UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 TITANIUM INTELLIGENCE, INC. |
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(Name of small business issuer in its charter) |
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Nevada |
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7372 |
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Pending |
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State or jurisdiction of
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(Primary Standard Industrial
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(I.R.S. Employer
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14th Floor, 265 West 37th Street
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(Address and telephone number of principal executive offices) |
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14th Floor, 265 West 37th Street
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(Address of principal place of business or intended principal place of business) |
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Paulo Martins, President and CEO
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(Name, address and telephone number of agent for service)
Copy of communications to:
Virgil Z. Hlus, Esq.
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Approximate date of proposed sale to the public As soon as practicable after the 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, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
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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
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Title of each class
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Amount to be
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Proposed maximum
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Proposed maximum
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Amount of
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Common Stock to be
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2,500,000 |
$0.04 (2) |
$100,000 |
$9.19 |
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Total Registration
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$9.19 |
(1) In the event of a stock split, stock dividend, or other transaction involving our common stock, the number of shares registered shall automatically be increased to cover the additional shares in accordance with Rule 416(a) under the Securities Act.
(2) Based on the last sales price on November 30, 2001.
(3) Estimated in accordance with Rule 457(c) solely for the purpose of computing the amount of the registration fee based on a bona fide estimate of the maximum offering price.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE 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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON THE DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
Subject to Completion
[ ], 2002
TITANIUM INTELLIGENCE, INC.
A NEVADA CORPORATION
2,500,000 SHARES OF COMMON STOCK OF TITANIUM INTELLIGENCE, INC.
_________________________________
This prospectus relates to the 2,500,000 shares of common stock of Titanium Intelligence, Inc., a Nevada Corporation, which may be resold by selling stockholders named in this prospectus. The shares were acquired by the selling shareholders directly from us in private offerings that were exempt from registration under the U.S. securities laws. We have been advised by the selling stockholders that they may offer to sell all or a portion of their shares of common stock being offered in this prospectus from time to time. We will not receive any proceeds from the resale of shares of common stock by the selling stockholders. However, we have received proceeds from the sale of shares of common stock that are presently outstanding. We will pay for expenses of this offering.
Our common stock is not currently listed on any national exchange, electronic quotation system market or securities exchange. In connection with any sales, any broker or dealer participating in such sales may be deemed to be an underwriter within the meaning of the Securities Act.
Our business is subject to many risks and an investment in our common stock will also involve a high degree of risk. You should invest in our common stock only if you can afford to lose your entire investment. You should carefully consider the various Risk Factors described beginning on page 7before investing in our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be changed. The selling stockholders may not sell or offer these securities until this registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
The date of this prospectus is [ ], 2002.
Please read this prospectus carefully. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. You should not assume that the information provided by the prospectus is accurate as of any date other than the date on the front of this prospectus.
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The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus.
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TABLE OF CONTENTS |
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Page Number |
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PROSPECTUS SUMMARY |
5 |
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Our Business |
5 |
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Summary of Risk Factors |
6 |
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The Offering |
6 |
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Summary of Financial Data |
7 |
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RISK FACTORS |
7 |
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Risks Associated with Our Business |
7 |
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Risks Associated with Our Common Stock |
13 |
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Risks Associated with Political, Economic and Regulatory Uncertainty in China |
14 |
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Other Risks |
15 |
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THE OFFERING |
16 |
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USE OF PROCEEDS |
16 |
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DILUTION |
16 |
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DIVIDEND POLICY |
16 |
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MANAGEMENT'S PLAN OF OPERATION |
16 |
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BUSINESS |
19 |
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PROPERTY |
24 |
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MANAGEMENT |
24 |
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EXECUTIVE COMPENSATION |
26 |
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DISCLOSURE OF SEC POSITION OF INDEMNIFICATION FOR SECURITIES
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27 |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
27 |
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS |
28 |
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PLAN OF DISTRIBUTION |
29 |
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SELLING STOCKHOLDERS |
30 |
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DESCRIPTION OF CAPITAL STOCK |
35 |
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LEGAL PROCEEDINGS |
35 |
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LEGAL MATTERS |
35 |
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
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35 |
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EXPERTS |
35 |
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MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS |
36 |
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WHERE YOU CAN FIND MORE INFORMATION |
36 |
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FINANCIAL STATEMENTS |
37 |
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" on pages 7 to 15, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
As used in this prospectus, the terms "we", "us", "our", and "Titanium" mean Titanium Intelligence, Inc. and its subsidiary, unless otherwise indicated.
