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As filed with the Securities and Exchange Commission on March 16, 2006 Registration No. 333-
==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SUN WORLD PARTNERS, INC.
(Name of small business issuer in its charter)
|
NEVADA (State or jurisdiction of incorporation or organization) |
5700 (Primary Standard Industrial Classification Code Number) |
20-4395271 (I.R.S. Employer Identification No.) |
1601 - 14 St. S.W., Calgary, AB, Canada, T3C 1E3 Phone (403) 228-2483
(Address and telephone number of principal executive offices)
1601 - 14 St. S.W., Calgary, AB, Canada, T3C 1E3 Phone (403) 228-2483
(Address of principal place of business or intended principal place of business)
Paracorp Incorporated
318 North Carson St., Suite #208, Carson City, NV 89701 Telephone: 888-972-7273
(Name, address and telephone numbers of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an Offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same Offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same Offering. [ ]
If this Form is a post effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same Offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
|
Title of Each Class of Securities To Be Registered |
Amount To Be Registered 1 |
Proposed Maximum Offering Price Per Unit |
Proposed Maximum Aggregate Offering Price |
Amount of Registration Fee (1) |
|
Common Stock |
3,250,000 |
$0.10 |
$325,000.00 |
$38.25 |
(1)
Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Subject to Completion
Prospectus
Sun World Partners, Inc.
3,250,000 shares of
Common Stock
This is a public Offering of 3,250,000 shares of common stock, $0.001 par value, of Sun World Partners, Inc., a Nevada Corporation, at a price of $0.10 per share.
This Offering involves a high degree of risk; see "RISK FACTORS" beginning on page 5 to read about factors you should consider before buying shares of the common stock.
These securities have not been approved or disapproved by the Securities and Exchange Commission (the “SEC”) or any state or provincial securities commission, nor has the SEC or any state or provincial securities commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
We have elected to make this public offering of securities to raise the funds that are necessary to commence the expansion of our present operations. Our decision to finance our expanded operations through this public offering is based on a presumption that we will be more successful by offering securities under an effective registration statement than through a private offering of equity or through debt financing. Following the effective date of the registration statement on Form SB-2 in which this prospectus is included becoming effective, we intend to have an application filed on our behalf by a market maker for approval of our common stock for quotation on the Over-the Counter / Bulletin Board quotation system.
Our common stock is presently not listed on any national securities exchange or the Nasdaq Stock Market.
The Offering:
|
3,250,000 Shares Offered |
Price Per Share |
Total |
|
Public Price |
$0.10 |
$325,000 |
|
Underwriting Discounts and Commissions |
- 0 - |
$ 0 |
|
Total |
$0.10 |
$325,000 |
This is a best efforts public Offering, with no minimum purchase requirement.
1. Sun World Partners, Inc. is not using an underwriter for this Offering.
2. There is no arrangement to place the proceeds from this Offering in an escrow, trust or similar account. Nevada law does not require that funds raised pursuant to the sale of securities be placed into an escrow account. Any funds raised from this Offering will be immediately available to Sun World Partners, Inc. for its use.
3. The closing date for this Offering is March 31, 2007.
The information in this prospectus is not complete and may be changed. Sun World Partners Inc. may not sell these securities until the registration statement relating to these securities which has been filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
The date of this Prospectus is ________, 2006
2
TABLE OF CONTENTS
|
Item No. |
Item in Form SB-2 Prospectus Caption |
Page No. |
|
1 |
Front of Registration Statement and Outside Front Cover Page of Prospectus |
1 |
|
2 |
Prospectus Cover Page |
2 |
|
3 |
Summary Information and Risk Factors |
4 |
|
4 |
Use of Proceeds |
9 |
|
5 |
Determination of Offering Price |
11 |
|
6 |
Dilution |
12 |
|
7 |
Selling Security Holders |
12 |
|
8 |
Plan of Distribution |
12 |
|
9 |
Legal Proceedings |
13 |
|
10 |
Directors, Executive Officers, Promoters and Control Persons |
13 |
|
11 |
Security Ownership of Certain Beneficial Owners and Management |
15 |
|
12 |
Description of Securities |
15 |
|
13 |
Interest of Named Experts and Counsel |
16 |
|
14 |
Disclosure of Commission Position on Indemnification for Securities Act Liabilities |
16 |
|
15 |
Organization within Last Five Years |
16 |
|
16 |
Description of Business |
16 |
|
17 |
Management’s Discussion and Analysis or Plan of Operation |
21 |
|
18 |
Description of Property |
24 |
|
19 |
Certain Relationships and Related Transactions |
25 |
|
20 |
Market for Common Equity and Related Stockholder Matters |
25 |
|
21 |
Executive Compensation |
26 |
|
22 |
Financial Statements |
27 |
|
23 |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
27 |
Securities offered through this prospectus will not be sold through dealers, but will be sold on a direct participation basis only.
3
SUNWORLD PARTNERS
NOTES TO THE FINANCIAL STATEMENTS
November 30, 2005 and 2004
Item 3. Summary Information and Risk Factors
The Company
Sun World Partners, Inc. (referred to in this prospectus as “Sun World”, “us”, “we” and “our”) was incorporated on April 2, 2000, in the State of Nevada. Sun World Partners, Inc.’s principal executive offices are located at 1601 - 14 St. S.W., Calgary, AB, Canada, T3C 1E3. Our telephone number is (403) 228-2483. Sun World was originally incorporated as an investment company. From the period of incorporation through to May 31, 2005, we had no operations. On December 31, 2004, the then existing directors of Sun World resigned and a new director and officer was appointed. On March 31, 2005, two additional directors were appointed. On May 31, 2005, we entered into a share exchange agreement with Tiempo de Mexico Ltd. (“referred to in this prospectus as “Tiempo”) a company incorporated pursuant to the laws of the Province of Alberta, Canada, with operations in Calgary, Alberta, Canada. Tiempo is in the business of retail sales of predominately Mexican furniture and accessories. The share exchange agreement called for Sun World to undertake an offering to raise a total of $325,000 for expansion of Tiempo. On November 29, 2005, Sun World completed a forward split of our shares on the basis of one hundred shares (100) for every one (1) share held. Tiempo has operated in Calgary, AB, Canada for the past 10 years, with one retail location. It is our intent to raise the funds under this prospectus to retire certain debt in Tiempo and to expand the operations of Tiempo by opening initially one additional location in Calgary and then other locations throughout Canada and the United States of America. As of the date of this prospectus, Tiempo generates sufficient revenues to meet all of its operating expenses however, it does not generate sufficient revenues to execute our business plan and we will be required to raise the funds under this prospectus in order to execute our proposed expansion plan.
We are a holding company with one wholly owned subsidiary, Tiempo. All of the operations are carried on presently by Tiempo who imports and sells furniture / home furnishings imported primarily from Mexico. Sun World’s objective is to utilize the model of Tiempo’s retail operations in Alberta to establish retail stores in Canada and the U.S. The president of Sun World and founder of Tiempo, Kimberley Coonfer, has operated Tiempo as a retail store importing and selling home furnishings in Canada since 1996.
Neither Sun World nor Tiempo have ever declared bankruptcy, have ever been in receivership, and have ever been involved in any legal action or proceedings.
Aside from the revenues and operations of our wholly-owned subsidiary, Tiempo, we have not had any other revenues or operations. Aside from Tiempo, we have no additional assets. Tiempo generates limited revenues at this time. The revenues generated from Tiempo will not be sufficient to execute our business plan described below.
Summary of Financial Information
All of the information in this prospectus has been stated in USD.
The financial information provided below reflects the consolidated financial statements of Sun World and Tiempo.
Summary Financial Information for the fiscal years ending May 31, 2004 and 2005 and the six month period ending November 30, 2004 and 2005.
4
As revenues and expenses of Tiempo were in Canadian dollars, we have applied exchange rates as follows:
(1)
For May 31, 2004 we applied an exchange rate of 0.726 to balance sheet items and 0.745 to income statement items.
(2)
For May 31, 2005 we applied an exchange rate of 0.796 to balance sheet items and 0.794 to income statement items.
(3)
For November 30, 2004 we applied an exchange rate of 0.726 to balance sheet items and 0.778 to income statement items.
(4)
For November 30, 2005 we applied an exchange rate of 0.856 to balance sheet items and 0.833 to income statement items.
Tiempo has been operating since November 1996 and currently has 3 employees including the President, Mrs. Kimberley Coonfer. As at November 30, 2005, our accumulated deficit was $59,696. We anticipate that we will operate in a deficit position and continue to sustain net losses for the foreseeable future while we expand our operations.
The Offering
|
Common Shares Outstanding Before This Offering |
5,500,000 |
|
Maximum Shares Being Offered |
3,250,000 |
|
Maximum Common Shares Outstanding After This Offering |
8,750,000 |
Sun World is authorized to issue 75,000,000 shares of common stock. Current shareholders of Sun World collectively own 5,500,000 shares of common stock, which represents all of our issued and outstanding shares.
This Offering consists of 3,250,000 shares of Sun World common stock (the “Offering”). The Offering price is $0.10 per share. No officers, directors or significant investors own any of the shares being offered.
There is currently no public market for the common stock of Sun World as it is presently not traded on any market or securities exchange.
Risk Factors
The securities offered hereby are highly speculative and should be purchased only by persons who can afford to lose their entire investment in Sun World. Each prospective investor should carefully consider the following risk factors, as well as all other information set forth elsewhere in this prospectus, before purchasing any of the shares of our common stock.
Failure to Secure Additional Financing May Affect Our Company’s Ability to Grow
We are dependent upon this Offering to be able to implement our business plan. For the fiscal year ended May 31, 2005, Tiempo showed a loss of $7,484, with a shareholders deficit of $90,166 as of May 31, 2005. Establishment of additional retail outlets in Canada and the U.S. will increase both fixed and variable costs, thereby increasing annual losses until such time as scale of economies leads to cost efficiencies. Without additional financing, there is insufficient capital to undertake an expansion. Even if we are successful in completing the financing under this Offering we may require additional financing in order to establish profitable operations. Such financing, if required, may not be forthcoming. Even if additional financing is available, it may not be available on terms we find favorable. Failure to secure the needed additional financing will have a very serious effect on our company's ability to survive. At this time, there are no anticipated additional funds in place.
Volume of Sales May be Insufficient or Untimely Which May Result in Insufficient Cash Flow to Meet our Commitments.
Our working capital will be extremely limited, especially if less than the total amount of the Offering is raised. While it is expected we will be able to eliminate $ 140,000 of our long term debt from the proceeds of this Offering if we raise the total amount of the Offering, our requirement for funds for expansion beyond the first expansion of an additional retail outlet is not in our budget and those cash requirements are expected to increase
5
dramatically and we will require additional funds for the establishment of retail sales across Canada and the U.S., which will include lease agreements, leasehold improvements, increased pre-paid inventory purchases, and general operations. We may not have sufficient volume of sales to fund further expansion and therefore we will not be able to execute our business plan without raising additional capital.
Inability of Our Officers and Directors to Devote Sufficient Time to the Operations of the Business May Limit Tiempo’s Success.
Presently, only one our officer’s, Mrs. Kimberley Coonfer, who is also a director of Sun World, allocates her full-time attention to the operations of the Company. Since our treasurer and secretary, are currently employed full time elsewhere, they are unable to commit time to the operations of Sun World. This lack of available time from the rest of our management could hinder our ability to develop the operation of the business and to ensure that it continues as a going concern.
Our Operating History Makes an Investment in Sun World an Investment in an Unproven Venture.
Sun World was incorporated on April 2, 2000. It was incorporated as a private investment company. Its operations ceased virtually at the time of incorporation from lack of funds. Sun World had no activity, nor did we make any investments until the purchase of Tiempo on May 31, 2005. As a result, as of the date of this prospectus, our revenues and assets are limited to those of our wholly-owned operating subsidiary Tiempo. Tiempo showed a loss for the period ending May 31, 2005, and has experienced losses in 9 years of the 10 years of operation.
We will not commence the expansion of the Tiempo concept until after the closing of this Offering and we do not expect to have increased revenues until at least three months after we commence our expansion plans.
If we cannot successfully implement our business strategies, we may not be able to generate sufficient revenues to operate profitably. Since our resources are very limited, insufficient revenues would result in termination of our operations, as we cannot fund unprofitable operations, unless additional equity or debt financing is obtained.
With No Minimum Share Sale Requirement it is Possible that We Will Fail to Commence Expansion Operations Despite Having Raised Some Funds from this Offering.
This Offering is not subject to any minimum number of shares to be sold by Sun World. Consequently, the early investor is not assured of any other, later shares being sold. You may be the only purchaser. If we fail to sell the entire Offering, we may never execute our planned expansion.
We presently have no significant operating capital and we are totally dependent upon receipt of the proceeds of this Offering to provide the capital necessary to implement our proposed business expansion plans. The amount of the capital available to us will still be extremely limited, especially if less than the total amount is raised. If we need and are unable to raise additional capital, then you may lose your entire investment.
Difficulty For Our Stockholders to Resell Their Stock Due to a Lack of Public Trading Market
There is presently no public trading market for our common stock, and it is unlikely that an active public trading market can be established or sustained in the foreseeable future. We intend to have our common stock quoted on the OTC / Bulletin Board as soon as practicable. However, there can be no assurance that our shares will be quoted on the OTC / Bulletin Board. Until there is an established trading market, holders of our common stock may find it difficult to sell their stock or to obtain accurate quotations for the price of the common stock. If a market for our common stock does develop, our stock price may be volatile.
Broker-dealers may be discouraged from effecting transactions in our shares because they are considered penny stocks and are subject to the penny stock rules.
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934 impose sales practice and disclosure requirements on NASD broker-dealers who make a market in "penny stocks". A penny stock generally includes any non-Nasdaq equity security that has a market price of less than $5.00 per share. Our shares currently are not traded on Nasdaq nor on any other exchange nor are they quoted on the OTC/Bulletin Board or “OTC/BB”. Following the date that the registration statement, in which this prospectus is included, becomes
6
effective we hope to find a broker-dealer to act as a market maker for our stock and file on our behalf with the NASD an application on Form 15c(2)(11) for approval for our shares to be quoted on the OTC/BB. As of the date of this prospectus, we have not attempted to find a market maker to file such application for us. If we are successful in finding such a market maker and successful in applying for quotation on the OTC/BB, it is very likely that our stock will be considered a “penny stock”. In that case, purchases and sales of our shares will be generally facilitated by NASD broker-dealers who act as market makers for our shares. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.
Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.
In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.
Investors will have little voice regarding the management of Sun World due to the large ownership position held by our existing management and thus it would be difficult for new investors to make changes in our operations or management, and therefore, shareholders would be subject to decisions made by management and the majority shareholders.
If all of the shares offered under this prospectus are sold, our current officers, directors and major shareholders will directly own 5,500,000 shares of the total of 8,750,000 issued and outstanding shares of Sun World’s common stock and will be in a position to continue to control Sun World. Of these 5,500,000 shares, Mrs. Kimberley Coonfer, our President, and her husband, Mr. Greg Coonfer, our Chief Financial Officer, own 4,240,000 shares. Therefore Mrs. Coonfer and her husband, after completion of this Offering, will still own approximately 48% of our company. Such control may be risky to the investor because the entire company's operations are controlled by a very few people who could lack the ability to implement Sun World’s expansion plans profitably. In such event, our business may fail and you may lose your entire investment. Moreover, new investors will not be able to effect a change in the company’s business or management.
All of our assets and our officers and directors are located in Canada. This may cause any attempts to enforce liabilities under the U.S. securities and bankruptcy laws to be very difficult.
Currently, all of our assets, current operations, and each of our officers and directors are located in Alberta, Canada. Therefore, any investor that attempts to enforce against Sun World or against any of our officers and directors liabilities that accrue under U.S. securities laws or bankruptcy laws will face the difficulty of complying with local laws in Alberta, Canada, with regards to enforcement of foreign judgments. This could make it impracticable or uneconomic to enforce such liabilities.
We intend to become subject to the periodic reporting requirements of the Securities Exchange Act of 1934, which will require us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs will negatively affect our ability to earn a profit.
Following the effective date of the registration statement in which this prospectus is included, we will be required to file periodic reports with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 and the rules and regulations thereunder. In order to comply with such requirements, our independent registered auditors will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in and the complexity of our
7
reports cannot be determined at this time and will have a major affect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit.
Currently, the majority (80%) our inventory comes from Mexico, where purchase and shipping are pre-paid, leaving us vulnerable to loss of funds in the event the purchased products never arrive.
Our current buying arrangement requires that all products purchased from Mexico be paid in advance and more than 80% of our product is shipped directly from Mexico. Further, our main supplier also serves as our consolidator. That consolidation service requires that we advance funds to this supplier, who in turn pays other manufacturers, in advance of shipment. This means we pay-out roughly $25,000 per shipment in advance, trusting the shipment will be forwarded as promised. In the event the product did not arrive, we would be receiving no new inventory, yet have paid-out the funds.
At present, 60% of our Mexican inventory comes from one supplier. If this supplier was to cease operations, our inventor supply would be severely curtailed.
As pottery represents 60% of our in-store inventory, its importance to our revenues is critical. Currently, we have only one developed relationship with a pottery supplier. This leaves us vulnerable to a shortage of inventory until such time as new relationships can be developed. While other suppliers certainly exist in Mexico, the development of an understanding, and trusting relationship, especially from afar, can take time. This time would have a direct effect on ongoing revenues.
Lack of a Storage Facility (Warehouse) Limits Our Ability to Maintain Adequate Levels of Inventory
At present we have no inventory storage facility (warehouse). As a result, we are only able to buy a quantity of product that physically fits into our retail location. This limit to our inventory curtails our ability to sell larger quantities of product, and to immediately replace those products which sell well. As a result, this limits our potential revenues.
Sun World’s day-to-day management and operations are controlled by one person. If that person was to no longer be able to provide services, the operations of Sun World would be threatened .
Currently only one of our officers, Mrs. Kimberley Coonfer, will oversee the expansion of operations. She is also responsible for the day-to-day management of our wholly-owned subsidiary Tiempo. With no immediate back-up available, and no plans to train anyone in the important roles of buying, merchandising, and display, our ability to operate would be severely curtailed if Mrs. Coonfer were to be unavailable due to a situation of ill-health or demise.
The home furnishings and decorative accessories market is highly fragmented. Sun World faces competition from furniture stores, department stores and other specialty retailers.
Recent years have seen the increase in the number of importers of home furnishings and we expect that this trend will continue. With products arriving from Indonesia, India, China and other South America countries, similarly priced products are readily available from several retailers—large and small. Additionally, Mexico serves as a popular source for a variety of products, including home furnishings, for Canadian and American importers. Differentiation is becoming more difficult, and thus, competition can only be expected to grow.
The company has not allotted funds for significant marketing efforts.
With increased competition, the role of marketing becomes more important. While the “Use of Proceeds” from this Offering allows for marketing expenditures, this amount is not considered adequate to create the level of brand awareness necessary to stimulate regular and loyal customers. As a result, we become more reliant on walk-by clientele, making retail location choice extremely important.
Economic growth and prosperity in the home renovation and decorating business have experienced unprecedented and sustained growth during the past decade. There is no guarantee this can continue.
Canada and USA have recently enjoyed a high level of economic growth and prosperity, thereby stimulating new housing development and renovations. For the six month period ended November 30, 2005, Tiempo was able to show a small income due to this increased economic growth and a greater demand for products. With these developments comes the need for new and replacement furniture and home decorations, which has in part been a
8
factor in Tiempo’s decision to expand operations. There can be no assurance that sustained growth will continue. Also, should interest rates increase in an attempt to control inflation, there is no guarantee that the demand for home furnishings will continue.
Increases in real estate values make stores leases very expensive. This may increase fixed costs to prohibitively expensive levels.
With increases in real estate values in recent years, the cost of leasing retail space has increased substantially. With location being of utmost importance to achieving walk-in clientele, the costs associated with prime retail space may prohibit profitability.
We have a history of losses with no assurance that current business model can be expanded profitably.
Our wholly-owned subsidiary Tiempo has operated with one retail location since 1996. In that time, this one location has only shown a profit for the period ended November 30, 2005 in the amount of $10,298 for the six month period. For the fiscal year ended May 31 2004 losses were $11,871, and May 31, 2005 losses were $7,484. There can be no assurance that we will continue to generate profits for the remainder of this fiscal year and based on our historical operations there can be no assurance that our current business model can be expanded profitably.
We may have a possible need for additional financing.
The potential proceeds from this Offering, if fully subscribed, would meet Tiempo’s minimal expansion requirements. We intend to rely on revenues to continue to fund operations and subsequent expansion. In order to achieve the economies of scale anticipated, it will require the opening of several locations in the very near future, and also a warehouse. This increase to fixed costs will challenge our limited cash reserves, and lead us to the possible need for further financing.
Item 4. Use of Proceeds
We intend to raise a maximum amount of $325,000 from the sale of 3,250,000 shares of common stock at $0.10 per share. This Offering has no minimum amount. We have no intention to return any stock sales proceeds to investors if the maximum amount is not raised.
The following table indicates how we intend to use these proceeds of this Offering.
The above expenditure items are defined as follows:
Costs of the Offering and Underwriting Commissions : We will be required to pay the costs of this offering, estimated to be $35,000 from the funds raised under this Offering.
