the duties and exercise the powers of the president.
5.4 Secretary: The secretary shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the board of directors, keep the minutes of such meetings, have charge of the corporate seal and stock records, be responsible for the maintenance of all corporate records and files and the preparation and filing of reports to governmental agencies, other than tax returns, have authority to affix the corporate seal to any instrument requiring it (and, when so affixed, it may be attested by his signature), and perform such other functions and duties as are appropriate and customary for the office of secretary as the board of directors or the president may prescribe from time to time.
5.5 Assistant Secretary: The assistant secretary, or, if there shall be more than one, the assistant secretaries in the order determined by the board of directors or the president, shall, in the death, absence of disability of the secretary or in case such duties are specifically delegated to him by the board of directors, president or secretary, perform the duties and exercise the powers of the secretary and shall, under the supervision of the secretary, perform such other duties and have such other powers as may be prescribed from time to time by the board of directors or the president.
5.6 Treasurer: The treasurer shall have control of the funds and the care and custody of all stock, bonds and other securities owned by the corporation and shall be responsible for the preparation and filing of tax returns. He shall receive all moneys ,oaid to the corporation and shall have authority to give receipts and vouchers, to sign and endorse checks and warrants in its name and on its behalf, and give full discharge for the same. He shall also have charge of disbursement of the funds of the corporation, shall keep full and accurate records of the receipts and disbursements, and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as shall be designated by the board of directors. He shall perform such other duties and have such other powers as are appropriate and customary for the office of treasurer as the board of directors or president may prescribe from time to time.
5.7 Assistant Treasurer: The assistant treasurer, or, if there shall be more than one, the assistant treasurers in the order determined by the board of directors or the president, shall, in the death, absence or disability of the treasurer or in case such duties are specifically delegated to him by the board of directors, president, or treasurer, perform the duties and exercise the powers of the treasurer, and shall, under the supervision of the treasurer, perform such other duties and have such other powers as the board of directors or the president may prescribe from time to time.
5.8 Removal and Resignation: Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any officer appointed by the president may be removed at any time by the board of directors or the president. Any officer may reslgn at any time by giving written notice of his resignation to the president or to the secretary, and acceptance of such resignation shall not be necessary to make it effective, unless the notice so provides. Any vacancy occurring in any office, the election or appointment to which is made by the board of directors, shall be filled by the board of directors. Any vacarcy occurring in any office of the corporation may be filled by the president for the unexpired portion of the term.
5.9. Compensation: Officers shall receive such compensation for their services as may be authorized or ratified by the board of directors. Election or appointment of an officer shall not of itself create a contract right to compensation for services performed as such officer.
ARTICLE VI
Stock
6.1 Certificates: Certificates representing sharss of the capital stock of the corporation shall be in such form as may be approved by the board of directors and shall be signed by the president or any vice president and by the secretary or an assistant secretary. All certif icates shall be consecutively numbered and the names of the owners, the number of the shares and the date of issue shall be entered on the books of the corporation. Each certificate representing shares shall state upon its face (a) that the corporation is organized under the laws of the State of Colorado, (b) the name of the person to whom issued, (c) the number of shares which the certificate represents, (d) the par value, if any, of each share represented by the certificate, and (e) any restriction placed upon the transfer of the shares represented by the certificate.
6.2 Facsimile Signature: When a certificate is signed (1) by a transfer agent other than the corporation or its employee, or (2) by a registrar other than the corporation or its employee, any other signature on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature or signatures have been placed upon, any certificate, shall cease to be such officer, transfer agent, or registrar, whether because of death, resignation or otherwise, before the certificate is issued by the corporation, it may nevertheless be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
6.3. Transfers of Stock: Transfers of shares shall be made on the books of the corporation only upon presentation of the certificate or certificates representing such shares properly endorsed by the person or persons appearing upon the face of such certificate to be the owner, or accompanied by a proper transfer or assignment separate from the certificate, except as may otherwise be expressly provided by the statutes of the State of Colorado or by order of a court of competent jurisdiction. The officers or transfer agents of the corporation may, in their discretion, require a signature guaranty before making any transfer. The corporation shall be entitled to treat the person in whose name any shares of stock are registered on its books as the owner of those shares for all purposes, and shall not be bound to recognize any equitable or other claim or interest in the shares on the part of any other person, whether or not the corporation shall have notice of such claim or interest.
ARTICLE VII
Miscellaneous
7.1 Corporate Seal: The board of directors may adopt a seal which shall be circular in form and shall bear the name of the corporation and the words "SEAL" and "COLORADO" which, when adopted, shall constitute the corporate seal of the corporation. The seal may be used by causing it or a facsimile thereof to be impressed, affixed, manually reproduced, or rubber stamped with indelible ink.
7.2 Fiscal Year: The board of directors may, by resolution, adopt a fiscal year for this corporation.
7.3 Amendment to Bylaws: These bylaws may at any time and from time to time be amended, supplemented or repealed by the board of directors.