All dollar amounts refer to US dollars unless otherwise indicated.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed information and financial statements and notes thereto appearing elsewhere in this prospectus. Consequently, this summary does not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire prospectus, including the "Risk Factors" section on pages 7 to 15 and the documents and information incorporated by reference into it.
Our Business
We plan to operate an Internet textile trade center through the development of our website http://www.titanium-intelligence.com. We intend to develop our Internet textile trade center into an online market place linking Chinese manufacturers and exporters of textile products to buyers around the world. Our plan is to target the textile products manufacturers and exporters in the People's Republic of China to register as sellers on our Internet textile trade center. Textile products may include semi-finished products such as thread, knit fabrics and woven clothes and finished products and such as dresses, shirts and other clothing and apparel. During the initial stage of the development of our Internet textile trade center, we will focus on finished textile products.
We are targeting the Chinese textile manufacturers and exporters because we want to take advantage of our management's Chinese language ability and their existing contacts in the Chinese textile industry. Three of our directors were born and educated in China and they speak fluent Chinese. Two of these directors, Qi (Alan) Zhuang and Hai Feng Zhang, have also worked in the textile industry in the Zhejiang Province of China. Through their business experience they have established many business contacts in the textile industry in China and have an intimate understanding of the Chinese business practices and customs. Our directors intend on actively promoting awareness of our Internet trade center among their business contacts and on soliciting interests from Chinese textile manufacturers to register as members of our Internet textile trade center.
Manufacturers and exporters of textile products in China will be able to register as members onto our website free of charge. On our website they can showcase their textile products and specify the availability and prices of each product. Our Internet textile trade center will simplify the access to foreign markets for these Chinese textile manufacturers and exporters. We do not plan to charge our members for registration or listing of their
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products on our Internet textile trade center. Rather, we will charge our members a service fee for each sale made through our Internet textile trade center. A schedule of service fees will be contained in the membership agreement that each member will be required to execute when they first register with our Internet textile trade center.
Both retail customers and wholesale buyers are welcomed to purchase textile products listed on our Internet textile trade center. A retail customer can complete his or her purchase on our website by filling out an online purchase order together with his or her credit card information. Once a purchase order is transmitted to us from a retail customer, we will forward the purchase order and the credit card information of the retail customer to our member. Our member will be responsible for arranging the shipment of the products to the customer and for processing the credit card payment from the customer. A wholesale customer can indicate its interest in buying products from one of our members on a wholesale basis by completing an online form. Once we receive an indication of interest from a wholesale customer, we will forward the notice to our member and assist our member in going through the negotiation process and in completion of the sale of such textile products. We will be able to utilize our Chinese language ability and our understanding of Chinese business practices and customs to facilitate the negotiation between our member and the wholesale buyer. Mr. Chen (Jason) Wu, our Chief Financial Officer who is also one of our directors, has extensive experience in establishing collaboration between Chinese businesses and businesses in the North America. His unique background and ability will enable us to assist our members in term of reducing the language, customs and trust barriers frequently encountered in an international trade transaction.
We were incorporated on August 20, 2001 under the laws of the State of Nevada. Our principal executive office is located at 14th Floor, 265 West 37th Street, New York, New York 10018. The telephone number of our principal executive office is (212) 840-9240.