9
Payment of Outstanding Loans : At November 30, 2005, our wholly-owned subsidiary Tiempo has an outstanding loan of $140,000, which we intend to pay from proceeds. The loan is a demand loan with no specific terms of repayment with an annual interest rate of 8 percent (8%) per annum.
POS (point-of-sale) Inventory Control System : With inventory control deemed a priority issue, the POS system will allow for accurate and immediate reference of inventory numbers, while also improving the customer experience. With the expected opening of an additional retail location and a warehouse, a POS system will provide accurate recording of inventory sales and future purchase requirements.
Legal and Accounting : This expenditure item refers to the normal legal and accounting costs associated with maintaining a publicly traded company. It will also cover the cost of preparation of appropriate agreements and documents.
Marketing and Promotion : This item refers to the cost of a basic marketing campaign and the provision of product information to our potential customers. This could include direct marketing as well as local newspapers and radio. It will also include marketing our product through home trade shows and cultural festivals.
Inventory : With the anticipated expansion in the number of retail outlets, coupled with a warehouse, our inventory levels need to be increased. This amount will allow for the immediate stocking of a second store and storage of additional inventory at a warehouse to provide for the two retail locations.
Lease and Leasehold Improvement : This category includes rental deposits and expenses necessary to allow us to undertake leasehold improvements at a second retail location to the standards necessary to create a warm environment, capable of effective display and merchandising. Additionally some funds may be necessary to improve the warehouse space.
Warehouse : We anticipate that we may have to spend up to $5000 to obtain warehouse space that we intend to locate and select at a later time.
Travel and Accommodations : Our travel and accommodation budget needs to be supplemented by $7000 to allow for more advanced and continuous relationship building with our suppliers in Mexico.
Computer and Office : This expenditure refers to items such as additional computers, office software, photocopier, fax machine, telephone system, filing cabinets, office supplies and other similar office equipment.
Website Development : This expense is the cost associated with development of our website. The website will be used as one means to promote our product. At this time, there is no plan to develop a transactional capability, but instead to use the web as simply a promotional tool. Preliminary website development will begin as funds are available.
Consulting : This expense refers to the cost of consulting with industry experts. It will include the cost of expert advice we may require to display and market our product lines, implementation of inventory control systems, and other areas.
Working Capital : This expense refers to working capital to be used for continuing operations.
10
There is no assurance that Tiempo will raise the full $325,000 as anticipated. The following is the break down of how management intends to use the proceeds if only 25 percent, 50 percent, or 75 percent of the total Offering amount is raised:
|
Expenditure Item |
25% |
50% |
75% |
100% |
|
$ |
$ |
$ |
$ |
|
|
Offering Costs |
35,000 |
35,000 |
35,000 |
35,000 |
|
Payment of Outstanding Loans |
0 |
30,000 |
85,000 |
140,000 |
|
POS Inventory System |
5,000 |
5,000 |
5,000 |
5,000 |
|
Warehouse |
0 |
0 |
5,000 |
5,000 |
|
Legal and Accounting |
20,000 |
20,000 |
20,000 |
20,000 |
|
Marketing and Promotion |
1,000 |
5,000 |
10,000 |
15,000 |
|
Inventory |
15,000 |
30,000 |
40,000 |
50,000 |
|
Lease and Leasehold Improvements |
2,500 |
15,000 |
15,000 |
15,000 |
|
Travel and Accommodation |
0 |
7,000 |
7,000 |
7,000 |
|
Website Development |
1,000 |
3,000 |
3,000 |
3,000 |
|
Consulting |
0 |
3,000 |
3,000 |
3,000 |
|
Working Capital |
1,750 |
9,500 |
15,750 |
27,000 |
|
TOTAL |
81,250 |
162,500 |
243,750 |
325,000 |
If only 25% of the Offering is sold, we would continue with our development plans. No debt would be retired. As the POS system is deemed high-priority, its expenditure remains, as does the Legal and Accounting category, allowing us to raise potential funds. All other categories would be reduced considerably, but would proceed. Inventory is reduced by $35,000 from the offering raising 100% of funds but we are of the opinion that this amount would be sufficient to allow us to open the second retail store. Leasehold improvements of the second location would be minimal, reflecting lesser available funds. Assuming success in finding a second retail location, it is unlikely a warehouse would be considered at this level of funding. Funding at this level would limit our abilities to achieve the level of professionalism originally intended. If funds proved insufficient to open a second retail outlet, inventory purchase would proceed providing us with inventory depth, likely resulting in the need for a warehouse.
In the event that only 50% of the Offering amount is raised , we would continue with our development plans, with a second retail outlet however we would not establish the warehouse. Inventory purchases would increase to $30,000, and leasehold improvements would allow a store design of appeal. Marketing and promotion All other categories would return to the level of funding as provided for in the 100% of funds raised category. In this scenario, $30,000 of the fixed debt would be repaid.
If 75% of the total Offering amount is raised , there would be sufficient funds to implement the expansion plan. We would establish our warehouse as it will be required to facilitate our increased inventory. Again, inventory and leasehold improvements budgets allow for the necessary investments to proceed. In this scenario, $85,000 of the $140,000 would be repaid. All other categories maintain a level of funding equal to the funding we require at 100% of proceeds.
If we do not raise any funds under this Offering then we will have the additional expenses of $35,000 for the costs of this Offering which will be additional debt and will be required to be paid from any available operating capital. We may not have sufficient operating capital to pay this debt on a timely basis.
Item 5. Determination of Offering Price
There is no established market for our stock. The Offering price for shares sold pursuant to this Offering is set at $0.10. Of the shares of stock held by affiliates, officers and directors, 500,000 shares were sold for total
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consideration of $500.00, and the remaining 5,000,000 shares were issued to acquire the shares of our wholly owned subsidiary, Tiempo. All of the shares of outstanding stock are restricted. The additional factors that were included in determining the sales price are the lack of liquidity since there is no present market for our stock and the high level of risk considering our lack of profitable operating history.
Item 6. Dilution
“Net tangible book value” is the amount that results from subtracting the total liabilities and intangible assets from the total assets of an entity. Dilution occurs because we determined the Offering price based on factors other than those used in computing book value of our stock. Dilution exists because the book value of shares held by existing stockholders is lower than the Offering price offered to new investors.
We are offering shares of our common stock for $0.10 per share through this Offering. Our directors and officers and affiliates purchased 500 shares of our common stock for $1.00 per share and we issued a total of 50,000 shares of our common stock at a deemed price of $0.001 per share for the acquisition of Tiempo. The shares issued were forward split on the basis of one hundred (100) shares for every one (1) share held on November 29, 2005.
As at November 30, 2005, our consolidated net tangible book value was ($0.015) per common share. If we are successful in selling all of the offered shares at the public offering price, our pro forma net tangible book value of Tiempo would be $204,782 after deducting remaining Offering costs of $35,000, or approximately $0.02 per share, which would represent an immediate increase of $0.035 in net tangible book value per share and $0.08 or 80% per share dilution to new investors, assuming all the shares are sold at the Offering price of $0.10 per share.
Following is a table detailing dilution to investors if 10%, 50%, 75%, or 100% of the Offering is sold. Table assumes net offering costs of $35,000 regardless of percentage of Offering sold.
|
10% |
50% |
75% |
100% |
|
|
Net Tangible Book Value Per Share Prior to Stock Sale |
(0.015) |
(0.015) |
(0.015) |
(0.015) |
|
Net Tangible Book Value Per Share After Stock Sale |
(0.015) |
0.006 |
0.015 |
0.02 |
|
Increase (Decrease) in Net Book Value Per Share Due to Stock Sale |
0.00 |
0.021 |
0.03 |
0.035 |
|
Immediate Dilution (subscription price of $.10 less net tangible book value per share) |
0.115 |
0.094 |
0.085 |
0.08 |
Item 7. Selling Security Holders
Our current shareholders are not selling any of the shares being offered in this prospectus.
Item 8. Plan of Distribution
Upon effectiveness of the registration statement, of which this prospectus is a part, we will conduct the sale of shares we are offering on a self-underwritten, best–efforts basis. There will be no underwriters used, no dealer's commissions, no finder's fees, and no passive market making. The officers and directors of Sun World, Mrs. Kimberley Coonfer, Mr. Greg Coonfer and Mr. Shaun Thorburn will sell securities on behalf of Sun World in this Offering. Mrs. Kimberley Coonfer, Mr. Greg Coonfer and Mr. Shaun Thorburn are not subject to a statutory disqualification as such term is defined in Section (a) (39) of the Securities Exchange Act of 1934 . They will rely on Rule 3a4-1 to sell Sun World’s securities without registering as broker-dealers. They are serving as officers and directors and primarily perform substantial duties for or on behalf of Sun World otherwise than in connection with transactions in securities and will continue to do so at the end of the Offering, and have not been a broker or
12
dealer, or an associated person of a broker or dealer, within the preceding 12 months, and have not nor will not participate in the sale of securities for any issuer more than once every twelve months. Our officers and directors will not receive commissions or other remuneration in connection with their participation in this Offering based either directly or indirectly on transactions in securities. Our officers and directors intend to personally contact their friends, family members and business acquaintances in attempting to sell the shares offered hereunder. Sun World will not be conducting a mass-mailing connection with this offering, nor will it offer shares to potential customers. Tiempo may also employ the services of an agent or intermediary to introduce Sun World to prospective subscribers to the Offering. In such event, Sun World is prepared to pay commissions or finder’s fees of up to 10% of the proceeds from the Offering. In the event that Sun World does employ the services of an agent or intermediary, and such agent or intermediary is acting as an underwriter, Sun World will file a post effective amendment to name such underwriter, disclose the material terms of the underwriting, disclose the material terms of such underwriting agreement and file such as an exhibit.
We plan to offer our shares to the public, at a price of $0.10 per share, with no minimum amount to be sold. The officers, directors and existing shareholders and affiliates will not purchase any shares under this Offering. We will keep the Offering open until we sell all of the shares registered, or March 31, 2007, which ever occurs first. There can be no assurance that we will sell all or any of the shares offered. We have no arrangement or guarantee that we will sell any shares. All subscription checks will be made payable to Sun World or as we may otherwise direct.
Item 9. Legal Proceedings
Sun World, or its wholly-owned subsidiary Tiempo, are not parties to any pending legal proceedings, nor is Sun World aware of any governmental authority contemplating any legal proceeding against it.
Item 10. Directors, Executive Officers, Promoters and Control Persons
Kimberley Coonfer, President and Member of the Board of Directors, age 32
Mrs. Kimberley Coonfer has been serving as Sun World’s President and a member of Sun World’s Board of Directors since March 31, 2005. The term of her office is for one year and is renewable on an annual basis.
Mrs. Coonfer is also the President, Secretary Treasurer and sole director of Tiempo de Mexico Ltd., our wholly-owned subsidiary and has served in that capacity since November, 1996. Mrs. Coonfer has been responsible for the daily operations of Tiempo since November, 1996. She has been and is currently responsible for buying, selling, display, accounts payable, accounts receivable, logistics, human resources, and all operations that could be expected of an owner/operator of a retail business.
Mrs. Kimberley Coonfer was born in Vancouver, BC, Canada; she moved to Montreal, Quebec, Canada in 1991 to undertake studies to earn a Bachelor of Science at McGill University in Montreal, Quebec, Canada. Mrs. Coonfer graduated in 1995 with a Biology major and an Environmental Studies minor.
In 1996, Mrs. Coonfer, along with her business partner purchased Tiempo.
Mrs. Coonfer is not an officer or director of any reporting company that files annual, quarterly, or periodic reports with the United States Securities and Exchange Commission.
Mr. Greg Coonfer, Chief Financial Officer and Member of the Board of Directors, age 33
Mr. Greg Coonfer has been serving as Sun World’s Chief Financial Officer and a member of Sun World’s Board of Directors since March 31, 2005.
Mr. Greg Coonfer is the husband of Mrs. Kimberley Coonfer, our President and a member of the Board of Directors.
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Mr. Coonfer was born in Olds, Alberta, Canada. In 1996 he graduated from the University of Lethbridge with a Bachelor of Management degree in Accounting. In 2002 he received his Certified General Account (CGA) designation, a 2-year accounting program.
In 1997 Mr. Coonfer joined Canadian 88 Energy Exploration Ltd. as a Joint-Interest Accountant. In that position he was responsible for compiling, reporting and distributing all oil and gas production joint-interest billings. In April, 2001, Mr. Coonfer was promoted to Marketing Accountant, where he was responsible for coordinating natural gas transportation, calculating natural gas production prices and reporting corporate net-back prices. In 2003, Canadian 88 Energy Exploration Ltd. was acquired by Esprit Exploration Ltd., a wholly-owned subsidiary of Esprit Energy Trust. In 2003, Mr. Coonfer was promoted to Marketing Coordinator, and is responsible for natural gas trading and contracts. He is currently responsible, with his team, for daily natural gas inventories, acting as a liaison between the marketing department and production accounting department.
Mr. Coonfer is not an officer or director of any reporting company that files annual, quarterly or period reports with the United States Securities and Exchange Commission.
Mr. Shaun Thorburn, Secretary and Member of Board of Directors, age 30
Mr. Shaun Thorburn was originally appointed to the Board of Directors and President and Secretary Treasurer of Sun World on December 31, 2004. On March 31, 2005, Mr. Thorburn resigned as President and Treasurer.
A resident of Olds, Alberta, Canada, Mr. Thorburn was involved in his family’s hardware business in part-time and full-time positions since the mid 1980’s. In 1991 he took a full-time position in the family owned franchise at Beaver Lumber, a Canadian retail chain selling lumber and other household hardware. For a period of 3 years he was responsible for merchandising, lumber yard operation and deliveries at Beaver Lumber.
In 1994, Mr. Thorburn attended the Northern Alberta Institute of Technology, Edmonton, AB, Canada where he studied in the Business Administration diploma program. In 1996, he returned to the family business where his responsibilities mirrored those of his previous time there.
In September, 2001, Mr. Thornton returned to school, this time at Olds College, Olds, AB, Canada where he earned a 2-year Land Resource Management diploma, graduating in April¸2003. The Land Management Resource program focuses on the skills necessary to reclaim oil-and-gas drilling and production sites.
From June, 2003 to May, 2004 he was employed by Peter Overwater Oilfield Construction, Olds, AB, Canada, an oilfield construction company, as a laborer, assisting in the building and maintenance of oil and gas production sites.
In May, 2004, with the family hardware business purchased by a national chain, Mr. Thornton agreed to employment with the purchaser, Home Hardware, Olds, AB, Canada, where he is currently employed. He is presently the yard foreman, scheduling and supervising a group of seven to ten employees.
Mr. Thorburn is not an officer or director of any reporting company that files annual, quarterly or period reports with the United States Securities and Exchange Commission.
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Item 11. Security Ownership of Certain Beneficial Owners and Management
The following is a table detailing the current shareholders of Sun World owning 5% or more of the common stock, and shares owned by Sun World’s directors and officers as of February 25, 2006:
|
Title of Class |
Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
Percent of Class (1) |
|
Common |
Kimberly Coonfer Director, President 2823 - 21 Ave. S.W, Calgary, Alberta, Canada, T2T 0P4 |
3,750,000 |
68.2% |
|
Common |
Greg Coonfer Director, Treasurer 2823 - 21 Ave. S.W. Calgary, Alberta, Canada, T2T 0P4 |
490,000 |
8.9% |
|
Common |
Shawn Thorburn Director, Secretary 17 Hawthorne Way Olds, AB, Canada, T4H 1T7 |
10,000 |
0.01% |
|
Common |
Directors and officers as a group of three (3) |
4,250,000 |
77.3% |
|
Common |
Caribbean Overseas Investments Ltd. Cor 12 Baymen Ave and Calle Al Mar Belize City, Belize |
1,250,000 |
22.7% |
|
Common |
Total including Directors and Officers and 5% shareholders as a group |
5,500,000 |
100% |
(1)
The percentage of class is based on the total number of shares outstanding of 5,500,000.
(2)
The beneficial owner of Caribbean Overseas Investments Ltd. is Clifford Larry Winsor.
Item 12. Description of Securities
Common Stock
Our Articles of Incorporation authorize the issuance of 75,000,000 shares of common stock with $0.001 par value. We are not authorized to issue any series or shares of preferred stock. Each record holder of common stock is entitled to one vote for each share held in all matters properly submitted to the stockholders for their vote. Cumulative voting for the election of directors is not permitted by the By-Laws of Sun World.
Holders of outstanding shares of common stock are entitled to such dividends as may be declared from time to time by the board of directors out of legally available funds; and, in the event of liquidation, dissolution or winding up of the affairs of Sun World, holders are entitled to receive, ratably, the net assets of the Company available to stockholders after distribution is made to the preferred stockholders, if any, who are given preferred rights upon liquidation. Holders of outstanding shares of common stock have no preemptive, conversion or redemptive rights. To the extent that additional shares of Sun World’s common stock are issued, the relative interest of then existing stockholders may be diluted.
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Item 13. Interest of Named Experts and Counsel
Sun World has not hired or retained any experts or counsel on a contingent basis, who would receive a direct or indirect interest in Sun World, or who is, or was, a promoter, underwriter, voting trustee, director, officer or employee, of Tiempo.
Child, Van Wagoner and Bradshaw, PLLC of, Salt Lake City, Utah, have audited our financial statements for the years ended May 31, 2004 and May 31, 2005 and presented their audit report dated February 10, 2006 regarding such audit which is included with this prospectus with consent as experts in accounting and auditing.
W. Scott Lawler, Esq. whose offices are located at 41877 Enterprise Circle N., Suite 220, Temecula, California has issued an opinion on the validity of the shares offered by this prospectus, which has been filed as an Exhibit to this prospectus with Mr. Lawler’s consent.
Item 14. Disclosure of Commission Position of Indemnification for Securities Liabilities
The Nevada General Corporation Law requires Sun World to indemnify officers and directors for any expenses incurred by any officer or director in connection with any actions or proceedings, whether civil, criminal, administrative, or investigative, brought against such officer or director because of his or her status as an officer or director, to the extent that the director or officer has been successful on the merits or otherwise in defense of the action or proceeding. The Nevada General Corporation Law permits a corporation to indemnify an officer or director, even in the absence of an agreement to do so, for expenses incurred in connection with any action or proceeding if such officer or director acted in good faith and in a manner in which he or she reasonably believed to be in or not opposed to the best interests of the Company and such indemnification is authorized by the stockholders, by a quorum of disinterested directors, by independent legal counsel in a written opinion authorized by a majority vote of a quorum of directors consisting of disinterested directors, or by independent legal counsel in a written opinion if a quorum of disinterested directors cannot be obtained.
The Nevada General Corporation Law prohibits indemnification of a director or officer if a final adjudication establishes that the officer's or director's acts or omissions involved intentional misconduct, fraud, or a knowing violation of the law and were material to the cause of action. Despite the foregoing limitations on indemnification, the Nevada General Corporation Law may permit an officer or director to apply to the court for approval of indemnification even if the officer or director is adjudged to have committed intentional misconduct, fraud, or a knowing violation of the law.
The Nevada General Corporation Law also provides that indemnification of directors is not permitted for the unlawful payment of distributions, except for those directors registering their dissent to the payment of the distribution.
According to Section 6.09 of Sun World’s bylaws, Sun World is authorized to indemnify its directors to the fullest extent authorized under Nevada Law subject to certain specified limitations.
Insofar as indemnification for liabilities arising under the Securities Act may be provided to directors, officers or persons controlling the Company pursuant to the foregoing provisions, Sun World has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Items 15 and 16. Organization Within Last Five Years and Description of Business
Business Development
Sun World was incorporated on April 3, 2000, in the State of Nevada. The company was established to participate in private investment opportunities as they became available. Until the purchase of our wholly-owned subsidiary, Tiempo on May 31, 2005, the company was inactive.
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Aside from the revenues and operations of our recently-acquired wholly-owned subsidiary, Tiempo, we have not had any other revenues or operations. Aside from Tiempo, we have no additional assets. We do not expect to commence earning additional revenues, aside from those of Tiempo. All of the operations are undertaken by our wholly-owned subsidiary, Tiempo.
Sun World has never declared bankruptcy, has never been in receivership, and has never been involved in any legal action or proceedings.
Since incorporation, Sun World has not made any significant purchase or sale of assets, nor has it been involved in any mergers, acquisitions or consolidations, other than the take-over of Tiempo.
Sun World is not a blank check registrant as that term is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933, since it has a specific business plan or purpose.
Neither Sun World nor its officers, directors, promoters or affiliates, has had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements or understandings with any representatives of the owners of any business or company regarding the possibility of an acquisition or merger.
Business of Issuer
Our business plan is to sell furniture and home furnishings, imported from Mexico, in Canada and the USA. The business will focus on securing retail locations with high pedestrian and vehicular traffic in mid-to-upscale neighborhoods.
The business will differentiate itself by offering various lines of Mexican products, appealing to those customers who have traveled to Mexico and are familiar with the type of products offered in Mexico. With a focus on decorations, pottery, home accessories and home furnishings, the creativity of the buying and displaying of products will serve to bring a small piece of Mexico by way of home décor that beautifies the home.
Principal Products and Services
By category, the principal products of Tiempo are: pottery (60%), furniture (15%), lighting (5%), textile products (5%), jewelry (5%), wall art (5%) and glassware (5%).
With proper buying and display techniques, the physical products are presented to bring “a touch of the Mexican culture” to the homes of Tiempo’s customers.