Summary of Risk Factors
An investment in Titanium's common stock involves a number of risks which should be carefully considered and evaluated. These risks would include:
- the fact that we have a limited operating history on which to base an evaluation of our business and prospects. Our prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies at the very early stage of their business development.
- the fact that we do not have an established source of income and have not generated any revenues since our inception. These circumstances raise substantial doubt about Titanium's ability to continue as a going concern as described in an explanatory paragraph to our independent auditors' opinion issued in connection with our audited financial statements for the period ended December 31, 2001;
- the fact that Titanium's business is heavily dependent on the textile industry in China and is subject to the political and economical uncertainties in China; and
- the fact that there is no established market for our common stock.
For a more complete discussion of risk factors relevant to an investment in our common stock see the "Risk Factors" section beginning on page 7 of this prospectus.
The Offering
This prospectus relates to the sale of up to 2,500,000 shares of our common stock to be sold by the selling stockholders named in this prospectus. The offering price will be determined by market factors and the independent decisions of the selling stockholders. There is no minimum number of shares to be sold in this offering. We will not receive any of the proceeds of the shares of common stock offered by the selling stockholders.
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As of the date of this prospectus there were 2,500,000 shares of our common stock issued and outstanding. All of the common stock to be sold under this prospectus will be sold by existing shareholders.
Summary Financial Data
The summarized financial data presented below is derived from and should be read in conjunction with our audited financial statements for the period ended December 31, 2001, including the notes to those financial statements which are included elsewhere in this prospectus along with the section entitled "Management's Plan of Operation" beginning on page 16 of this prospectus.
For the period
Revenue
$Nil
Net Loss for the Period
$(5,061)
Loss Per Share - basic and diluted
$(0.01)
As at
Working Capital
$94,939
Total Assets
$97,546
Total Stockholders' Equity
$94,939
Deficit Accumulated in the Development Stage
$(5,061)
ended
December 31, 2001
December 31, 2002
RISK FACTORS
An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this prospectus in evaluating Titanium and its business before purchasing shares of common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. The risks described below are not the only ones facing our company. Additional risks not presently known to us may also impair our business operations. You could lose all or part of your investment due to any of these risks.
RISKS ASSOCIATED WITH OUR BUSINESS
WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO BASE AN EVALUATION OF OUR BUSINESS AND PROSPECTS.
Since we were incorporated on August 20, 2001 and have only recently began the construction of our Internet textile trade center at http://titanium-intelligence.com, we have a limited operating history on which to base an evaluation of our prospects. Our operating activities since the inception have consisted primarily of developing our website. Since we only recently commenced the construction of our Internet textile trade center at our website http://www.titanium-intelligence.com, we have not earned any revenues to date. We have no way to evaluate the likelihood that we will be able to operate our business successfully. We anticipate that we will incur increased operating costs without realizing any revenues during the period when we are developing our Internet textile trade center and trying to establish a customer base for our Internet textile trade center. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from our Internet textile trade center, we will not be able to earn profits or continue operations. At this early stage of our operation, we also expect to face the risks, uncertainties, expenses and difficulties frequently encountered by companies at the start up stage of their business development. We cannot be sure that we will be successful in
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addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. There is no history upon which to base any assumption as to the likelihood that we will prove successful and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.
THE FACT THAT we have NOT EARNED ANY REVENUES SINCE our INCORPORATION RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
We have not generated any revenues since our incorporation and we will, in all likelihood, continue to incur operating expenses without revenues until our Internet textile trade center becomes fully operational and gains significant popularity with the textile manufacturers in China and buyers around the world. Our business plan requires us to incur further expenses in connection with upgrading the features and functionality of our website and with the building of brand recognition for our Internet textile trade center. We had cash in the amount of $88,395 as of March 31, 2002. We estimate our average monthly operating expenses, not including one time expenses in marketing and in upgrading the functionality of our website, to be approximately $1,000 each month. At this rate we will be able to maintain our operations for a period of at least 12 months without generating significant revenues from our operations. We cannot assure that we will be able to generate enough interest in our Internet textile trade center among Chinese textile manufacturers and exporters. If we cannot attract a significant number of textile manufacturers and exporters in China to form our membership base, we will not be able to general any revenues or income. These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent auditors' opinion on the financial statements for the period ended December 31, 2001.