The Market
The market for our products could be described as young married couples, with or without children. With the majority of the shopping done by females, aged 30 to 50 years, this group tends to have high disposable income, treating their home as their most important possession. To that end, pride in their surroundings continues to motivate them to create an atmosphere of uniqueness and sophistication.
The customers’ desire is to have a home decorated with non-typical furnishings, often representing their admiration for Mexico and its culture.
Geographically, we intend to open an additional Calgary, Alberta, Canada store almost immediately. Being in the same city as our current retail location, Mrs. Kimberley Coonfer, our one full-time director and officer, can spread her efforts evenly over the 2 locations utilizing her operational experience while limiting expenses.
Utilizing the experience of this expansion, additional cities across Western Canada will be explored for store openings, likely starting in Edmonton, Alberta, Canada, due to proximity, and then Vancouver, British Columbia,
17
Canada, again because of proximity and potential. The economies in Western Canada are presently experiencing strong growth.
It is intended we will thereafter move eastward in Canada, but could also begin exploring northern USA locations at about the same time.
Distribution
With one location in Calgary, Alberta, Canada, our intention is to open a second location in Calgary. Upon successful execution of this store, our intention is to enter the Edmonton, Alberta, Canada and Vancouver, British Columbia, Canada market, thereby giving us physical proximity to Seattle, Washington to introduce our first store in the United States.
Our intention is to thereafter roll-out across Canada, west to east, one store per major city, while researching the northern states of the United States market for locations of reasonably close proximity to Canada. We have no intention of entering the southern United States, as competition from Mexican expatriates could be expected to be well-established and fierce.
Competition and Competitive Strategy
We presently have no direct competition in the market in Calgary and we expect our competitive position within the industry will continue to be limited. The challenge will be to build our business from the one existing location, growing to allow for economies of scale to provide a buying and management advantage, while utilizing marketing efforts specific to each individual store.
We intend to develop into a destination shopping location, rather than relying on walk-by or drive-by traffic.
At present there are numerous retailers selling furnishings imported from around the globe, but no retailers that specialize solely in products from Mexico in the Calgary area.
Our competitive strategy will be to select (buy) products of a unique nature, in a quantity allowing for higher selling margins, and implementing marketing efforts aimed at creating differentiation.
Our competition could be grouped into three major categories. First are the furniture stores, some big, some small, that sell typical pine furniture. These stores typically offer this pine furniture as only a small portion of their inventory, but others offer this pine as their only furniture product. Second are the national chains that market a varied array of imported and specifically-manufactured items, some from Mexico, but mainly from all-parts of the world. The third category of competition is gift stores which are in close proximity to our physical location. These stores often offer products imported from around the world, some of the products sourced from the same Calgary supplier we utilize.
Sources and Availability of Products and Supplies
We utilize 3 main sources of product: Mexican wholesalers--80%, local Calgary import distributors--15%, and local Calgary artists--5%.
Of the 80% of the product line coming from Mexico, Tiempo utilizes the services of one main supplier for 60% of the Mexican-sourced product line. This supplier is our main supplier of pottery products. This supplier also serves as our freight consolidator in Mexico.
Our major suppliers are as follows:
1.
Artesanias Macexport
Emilio Carranza No. 244
18
Tlaquepaque, Jalisco, Mexico
Mexico C.P. 4500
Tel: (33) 3657-5979
Fax: (33) 3657-5544
Pottery Supplier: Chimeneas, Planters, Vases, Clay ornaments
2.
Artesanias Arzola
Juarez 286
Tonala, Jalisco, Mexico
Tel/Fax: 3683-3761
Tin and Glass Supplier: Glass Stars, Mirrors, Tin Sculptures
3.
Down the Beaten Path
7519G 30 th St. S.E.
Calgary, AB, Canada T2C 1V4
Tel: (403) 519 7230
Fax: (403) 238 9760
Local Pottery Supplier: Vases
4.
Index Gift Imports Ltd.
#50, 5251 48 th AVE. SE
Calgary, AB, Canada T2B 3S2
Tel: (403) 291 2906
Fax: (403) 291 4715
Local Giftware Supplier: Imports from China and India including Candleholders,
Picture frames, Masks and sculptures.
The Mexican export market is well-established, with wholesalers easily accessible in the Mexican state of Jalisco, specifically the cities of Tonala and Talaquepaque. With formal buying facilities, credit availability, transportation arrangements, and constant supply,we believe the long-term availability of products is secure.
As our buying power increases over time, our intention is to negotiate for exclusive products--products made available only to Tiempo.
It is our intention to develop additional supplier relationships to ensure adequacy of supply, in the event our current main Mexican supplier should unexpectedly cease operations.
Patent, Trademark, License & Franchise Restrictions and Contractual Obligations & Concessions
There are no inherent factors or circumstances associated with this industry that would give cause for any patent, trademark or license infringements or violations. Tiempo has not entered into any franchise agreements or other contracts that have given, or could give rise to obligations or concessions.
At present Tiempo does not hold any intellectual property, although trademark protection may be necessary in the foreseeable future.
Approvals and Existing or Probable Government Regulations
There are no types of government approvals required and no government regulations on our business nor are we aware of any regulations being contemplated that would adversely affect our ability to operate.
19
Research and Development Activities and Costs
We have not incurred any costs to date and have no plans to undertake any research and development activities.
Compliance With Environmental Laws
There are no environmental concerns we must be concerned with.
Facilities
We do not own facilities of any kind.
At present we are leasing space for our single retail location in Calgary, AB, Canada, which also serves as our principal office. The space is 2984 sq. ft., with a 3-year lease expiring July 31, 2006, at $CDN18.19 per sq. ft. (approximately $US15.55 per sq. ft.). We have a 2-year option on the lease, with the lease rate to be determined at time of renewal, should we exercise the option.
Employees
Tiempo has 4 employees at the present time, 2 full-time and 2 part-time. Of the 2 full-time employees, one is Mrs. Kimberley Coonfer, a director and officer of Sun World. Her salary is $1300 per month.
The second full-time employee is our manager who also undertakes floor sales, however she has limited exposure to purchasing of inventory, which is presently handled solely by Mrs. Coonfer.
Of the 2 part-time employees, one is Mr. Greg Coonfer, a director and officer of Sun World, and husband of Mrs. Kimberley Coonfer. Mr. Coonfer offers his time as an accountant, without compensation. As a Certified General Accountant (Canada), Greg’s involvement is limited to producing regular monthly and year-end financial statements.
The second part-time employee is a floor sales person.
The officers and directors of Sun World are presently responsible for all planning, developing and operational duties, and will continue to be so throughout the early stages of our growth.
Human resource planning will be part of an ongoing process that will include regular evaluation of operations and revenue realization. It is expected we will require a manager for each new store location, who will then be responsible for the hiring of floor sales people as necessary. It is expected all buying and accounting functions will be centralized for efficiency. Further, the implementation of a point-of-sale (POS) system will allow for effective inventory control.
Forward-Looking Statements
This prospectus contains forward-looking statements that involve risks and uncertainties. Tiempo uses words such as: anticipate, believe, plan, expect, future, intend and similar expressions, to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Actual results are most likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced as described in this Risk Factors section and elsewhere in this prospectus. Factors which may cause the actual results or the actual plan of operations to vary include, among other things, decisions of the board of directors not to pursue a specific course of action based on its re-assessment of the facts or new facts, or changes in general economic conditions and those other factors set out in this prospectus.
20
Reports to Security Holders
We will voluntarily make available to securities holders an annual report, including audited financials, on Form 10-KSB. We are not currently a fully reporting company, but upon effectiveness of this registration statement, we will be required to file reports with the SEC pursuant to the Securities Exchange Act of 1934; such as quarterly reports on Form 10-QSB and current reports on Form 8-K.
The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
Item 17. Management’s Discussion and Analysis or Plan of Operation
Management’s Discussion and Analysis of Financial Condition and Results of Operations
For the fiscal year ended May 31, 2005 Sun World had income from operations of $1,704 as compared to a loss from operations of $4,836 for fiscal year 2004. Fiscal 2005 income included an increase in gross revenues after costs of sales to $95,114 from $81,797 (2004). The increase in revenues can be attributed to increased product sales. Administrative expenses increased to $62,337 from $58,682 (2004) and salaries and wages increased to $28,094 from $24,884 (2004) which was also due to the increase in revenues as the company hired additional part time staff.
Net losses for the two completed fiscal years were $7,484 (2005) and $11,871 (2004) respectively. The loss for 2005 was solely due to an interest expense in the amount of $9,188 accrued for certain long term debt. The loss related to fiscal 2004 relates to both an interest expense accrued with respect to long term debt as well as a shortfall from operations.
For the six month periods ending November 30, 2005 and 2004, Sun World had income from operations of $15,118 as compared to a loss from operations of $1,017 (2004). The increase in income from operations includes an increase in gross revenues after cost of sales to $67,732 (2005) from $41,845 (2004). The increase in revenues can be attributed to increased product sales. Salaries and wages increased to $19,311 (2005) from $10,924 (2004), administrative expenses increased to $31,660 (2005) from $30,417 (2004).
Interest expense on long term debt was accrued for the respective six month periods and totaled $4,820 to November 30, 2005 as compared to $4,503 to November 30, 2004.
It is our intent to raise the funds under this prospectus to retire certain debt in Tiempo and to expand the operations of Tiempo by opening initially one additional location in Calgary and then other locations throughout Canada and the United States of Amercia. As of the date of this prospectus, Tiempo generates sufficient revenues to meet all of its operating expenses however, it does not generate sufficient revenues to execute our business plan and we will be required to raise the funds under this prospectus in order to execute our proposed expansion plan.
Trends
Sun World is not aware of any trends, events or uncertainties that have or are reasonably likely to have a material impact on our short term or long term liquidity.
21
Liquidity and Capital Resources
Summary of Working Capital and Stockholders' Equity
As of May 31, 2005, the Company had working capital of $58,381 and Stockholders' Deficit of $83,626 compared with working capital of $35,123 and Stockholders' Deficit of $76,142 as of May 31, 2004.. The Company’s working capital has increased primarily as a result of an increase in cash to $19,541 (2005) from $9,685 (2004) and an increase in inventory to $43,518 (2005) from $25,171 (2004). Stockholders' Deficiency increased predominantly as a result of increase in shareholders loans to $24,652 (2005) from $18,545 (2004) and the increase in loans payable, related parties to $124,433 (2005) from $92,563 (2004). Shareholder loans increased as a result of cash contributions to the loan account. Loans payable to related parties increased as a result of both cash contributions and the accrual of annual interest obligations.
As of November 30, 2005, the Company had working capital of $75,668.
Liquidity
The Company anticipates it may require approximately $325,000 over the next twelve months to fully implement its existing business plan, The Company may require additional funds over the next three years to assist in realizing its goals should it not achieve anticipated bench marks over the 2005, 2006 and 2007 fiscal years. The amount and timing of additional funds required can not be definitively stated as at the date of this report and will be dependent on a variety of factors. As of the filing of this report, the Company has been successful in paying its operating costs from existing revenue and shareholder loans. The Company anticipates revenues generated from its retail sales and the funds raised under this Offering will greatly reduce the requirement for additional funding; however, we can not be certain the Company will be successful in achieving revenues from those operations. Furthermore the Company cannot be certain that we will be able to raise any additional capital to fund our ongoing operations or that the Company will raise any funds under this Offering..
Sources of Working Capital
During fiscal 2005 the Company's primary sources of working capital have come from net proceeds generated from the sale of in-store merchandise, as well as certain shareholder and related party loans as follows:
*
$22,011 in the form of loans from related parties bearing interest at a rate of 8% per annum; and,
*
$8,171 in the form of loans from shareholders carrying interest at a variable interest rate based on the Manulife Bank of Canada base rate. The rate was 4.25% as at the fiscal year ended May 31, 2005.
Material Commitments for Capital Expenditures
None.
Plan of Operation
Milestones
When we have raised a minimum of $81,250 or 25% of the Offering , Sun World will immediately begin the process of securing a second prime retail location in Calgary, AB, Canada. This store shall serve as the expansion template, with a documented process for additional executions in the future.
We would proceed to expend funds for inventory and to purchase a Point of Sale Inventory System. Sun World intends to design and build a website. The website will provide basic information about our stores. It will give us exposure to the general marketplace. The website will have the facility for prospective customers to contact us
22
with questions and inquiries, but will not be designed to process orders at this time. Initially, we anticipate the website development will cost approximately $1,000. Our website should be under construction within two months after the closing of this Offering.
We are presently evaluating certain potential domain names, all of which contain the word ‘Tiempo’. After a decision has been made regarding a domain name, registration of our website domain name will be implemented. Web server space will be contracted from a local Internet Service Provider (ISP), which has not yet been chosen.
During the second and third month, Mrs. Coonfer plans to have determined a location for our second store in Calgary. During months five through eight, she may possibly determine an Edmonton, AB, Canada location.
Concurrently with retail location determination, Mrs. Coonfer will begin the search for managers with retail experience for each of the locations. These managers will then participate in product buying trips, giving them perceived ownership of their respective stores. These managers will be provided with profit-sharing to ensure loyalty and commitment.
Expenditures
The following chart provides an overview of our budgeted expenditures, by significant area of activity, for Sun World to continue operations and to effect our business plan. The centre column, totaling $81,250, is the minimum funds required for us to continue our expansion if we are only able to raise some funds from this Offering. The right column, totaling $325,000 will allow us to effect our total business plan,
|
Minimum funds required |
Maximum funds received |
|
|
Expenses Costs of the Offering Payment of Outstanding Loans POS Inventory System Legal and Accounting Marketing and Promotion Inventory Lease and Leasehold Improvements Warehouse Travel and Accommodation Website Development Consulting Working Capital |
35,000 0 5,000 20,000 1,000 14,000 2,500 0 2,000 1,000 0 750 |
35,000 140,000 5,000 20,000 15,000 50,000 15,000 5,000 7,000 3,000 3,000 27,000 |
|
Total |
$325,000 |
The above expenditure items are defined as follows:
Offering Costs: This expenditure item refers to the costs of this Offering, including, legal, accounting and transfer agent fees.
Payment of Outstanding Loans: This expenditure item is for the payment of the outstanding loan which will reduce interest costs annually.
POS (Point of Sale) Inventory System: As control of inventory is deemed extremely important, especially with multiple stores, we anticipate implementing a user-friendly, effective POS system. This expense covers the cost of such a system.
23
Warehouse: This expenditure item refers to the costs of establishing a warehouse to better maintain inventory for our retail outlets.
Legal and Accounting: This expenditure item refers to the normal legal and accounting costs associated with maintaining a publicly traded company. It will also cover the cost of preparation of appropriate agreements and documents. We expect to be making these expenditures throughout the year, commencing on the effective date of this registration.
Marketing and Promotion: This item refers to the cost of a basic marketing campaign and the provision of product information to our potential customers. It includes direct marketing, advertisements in community papers, displays at home shows, and participation in local community events. This expense includes these costs over the twelve-month period after the effective date of this Offering.
Inventory: With more stores, we must increase the level of our buying. It is anticipated that start-up inventory per store will cost roughly $15,000 for minimal inventory levels to be maintained.
Lease and Leasehold Improvements : This expenditure includes the costs of leasing a second location and the costs of leasehold improvements.
Travel and Accommodations: This expenditure includes all travel costs incurred in sourcing products, but also in searching-out retail locations as we expand.
Consulting: This expense refers to the cost of consulting with industry experts. It will include the cost of technical support, marketing support, or retail support. We expect to be making these expenditures throughout the year, commencing on the effective date of this registration.
Working Capital: This item refers general working capital to be used for any costs that have not been otherwise listed. This amount will cover such costs during the first year of operation.
We are confident we can meet our financial obligations and pursue our plan of operations if we can raise the amount of funding as contemplated by this Offering.
Off Balance Sheet Arrangements
None.
Item 18. Description of Property
Sun World does not own any real property.
We do not have any investments or interests in any real estate. Our company does not invest in real estate mortgages, nor does it invest in securities of, or interests in, persons primarily engaged in real estate activities.
Tiempo currently has a lease for our one store location in Calgary, AB, Canada. The terms of the lease are as follows:
The space is 2,984 sq. ft., with a 3-year lease expiring July 31, 2006, at CDN$17.00per sq. ft. (approximately US$13.53 per sq. ft.). We have a 2-year option on the lease, with the lease rate to be determined at that time.
24
Item 19. Certain Relationships and Related Transactions
Other than the stock transactions discussed below, Sun World has not entered into any transaction nor are there any proposed transactions in which any director, executive officer, shareholder of Sun World or any member of the immediate family of any of the foregoing had or is to have a direct or indirect material interest.
On May 31, 2005, we issued from treasury a total of 5,000,000 shares to Mrs. Kimberley Coonfer, an officer and a member of our board of directors, as to 3,750,000 shares and Caribbean Overseas Investments Ltd., a company controlled by Mr. Clifford Larry Winsor, who is Mrs. Coonfer’s step-father, as to 1,250,000 shares. This loan is from Caribbean Overseas Investments Ltd., a company controlled by Clifford Larry Winsor, the step father of Kimberley Coonfer.
There are no promoters being used in relation to this Offering, except for our officers and directors who will be selling the securities offered by Sun World and who may be deemed to be promoters under Rule 405 of Regulation C promulgated by the Securities and Exchange Commission under the Securities Act of 1933. No person who may, in the future, be considered a promoter of this Offering, will receive or expect to receive assets, services or other considerations from us. No assets will be, nor are expected to be, acquired from any promoter on behalf of our company. We have not entered into any agreements that require disclosure to our shareholders.
Item 20. Market for Common Equity and Related Stockholder Matters
Market Information
Currently there is no public trading market for our stock, and we have not applied to have Sun World’s common stock listed. We intend to apply to have our common stock quoted on the OTC Bulletin Board. No trading symbol has yet been assigned.
Rules Governing Low-Price Stocks that May Affect Our Shareholders' Ability to Resell Shares of Our Common Stock
Our stock currently is not traded on any stock exchange or quoted on any stock quotation system. Upon the registration statement in which this prospectus is included becoming effective, we will apply for quotation of our common stock on the NASD's OTC/BB.
Quotations on the OTC/BB reflect inter-dealer prices, without retail mark-up, markdown or commission and may not reflect actual transactions. Sun World’s common stock may be subject to certain rules adopted by the SEC that regulate broker-dealer practices in connection with transactions in "penny stocks". Penny stocks generally are securities with a price of less than $5.00, other than securities registered on certain national exchanges or quoted on the Nasdaq system, provided that the exchange or system provides current price and volume information with respect to transaction in such securities. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.
The penny stock rules require broker-dealers, prior to a transaction in a penny stock not otherwise exempt from the rules, to make a special suitability determination for the purchaser to receive the purchaser’s written consent to the transaction prior to sale, to deliver standardized risk disclosure documents prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock. In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.
25
Holders
As of the filing of this prospectus, we have four (4) shareholders of record of Sun World’s common stock.
Rule 144 Shares.
A total of 500,000 shares of the common stock are available for resale to the public as of the date of this prospectus; and a total of 5,000,000 shares of the common stock will be available for resale to the public after May 31, 2006 in accordance with the volume and trading limitations of Rule 144 of the Act. In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company's common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed the greater of: 1% of the number of shares of Tiempo common stock then outstanding which, in this case, will equal approximately 55,000 shares as of the date of this prospectus; or the average weekly trading volume of Sun World’s common stock during the four calendar weeks preceding the filing of a notice on form 144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about Sun World. Under Rule 144(k), a person who is not one of Sun World’s affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least 2 years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.
As of the date of this prospectus, persons who are Sun World’s affiliates hold all of the 500,000 shares which may be sold as of the date of this prospectus and the 5,000,000 shares, which may be sold pursuant to Rule 144 after May 31, 2006.
Dividends.
As of the filing of this prospectus, we have not paid any dividends to our shareholders. There are no restrictions which would limit the ability of Sun World to pay dividends on common equity or that are likely to do so in the future. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend: Sun World would not be able to pay its debts as they become due in the usual course of business; or its total assets would be less than the sum of the total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
Difficulty To Resell Sun World Stock, As The Company Has No Expectations To Pay Cash Dividends In The Near Future
The holders of our common stock are entitled to receive dividends when, and if, declared by the board of directors. We will not be paying cash dividends in the foreseeable future, but instead we will be retaining any and all earnings to finance the growth of our business. To date, we have not paid cash dividends on our common stock. This lack of an ongoing return on investment may make it difficult to sell our common stock and if the stock is sold the seller may be forced to sell the stock at a loss.
Item 21. Executive Compensation
COMPENSATION
The following table sets forth the compensation paid to our directors and members of our management group for the last fiscal year. No executive officer of Sun World or its wholly owned subsidiary earned a salary and bonus for such fiscal year in excess of USD$100,000.
26
|
Annualized Compensation |
Long Term Compensation |
|||||
|
Name and Principal Position |
Year |
Salary |
Bonus |
Securities Under Options to be Granted (#) |
Long Term Incentive Plan Payouts |
All other Compensation |
|
Kimberley Coonfer (1) President & Director |
2005 |
7,585 |
- |
- |
- |
- |
|
Greg Coonfer Chief Financial Officer & Director |
2005 |
- |
- |
- |
- |
- |
|
Shaun Thorburn Secretary & Director |
2005 |
- |
- |
- |
- |
- |
(1) This compensation was paid to Mrs. Coonfer by the Company’s wholly owned subsidiary, Tiempo.
The Company has not paid any compensation to any other members of its management, administrative or supervisory bodies.
Compensation of Directors
No directors receive any form of compensation in their capacity as directors of Sun World.
Item 22. Financial Statements
The audited financial statements of Sun World appear on pages F-1 through F-16.
Item 23. Changes In and Disagreements With Accountants on Accounting and Financial Disclosures
Not applicable
27
SUN WORLD PARTNERS INC.
FINANCIAL STATEMENTS
For the six months ended November 30, 2005 and 2004
F-1
SUN WORLD PARTNERS INC.
CONSOLIDATED BALANCE SHEETS
|
ASSETS |
||
|
November 30, 2005 Unaudited |
May 31, 2005 Audited |
|
|
Current |
||
|
Cash |
$ 21,526 |
$ 19,541 |
|
Accounts receivable |
1,465 |
1,130 |
|
Inventory |
54,764 |
43,518 |
|
Prepaid Expenses |
8,943 |
5,931 |
|
86,698 |
70,120 |
|
|
|
|
|
|
Equipment (net of depreciation $157) |
53 |
64 |
|
Leasehold improvements (net of amortization of $999) |
400 |
474 |
|
$ 87,151 |
$ 70,658 |
|
|
LIABILITIES |
||
|
Current |
||
|
Accounts payable and accrued liabilities |
$ 5,159 |
$ 8,574 |
|
Gift certificates payable |
1,992 |
1,050 |
|
GST payable |
3,879 |
2,115 |
|
11,030 |
11,739 |
|
|
Shareholder loans |
26,389 |
24,652 |
|
Loan payable - related |
134,950 |
124,433 |
|
$ 172,369 |
$ 160,824 |
|
|
SHAREHOLDERS’ DEFICIENCY |
||
|
Share capital |
5,500 |
5,500 |
|
Paid in capital |
(4,999) |
(4,999) |
|
Deficit |
(73,329) |
(83,626) |
|
Accumulated other comprehensive income |
(12,390) |
(7,041) |
|
(85,218) |
(90,166) |
|
|
$ 87,151 |
$ 70,658 |
|
|
APPROVED BY THE DIRECTORS: |
||||
|
“Kimberley Danforth” |
Director |
“Greg Coonfer” |
Director |
|
|
Kimberley Danforth |
Greg Coonfer |
|||
SEE ACCOMPANYING NOTES
F-2
SUN WORLD PARTNERS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
for the six month periods ended November 30
|
2005 |
2004 |
|
|
Revenues |
||
|
Sales (net of returns) |
$ 112,593 |
$ 76,510 |
|
Costs of goods sold |
44,861 |
34,665 |
|
Gross profit |
67,732 |
41,845 |
|
Expenses |
||
|
Administrative expenses |
31,660 |
30,417 |
|
Professional fees |
1,643 |
1,521 |
|
Salaries and wages |
19,311 |
10,924 |
|
52,614 |
42,862 |
|
|
Income (loss) from operations |
15,118 |
(1,017) |
|
Interest expense |
(4,820) |
(4,503) |
|
Provision for income taxes |
- |
- |
|
Net Income (Loss) |
$ 10,298 |
$ (5,520) |
|
Net Income (Loss) per Common Share |
$ 0.00 |
$ (0.00) |
|
Weighted Average Number of Common Shares Used in Calculation |
5,500,000 |
5,000,000 |
|
Other comprehensive income |
||
|
Net Income (Loss) |
$ 10,298 |
$ (5,520) |
|
Foreign Currency adjustment |
(5,349) |
(14,788) |
|
Total other comprehensive income |
$ 4,949 |
$ (20,308) |
SEE ACCOMPANYING NOTES
F-3
SUN WORLD PARTNERS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six month periods ended November 30
|
2005 |
2004 |
|
|
Cash Flows from (used in) Operating Activities |
||
|
Net income (loss) from operations |
$ 15,118 |
$ (1,017) |
|
Adjustment for items no involving cash: |
||
|
Depreciation and amortization |
85 |
154 |
|
Inventory |
(11,246) |
(9,862) |
|
Change in non-cash working capital items: |
||
|
Accounts payable |
(2,475) |
11,290 |
|
Accounts receivable |
(335) |
5 |
|
Prepaid expenses and deposits |
(3,012) |
(6,872) |
|
Refundable tax credits |
1,764 |
(1,885) |
|
(101) |
(8,187) |
|
|
Cash Flow from Financing Activities |
||
|
Loans received from related parties |
$ 7,435 |
$ 22,094 |
|
Exchange Gain/Loss |
$ (5,349) |
$ (14,788) |
|
Increase (Decrease) in Cash Position |
$ 1,985 |
$ (881) |
|
Cash position at beginning of year |
$ 19,541 |
$ 9,685 |
|
Cash position at end of period |
$ 21,526 |
$ 8,804 |
|
|
|
|
SEE ACCOMPANYING NOTES
F-4
SUN WORLD PARTNERS INC.
UNAUDITED STATEMENT OF STOCKHOLDERS’ DEFICIT
for the six month period ended November 30, 2005
|
Class A Common Stock |
|||||||||||
|
Shares |
Amount |
Paid in capital |
Accumulated deficit |
Accumulated other comprehensive income (loss) |
Total Shareholders’ Deficit |
||||||
|
Balance at May 31, 2003 |
5,000,000 |
|
$ 5,000 |
$ (4,499) |
|
$ (64,271) |
|
$ ¾ |
|
$ (63,770) |
|
|
Net loss for the year |
¾ |
|
¾ |
¾ |
|
(11,871) |
|
¾ |
|
(11,871) |
|
|
Foreign currency translation |
¾ |
|
¾ |
¾ |
|
¾ |
|
301 |
|
301 |
|
|
Balance at May 31, 2004 |
5,000,000 |
|
5,000 |
(4,499) |
|
(76,142) |
|
301 |
|
(75,340) |
|
|
Net effect of recapitalization |
500,000 |
|
500 |
(500) |
|
¾ |
|
¾ |
|
¾ |
|
|
Net loss for the year |
¾ |
|
¾ |
¾ |
|
(7,484) |
|
¾ |
|
(7,484) |
|
|
Foreign currency translation |
¾ |
|
¾ |
¾ |
|
¾ |
|
(7,342) |
|
(7,342) |
|
|
Balance May 31, 2005 |
5,500,000 |
|
5,500 |
(4,999) |
|
(83,626) |
|
(7,041) |
|
(90,166) |
|
|
Income for the period |
¾ |
¾ |
¾ |
10,298 |
¾ |
10,298 |
|||||
|
Foreign currency translation |
¾ |
¾ |
¾ |
¾ |
(5,349) |
(5,349) |
|||||
|
Balance November 30, 2005 |
5,500,000 |
$ 5,500 |
$ (4,999) |
$ (73,329) |
$ (12,390) |
$ (85,218) |
|||||
SEE ACCOMPANYING NOTES
F-5
SUNWORLD PARTNERS
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2005 and 2004
SUNWORLD PARTNERS
NOTES TO THE FINANCIAL STATEMENTS
For the six month period ended November 30, 2005 and 2004
Note 1- Basis of presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the financial statements for the year ended May 31, 2005 of Sun World Partners (the "Company").
The interim financial statements present the balance sheet, statements of operations, stockholders' equity and cash flows of Sun World Partners. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States.
The interim financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of November 30, 2005 and the results of operations, stockholders' equity and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.
SEE ACCOMPANYING NOTES
F-6
SUN WORLD PARTNERS INC.
AUDIT REPORT AND FINANCIAL STATEMENTS
May 31, 2005 and 2004
SEE ACCOMPANYING NOTES
F-7
Child Van Wagoner &
Bradshaw, PLLC
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Officers and Directors
Sun World Partners, Inc.
We have audited the balance sheets of Sun World Partners, Inc. as of May 31, 2005 and 2004, and the related statements of operations, changes in stockholders’ equity (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 the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sun World Partners, Inc. as of May 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ Child, Van Wagoner & Bradshaw
Certified Public Accountants
Salt Lake City, Utah
February 10, 2006
1284 W. Flint Meadow Dr. #D
Kaysville, Utah 84037
Telephone 801.927.1337
Facsimile 801.927.1344
5296 S. Commerce Dr. #300
(53 rd So. @ 1-15)
Salt Lake City, Utah 84107
Telephone 801.281.4700
Facsimile 801.281.4701
Suite B. 4F,
North Cape Commercial Bldg,
388 King’s Road
North Point, Hong Kong
www.cpaone.net
F-8
SUN WORLD PARTNERS INC.
CONSOLIDATED BALANCE SHEETS
May 31, 2005 and 2004
|
ASSETS |
2005 |
2004 |
|
Current |
||
|
Cash |
$ 19,541 |
$ 9,685 |
|
Accounts receivable |
1,130 |
1,532 |
|
Loan Receivable |
- |
508 |
|
Inventory |
43,518 |
25,171 |
|
Prepaid Expenses |
5,931 |
5,406 |
|
Total Current Assets |
70,120 |
42,302 |
|
|
|
|
|
Equipment (net of depreciation $157) |
64 |
79 |
|
Leasehold improvements (net of amortization of $999) |
474 |
566 |
|
$ 70,658 |
$ 42,947 |
|
|
LIABILITIES |
||
|
Current |
||
|
Accounts payable and accrued liabilities |
$ 8,574 |
$ 3,888 |
|
Gift certificates payable |
1,050 |
1,393 |
|
GST payable |
2,115 |
1,898 |
|
Total Current Liabilities |
11,739 |
7,179 |
|
Shareholder loans |
24,652 |
18,545 |
|
Loan payable – related |
124,433 |
92,563 |
|
$ 160,824 |
$ 118,288 |
|
|
SHAREHOLDERS’ DEFICIENCY |
||
|
Share capital |
5,500 |
5,000 |
|
Paid in capital |
(4,999) |
(4,499) |
|
Deficit |
(83,626) |
(76,142) |
|
Accumulated other comprehensive income |
(7,041) |
301 |
|
(90,166) |
(75,340) |
|
|
$ 70,658 |
$ 42,947 |
|
|
APPROVED BY THE DIRECTORS: |
||||
|
“Kimberley Danforth” |
Director |
“Greg Coonfer” |
Director |
|
|
Kimberley Danforth |
Greg Coonfer |
|||
Nature and Continuance of Operations – Note 1
SEE ACCOMPANYING NOTES
F-9
SUN WORLD PARTNERS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
for the years ended May 31, 2005 and 2004
|
2005 |
2004 |
|
|
Revenues |
||
|
Sales (net of returns) |
$ 179,241 |
$ 153,598 |
|
Costs of goods sold |
84,127 |
71,801 |
|
95,114 |
81,797 |
|
|
Expenses |
||
|
Depreciation and amortization |
169 |
158 |
|
Administrative expenses |
62,337 |
58,682 |
|
Professional fees |
2,810 |
2,908 |
|
Salaries and wages |
28,094 |
24,884 |
|
93,410 |
86,633 |
|
|
Income (loss) from operations |
1,704 |
(4,836) |
|
Interest expense |
(9,188) |
(7,035) |
|
Provision for income taxes |
- |
- |
|
Net Income (Loss) |
$ (7,484) |
$ (11,871) |
|
Net Income (Loss) per Common Share |
$ (0.00) |
$ (0.00) |
|
Weighted Average Number of Common Shares Used in Calculation |
5,000,000 |
5,000,000 |
|
Other comprehensive income |
||
|
Net Income (Loss) |
$ (7,484) |
$ (11,871) |
|
Foreign Currency adjustment |
(7,342) |
301 |
|
Total other comprehensive income |
$ (14,826) |
$ (11,570) |
SEE ACCOMPANYING NOTES
F-10
SUN WORLD PARTNERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended May 31, 2005 and 2004
|
2005 |
2004 |
|
|
Cash Flow from Operating Activities |
||
|
Net income (loss) from operations |
$ 1,704 |
$ (4,836) |
|
Write down bad debts |
556 |
- |
|
Inventory |
(15,900) |
1,020 |
|
Depreciation and amortization |
169 |
158 |
|
Cash flow from operations |
(13,471) |
(3,658) |
|
Change in non-cash working capital items: |
||
|
Accounts payable |
3,829 |
(846) |
|
Accounts receivable |
550 |
- |
|
Loan receivable |
- |
- |
|
Prepaid expenses and deposits |
- |
2,399 |
|
Refundable tax credits |
33 |
325 |
|
$ (9,059) |
$ (1,780) |
|
|
Cash Flow from Financing Activities |
||
|
Loans received from related parties |
$ 17,968 |
$ - |
|
Exchange Gain/Loss |
$ 947 |
$ 120 |
|
Increase (Decrease) in Cash Position |
$ 9,856 |
$ (1,660) |
|
Cash position at beginning of year |
$ 9,685 |
$ 11,345 |
|
Cash position at end of year |
$ 19,541 |
$ 9,685 |
|
|
|
|
|
Supplemental disclosure of non cash transactions: |
||
|
Shares issued to acquire Tiempo de Mexico |
$ 500 |
$ - |
|
Supplemental disclosure of cash flow information: |
||
|
Cash paid for: |
||
|
Interest |
$ 9,188 |
$ 7,035 |
|
Income taxes |
$ - |
$ - |
SEE ACCOMPANYING NOTES
F-11
SUN WORLD PARTNERS INC.
STATEMENT OF STOCKHOLDERS’ DEFICIT
for the years ended May 31, 2005 and 2004
|
Class A Common Stock |
|||||||||||
|
Shares |
Amount |
Paid in capital |
Accumulated deficit |
Accumulated other comprehensive income (loss) |
Total Shareholders’ Deficit |
||||||
|
Balance at May 31, 2003 |
5,000,000 |
|
$ 5,000 |
$ (4,499) |
|
$ (64,271) |
|
$ ¾ |
|
$ (63,770) |
|
|
Net loss for the year |
¾ |
|
¾ |
¾ |
|
(11,871) |
|
¾ |
|
(11,871) |
|
|
Foreign currency translation |
¾ |
|
¾ |
¾ |
|
¾ |
|
301 |
|
301 |
|
|
Balance at May 31, 2004 |
5,000,000 |
|
5,000 |
(4,499) |
|
(76,142) |
|
301 |
|
(75,340) |
|
|
Net effect of recapitalization |
500,000 |
|
500 |
(500) |
|
¾ |
|
¾ |
|
¾ |
|
|
Net loss for the year |
¾ |
|
¾ |
¾ |
|
(7,484) |
|
¾ |
|
(7,484) |
|
|
Foreign currency translation |
¾ |
|
¾ |
¾ |
|
¾ |
|
(7,342) |
|
(7,342) |
|
|
Balance May 31, 2005 |
5,500,000 |
|
5,500 |
(4,999) |
|
(83,626) |
|
(7,041) |
|
(90,166) |
|
SEE ACCOMPANYING NOTES
F-12
SUNWORLD PARTNERS
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2005 and 2004
Note 1- Summary of Significant Accounting Policies
This summary of significant accounting policies of Sun World Partners (the “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 are responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements, which are stated in U.S. Dollars.
Organization
Sun World Partners (the Company) was incorporated on April 3, 2000 in the State of Nevada. On May 31, 2005 the Company acquired all of the outstanding stock of Tiempo de Mexico (“Tiempo”) in exchange for 50,000 shares (5,000,000 shares post-split) of the common stock of the Company with a par value of $0.001. The consolidated results of operations are primarily those of Tiempo.
Tiempo was incorporated on May 5, 1996 under the laws of the Province of Alberta.
Operations
The Company presently has no ongoing operations save the management of its subsidiary, Tiempo. Tiempo operates in the retail merchandise industry operating one retail location in Calgary, Alberta where it sells a variety of Central American furniture, pottery and associated goods.
Use of Estimates in the preparation of the financial statements
The preparation of the Company's financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.
Depreciation and amortization
Depreciation and amortization have been provided in amounts sufficient to relate the costs of depreciable assets to operations over their estimated useful lives. Equipment is depreciated at a rate of 10% per annum and leasehold improvements are depreciated at a rate of 8% per annum.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.
Currency
The functional currency of the Company is the Canadian dollar. Assets and liabilities in the accompanying financial statements are translated to United States dollars at current exchange rates and income statement accounts are translated at the average rates prevailing during the period. Related translation adjustments are reported as other comprehensive income (loss), a component of stockholders’ equity.
F-13
SUNWORLD PARTNERS
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2005 and 2004
Gain (Loss) Per Share
Gain (loss) per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the year. Fully diluted earnings per share are not presented because they are anti-dilutive.
Fair Value of Financial Instruments
Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 107 (“SFAS 107”), Disclosure About Fair Value of Financial Instruments. SFAS 107 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amount of the Company’s cash and cash equivalents, accounts receivable, prepaid expenses and other current expenses, and the current portions of notes payable approximate their estimated fair values due to their short-term maturities.
Inventory
The Company periodically analyzes its inventory for potential impairment, assessing the appropriateness of turnover rates and recoverability of costs based on sales cycles and standard holding time for each item. Inventory is recorded at cost and is reconciled annually at the close of each fiscal year.
Income taxes
The Company is subject to Canadian income taxes.
Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.
At May 31, 2005, the Company has net operating loss carry forwards totaling approximately $80,000. The carry forwards begin to expire in fiscal year 2007. The Company has established a valuation allowance for the full tax benefit of the operating loss carryovers due to the uncertainty regarding realization.
Other
The company has selected May 31 as its year-end.
The Company paid no dividends in 2005 or 2004.
Note 2 – Basis of Presentation
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) and have been retroactively restated to give effect to the recapitalization due to a reverse merger consummated on May 31, 2005. All necessary inter-company transactions and balances have been eliminated in consolidation, and all necessary adjustments have been made to present the consolidated financial statements in accordance with US GAAP.
F-14
SUNWORLD PARTNERS
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2005 and 2004
Note 2 – Basis of Presentation (cont’d)
The accompanying consolidated financial statements include the accounts of the Company after the acquisition and Tiempo since its inception. Tiempo is the Company’s only subsidiary at May 31 2005.
Note 3 – Business combinations
On May 31, 2005, shareholders of Tiempo acquired a controlling interest in the Company as a result of a share exchange agreement between the Company and Tiempo whereby the Company issued the shareholders of Tiempo a total of 50,000 shares (5,000,000 shares post-split) of its common stock with a par value of $0.001 for 100% of the issued shares of Tiempo. Consequently, these financial statements reflect the accounts and operations of Tiempo, with the adopted capital structure of the Company retroactively restated.
Note 4 – Amounts due to and from shareholders
Amounts due to and from shareholders reflect the following:
(i)
a loan from an officer and director of the Company in the form of an operating line of credit (“LOC”) which carries a variable interest rate based on the Manulife Bank of Canada “Manulife One” base rate, requiring monthly payments of interest only. As at May 31, 2005 the LOC carried a balance of $22,386 with a rate of interest of 4.25%; and,
(ii)
a loan from shareholders in the amount of $2,266 bearing no interest and with no specific terms of repayment.
Note 5 -Loans Payable (related)
Loans payable as at the year ended May 31, 2005 includes an amount of $124,433 from a shareholder of the Company bearing interest at a rate of 8% per annum, with no payments required until maturity. The loan matures on May 31, 2008 at which time all accrued interest and the principal sum of the loan become immediately due and payable. The loan may be retired in full at any time without penalty.
Note 6 – Related Party Transactions
During the year ended May 31, 2005 an officer and director of the Company received $7,585 for services rendered.
Note 7 – Commitments
(i)
The Company entered into a three year lease agreement on August 1, 2003 for a total of 2,984 square feet at $13.53 per square foot (CDN$17.00) expiring July 31, 2006. The lease also provides an option for a two (2) year extension upon expiry, subject to re-negotiation of annual lease payments. The Company is required to make minimum lease payments over the remaining term of the lease as follows:
|
2006 |
$ 43,206 |
(i)
The Company entered into a 60 month lease in February 2004 with respect to a commercial vehicle for the business. The lease bears interest at a rate of 3.9% per annum and requires monthly payments of $227 (CDN$286) until maturity.
F-15
SUNWORLD PARTNERS
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2005 and 2004
Note 8 – Subsequent Events
On October 31, 2005 the Company’s shareholders approved a stock split on the basis of 100:1 so that each shareholder received one hundred (100) shares of the Company’s common stock for every one (1) share previously held. As a result of the stock split the Company’s issued and outstanding share capital increased to 5,500,000 common shares.
F-16
[OUTSIDE BACK COVER PAGE OF PROSPECTUS]
Dealer Prospectus Delivery Requirements
Until ninety (90) days from the effective date of this registration statement, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
28
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Our officers and directors are indemnified as provided by the Nevada Revised Statutes and the Company’s bylaws.
Under the Nevada Revised Statutes, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's Articles of Incorporation. Our Articles of Incorporation do not specifically limit the directors’ immunity. Excepted from that immunity are: (a) a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest; (b) a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful; (c) a transaction from which the director derived an improper personal profit; and (d) willful misconduct.
Our bylaws provide that we will indemnify the directors to the fullest extent not prohibited by Nevada law; provided, however, that the Company may modify the extent of such indemnification by individual contracts with the directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding, or part thereof, initiated by such person unless such indemnification: (a) is expressly required to be made by law, (b) the proceeding was authorized by the board of directors, (c) is provided by us, in our sole discretion, pursuant to the powers vested us under Nevada law or (d) is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance to 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, by reason of the fact that he is or was a director or officer, of the Company, or is or was serving at the request of us as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefore, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be indemnified under the bylaws or otherwise.