WE CANNOT ASSURE THAT WE WILL BE ABLE TO ACHIEVE A SATISFACTORY LEVEL OF ACCEPTANCE OF OUR INTERNET TEXTILE TRADE CENTER AMONG THE TEXTILE MANUFACTURERS AND EXPORTERS IN CHINA. ACCORDINGLY, WE FACE A HIGH RISK OF BUSINESS FAILURE.
Our success depends on the acceptance and use of our Internet textile trade center by Chinese textile manufacturers and exporters as a tool to market and sell their textile products to buyers in China and around the world. We will need to achieve a level of brand recognition and confidence in our Internet textile trade center and our services among the users of our website. There is no assurance that the Chinese textile manufacturers and exporters will use our Internet textile trade center as their primary tool to market their products. Accordingly, our prospect of generating revenue from the operation of our Internet textile trade center is uncertain.
WE HAVE BEEN UNABLE TO FUND OUR OPERATIONS WITH INTERNALLY GENERATED FUNDS BECAUSE OUR BUSINESS HAS NOT GENERATED ANY REVENUE. WE WILL NEED TO GENERATE FUNDS INTERNALLY OR RAISE ADDITIONAL CAPITAL TO FUND OUR OPERATIONS DURING THE NEXT FISCAL YEAR OR WE WILL BE UNABLE TO CONTINUE OUR OPERATIONS AND BUSINESS.
As of March 31, 2002, we had cash in the amount of $88,395. We currently do not have any operations which generate any income or cash flow. We have not generated any revenues since our incorporation and we have required and will continue to require substantial capital to fund the completion of our Internet textile trade center. We also expect to require additional funds to promote our Internet textile trade center and to develop a customer base that will utilize the services offered through our Internet textile trade center. We do not currently have any arrangements for financing and we can provide no assurance to investors we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor acceptance of our Internet textile trade center and our business model. The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders. If adequate funds are not available when required or on acceptable terms, we may be forced to delay, scale back, or eliminate our services, development of our Internet textile trade center and sales and marketing activities. If this were to become necessary, it could adversely affect our business, result of operations and our financial conditions and there is a substantial risk our business would fail.
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IF WE ARE NOT ABLE TO OBTAIN FUTURE FINANCING WHEN REQUIRED, WE MIGHT BE FORCED TO DISCONTINUE OUR BUSINESS
We may need to raise additional funds in order to complete our Internet textile trade center, respond to competitive pressures, acquire complementary businesses or technologies or respond to unanticipated requirements. There can be no assurance that additional financing will be available when needed on terms favorable to us. There is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay our future indebtedness or that we will not default on our future debts, jeopardising our business viability. Furthermore, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct business, which might result in the loss of some or all of your investment in our common stock.
OUR SUCCESS IS DEPENDENT UPON THE WIDESPREAD ACCEPTANCE AND USE OF THE INTERNET AS AN EFFECTIVE MEDIUM OF COMMERCE.
The growth of commercial transactions on the Internet is a recent phenomenon. There can be no assurance that acceptance and use of the Internet will continue to grow at a fast pace or that a sufficient number of textile importers and exporters will begin using the Internet and other online services as a medium of trade. Demand and market acceptance for recently introduced services and products over the Internet are subject to a high level of uncertainty and relatively few proven services and products exist. In addition, Internet based commercial transactions could lose their viability due to delays in the development or adoption of new standards and protocols required for handling of increased levels of Internet activities. Changes in or insufficient availability of telecommunications services to support the Internet also could result in slower response times and adversely affect usage of the Internet and other online services generally and our business in particular. Our business, prospects, financial condition and results of operations could be materially adversely affected if:
- use of the Internet as a medium for commerce does not continue to grow or grows more slowly than expected;
- the infrastructure for the Internet and other online services does not effectively support growth that may occur; or
- the Internet does not become viable commercial marketplaces for the products and services offered through our Internet textile trade center.