Our bylaws provide that no advance shall be made by it to an officer of the Company except by reason of the fact that such officer is or was a director of the Company in which event this paragraph shall not apply, in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.
Item 25. Other Expenses of Issuance and Distribution
We have, or will expend fees in relation to this registration statement as detailed below:
|
Expenditure Item |
Amount |
|
Attorney Fees |
25,000 |
|
Audit Fees |
7,500 |
|
Transfer Agent Fees |
2,000 |
|
SEC Registration and Blue Sky Registration |
6 |
|
Printing Costs and Miscellaneous Expenses |
494 |
|
Total |
$35,000 |
Item 26. Recent Sales of Unregistered Securities
We have sold securities within the past three years without registering the securities under the Securities Act of 1933 on one occasion.
29
We issued a total of 5,000,000 shares of common stock to acquire all of the issued and outstanding shares of Tiempo on May 31,2005 to two shareholders, Mrs. Kimberley Coonfer as to 3,750,000 common shares and Caribbean Overseas Investments Ltd. as to 1,250,000 common shares . The securities were issued in reliance on Regulation S
The shares continue to be subject to Rule 144 of the Securities Act of 1933.
All shareholders continue to be subject to Rule 144 of the Securities Act of 1933. Sun World qualified for an exemption from registration under Rule 504 in both of these issuances since it is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Act of 1933, is not an investment company, it had a specific business plan at the time it sold the securities, it was not a blank check company, as that term is defined in Rule 419(a)(2) of Regulation C or Rule 504 (a)(3) of Regulation D of the Securities Act of 1933. Neither Sun World nor any person acting on its behalf offered or sold any of the securities by any form of general solicitation or general advertising. The securities sold are restricted shares; the purchasers were informed that the securities cannot be resold without the securities being registered under the Securities Act of 1933 or an exemption therefrom. Sun World exercised reasonable care to assure that the purchases were not underwritten within the meaning of section 2(a) (11) of this Act including but not limited to the placement of a restrictive legend on the certificates representing the shares, and the aggregate offering price was less that $1,000,000.
Item 27. Exhibits
|
Number |
Description |
|
|
3.1 |
Articles of Incorporation |
Filed herewith |
|
3.2 |
Bylaws |
Filed herewith |
|
5 |
Opinion re: Legality |
Filed herewith |
|
10.1 |
Share Exchange Agreement between Sun World Partners, Inc. and Tiempo de Mexico Ltd. dated May 31, 2005 |
Filed herewith |
|
23.1 |
Consent of Attorney |
Consent included in Exhibit 5 |
|
23.2 |
Consent of Accountant |
Filed herewith |
30
Item 28. Undertakings
Sun World hereby undertakes the following:
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(a)
To include any prospectus required by Section 10(a) (3) of the Securities Act of 1933;
(b)
To reflect in the prospectus any facts or events arising after the effective date of this registration statement, or most recent post-effective amendment, which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; and
(c)
To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement.
That, for the purpose of determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to the directors, officers and controlling persons pursuant to the provisions above, or otherwise, Sun World has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of the directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of the directors, officers, or controlling persons in connection with the securities being registered, Sun World will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and Sun World will be governed by the final adjudication of such issue.
For determining liability under the Securities Act, to treat the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 424(b) (1) or (4) or 497(h) under the Securities Act as part of this Registration Statement as of the time the Commission declared it effective.
31
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Canada on March 15, 2006.
SUN WORLD PARTNERS, INC.
/s/ Kimberley Coonfer
Kimberley Coonfer
President, Principal Executive Officer
/s/ Greg Coonfer
Greg Coonfer
Chief Financial Officer and Principal Accounting Officer
In accordance with the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates stated.
/s/ Kimberley Coonfer
March 15, 2006
Kimberley Coonfer
Director
/s/ Greg Coonfer
March 15, 2006
Greg Coonfer
Director
/s/ Shaun Thorburn
March 15, 2006
Shaun Thorburn
Director
32
==================== FILED # C9130-00
[State of DEAN HELLER
April 03, 2000
Nevada Secretary of State Articles of
Seal) 101 North Carson Street, Suite 3 Incorporation
Carson City, Nevada 89701-4788
(775) 684 5708 (PURSUANT TO NRS 78) IN THE OFFICE OF
====================
/s/ Dean Heller
DEAN HELLER SECRETARY OF STATE
Important: Read attached instructions before completing form.
1. Name of
Corporation: SUN WORLD PARTNERS, INC.
=================================================================================
2. Resident Agent The Corporation Trust Company of Nevada
Name and Street ---------------------------------------------------------------------------------
Address: Name
6100 Neil Road, Suite 500 Reno Nevada 89511
------------------------------------------------------- ------------
Street Address City Zip Code
------------------------------------------------------------------- ------------
3. Shares:
(number of shares
corporation Number of shares Number of shares
authorized to issue) with par value: 1,000,000 par value: $ .001 without par value:
------------- ------ ------
=================================================================================
4. Governing Board Shall be styled as __X__ Directors of ______ Trustees
---------------------------------------------------------------------------------
Names, Addresses, The First Board of Directors/Trustees shall consist of 1 members whose names and
Number Of Board of addresses are as follows:
Directors/Trustees:
W. Scott Lawler
--------------------------------- ----------------------------------------
Name
Name
2200 Sunrise Blvd., #240
Gold River, CA 95670
---------------------------------- ----------------------------------------
Address
City
State
Zip
Address
City
State
Zip
5. Purpose: The purpose of this Corporation shall be: Investments
=================================================================================
6. Other Matters
Number of additional pages attached: 0
7. Names, Address W. Scott Lawler
and Signatures of ---------------------------------- ----------------------------------------
Incorporators: Name
Name
2200 Sunrise Blvd., #240
Gold River, CA 95670
------------------------------------------------------------------- ------------
Address
City
State
Zip
Address
City
State
Zip
=================================================================================
/s/ W. Scott Lawler
----------------------------------- ----------------------------------------
Signature
Signature
Notary:
This Instrument was acknowledged before This Instrument was acknowledged before me on
me on April 3, 2000 by
Scott Lawler
----------------------------------
----------------------------------------
Name of person
Name of person
As Incorporator
As Incorporator
Of Sun World Partners Inc.
of
(Name of party on behalf of whom Instrument executed)
/s/ Scott Douglas Brewer
Notary Public Signature
Notary Public Signature
7. Certificate of The Corporation Trust Company of Nevada hereby accept appointment as Resident Agent
Acceptance of for the above named corporation.
Appointment of
Resident Agent: By: /s/ Nazeem A. Conde 4.3.00
--------------------------------------------------------- ---------------------------------------
Signature of Resident Agent Date
=================================================================================
Entity #: C9130-2000
[State of DEAN HELLER
Document Number:
Nevada Secretary of State
20050584036-03
Seal) 204 North Carson Street, Suite 1
Carson City, Nevada 897014-4299
Dated Filed: 11/30/2005 1:24:07 PM
(775) 684 5708
In the office of
Website: secretaryofstate.biz
/s/ Dean Heller
Dean Heller
Certificate of Amendment
Secretary of State
(PURSUANT TO NRS 78.380)
Certificate of Amendment to Articles of Incorporation
For Nevada Profit Corporations
(Pursuant to NRS 78.380 - Before Issuance of Stock)
1. Name of corporation:
SUN WORLD PARTNERS, INC.
2. The articles have been amended as follows (provide article numbers, if available):
ARTICLE 3, SHARES: (NUMBER OF SHARES OF THE CORPORATION IS AUTHORIZED TO ISSUE)
NUMBER OF SHARES WITH PAR VALUE: 75,000,000, PAR VALUE: $0.001
ALL ISSUED AND OUTSTANDING SHARES OF THE CORPORATIONS COMMON STOCK ARE HEREBY SPLIT AT A RATIO OF EVERY ONE (1) SHARE OF COMMON STOCK SPLIT INTO ONE HUNDRED (100) SHARES OF COMMON STOCK. ALL FRACTIONAL SHARES SHALL BE ROUNDED UP TO THE NEXT WHOLE NUMBER AND THUS TWO FRACTIONAL SHARES SHALL EXIST AS A RESULT OF THIS FORWARD SPLIT.
3. The undersigned declare that they constitute at least two-thirds of the incorporators [ ] or of the board of directors [X](check one box only)
4. Effective date of filing (optional): Nov 29, 2005
(must not be later than 90 days after the certificate is filed)
5. The undersigned affirmatively declare that to the date of this certificate, no stock of the corporation has been issued.
6. Signatures*:
/s/ Kimberley Coonfer
Signature
Signature
•
If more than two signatures, attach an 8 1/2x 11 plain sheet with the additional signatures.
•
IMPORTANT: Failure to include any of the above information and submit the proper fees may
cause this filing to be rejected.
This form must be accompanied by appropriate fees. Nevada Secretary of State Amend 78.380 2003
BYLAWS FOR THE REGULATION OF
SUN WORLD PARTNERS, INC.
a Nevada corporation
(the "Corporation")
ARTICLE 1
Offices
Section 1.01 -- Principal And Registered Office .
The principal and registered office for the Corporation is hereby fixed and located at 6100 Neil Road # 500, Reno, Nevada 89511. The Corporation's administrative offices shall be located 2200 Sunrise Blvd. #240, Gold River, California 95670. The Corporation may have such other offices, within any state of the United States, as the Corporation's board of directors (the “Board”) may designate or as the business of the Corporation may require from time to time.
Section 1.02 -- Other Offices .
Branch or subordinate offices may at any time be established by the Board at any place or places where the Corporation is qualified to do business.
ARTICLE 2
Meetings of Shareholders
Section 2.01 -- Meeting Place .
All annual meetings of shareholders and all other meetings of shareholders shall be held at the administrative office or at any other place within or without the State of Nevada, which may be designated by the Board.
Section 2.02 -- Annual Meetings .
A. The Board of Directors shall have the authority to set the date, time, and place for the annual meeting of the shareholders which shall not be held later than 18 months from the date of the last annual meeting of shareholders.
B. Written notice of each annual meeting signed by the president or the secretary, or by such other person or persons as the Board may designate, shall be given to each shareholder entitled to vote thereat, either personally or by mail or other means of written communication, charges prepaid, addressed to such shareholder at his address appearing on the books of the Corporation or given by him to the Corporation for the purpose of notice. If a shareholder gives no address, notice shall be deemed to have been given to him if sent by mail or other means of written communication addressed to the place where the principal office of the Corporation is situated, or if published at least once in some newspaper of general circulation in the county in which said office is located. All such notices shall be sent to each shareholder entitled thereto, or
1
published, not less than ten (10) nor more than sixty (60) days before each annual meeting, and shall specify the place, the day and the hour of such meeting, and shall also state the purpose or purposes for which the meeting is called.
C . Failure to hold the annual meeting shall not constitute dissolution or forfeiture of the Corporation, and a special meeting of the shareholders may take the place thereof.
Section 2.03 -- Special Meetings .
Special meetings of the shareholders, for any purpose or purposes whatsoever, may be called at any time by the president or by the Board, or by one or more shareholders holding not less that 10% of the voting power of the Corporation. Except in special cases where other express provision is made by statute, notice of such special meetings shall be given in the same manner as for annual meetings of shareholders. Notices of any special meeting shall specify in addition to the place, day and hour of such meeting, the purpose or purposes for which the meeting is called.
Section 2.04 -- Adjourned Meetings And Notice Thereof .
A. Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but in the absence of a quorum, no other business may be transacted at any such meeting.
B. When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Otherwise, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken.
Section 2.05 -- Entry Of Notice .
Whenever any shareholder entitled to vote has been absent from any meeting of shareholders, whether annual or special, an entry in the minutes to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of such meeting was given to such shareholder, as required by law and these bylaws.
2
Section 2.06 -- Voting .
At all annual and special meetings of shareholders, each shareholder entitled to vote thereat shall have one vote for each share of stock so held and represented at such meetings, either in person or by written proxy, unless the Corporation's articles of incorporation ("Articles") provide otherwise, in which event, the voting rights, powers and privileges prescribed in the Articles shall prevail. Voting for directors and, upon demand of any shareholder, upon any question at any meeting, shall be by ballot. If a quorum is present at a meeting of the shareholders, the vote of a majority of the shares represented at such meeting shall be sufficient to bind the Corporation, unless otherwise provided by law or the Articles.
Section 2.07 -- Quorum .
The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
Section 2.08 -- Consent Of Absentees .
The transactions of any meeting of shareholders, either annual or special, however called and notice given thereof, shall be as valid as though done at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before of after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, sign a written Waiver of Notice, or a consent to the holding of such meeting, or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of such meeting.
Section 2.09 -- Proxies .
Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the secretary of the Corporation; provided however, that no such proxy shall be valid after the expiration of eleven (11) months from the date of its execution, unless the shareholder executing it specifies therein the length of time for which such proxy is to continue in force, which in no case shall exceed seven (7) years from the date of its execution.
Section 2.10 -- Shareholder Action Without A Meeting .
Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if a written consent thereto is signed by shareholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required. In no instance
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where action is authorized by this written consent need a meeting of shareholders be called or notice given. The written consent must be filed with the proceedings of the shareholders.
ARTICLE 3
Board of Directors
Section 3.01 -- Powers .
Subject to the limitations of the Articles, these bylaws, and the provisions of Nevada corporate law as to action to be authorized or approved by the shareholders, and subject to the duties of directors as prescribed by these bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be controlled by, the Board. Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the directors shall have the following powers:
A. To select and remove all the other officers, agents and employees of the Corporation, prescribe such powers and duties for them as are not inconsistent with law, with the Articles, or these bylaws, fix their compensation, and require from them security for faithful service.
B. To conduct, manage and control the affairs and business of the Corporation, and to make such rules and regulations therefore not inconsistent with law, the Articles, or these bylaws, as they may deem best.
C. To change the principal office for the transaction of the business if such change becomes necessary or useful; to fix and locate from time to time one or more subsidiary offices of the Corporation within or without the State of Nevada, as provided in Section 1.02 of Article 1 hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of such seal and of such certificates from time to time, as in their judgment they may deem best, provided such seal and such certificates shall at all times comply with the provisions of law.
D. To authorize the issuance of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, or tangible or intangible property actually received, or in the case of shares issued as a dividend, against amounts transferred from surplus to stated capital.
E. To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefore, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecation or other evidences of debt and securities therefore.
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F. To appoint an executive committee and other committees and to delegate to the executive committee any of the powers and authority of the Board in management of the business and affairs of the Corporation, except the power to declare dividends and to adopt, amend or repeal bylaws. The executive committee shall be composed of one or more directors.
Section 3.02 -- Number And Qualification Of Directors .
The authorized number of directors of the Corporation shall be a minimum of 1 and a maximum of 7 or such other number as may be required by law.
Section 3.03 -- Election And Term Of Office .
The directors shall be elected at each annual meeting of shareholders, but if any such annual meeting is not held, or the directors are not elected thereat, the directors may be elected at any special meeting of shareholders. All directors shall hold office until their respective successors are elected.
Section 3.04 -- Vacancies .
A. Vacancies in the Board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected or appointed shall hold office until his successor is elected at an annual or a special meeting of the shareholders.
B. A vacancy or vacancies in the Board shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any director or directors are elected to elect the full authorized number of directors to be voted for at that meeting.
C. The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors.
D. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.
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ARTICLE 4
Meetings of the Board of Directors
Section 4.01 -- Place Of Meetings .
Regular meetings of the Board shall be held at any place within or without the State of Nevada which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation, regular meetings shall be held at the principal office of the Corporation. Special meetings of the Board may be held either at a place so designated, or at the principal office. Failure to hold an annual meeting of the Board shall not constitute forfeiture or dissolution of the Corporation.
Section 4.02 -- Organization Meeting .
Immediately following each annual meeting of shareholders, the Board shall hold a regular meeting for the purpose of organization, election of officers, and the transaction of other business.
Section 4.03 -- Other Regular Meetings .
Other regular meetings of the Board shall be held as determined by the Board.
Section 4.04 -- Special Meetings .
A. Special meetings of the Board may be called at any time for any purpose or purposes by the President, or, if he is absent or unable or refuses to act, by any Vice President or by any two directors.
B. Written notice of the time and place of special meetings shall be delivered personally to each director or sent to each director by overnight delivery services, facsimile or telegraph, charges prepaid, addressed to him at his address as it is shown upon the records of the Corporation, or if it is not shown upon such records or is not readily ascertainable, at the place in which the regular meetings of the directors are normally held. No such notice is valid unless delivered to the director to whom it was addressed at least twenty-four (24) hours prior to the time of the holding of the meeting. In the case of overnight delivery, telecopying or telegraphing, delivery shall be deemed to be completed upon receipt of the notice at the address (or facsimile number) provided in the records of the Corporation for such member.
Section 4.05 -- Notice Of Adjournment .
Notice of the time and place of holding an adjourned meeting need not be given to absent directors, if the time and place be fixed at the meeting adjourned.
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Section 4.06 -- Waiver Of Notice .
The transactions of any meeting of the Board, however called and noticed or wherever held, shall be as valid as though a meeting had been duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the directors not present sign a written waiver of notice or a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 4.07 -- Quorum .
If the Corporation has only one director, then the presence of that one director constitutes a quorum. If the Corporation has only two directors, then the presence of both such directors is necessary to constitute a quorum. If the Corporation has three or more directors, then a majority of those directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. A director may be present at a meeting either in person or by telephone. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present, shall be regarded as the act of the Board, unless a greater number be required by law or by the Articles.
Section 4.08 -- Adjournment .
A quorum of the directors may adjourn any directors' meeting to meet again at a stated day and hour; provided however, that in the absence of a quorum, a majority of the directors present at any directors' meeting, either regular or special, may adjourn such meeting only until the time fixed for the next regular meeting of the Board.
Section 4.09 -- Fees And Compensation .
Directors shall not receive any stated salary for their services as directors, but by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed for attendance at each meeting. Nothing stated herein shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation therefore.
Section 4.10 -- Action Without A Meeting .
Any action required or permitted to be taken at a meeting of the Board, or a committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by all the members of the Board or of the committee. The written consent must be filed with the proceedings of the Board or committee.
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ARTICLE 5
Officers
Section 5.01 -- Executive Officers .
The executive officers of the Corporation shall be a president, a secretary, and a treasurer or such other offices as may be designated. The Corporation may also have, at the direction of the Board, a chairman of the Board, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 5.03 of this Article. Officers other than the president and the chairman of the board need not be directors. Any one person may hold two or more offices, unless otherwise prohibited by the Articles or by law.
Section 5.02 -- Appointment .
The officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.03 and 5.05 of this Article, shall be appointed annually by the Board, and each shall hold his office until he resigns or is removed or otherwise disqualified to serve, or his successor is appointed and qualified.
Section 5.03 -- Subordinate Officers, Etc .
The Board may appoint such other officers as the business of the Corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.
Section 5.04 -- Removal And Resignation .
A. Any officer may be removed, either with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the Board.
B. Any officer may resign at any time by giving written notice to the Board or to the president or secretary. Any such resignation shall take effect on the date such notice is received or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
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Section 5.05 -- Vacancies .
A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to such office.
Section 5.06 -- Chairman of the Board .
The Chairman of the Board, if there be such an officer, shall, if present, preside at all meetings of the Board, and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board or prescribed by these bylaws.
Section 5.07 -- President .
Subject to such supervisory powers, if any, as may be given by the Board to the Chairman of the Board (if there be such an officer), the president shall, subject to the control of the Board, have general supervision, direction and control of the business and officers of the Corporation. He shall preside at all meetings of the shareholders and, at all meetings of the Board. He shall be an ex-officio member of all the standing committees, including the executive committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the Board or these bylaws.
Section 5.08 -- Vice President .
In the absence or disability of the president, the vice presidents, in order of their rank as fixed by the Board, or if not ranked, the vice president designated by the Board, shall perform all the duties of the president and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board or these bylaws.
Section 5.09 -- Secretary .
A. The secretary shall keep, or cause to be kept, at the principal office or such other place as the Board may direct, a book of (i) minutes of all meetings of directors and shareholders, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present and absent at directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof; and (ii) any waivers, consents, or approvals authorized to be given by law or these bylaws.
B. The secretary shall keep, or cause to be kept, at the principal office, a share register, or a duplicate share register, showing (i) the name of each shareholder and his or her address; (ii) the number and class or classes of shares held by each, and the number and date of certificates
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issued for the same; and (iii) the number and date of cancellation of every certificate surrendered for cancellation.
Section 5.10 -- Treasurer
A. The treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any director.
B. The treasurer shall deposit all monies and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board. He shall disburse the funds of the Corporation as may be ordered by the Board, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board or these bylaws.
ARTICLE 6
Miscellaneous
Section 6.01 -- Record Date and Closing Stock Books.
The Board may fix a time in the future, not exceeding Sixty (60) days preceding the date of any meeting of shareholders, and not exceeding thirty (30) days preceding the date fixed for the payment of any dividend or distribution, or for the allotment of rights, or when any change or conversion or exchange of shares shall go into effect, as a record date for the determination of the shareholders entitled to notice of and to vote at any such meeting, or entitled to receive any such dividend or distribution, or any such allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares, and in such case only shareholders of record on the date so fixed shall be entitled to notice of and to vote at such meetings, or to receive such dividend, distribution or allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after any record date fixed as herein set forth. The Board may close the books of the Corporation against transfers of shares during the whole, or any part, of any such period.
Section 6.02 -- Inspection of Corporate Records .
The share register or duplicate share register, the books of account, and records of proceedings of the shareholders and directors shall be open to inspection upon the written demand of any shareholder or the holder of a voting trust certificate, at any reasonable time, and for a purpose reasonably related to his interests as a shareholder or as the holder of a voting trust certificate, and shall be exhibited at any time when required by the demand of ten percent (10%) of the shares represented at any shareholders' meeting. Such inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand of inspection
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other than at a shareholders' meeting shall be made in writing upon the president, secretary, or assistant secretary, and shall state the reason for which inspection is requested.
Section 6.03 -- Checks, Drafts, Etc .
All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board.
Section 6.04 -- Annual Report .
The Board shall cause the annual report to be sent to the shareholders with notice of the annual meeting.
Section 6.05 -- Contracts, Etc., How Executed .
The Board, except as otherwise provided in these bylaws, may authorize any officer, officers, agent, or agents, to enter into any contract, deed or lease, or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board, no officer, agent, or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or render it liable for any purpose or for any amount.
Section 6.06 -- Certificates of Stock .
A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any such shares are fully paid up. All such certificates shall be signed by the president and the secretary or be authenticated by facsimiles of the signature of the president and secretary or by a facsimile of the signatures of the president and the written signature of the secretary. Every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk.
Section 6.07 -- Representations of Shares of Other Corporations .
The president and the secretary of this Corporation are authorized to vote, represent, and exercise on behalf of this Corporation, all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to said officers to vote or represent on behalf of this Corporation or companies may be exercised either by such officers in person or by any person authorized so to do by proxy or power of attorney duly executed by said officers.
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Section 6.08 -- Inspection of Bylaws .
The Corporation shall keep in its principal office for the transaction of business the original or a copy of these bylaws, as amended or otherwise altered to date, certified by the secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours.
Section 6.09 -- Indemnification .
The Corporation shall indemnify its officers and directors for any liability including reasonable costs of defense arising out of any act or omission of any officer or director on behalf of the Corporation to the full extent allowed by the laws of the State of Nevada.
ARTICLE 7
Amendments
Section 7.01 -- Power of Shareholders .
New bylaws may be adopted, or these bylaws may be amended or repealed, by the affirmative vote of the shareholders collectively having a majority of the voting power or by the written assent of such shareholders.
Section 7.02 -- Power of Directors .
Subject to the rights of the shareholders as provided in Section 7.01 of this Article, bylaws other than a bylaw, or amendment thereof, changing the authorized number of directors, may also be adopted, amended, or repealed by the Board.
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Certificate of Secretary
The undersigned does hereby certify that the undersigned is the Secretary of SUN WORLD PARTNERS, INC., a Corporation duly organized and existing under and by virtue of the laws of the State of Nevada; that the above and foregoing bylaws of said Corporation were duly and regularly adopted as such by the board of directors of the Corporation by unanimous written consent of said Board on the 3 rd day of April, 2000, and that the above and foregoing bylaws are now in full force and effect.
DATED : April 3, 2000
/s/ W. Scott Lawler
W. Scott Lawler - Secretary
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AMENDED BYLAWS FOR THE REGULATION OF
SUN WORLD PARTNERS, INC.
a Nevada corporation
(the "Corporation")
ARTICLE 1
Offices
Section 1.01 -- Principal And Registered Office .
The principal and registered office for the Corporation is hereby fixed and located at 318 North Carson Street, Suite 208, Carson City, Nevada 89701. The Corporation's administrative offices shall be located 1601 – 14 th Street SW, Calgary, Alberta T3C 1E3. The Corporation may have such other offices, within any state of the United States, as the Corporation's board of directors (the “Board”) may designate or as the business of the Corporation may require from time to time.
Section 1.02 -- Other Offices .
Branch or subordinate offices may at any time be established by the Board at any place or places where the Corporation is qualified to do business.
ARTICLE 2
Meetings of Shareholders
Section 2.01 -- Meeting Place .
All annual meetings of shareholders and all other meetings of shareholders shall be held at the administrative office or at any other place within or without the State of Nevada, which may be designated by the Board.
Section 2.02 -- Annual Meetings .
A. The Board of Directors shall have the authority to set the date, time, and place for the annual meeting of the shareholders which shall not be held later than 18 months from the date of the last annual meeting of shareholders.
B. Written notice of each annual meeting signed by the president or the secretary, or by such other person or persons as the Board may designate, shall be given to each shareholder entitled to vote thereat, either personally or by mail or other means of written communication, charges prepaid, addressed to such shareholder at his address appearing on the books of the Corporation or given by him to the Corporation for the purpose of notice. If a shareholder gives no address, notice shall be deemed to have been given to him if sent by mail or other means of written communication addressed to the place where the principal office of the Corporation is situated, or if published at least once in some newspaper of general circulation in the county in
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which said office is located. All such notices shall be sent to each shareholder entitled thereto, or published, not less than ten (10) nor more than sixty (60) days before each annual meeting, and shall specify the place, the day and the hour of such meeting, and shall also state the purpose or purposes for which the meeting is called.
C . Failure to hold the annual meeting shall not constitute dissolution or forfeiture of the Corporation, and a special meeting of the shareholders may take the place thereof.
Section 2.03 -- Special Meetings .
Special meetings of the shareholders, for any purpose or purposes whatsoever, may be called at any time by the president or by the Board, or by one or more shareholders holding not less that 10% of the voting power of the Corporation. Except in special cases where other express provision is made by statute, notice of such special meetings shall be given in the same manner as for annual meetings of shareholders. Notices of any special meeting shall specify in addition to the place, day and hour of such meeting, the purpose or purposes for which the meeting is called.
Section 2.04 -- Adjourned Meetings And Notice Thereof .
A. Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but in the absence of a quorum, no other business may be transacted at any such meeting.
B. When any shareholders' meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Otherwise, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken.
Section 2.05 -- Entry Of Notice .
Whenever any shareholder entitled to vote has been absent from any meeting of shareholders, whether annual or special, an entry in the minutes to the effect that notice has been duly given shall be conclusive and incontrovertible evidence that due notice of such meeting was given to such shareholder, as required by law and these bylaws.
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Section 2.06 -- Voting .
At all annual and special meetings of shareholders, each shareholder entitled to vote thereat shall have one vote for each share of stock so held and represented at such meetings, either in person or by written proxy, unless the Corporation's articles of incorporation ("Articles") provide otherwise, in which event, the voting rights, powers and privileges prescribed in the Articles shall prevail. Voting for directors and, upon demand of any shareholder, upon any question at any meeting, shall be by ballot. If a quorum is present at a meeting of the shareholders, the vote of a majority of the shares represented at such meeting shall be sufficient to bind the Corporation, unless otherwise provided by law or the Articles.
Section 2.07 -- Quorum .
The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
Section 2.08 -- Consent Of Absentees .
The transactions of any meeting of shareholders, either annual or special, however called and notice given thereof, shall be as valid as though done at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before of after the meeting, each of the shareholders entitled to vote, not present in person or by proxy, sign a written Waiver of Notice, or a consent to the holding of such meeting, or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of such meeting.
Section 2.09 -- Proxies .
Every person entitled to vote or execute consents shall have the right to do so either in person or by an agent or agents authorized by a written proxy executed by such person or his duly authorized agent and filed with the secretary of the Corporation; provided however, that no such proxy shall be valid after the expiration of eleven (11) months from the date of its execution, unless the shareholder executing it specifies therein the length of time for which such proxy is to continue in force, which in no case shall exceed seven (7) years from the date of its execution.
Section 2.10 -- Shareholder Action Without A Meeting .
Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if a written consent thereto is signed by shareholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required. In no instance
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where action is authorized by this written consent need a meeting of shareholders be called or notice given. The written consent must be filed with the proceedings of the shareholders.
ARTICLE 3
Board of Directors
Section 3.01 -- Powers .
Subject to the limitations of the Articles, these bylaws, and the provisions of Nevada corporate law as to action to be authorized or approved by the shareholders, and subject to the duties of directors as prescribed by these bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be controlled by, the Board. Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the directors shall have the following powers:
A. To select and remove all the other officers, agents and employees of the Corporation, prescribe such powers and duties for them as are not inconsistent with law, with the Articles, or these bylaws, fix their compensation, and require from them security for faithful service.
B. To conduct, manage and control the affairs and business of the Corporation, and to make such rules and regulations therefore not inconsistent with law, the Articles, or these bylaws, as they may deem best.
C. To change the principal office for the transaction of the business if such change becomes necessary or useful; to fix and locate from time to time one or more subsidiary offices of the Corporation within or without the State of Nevada, as provided in Section 1.02 of Article 1 hereof; to designate any place within or without the State of Nevada for the holding of any shareholders' meeting or meetings; and to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of such seal and of such certificates from time to time, as in their judgment they may deem best, provided such seal and such certificates shall at all times comply with the provisions of law.
D. To authorize the issuance of shares of stock of the Corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled, or tangible or intangible property actually received, or in the case of shares issued as a dividend, against amounts transferred from surplus to stated capital.
E. To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefore, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecation or other evidences of debt and securities therefore.
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F. To appoint an executive committee and other committees and to delegate to the executive committee any of the powers and authority of the Board in management of the business and affairs of the Corporation, except the power to declare dividends and to adopt, amend or repeal bylaws. The executive committee shall be composed of one or more directors.
Section 3.02 -- Number And Qualification Of Directors .
The authorized number of directors of the Corporation shall be a minimum of 1 and a maximum of 7 or such other number as may be required by law.
Section 3.03 -- Election And Term Of Office .
The directors shall be elected at each annual meeting of shareholders, but if any such annual meeting is not held, or the directors are not elected thereat, the directors may be elected at any special meeting of shareholders. All directors shall hold office until their respective successors are elected.
Section 3.04 -- Vacancies .
A. Vacancies in the Board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected or appointed shall hold office until his successor is elected at an annual or a special meeting of the shareholders.
B. A vacancy or vacancies in the Board shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors be increased, or if the shareholders fail at any annual or special meeting of shareholders at which any director or directors are elected to elect the full authorized number of directors to be voted for at that meeting.
C. The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors.
D. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.
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ARTICLE 4
Meetings of the Board of Directors
Section 4.01 -- Place Of Meetings .
Regular meetings of the Board shall be held at any place within or without the State of Nevada which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation, regular meetings shall be held at the principal office of the Corporation. Special meetings of the Board may be held either at a place so designated, or at the principal office. Failure to hold an annual meeting of the Board shall not constitute forfeiture or dissolution of the Corporation.
Section 4.02 -- Organization Meeting .
Immediately following each annual meeting of shareholders, the Board shall hold a regular meeting for the purpose of organization, election of officers, and the transaction of other business.
Section 4.03 -- Other Regular Meetings .
Other regular meetings of the Board shall be held as determined by the Board.
Section 4.04 -- Special Meetings .
A. Special meetings of the Board may be called at any time for any purpose or purposes by the President, or, if he is absent or unable or refuses to act, by any Vice President or by any two directors.
B. Written notice of the time and place of special meetings shall be delivered personally to each director or sent to each director by overnight delivery services, facsimile or telegraph, charges prepaid, addressed to him at his address as it is shown upon the records of the Corporation, or if it is not shown upon such records or is not readily ascertainable, at the place in which the regular meetings of the directors are normally held. No such notice is valid unless delivered to the director to whom it was addressed at least twenty-four (24) hours prior to the time of the holding of the meeting. In the case of overnight delivery, telecopying or telegraphing, delivery shall be deemed to be completed upon receipt of the notice at the address (or facsimile number) provided in the records of the Corporation for such member.
Section 4.05 -- Notice Of Adjournment .
Notice of the time and place of holding an adjourned meeting need not be given to absent directors, if the time and place be fixed at the meeting adjourned.
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Section 4.06 -- Waiver Of Notice .
The transactions of any meeting of the Board, however called and noticed or wherever held, shall be as valid as though a meeting had been duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the directors not present sign a written waiver of notice or a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 4.07 -- Quorum .
If the Corporation has only one director, then the presence of that one director constitutes a quorum. If the Corporation has only two directors, then the presence of both such directors is necessary to constitute a quorum. If the Corporation has three or more directors, then a majority of those directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. A director may be present at a meeting either in person or by telephone. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present, shall be regarded as the act of the Board, unless a greater number be required by law or by the Articles.
Section 4.08 -- Adjournment .
A quorum of the directors may adjourn any directors' meeting to meet again at a stated day and hour; provided however, that in the absence of a quorum, a majority of the directors present at any directors' meeting, either regular or special, may adjourn such meeting only until the time fixed for the next regular meeting of the Board.
Section 4.09 -- Fees And Compensation .
Directors shall not receive any stated salary for their services as directors, but by resolution of the Board, a fixed fee, with or without expenses of attendance, may be allowed for attendance at each meeting. Nothing stated herein shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation therefore.
Section 4.10 -- Action Without A Meeting .
Any action required or permitted to be taken at a meeting of the Board, or a committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by all the members of the Board or of the committee. The written consent must be filed with the proceedings of the Board or committee.
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ARTICLE 5
Officers
Section 5.01 -- Executive Officers .
The executive officers of the Corporation shall be a president, a secretary, and a treasurer or such other offices as may be designated. The Corporation may also have, at the direction of the Board, a chairman of the Board, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 5.03 of this Article. Officers other than the president and the chairman of the board need not be directors. Any one person may hold two or more offices, unless otherwise prohibited by the Articles or by law.
Section 5.02 -- Appointment .
The officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.03 and 5.05 of this Article, shall be appointed annually by the Board, and each shall hold his office until he resigns or is removed or otherwise disqualified to serve, or his successor is appointed and qualified.
Section 5.03 -- Subordinate Officers, Etc .
The Board may appoint such other officers as the business of the Corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.
Section 5.04 -- Removal And Resignation .
A. Any officer may be removed, either with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the Board.
B. Any officer may resign at any time by giving written notice to the Board or to the president or secretary. Any such resignation shall take effect on the date such notice is received or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
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Section 5.05 -- Vacancies .
A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to such office.
Section 5.06 -- Chairman of the Board .
The Chairman of the Board, if there be such an officer, shall, if present, preside at all meetings of the Board, and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board or prescribed by these bylaws.
Section 5.07 -- President .
Subject to such supervisory powers, if any, as may be given by the Board to the Chairman of the Board (if there be such an officer), the president shall, subject to the control of the Board, have general supervision, direction and control of the business and officers of the Corporation. He shall preside at all meetings of the shareholders and, at all meetings of the Board. He shall be an ex-officio member of all the standing committees, including the executive committee, if any, and shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the Board or these bylaws.
Section 5.08 -- Vice President .
In the absence or disability of the president, the vice presidents, in order of their rank as fixed by the Board, or if not ranked, the vice president designated by the Board, shall perform all the duties of the president and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board or these bylaws.
Section 5.09 -- Secretary .
A. The secretary shall keep, or cause to be kept, at the principal office or such other place as the Board may direct, a book of (i) minutes of all meetings of directors and shareholders, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present and absent at directors' meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof; and (ii) any waivers, consents, or approvals authorized to be given by law or these bylaws.
B. The secretary shall keep, or cause to be kept, at the principal office, a share register, or a duplicate share register, showing (i) the name of each shareholder and his or her address; (ii) the number and class or classes of shares held by each, and the number and date of certificates
9
issued for the same; and (iii) the number and date of cancellation of every certificate surrendered for cancellation.
Section 5.10 -- Treasurer
A. The treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of stated capital, shall be classified according to source and shown in a separate account. The books of account shall at all times be open to inspection by any director.
B. The treasurer shall deposit all monies and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board. He shall disburse the funds of the Corporation as may be ordered by the Board, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board or these bylaws.
ARTICLE 6
Miscellaneous
Section 6.01 -- Record Date and Closing Stock Books.
The Board may fix a time in the future, not exceeding Sixty (60) days preceding the date of any meeting of shareholders, and not exceeding thirty (30) days preceding the date fixed for the payment of any dividend or distribution, or for the allotment of rights, or when any change or conversion or exchange of shares shall go into effect, as a record date for the determination of the shareholders entitled to notice of and to vote at any such meeting, or entitled to receive any such dividend or distribution, or any such allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares, and in such case only shareholders of record on the date so fixed shall be entitled to notice of and to vote at such meetings, or to receive such dividend, distribution or allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after any record date fixed as herein set forth. The Board may close the books of the Corporation against transfers of shares during the whole, or any part, of any such period.
Section 6.02 -- Inspection of Corporate Records .
The share register or duplicate share register, the books of account, and records of proceedings of the shareholders and directors shall be open to inspection upon the written demand of any shareholder or the holder of a voting trust certificate, at any reasonable time, and for a purpose reasonably related to his interests as a shareholder or as the holder of a voting trust certificate, and shall be exhibited at any time when required by the demand of ten percent (10%) of the shares represented at any shareholders' meeting. Such inspection may be made in person or by an agent or attorney, and shall include the right to make extracts. Demand of inspection
10
other than at a shareholders' meeting shall be made in writing upon the president, secretary, or assistant secretary, and shall state the reason for which inspection is requested.
Section 6.03 -- Checks, Drafts, Etc .
All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board.
Section 6.04 -- Annual Report .
The Board shall cause the annual report to be sent to the shareholders with notice of the annual meeting.
Section 6.05 -- Contracts, Etc., How Executed .
The Board, except as otherwise provided in these bylaws, may authorize any officer, officers, agent, or agents, to enter into any contract, deed or lease, or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board, no officer, agent, or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or render it liable for any purpose or for any amount.
Section 6.06 -- Certificates of Stock .
A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any such shares are fully paid up. All such certificates shall be signed by the president and the secretary or be authenticated by facsimiles of the signature of the president and secretary or by a facsimile of the signatures of the president and the written signature of the secretary. Every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk.
Section 6.07 -- Representations of Shares of Other Corporations .
The president and the secretary of this Corporation are authorized to vote, represent, and exercise on behalf of this Corporation, all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to said officers to vote or represent on behalf of this Corporation or companies may be exercised either by such officers in person or by any person authorized so to do by proxy or power of attorney duly executed by said officers.
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Section 6.08 -- Inspection of Bylaws .
The Corporation shall keep in its principal office for the transaction of business the original or a copy of these bylaws, as amended or otherwise altered to date, certified by the secretary, which shall be open to inspection by the shareholders at all reasonable times during office hours.
Section 6.09 -- Indemnification .
The Corporation shall indemnify its officers and directors for any liability including reasonable costs of defense arising out of any act or omission of any officer or director on behalf of the Corporation to the full extent allowed by the laws of the State of Nevada.
ARTICLE 7
Amendments
Section 7.01 -- Power of Shareholders .
New bylaws may be adopted, or these bylaws may be amended or repealed, by the affirmative vote of the shareholders collectively having a majority of the voting power or by the written assent of such shareholders.
Section 7.02 -- Power of Directors .
Subject to the rights of the shareholders as provided in Section 7.01 of this Article, bylaws other than a bylaw, or amendment thereof, changing the authorized number of directors, may also be adopted, amended, or repealed by the Board.
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Certificate of Secretary
The undersigned does hereby certify that the undersigned is the Secretary of SUN WORLD PARTNERS, INC., a Corporation duly organized and existing under and by virtue of the laws of the State of Nevada; that the above and foregoing amended bylaws of said Corporation were duly and regularly adopted as such by the board of directors of the Corporation by unanimous written consent of said Board on the 31 st day of October, 2005, and that the above and foregoing amended bylaws are now in full force and effect.
DATED : October 31, 2005
/s/ Shawn Thorburn
Shawn Thorburn - Secretary
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LAWLER & ASSOCIATES
a professional law corporation
41877 Enterprise Circle North, Suite 220
Temecula, California 92592
Telephone: 951-506-8888
Facsimile: 951-506-8877
W. Scott Lawler, Esq.
Admitted in California
Board of Directors
SUN WORLD PARTNERS, INC.
1601 – 14 th Street S.W.
Calgary, Alberta
CANADA T3C 1E3
Dear Board Members:
Sun World Partners, Inc., a Nevada corporation (the “Company”), has asked me to opine on the legality of the issuance of up to 3,250,000 shares of common stock in connection with the registration under the Securities Act of 1933 (the “Securities Act”) of such 3,250,000 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), as described below. A registration statement on Form SB-2 has been prepared by the Company and will be filed with the Securities and Exchange Commission on or about March 15, 2006 (the “Registration Statement”). This opinion shall be filed with the Registration Statement.
The Registration Statement seeks the registration of 3,250,000 shares of the Common Stock (the “Registered Shares”). The Registered Shares are to be offered to the public by the Company on a best efforts basis without the use of any underwriters.
In connection with rendering this opinion I have examined copies of the Registration Statement and all exhibits thereto as well as the amendments to the Registration Statement. I have also examined and relied upon the original, or copies certified to my satisfaction, of (i) the Articles of Incorporation and the By-laws of the Company, (ii) minutes and records of the corporate proceedings of the Company with respect to the issuance of the Registered Shares and related matters, and (iii) such other agreements and instruments relating to the Company as I deemed necessary or appropriate for purposes of the opinion expressed herein. In rendering such opinion, I have made such further investigation and inquiries relevant to the transactions contemplated by the Registration Statement as I have deemed necessary for the opinion expressed herein, and I have relied, to the extent I deemed reasonable, on certificates and certain other information provided to me by officers of the Company and public officials as to matters of fact of which the maker of such certificate or the person providing such other information had knowledge.