WE MAY EXPERIENCE SIGNIFICANT FLUCTUATIONS IN OUR OPERATING RESULTS DUE TO A VARIETY OF FACTORS OUTSIDE OF OUR CONTROL
We expect to experience significant fluctuations in our future operating results due to a variety of factors, many of which are outside our control. Factors that may adversely affect our operating results include but are not limited to:
- our ability to attract new users of our Internet textile trade center at a steady rate and maintain user satisfaction;
- our ability to develop a reasonable membership base willing to market their textile products on our Internet textile trade center;
- our ability to develop a base of retail customers and wholesale buyers willing to utilize our Internet textile trade center to purchase and sell textile products;
- our ability to upgrade and develop our systems and infrastructure in connection with our Internet textile trade center and attract new personnel in a timely and effective manner;
- our ability to generate and maintain an sufficient level of traffic on our Internet textile trade center;
- our ability to resolve any technical difficulties and avoid system downtime or Internet outages;
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- the continued use of the Internet and online services and increasing acceptance of the Internet and other online services for the purchase of products, including textile products, in China and around the world;
- governmental regulations on use of Internet as a tool to conduct business transactions; and
- economic conditions in general and economic conditions specific to the Internet and online commerce.
OUR SUCCESS LARGELY DEPENDS ON THE EFFICIENT AND UNINTERRUPTED OPERATION OF OUR COMPUTER AND COMMUNICATIONS HARDWARE SYSTEMS
Our website http://www.titanium-intelligence.com are currently hosted by wedohosting.com Inc. of Victoria, British Columbia, Canada. Despite their implementation of network security measures, their servers are vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions, delays, loss of data or the inability to assist in the completion of purchases and sales of textile products by our future members. Our computer systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, break-ins, earthquake and similar events. We do not presently have any redundant systems or a formal disaster recovery plan and we do not carry sufficient business interruption insurance to compensate us for losses that may occur. The occurrence of any of the foregoing risks could have a materially adverse effect on our business, prospects, financial condition and results of operations.
THE SUCCESS OF OUR BUSINESS MAY BE CONSTRAINED BY OUR NETWORK SYSTEMS CAPACITY
A key element of the our strategy is to generate a high volume of traffic on our Internet textile trade center. Accordingly, the satisfactory performance, reliability and availability of our Internet textile trade center and network infrastructure are critical to our ability to attract and retain users and maintain adequate user service levels.
Any substantial increase in the volume of traffic on our Internet textile trade center or the number of businesses utilizing our Internet textile trade center will require us to expand and upgrade further our technology and network infrastructure. Any substantial expansion will require further capital resources and, unless we can generate sufficient revenues or raise further funding, we will not have the funds necessary to finance such expansion. There can be no assurance that we will be able to accurately project the rate or timing of increases, if any, of the use of our Internet textile trade center and timely expand and upgrade our systems and infrastructure to accommodate such increases.
WE MAY NOT BE ABLE TO DEVELOP ADEQUATE SALES AND MARKETING CAPABILITIES TO ACHIEVE A SATISFACTORY LEVEL OF ACCEPTANCE OF OUR INTERNET TEXTILE TRADE CENTER
We have not incurred significant advertising, sales and marketing expenses to date. To promote the awareness of our Internet textile trade center and attract members and users for our Internet textile trade center, we expect to spend significantly more on advertising, sales and marketing in the current fiscal year. If our marketing strategy is unsuccessful, we may not be able to recover these expenses or even generate any revenues. We will be required to develop a marketing and sales campaign that will effectively demonstrate the advantages of using our Internet textile trade center to sell and to buy textile products. To date, our experience with respect to marketing our Internet textile trade center is very limited. There can be no assurance that we will be able to establish adequate sales and marketing capabilities to achieve a satisfactory level of acceptance of our Internet textile trade center. If we are unable to establish satisfactory acceptance of our website and unable to establish a significant group of users of our website, our business will most likely fail.
WE FACE INTENSE COMPETITION AND SOME OF OUR COMPETITORS HAVE GREATER FINANCIAL, TECHNICAL AND HUMAN RESOURCES THAN US
The online commerce market, particularly over the Internet, is new, rapidly evolving and intensely competitive, and we expect that the competition will intensify in the future. Barriers to entry are minimal, and current and new competitors can launch new websites at a relatively low cost. There are currently several websites, such as
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chinaproducts.com, chinaexporters.com and made-in-china.com, that serve as marketing and distribution channels for manufacturers or exporters of textile products in China, but no single website has emerged as the market leader to date.
A number of our competitors, including chinaproducts.com, chinaexporters.com, and made-in-china.com, are well established, substantially larger and have substantially greater market recognition, greater resources and broader distribution capabilities than we have. There can be no assurance that we will be able to compete successfully against current and future competitors, and competitive pressures faced by Titanium may have a materially adverse effect on our business, prospects, financial condition and results of operations.
OUR PROPRIETARY RIGHTS MAY BE INADEQUATELY PROTECTED AND THERE IS A RISK THAT LITIGATION MAY BE NECESSARY TO PROTECT OUR INTERNET TEXTILE TRADE CENTER WEBSITE
Our success and ability to compete depend substantially upon our intellectual property rights. Other than registering our domain name "titanium-intelligence.com" with the domain registration service offered by MDI Internet Inc. in Vancouver, British Columbia, Canada, and by entering into service agreements containing restrictive covenants with technical service providers, we have not taken any active steps to protect our intellectual property rights and trade secret rights. We do not own any patents or trademark and have not filed any patent or trademark applications, as we do not believe that the benefits of these protections outweigh the costs of filing and updating the patent and trademark applications. It may be possible for a third party to copy our Internet textile trade center without authorization. In addition, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others, which could result in substantial costs and diversion of our resources and could have a detrimental effect on our business, results of operations and financial conditions.
IT IS POSSIBLE THAT WE COULD BECOME SUBJECT TO INFRINGEMENT ACTIONS BASED UPON THE CONTENT OF OUR INTERNET TEXTILE TRADE CENTER
There is a risk that one of our competitors or another business may commence a lawsuit against us claiming that our Internet textile trade center infringes on their proprietary technology or intellectual property. Any infringement claims against us, with or without merit, could subject us to costly litigation and the diversion of our financial resources and technical and management personnel. Further, if such claims are successful, we may be required to change or alter the content of our Internet textile trade center and pay financial damages. An adverse outcome in any litigation or proceedings could require us to license disputed rights from third parties or to cease using such rights.
The Loss of our present officers and directors Would Have an Adverse Impact on Future Development of titanium and could impair our ability to succeed.
Although none of our present officers or directors are key to our continuing operations, we rely upon the continued service and performance of our President and Chief Executive Officer, Paulo Martins, our Chief Financial Officer, Chen (Jason) Wu, and our other directors. Our President and Chief Executive Officer, Paulo Martins, has been instrumental in the development of fund raising strategy for our company. With the assistance of our Chief Financial Officer, Chen (Jason) Wu, they were successful in raising capital from business contacts in China in November 2001. Since February, 2002, Mr. Chen (Jason) Wu has also provided website design services to our company in connection with the construction of our website. Mr. Chen (Jason) Wu speaks fluent English and Chinese and has extensive experience in establishing collaboration between Chinese and North American businesses. Mr. Chen (Jason) Wu will play a major role in providing assistance to our members to negotiate sales agreements with wholesale buyers. In addition, two of our directors, Qi (Alan) Zhuang and Hai Feng Zhang speak fluent Chinese and have worked in the textile industry in the Zhejiang Province of China. Through their experience, they have established many business contacts in the textile industry in China and have developed an intimate understanding of the Chinese business practices and customs. Our future success depends on the retention of these people, whose language ability and knowledge and understanding of our business and Chinese business practices and customs, and whose technical expertise would be difficult to replace. At this time, none of our officers or
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directors are bound by employment agreements, and as a result, any of them could leave with little or no prior notice.