Furthermore, in rendering my opinion, I have assumed that the signatures on all documents examined by me are genuine, that all documents and corporate record books submitted to me as
originals are accurate and complete, and that all documents submitted to me are true, correct and complete copies of the originals thereof.
Based upon the foregoing, I am of the opinion that the Registered Shares have been duly and validly authorized by the Company and that the Registered Shares will be legally and validly issued upon the effectiveness of the Company’s Registration Statement for such shares on Form SB-2.
I hereby consent to the filing of this opinion as an exhibit to the Registration Statement.
Sincerely,
/s/ W. Scott Lawler
W. Scott Lawler
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT is dated May 31, 2005
BETWEEN:
Kimberley Coonfer, an individual residing in the Province of Alberta;
Caribbean Overseas Investments Ltd., a company incorporated pursuant to the laws of Belize, Central America;
(hereinafter the “Shareholders”)
AND
SUN WORLD PARTNERS INC., a company incorporated pursuant to the laws of the State of Nevada.
(hereinafter “Sunworld”)
AND
TIEMPO DE MEXICO LTD., a company incorporated pursuant to the laws of the Province of Alberta.
(hereinafter “Tiempo”)
WHEREAS:
A.
Tiempo is a private Alberta company having an address at 1601-14 th St., SW, Calgary, Alberta T3C 1E3
B.
The Shareholders are the registered and beneficial owners of 100% percent of the issued and outstanding shares of Tiempo being 50,000 common shares, (the “Shareholders Shares”);
C.
Sunworld is a private company which will be registered with the U.S. Securities and Exchange Commission, having an office address of 41877 Enterprise Circle N., Suite 220, Temecula, CA 92590;
D.
Sunworld desires to acquire the Shareholders Shares on the basis of one share of Sunworld to be exchanged for each one share of Tiempo, from the Shareholders, for a total of 50,000 common shares to be issued by Sunworld (the “Sunworld Shares”) to the Shareholders.
NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the mutual premises and the mutual covenants and agreements contained herein, the parties covenant and agree each with the other as follows:
ARTICLE I
DEFINITIONS
Section 1.01. The following terms shall have the following respective meanings:
(a)
“Closing Date” shall mean on or before May 31, 2005 or any other date that the parties hereto agree to in writing;
(b)
“Share Exchange” shall mean the transfer, by the Shareholders, of the Tiempo Shares to Sunworld in exchange for the Sunworld Shares;
ARTICLE II
THE SHARE EXCHANGE
Section 2.01.
Exchange. Based upon the terms and subject to the conditions of this Agreement, on the Closing Date, the Shareholders agree to transfer the Tiempo Shares to Sunworld in exchange for Sunworld issuing to the Shareholders, 50,000 Sunworld Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF Tiempo
Section 3.01.
Organization, Standing and Authority; Qualification.
(a)
Tiempo is a corporation duly organized, validly existing and in good standing under the laws of the Province of Alberta with all requisite power and authority to enter into, and perform the obligations under the Agreement. Tiempo has all requisite power and authority to own, lease and operate its assets, properties and business and to carry on its business as now being and as heretofore conducted.
(b)
Tiempo is duly qualified or otherwise authorized to transact business and is in good standing in the jurisdiction of the Province of Alberta, which is the only jurisdiction in which such qualification or authorization is required by law. No other jurisdiction has claimed, in writing or otherwise, that Tiempo is required to qualify or otherwise be licensed therein. Tiempo does not file any franchise, income or other tax returns in any other jurisdiction based upon the ownership or use of property therein or the derivation of income therefrom.
Section 3.02.
Capitalization. The Tiempo Shares are duly authorized, validly issued, fully paid and non-assessable and free of preemptive rights.
Section 3.03.
Corporate Status of Tiempo
(a)
Tiempo has heretofore delivered to Sunworld true, correct and complete copies of the Certificate or Articles of Incorporation (certified by the Province of Alberta) and By-laws or comparable instruments (certified by the corporate secretary thereof) of Tiempo.
(b)
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(c)
The minute books of Tiempo accurately reflect all actions taken at all meetings and consents in lieu of meetings of its stockholders, and all actions taken at all meetings and consents in lieu of meetings of each of their boards of directors and all committees.
Section 3.04.
Execution and Delivery. This Agreement has been duly executed and delivered by Tiempo and thereby constitutes a valid and binding agreement, enforceable against Tiempo in accordance with its terms.
Section 3.05.
Consents and Approvals. The execution, delivery and performance of this Agreement and the completion of the transactions contemplated herein do not require Tiempo to obtain any consent, approval or action of, or make any filing with or give any notice to, any person or entity.
Section 3.06. No Conflict. The execution, delivery and performance of this Agreement and the completion of the transactions contemplated herein will not:
(a)
violate any provisions of the Articles or Certificate of Incorporation, By-laws or other charter or organizational document of Tiempo;
(b)
violate, conflict with or result in any modification of the effect of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both, constitute) a default under, any contract or agreement to which Tiempo is a party to by or to which any of them or any of their respective assets or properties may be bound or subject;
(c)
violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon or any agreement with, or condition imposed by, any governmental or regulatory body, foreign or domestic, binding upon Tiempo or upon the Tiempo Shares or the properties or business of Tiempo;
(d)
violate any statute, law or regulation of any jurisdiction as such statute, law or regulation relates to Tiempo; or
(e)
result in the breach of any of the terms or conditions of, constitute a default under, or otherwise cause an impairment of, any permit or license.
Section 3.07.
Options or Other Rights.
(a)
There is no outstanding right, subscription, warrant, call, unsatisfied preemptive right, option, contract or other agreement of any kind to purchase or otherwise to receive from Tiempo any of the outstanding, unauthorized or treasury shares of the Common Stock of Tiempo, other than those disclosed in this Agreement; and
(b)
there is no outstanding security of any kind convertible into any common shares of Tiempo, and, except as aforesaid, there is no outstanding contract or other agreement to purchase, redeem or otherwise acquire any of the Tiempo Shares.
Section 3.08.
Tiempo Financial Statements.
(a)
Tiempo has, or will have prior to the Closing Date, provided to Sunworld the unaudited financial statements of Tiempo for the period ended May 31, 2005 (the “Tiempo Financial Statements”).
(b)
3
(c)
The Tiempo Financial Statements shall be true, correct and complete in all material respects and fairly present the financial condition of Tiempo and the results of its operations for the period then ended and shall be prepared in conformity with Canadian generally accepted accounting principles applied on a consistent basis.
Section 3.09.
Material Information.
(a)
This Agreement, the Schedules hereto, the Tiempo Financial Statements and all other information provided in writing by Tiempo, or representatives thereof, to Sunworld, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make any statement contained herein or therein not misleading.
(b)
There are no facts or conditions, which have not been disclosed to Sunworld in writing, which, individually or in the aggregate, could have a material adverse effect on Tiempo or a material adverse effect on the ability of Tiempo to perform any of its obligations pursuant this Agreement.
Section 3.10.
Absence of Certain Changes. Since
the date of the Tiempo Financial Statements, there has been no event, change or development which could have a material adverse effect on Tiempo.
Section 3.11.
Undisclosed Liabilities. Except as reflected or reserved against in the Tiempo Financial Statements, as of and for the period reflected therein, Tiempo was not on that date subject to, and since that date Tiempo has not incurred, any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise, of a kind required by generally accepted accounting principles to be reflected or reserved against on a financial statement (“Liabilities”), which individually or in the aggregate exceeds $200,000.
Section 3.12. Operations of Tiempo. Except as contemplated by this Agreement, since the date of the Tiempo Financial Statements, Tiempo has not:
(a)
amended its Certificate or Articles of Incorporation or By-laws or merged with or into or consolidated with any other person or entity, subdivided or in any way reclassified any shares of its capital stock or changed or agreed to change in any manner the rights of its outstanding capital stock or the character of its business;
(b)
issued, reserved for issuance, sold or redeemed, repurchased or otherwise acquired, or issued options or rights to subscribe to, or entered into any contract or commitment to issue, sell or redeem, repurchase or otherwise acquire, any shares of its capital stock or any bonds, notes, debentures or other evidence or indebtedness;
(c)
incurred any indebtedness for borrowed money or incurred or assumed any other liability in excess of $150,000 in any one case (or, in the aggregate, in the case of any related series of occurrences) or $250,000 in the aggregate;
(d)
declared or paid any dividends or declared or made any other distributions of any kind to its shareholders;
(e)
4
(f)
made any change in its accounting methods or practices or made any change in depreciation or amortization policies, except as required by law or generally accepted accounting principles;
(g)
made any loan or advance to any of its shareholders or to any of its directors, officers or employees, consultants, agents or other representatives, or made any other loan or advance, otherwise than in the ordinary course of business;
(h)
entered into any lease (as lessor or lessee) under which Tiempo is obligated to make or would receive payments in any one year of $75,000 or more;
(i)
sold, abandoned or made any other disposition of any of its assets or properties;
(j)
granted or suffered any lien on any of its assets or properties;
(k)
entered into or amended any contracts to which it is a party, or by or to which it or its assets or properties are bound or subject which if existing on the date hereof would be required to be disclosed in Section 3.16;
(l)
made any acquisition of all or a substantial part of the assets, properties, securities or business of any other person or entity;
(m)
paid, directly or indirectly, any of its material liabilities before the same became due in accordance with its terms or otherwise than in the ordinary course of business;
(n)
terminated or failed to renew, or received any written threat (that was not subsequently withdrawn) to terminate or fail to renew, any contract that is or was material to the assets, liabilities, business, property, operations, prospects, results of operations or condition (financial or otherwise of Tiempo); or
(o)
entered into any other contract or other transaction that materially increases the liabilities of Tiempo.
Section 3.13.
Compliance with Laws. Tiempo is not in violation of any applicable order, judgment, injunction, award or decree nor is it in violation of any Federal, provincial, local or foreign law, ordinance or regulation or any other requirement of any governmental or regulatory body, court or arbitrator, other than those violations which, in the aggregate, would not have a material adverse effect on Tiempo, Tiempo has not received written notice that any violation is being alleged.
Section 3.14. Permits and Licences
(a)
Tiempo has all permits and licences that are necessary for the ownership and conduct of its business, and such permits and licences are or, shall be, in full force and effect and are or, shall be, sufficient for the ownership and conduct of such business;
(b)
no violations exist or have been recorded in respect of any such permit or licence; and, to the best of Tiempo’s knowledge, no proceeding is pending or threatened that would suspend, revoke or limit any such permit.
Section 3.15. Actions and Proceedings.
(a)
there are no outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against or involving Tiempo or against or involving any of the Tiempo Shares; and
(b)
to the best of Tiempo’s knowledge, there are no actions, suits or claims or legal, regulatory, administrative or arbitration proceedings pending or threatened against or involving Tiempo or any of the Tiempo Shares.
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Section 3.16. Contracts.
(a)
there have been delivered or made available to Sunworld true, correct and complete copies of each of the contracts set forth in Schedule 3.16 or in any other Schedule. Each such contract is valid, subsisting, in full force and effect and binding upon the parties thereto in accordance with its terms, and neither Tiempo nor any of TIEMPO’s other affiliates, as the case may be, is in default in any respect under any of them; and
(b)
without limiting the generality of section 3.16(a), Tiempo is not a party to any:
(i)
contracts with any current or former officer, director, employee, consultant, agent or other representative which is not disclosed;
(ii)
contracts for the purchase or sale of equipment or services that contain an escalation, renegotiation or re-determination clause or that can be cancelled without liability, premium or penalty only on ninety days’ or more notice;
(iii)
contracts for the sale of any of its assets or properties or for the grant to any person of any preferential rights to purchase any of its or their assets or properties;
(iv)
contracts (including with limitation, leases of real property) calling for an aggregate purchase price or payments in any one year of more than $100,000 in any one case (or in the aggregate, in the case of any related series of contracts);
(v)
contracts relating to the acquisition by Tiempo of any operating business of, or the disposition of any operating business by, any other person;
(vi)
executory contracts relating to the disposition or acquisition of any investment or of any interest in any person;
(vii)
joint venture contracts or agreements;
(viii)
contracts under which Tiempo agrees to indemnify any party, other than in the ordinary course of business or in amounts not in excess of $100,000, or to share tax liability of any party;
(ix)
contracts containing covenants of Tiempo not to compete in any line of business or with any person in any geographical area or covenants of any other person not to compete with Tiempo in any line of business or in any geographical area;
(x)
contracts relating to the making of any loan by Tiempo;
(xi)
contracts relating to the borrowing of money by Tiempo or the direct or indirect guaranty by Tiempo of any obligation for, or an agreement by Tiempo to service, the repayment of borrowed money, or any other contingent obligations in respect of indebtedness of any other Person, including, without limitation,
(1)
any contract with respect to lines of credit;
(2)
any contract to advance or supply funds to any other person other than in the ordinary course of business;
(3)
any contract to pay for property, products or services of any other person even if such property, products or services are not conveyed, delivered or rendered;
(4)
any keep-well, make-whole or maintenance of working capital or earnings or similar contract; or
(5)
any guarantee with respect to any lease or other similar periodic payments to be made by any other person;
(xii)
contracts for or relating to computers, computer equipment, computer software or computer services; and
(xiii)
any other material contract whether or not made in the ordinary course of business.
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Section 3.17.
Liens. Tiempo has marketable title to all of its assets and properties free and clear of any liens, other than those liens disclosed in Schedule 3.17 appended hereto.
Section 3.18.
Officers, Directors and Key Employees.
(a)
Tiempo does not have any contract or agreement with any of its officers, directors, employees or consultants whose annual salary equals or exceeds $100,000 or who received or has accrued in respect of such period a bonus equal to or in excess of $100,000; and
(b)
Tiempo does not have any commitments or contracts to increase the wages or to modify the condition or terms of employment or consultancy of any of the employees or consultants of Tiempo, including the aggregate cost to Tiempo of all such commitments or contracts.
Section 3.19.
Brokerage. No broker or finder has acted, directly or indirectly, for the Shareholders nor have the Shareholders incurred any finder’s fee or other commission, in connection with the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Section 4.01.
Execution and Delivery. This Agreement has been duly executed and delivered by the Shareholders and thereby constitutes a valid and binding agreement, enforceable against the Shareholders in accordance with its terms.
Section 4.02.
Consents and Approvals. The execution, delivery and performance of this Agreement and the completion of the transactions contemplated herein do not require the Shareholders to obtain any consent, approval or action of, or make any filing with or give any notice to, any person or entity.
Section 4.03.
Title to Stock.
(a)
The Shareholders have valid title to the Tiempo Shares free and clear of all liens or encumbrances, including, without limitation, any community property claim; and
(b)
Upon delivery of the Tiempo Shares on the Closing Date, as herein provided, Sunworld shall acquire good and marketable title thereto, free and clear of any lien, including, without limitation, any community property claim.
Section 4.04. Actions and Proceedings.
(a)
there are no outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against or involving any of the Tiempo Shares held by the Shareholders; and
(b)
to the best of the Shareholder’s knowledge, there are no actions, suits or claims or legal, regulatory, administrative or arbitration proceedings pending or threatened against or involving the Tiempo Shares.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SUNWORLD
Sunworld represents and warrant to the Shareholders as follows:
Section 5.01.
Organization, Standing and Authority of Sunworld
Sunworld is a corporation duly organized, validly existing under the laws of the State of Nevada and have all requisite power and authority to enter into this Agreement and to perform their obligations hereunder. Sunworld acknowledges that it is not presently in good standing in the State of Nevada but will undertake to bring Sunworld into good standing after the execution of this Agreement.
Section 5.02. Execution and Delivery. This Agreement has been duly authorized, executed and delivered by Sunworld and constitutes the valid and binding agreement of Sunworld enforceable against Sunworld in accordance with its terms.
Section 5.03.
Consents and Approvals. The execution, delivery and performance by Sunworld of this Agreement and the completion by Sunworld of the transactions contemplated hereby do not require Sunworld to obtain any consent, approval or action of, or make any filing with or give any notice to, any person.
Section 5.04.
No Conflict. The execution, delivery and performance of this Agreement and the completion of the transactions contemplated herein will not:
(a)
violate any provision of the Articles or Certificate of Incorporation, By-laws or other charter or organizational document of Sunworld;
(b)
violate, conflict with or result in the breach of any of the terms of, result in any modification of the effect of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both constitute) a default under, any contract to which Sunworld are a party or by or to which their assets or properties may be bound or subject;
(c)
violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, or any agreement with, or condition imposed by, any governmental or regulatory body, foreign or domestic, binding upon Sunworld or upon the securities, assets or business of Sunworld;
(d)
violate any statute, law or regulation of any jurisdiction as such statute, law or regulation relates to Sunworld or to the securities, properties or business of Sunworld; or
(e)
result in the breach of any of the terms or conditions of, constitute a default under, or otherwise cause an impairment of, any permit or licence held by Sunworld.
Section 5.05.
Capitalization.
(a)
Schedule 5.05 sets forth the total issued and outstanding common shares, which is the only class of Sunworld’s capital stock issued and outstanding at Closing, other than the newly authorized share issuances as indicated in this Agreement.
(b)
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(c)
Schedule 5.05 also sets forth all the outstanding warrants and options and any other security issued by Sunworld that carry the right to purchase additional shares of Sunworld Shares and the terms thereof at Closing.
Section 5.06.
Brokerage. No broker or finder, has acted, directly or indirectly, for Sunworld, nor have Sunworld incurred any obligation to pay any brokerage, finder’s fee or other commission in connection with the transactions contemplated by this Agreement.
Section 5.07.
Certificate of Incorporation and By-Laws.
(a)
Sunworld have heretofore delivered to the Shareholders true, correct and complete copies of the Certificate or Articles of Incorporation and By-laws or comparable instruments of Sunworld; and
(b)
The minute books of Sunworld accurately reflect all actions taken at all meetings and consents in lieu of meetings of its shareholders, and all actions taken at all meetings and consents in lieu of meetings of its board of directors and all committees for the period from incorporation to the date hereof.
Section 5.08.
Material Information. This Agreement, the Schedules attached hereto and all other information provided, in writing, by Sunworld or representatives thereof to the Shareholders, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make any statement contained herein or therein not misleading. There are no facts or conditions which have not been disclosed to the Shareholders in writing which, individually or in the aggregate, could have a material adverse effect on Sunworld or a material adverse effect on the ability of Sunworld to perform any of their obligations pursuant to this Agreement.
Section 5.09.
Financial Statements.
(a)
Sunworld’s financial statements for the years ended May 31, 2005 are true, correct and complete in all material respects and fairly present the financial condition of Sunworld and the results of its operations for the periods then ended and were prepared in conformity with U.S. generally accepted accounting principles applied on a consistent basis;
(b)
The Shareholders have the right to inspect, review and approve any debts incurred by Sunworld subsequent to the date of this Agreement that individually or in aggregate exceed $10,000; and
(c)
Sunworld has, or will have prior to the Closing Date, provided to the Shareholders, the Sunworld financial statements, May 31, 2005 (the “Sunworld Financial Statements”). The Sunworld Financial Statements shall be true, correct and complete in all material respects and fairly present the financial condition of Sunworld and the results of its operations for the period then ended and shall be prepared in conformity with U.S. generally accepted accounting principles applied on a consistent basis.
Section 5.10.
Undisclosed Liabilities. Sunworld has no liabilities except as reflected in the Sunworld Financial Statements as of and for the period reflected therein, Sunworld was not, as of May 31, , 2005, subject to, and since that date Sunworld has not incurred, any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility,
9
fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise, of a kind required by generally accepted accounting principles to be reflected or reserved against on a financial statement (“Liabilities”), which individually or in the aggregate exceeds $10,000.
Section 5.11.
Compliance with Laws. To the best of Sunworld’s knowledge, Sunworld is not in violation of any applicable order, judgment, injunction, award or decree nor is it in violation of any Federal, state, local or foreign law, ordinance or regulation or any other requirement of any governmental or regulatory body, court or arbitrator, other than those violations which, in the aggregate, would not have a material adverse effect on Sunworld and Sunworld has not received written notice that any violation is being alleged.
Section 5.12. Actions and Proceedings. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against or involving Sunworld. There are no actions, suits or claims or legal, regulatory, administrative or arbitration proceedings pending or, to the knowledge of Sunworld threatened against or involving Sunworld.
Section 5.13. Contracts.
(a)
there are no existing contract in Sunworld; and
(b)
without limiting the generality of section 5.13(a) and excluding any obligation referenced in this Agreement, Sunworld is not a party to any:
(i)
contracts with any current or former officer, director, employee, consultant, agent or other representative having more than three months to run from the date hereof or providing for an obligation to pay and/or accrue compensation of $10,000 or more per annum, or providing for the payment of fees or other consideration in excess of $10,000 in the aggregate to any officer or director of Sunworld, or to any other entity in which Sunworld has an interest;
(ii)
contracts for the purchase or sale of equipment or services that contain an escalation, renegotiation or re-determination clause or that can be cancelled without liability, premium or penalty only on ninety days’ or more notice;
(iii)
contracts for the sale of any of its assets or properties or for the grant to any person of any preferential rights to purchase any of its or their assets or properties;
(iv)
contracts (including with limitation, leases of real property) calling for an aggregate purchase price or payments in any one year of more than $50,000 in any one case (or in the aggregate, in the case of any related series of contracts);
(v)
contracts relating to the acquisition by Sunworld of any operating business of, or the disposition of any operating business by, any other person;
(vi)
executory contracts relating to the disposition or acquisition of any investment or of any interest in any person;
(vii)
joint venture contracts or agreements;
(viii)
contracts under which Sunworld agrees to indemnify any party, other than in the ordinary course of business or in amounts not in excess of $10,000, or to share tax liability of any party;
(ix)
10
(x)
contracts containing covenants of Sunworld not to compete in any line of business or with any person in any geographical area or covenants of any other person not to compete with Sunworld in any line of business or in any geographical area;
(xi)
other than disclosed in Schedule 5.13 appended hereto, contracts relating to the making of any loan by Sunworld;
(xii)
contracts relating to the borrowing of money by Sunworld or the direct or indirect guarantee by Sunworld of any obligation for, or an agreement by Sunworld to service, the repayment of borrowed money, or any other contingent obligations in respect of indebtedness of any other Person, including, without limitation,
(1)
any contract with respect to lines of credit;
(2)
any contract to advance or supply funds to any other person other than in the ordinary course of business;
(3)
any contract to pay for property, products or services of any other person even if such property, products or services are not conveyed, delivered or rendered;
(4)
any keep-well, make-whole or maintenance of working capital or earnings or similar contract; or
(5)
any guarantee with respect to any lease or other similar periodic payments to be made by any other person;
(xiii)
contracts for or relating to computers, computer equipment, computer software or computer services; or
(xiv)
any other material contract whether or not made in the ordinary course of business.
Section 5.14.
Officers, Directors and Key Employees. Sunworld does not have any contract or agreement with any of its officers, directors, employees or consultants whose annual salary equals or exceeds $10,000 or who received or has accrued in respect of such period a bonus equal to or in excess of $5,000; and Sunworld does not have any commitments or contracts to increase the wages or to modify the condition or terms of employment or consultancy of any of the employees or consultants of Sunworld, including the aggregate cost to Sunworld of all such commitments or contracts.
Section 5.15 Operations of Sunworld. Except as contemplated by this Agreement, since the date of the Sunworld Financial Statements, Sunworld has not:
(a)
amended its Certificate or Articles of Incorporation or By-laws or merged with or into or consolidated with any other person or entity, subdivided or in any way reclassified any shares of its capital stock or changed or agreed to change in any manner the rights of its outstanding capital stock or the character of its business;
(b)
other than disclosed in Schedule 5.05 appended hereto, issued, reserved for issuance, sold or redeemed, repurchased or otherwise acquired, or issued options or rights to subscribe to, or entered into any contract or commitment to issue, sell or redeem, repurchase or otherwise acquire, any shares of its capital stock or any bonds, notes, debentures or other evidence or indebtedness;
(c)
incurred any indebtedness for borrowed money or incurred or assumed any other liability in excess of $10,000 in any one case (or, in the aggregate, in the case of any related series of occurrences) or $25,000 in the aggregate;
(d)
declared or paid any dividends or declared or made any other distributions of any kind to its shareholders;
(e)
11
(f)
made any change in its accounting methods or practices or made any change in depreciation or amortization policies, except as required by law or generally accepted accounting principles;
(g)
made any loan or advance to any of its shareholders or to any of its directors, officers or employees, consultants, agents or other representatives, or made any other loan or advance, otherwise than in the ordinary course of business;
(h)
entered into any lease (as lessor or lessee) under which Sunworld is obligated to make or would receive payments in any one year of $10,000 or more;
(i)
sold, abandoned or made any other disposition of any of its assets or properties;
(j)
granted or suffered any lien on any of its assets or properties;
(k)
entered into or amended any contracts to which it is a party, or by or to which it or its assets or properties are bound or subject which if existing on the date hereof would be required to be disclosed in Schedule 5.13;
(l)
made any acquisition of all or a substantial part of the assets, properties, securities or business of any other person or entity;
(m)
paid, directly or indirectly, any of its material liabilities before the same became due in accordance with its terms or otherwise than in the ordinary course of business;
(n)
terminated or failed to renew, or received any written threat (that was no subsequently withdrawn) to terminate or fail to renew, any contract that is or was material to the assets, liabilities, business, property, operations, prospects, results of operations or condition (financial or otherwise) of Sunworld; or
(o)
entered into any other contract or other transaction that materially increases the liabilities of Sunworld.
Section 5.16.
Absence of Certain Changes. Since
the date of the Sunworld Financial Statements, there has been no event, change or development which could have a material adverse effect on Sunworld.
ARTICLE VI
THE SHAREHOLDERS’S COVENANTS AND AGREEMENTS
Section 6.01.
Conduct of Businesses in the Ordinary Course. From the date of this Agreement to the Closing Date, the Shareholders shall cause Tiempo to conduct its business substantially in the manner in which it is currently conducted and to not undertake any of the actions specified in Sections 3.12 and 3.14, nor enter into any Contract described in Section 3.16, without the prior written consent of Sunworld.
Section 6.02.
Preservation of Permits and Services . From the date of this Agreement to the Closing Date, the Shareholders shall cause Tiempo to use its best efforts preserve any permits and licences in full force and effect and to keep available the services, and preserve the goodwill, of its present officers, employees, agents, and consultants.
Section 6.03. Litigation. From the date of this Agreement to the Closing Date, the Shareholders shall notify Sunworld promptly of any actions or proceedings of the type described in Section 3.15 that from the date hereof are threatened or commenced against Tiempo or against any officer, director, employee, properties or assets of Tiempo with respect to its affairs, or against
12
any of the Tiempo Shares and of any requests for information or documentary materials by any governmental or regulatory body in connection with the transactions contemplated hereby.
Section 6.04.
Conduct of the Shareholders Pending the Closing Date. From the date of this Agreement to the Closing Date:
(a)
the Shareholders shall use, and the Shareholders shall cause Tiempo to use, its best efforts to conduct its affairs in such a manner so that, except as otherwise contemplated or permitted by this Agreement, the representations and warranties contained in Article III shall continue to be true and correct on and as of the Closing Date as if made on and as of the Closing Date; and
(b)
the Shareholders shall promptly notify Sunworld of any event, condition or circumstance occurring from the date of this Agreement to the Closing Date that would constitute a violation or breach of this Agreement by the Shareholders
Section 6.05. Corporate Examinations and Investigations. Prior to the Closing Date, Sunworld shall be entitled, through its employees and representatives, to make such reasonable investigation of the assets, liabilities, properties, business and operations of Tiempo and its subsidiaries, and such examination of the books, records, tax returns, results of operations and financial condition of Tiempo. Any such investigation and examination shall be conducted at reasonable times and under reasonable circumstances and the Shareholders and Tiempo and the employees and representatives of Tiempo, including without limitation, their counsel and independent public accountants, shall cooperate fully with such representatives in connection with such reasonable review and examination.
Section 6.06.
Acquisition Proposals. From the date of this Agreement to the Closing Date, neither the Shareholders nor Tiempo, nor any of the officers, directors, affiliates, employees, representatives or agents of Tiempo, shall, directly or indirectly, solicit, initiate or participate in any way in discussions or negotiations with, or provide any information or assistance to, or enter into any contract with any person, entity or group (other than Sunworld) concerning any acquisition of a substantial equity interest in, or in a merger, consolidation, liquidation, dissolution, disposition of assets of Tiempo or any disposition of any of the Tiempo Shares (other than pursuant to the transactions contemplated by this Agreement) (each, an “Acquisition Proposal”), or assist or participate in, facilitate or encourage any effort or attempt by any other person or entity to do or seek to do any of the foregoing. The Shareholders shall promptly communicate to Sunworld the terms of any Acquisition Proposal, which any of them may receive.
Section 6.07.
Expenses. Tiempo, shall bear its own expenses incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated hereby, including, without limitation, all fees and expenses of agents, representatives, counsel, actuaries, and accountants.
ARTICLE VII
SUNWORLD COVENANTS AND AGREEMENTS
13
Section 7.01.
Conduct of Businesses in the Ordinary Course. From the date of this Agreement to the Closing Date, Sunworld shall conduct its business substantially in the manner in which it is currently conducted and shall not enter into any Contract described in Section 5.13, or undertake any of the actions specified in Sections 5.15 or 5.16, without the prior written consent of the Shareholders.
Section 7.02.
Preservation of Permits and Services . From the date of this Agreement to the Closing Date, Sunworld shall use its best efforts to preserve any permits and licenses in full force and effect and to keep available the services of its respective present officers, employees, consultants and agents and to preserve their goodwill.
Section 7.03. Litigation. From the date of this Agreement to the Closing Date, Sunworld shall notify the Shareholders of any actions or proceedings of the type described in Section 5.12 that are threatened or commenced against Sunworld or against any officer, director, employee, properties or assets of Sunworld with respect to their affairs and of any requests for information or documentary materials by any governmental or regulatory body in connection with the transactions contemplated hereby.
Section 7.04.
Conduct of Sunworld Pending the Closing. From the date hereof through the Closing Date,
(a)
Sunworld shall use their best efforts to conduct its affairs in such a manner so that, except as otherwise contemplated or permitted by this Agreement, the representations and warranties contained in Article V shall continue to be true and correct on and as of the Closing Date as if made on and as of the Closing Date
(b)
Sunworld shall promptly notify the Shareholders of any event, condition or circumstance occurring from the date hereof through the Closing Date that would constitute a violation or breach of this Agreement by Sunworld.
Section 7.05. Corporate Examinations and Investigations. Prior to the Closing Date, the Shareholders, or Tiempo, shall be entitled, through its employees and representatives, to make any investigation of the assets, liabilities, properties, business and operations of Sunworld such examination of the books, records, tax returns, results of operations and financial condition of Sunworld. Any such investigation and examination shall be conducted at reasonable times and under reasonable circumstances and Sunworld and the employees and representatives of Sunworld, including without limitation, their counsel and independent public accountants, shall cooperate fully with such representatives in connection with such reasonable review and examination
Section 7.06.
Expenses. Sunworld shall bear their own expenses incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated hereby, including, without limitation, all fees and expenses of agents, representatives, counsel, actuaries, and accountants.
Section 7.07.
Further Assurances. Sunworld shall execute such documents and other papers and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby.
14
Section 7.08. Directors and Good Standing: On or subsequent to the Closing Date, Sunworld shall take all necessary corporate steps to cause:
(a)
the appointment of directors as designated by the Shareholders to the Board of Sunworld;
(b)
to file with the State of Nevada such documents as shall be required to bring Sunworld into good standing in the State of Nevada.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF CAPITAL COMPANIES TO CLOSE
The obligation of Sunworld to enter into and complete the Share Exchange and related transactions contemplated by the Agreement is subject, at Sunworld’s option, acting in accordance with the provisions of this Agreement with respect to the termination hereof, to the fulfillment on or before the Closing Date, of the following conditions, any one or more of which may be waived by it, to the extent permitted by law.
Section 8.01.
Representations and Covenants.
(a)
the representations and warranties of the Shareholders and Tiempo contained in this Agreement shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date, except that any of such representations and warranties that are given as of a particular date and relate solely to a particular date or period shall be true as of such date or period;
(b)
the Shareholders and Tiempo shall have performed and complied with all covenants and agreements required by this Agreement to be performed or complied with by them on or before the Closing Date. The Shareholders and Tiempo shall each have delivered to Sunworld a certificate, dated the Closing Date, and signed by each of the Shareholders and Tiempo to the foregoing effect.
Section 8.02.
Governmental Permits and Approvals.
(a)
all approvals, authorizations, consents, permits and licenses from governmental and regulatory bodies required for the transactions contemplated by this Agreement and to permit the business currently carried on by Tiempo to continue to be carried on by Tiempo substantially in the same manner immediately following the Closing Date shall have been obtained and shall be in full force and effect, and Sunworld shall have been furnished with appropriate evidence, reasonably satisfactory to it, of the granting of such approvals, authorizations, consents, permits and licenses; and
(b)
there shall not have been any action taken by any court, governmental or regulatory body then prohibiting or making illegal on the Closing Date the transactions contemplated by this Agreement;
Section 8.03.
Third Party Consents. All consents, permits and approvals from parties to contracts with Tiempo that may be required in connections with the performance by the Shareholders of their obligations under this Agreement or the continuance of such contracts with Tiempo in full force and effect after the Closing Date, shall have been obtained.
15
Section 8.04.
Litigation. No action, suit or proceeding shall have been instituted and be continuing or be threatened by any person to restrain, modify or prevent the carrying out of the transactions contemplated hereby, or to seek damages in connection with such transactions, or that has or could have a material adverse effect on Tiempo.
Section 8.05
No Change in Capitalization. On the Closing Date, the capitalization of Tiempo shall be as represented.
Section 8.06
No Severance Payments.
No Shareholders shall be entitled to severance or change of control payments by Tiempo as a result of this Agreement being performed.
ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE SHAREHOLDERS TO CLOSE
The obligation of the Shareholders to enter into and complete the Share Exchange, and related transactions contemplated by this Agreement, is subject, at the Shareholder’s option acting in accordance with the provisions of this Agreement with respect to the termination hereof, to the fulfillment, on or before the Closing Date, of the following conditions, any one or more of which may be waived by it, to the extent permitted by law.
Section 9.01.
Representations and Covenants.
(a)
The representations and warranties of Sunworld contained in this Agreement shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date, except that any of such representations and warranties that are given as of a particular date and relate solely to a particular date or period shall be true as of such date or period; and
(b)
Sunworld shall have performed and complied with all covenants and agreements required by this Agreement to be performed or complied with by it on or before the Closing Date. Sunworld shall each have delivered to the Shareholders a certificate dated the Closing Date, and signed by an authorized signatories of Sunworld to the foregoing effect.
Section 9.02.
No Change in Capitalization. On the Closing Date, the capitalization of Sunworld shall be as represented in Schedule 9.02, which represents the complete capitalization as at the Closing Date as per this Agreement, and includes the intended allocation of all shares issued and funds raised pursuant to this Agreement.
ARTICLE X
CLOSING ARRANGEMENTS
Section 10.01. Closing Location. The closing of the Share Exchange and the other transactions contemplated by this Agreement (“The Closing”) will take place at 13:00 (MST) on the Closing
16
Date at the offices of Sunworld’s Solicitor, or such other date or location as the parties may agree to in writing.
Section 10.02. The Shareholders’ Closing Documents . At the Closing, the Shareholders will tender to Sunworld:
(a)
Certified copies of resolutions of the directors of Tiempo in a form satisfactory to Sunworld acting reasonably, authorizing:
(i)
the execution and delivery of this Agreement;
(ii)
the transfer of the Tiempo Shares to, and registration of the Tiempo Shares in the name of, Sunworld, and issue of new share certificates representing the Tiempo Shares in the name of Sunworld;
(b)
Share certificates issued in the name of the Shareholders representing the Tiempo Shares duly endorsed for transfer to Sunworld;
(c)
Share certificates issued in the name of the Shareholders representing the Sunworld Shares;
(d)
Share certificates registered in the name of Sunworld, representing the Tiempo Shares;
(e)
A copy of the register of members of Tiempo showing Sunworld as the registered owner of the Tiempo Shares;
(f)
A certificate executed by each of the Shareholders certifying that Sunworld conditions in Section 8.01(b) have been satisfied; and
(g)
All corporate records and books of account of Tiempo including minute books, share registers and annual reports, and a certificate of good standing.
Section 10.03. Capital Companies’ Closing Documents. At the Closing, Sunworld will tender to the Shareholders:
(a)
Copies of resolutions of the directors of Sunworld in a form satisfactory to the Shareholders, acting reasonably, authorizing:
(i)
the execution and delivery of this Agreement;
(ii)
the amendments as specified in 7.08(a);
(b)
share certificates, registered in the names of the Shareholders, representing the Sunworld Shares;
(c)
a certified copy of the share issuance order of Sunworld showing the Shareholders as the registered owners of the Sunworld Shares;
(d)
A certificate executed by Sunworld certifying that the Shareholders’ conditions in Section 9.01(b) have been satisfied.
.
Section 10.04. The parties hereto mutually agree to conduct the Closing by relying upon the exchange of solicitors’ undertakings and that the Closing shall take place in the following sequence:
(a)
Sunworld’ Solicitor will deliver to the Shareholders’ Solicitor Sunworld Closing Documents, upon the latter’s undertaking to hold them in trust;
(b)
Upon receipt of Sunworld Closing Documents, the Shareholders’ Solicitor will hold them in trust until it is able to deliver to Sunworld Solicitor the Shareholders’ Closing Documents;
(c)
17
(d)
The Shareholders’ Solicitor will then deliver to Sunworld Solicitor the Shareholders’ Closing Documents;
(e)
Upon receipt of the Shareholders’ Closing Documents, Sunworld Solicitors shall release the Shareholders’ Closing Documents to Sunworld and the Shareholders’ Solicitor shall release Sunworld Closing Documents to the Shareholders.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Public Notices. The parties agree that all notices to third parties and all other publicity concerning the transactions contemplated by this Agreement shall be jointly planned and coordinated and no party shall act unilaterally in this regard without the prior approval of the others, such approval not to be unreasonably withheld.
Section 11.2. Time. Time shall be of the essence hereof.
Section 11.3. Notices. Any notice or other writing required or permitted to be given hereunder or for the purposes hereof shall be sufficiently given if delivered or faxed to the party to whom it is given or, if mailed, by prepaid registered mail addressed to such party at:
A.
if to Tiempo Shareholders, at: 1601-14 th St., SW, Calgary, Alberta T3C 1E3 fax number 228-2843
if to Sunworld, at: Sunworld Solicitors, fax number (403) 272-3620, attention Scott Lawler;
Or at such other address as the party to whom such writing is to be given shall have last notified to the party giving the same in the manner provided in this clause. Any notice mailed shall be deemed to have been given and received on the fifth business day next following the date of its mailing unless at the time of mailing or within five business days thereafter there occurs a postal interruption which could have the effect of delaying the mail in the ordinary and usual course, in which case any notice shall only be effectively given if actually delivered or sent by telecopy. Any notice delivered or faxed to the party to whom it is addressed shall be deemed to have been given and received on the business day next following the day it was delivered or faxed.
Section 11.4. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the Province of Alberta and the parties submit and attorn to the jurisdiction of the courts of the Province of Alberta.
Section 11.5. Severability . If a court of other tribunal of competent jurisdiction determines that any one or more of the provisions contained in this Agreement is invalid, illegal or unenforceable in any respect in any jurisdiction, the validity, legality and enforceability of such provision or provisions shall not in any way be affected or impaired thereby in any other jurisdiction and the validity, legality and enforceability of the remaining provisions contained herein shall not in any
18
way be affected or impaired thereby, unless in either case as a result of such determination this Agreement would fail in its essential purpose.
Section 11.6. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, oral or written, by and between any of the parties with respect to the subject matter hereof.
Section 11.7. Further Assurances. The parties shall with reasonable diligence, do all such things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each party shall provide such further documents or instruments required by the other party as may be reasonably necessary or desirable to give
effect to the purpose of this Agreement and carry out its provisions whether before or after the Closing Date.
Section 11.8. Enurement. This Agreement and each of the terms and provisions hereof shall enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, personal representatives, successors and assigns.
Section 11.9. Counterparts. This Agreement may be executed in as many counterparts as may be necessary or by facsimile and each such counterpart agreement or facsimile so executed shall be deemed to be an original and such counterparts and facsimile copies together shall constitute one and the same instrument.
Section 11.10. Currency. All amounts expressed in this document are in US Dollars, unless otherwise specified.
IN WITNESS WHEREOF the parties hereto have set their hand and seal as of the day and year first above written.
“The Shareholders”
TIEMPO DE MEXICO LTD., an Alberta corporation
/s/ Kimberley Coonfer
By: /s/ Kimberley Coonfer
Kimberley Coonfer
Name: Kimberley Coonfer
Title: President
/s/ Larry Winsor
SUN WORLD PARTNERS, INC.
Caribbean Overseas Investments Ltd.
By: /s/ Greg Coonfer
Name: Greg Coonfer
Title: Treasurer
19
SCHEDULE A
CAPITALIZATION OF TIEMPO
Common Stock
|
Total Capitalization of TIEMPO |
500 |
Warrants, Options, ROFR, Pre-empted Rights
None
20
SCHEDULE 2.01
SHARE EXCHANGE
|
TIEMPO Shareholder |
TIEMPO Shares Held |
TIEMPO Shares to be Transferred to Sunworld |
|
Kimberley Coonfer |
375 |
375 |
|
Caribbean Overseas Investments Ltd. |
125 |
125 |
|
Sunworld Shares Issued to Tiempo Shareholders |
Recipient TIEMPO Shareholder |
|
37,500 |
Kimberley Coonfer |
|
12,500 |
Caribbean Overseas Investments Ltd. |
22
Child, Van Wagoner & Bradshaw, PLLC
5296 S. Commerce Dr. #300
Salt Lake City, UT 84107-5370
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Form SB-2 for Sun World Partners, Inc. of our report dated February 10, 2006 relating to the May 31, 2005 financial statements of Sun World Partners Inc., which appears in such Form.
/s/ Child, Van Wagoner & Bradshaw, PLLC
Certified Public Accountants
Salt Lake City, Utah
March 16, 2006