If we are unable to hire and retain technical, sales and marketing and operational personnel, our business could be materially adversely affected. We intend to hire a significant number of additional personnel in the future to expand the scope of services for our Internet textile trade center. Competition for these individuals in the technology sector is intense, and we may not be able to attract, assimilate, or retain additional highly qualified personnel in the future. The failure to attract, integrate, motivate and retain these employees could harm our business.
GROWTH OF OUR BUSINESS MAY STRAIN OUR MANAGERIAL, FINANCIAL AND OPERATIONAL RESOURCES.
We may experience rapid growth, which will place a significant strain on our managerial, financial and operational resources. Any growth we may experience will result in increased responsibility for existing and new management personnel. Our ability to manage our growth effectively will depend on our ability to:
- integrate new personnel into our corporate structure;
- improve our operational, management and financial systems and controls; and
- retrain, train, motivate and manage employees.
We cannot assure you that our systems, procedures or controls will be adequate to support our operations or that we will be able to manage any growth effectively.
IF A NEW LAW OR NEW GOVERNMENT REGULATION IS CREATED PERTAINING TO THE INTERNET, IT COULD DECREASE THE DEMAND FOR OUR SERVICES OR INCREASE THE COST OF DOING BUSINESS.
Any new law or regulation pertaining to the Internet, or the application or interpretation of existing laws, could decrease the demand for our services or increase our cost of doing business. There is, and will likely continue to be, an increasing number of laws and regulations pertaining to the Internet. These laws or regulations may relate to liability for information retrieved from or transmitted over the Internet, online content regulation, user privacy, taxation and the quality of products and services. Furthermore, the growth and development of electronic commerce may prompt calls for more stringent consumer protection laws that may impose additional burdens on electronic commerce companies as well as companies like ours that provide electronic commerce services. Moreover, the applicability to the Internet of existing laws governing intellectual property ownership and infringement, copyright, trademark, trade secret, obscenity, libel, employment, personal privacy, advertising and other issues is uncertain and developing. We will file tax returns in such jurisdictions as required by law based on principles applicable to traditional businesses. However, one or more jurisdictions could seek to impose additional income tax obligations or sales tax collection obligations on companies, such as ours, that engage in or facilitate electronic commerce. A number of proposals have been made at state and local levels in the United States that could impose such taxes on the sale of products and services through the Internet. Such proposals, if adopted, could substantially impair the growth of electronic commerce and adversely affect our opportunity to become profitable. The United States Congress has enacted legislation limiting the ability of the states to impose taxes on Internet-based transactions. This legislation, known as the Internet Tax Freedom Act was enacted on October 1, 1998 and was scheduled to expire on October 21, 2001. The legislation imposes only a three-year moratorium on state and local taxes on (1) electronic commerce where such taxes are discriminatory and (2) Internet access unless such taxes were generally imposed and actually enforced prior to October 1, 1998. This tax moratorium has been renewed for two more years. However, failure to renew this legislation in the future would allow various states of the United States to impose taxes on Internet-based commerce. The imposition of such taxes could adversely affect our ability to become profitable. Due to the global nature of the Internet, it is possible that the governments of other states and foreign countries, including China, might attempt to regulate transmissions over the Internet, impose taxes on the use of the Internet or prosecute for violations of their laws. We might unintentionally violate such laws, such laws may be modified, and new laws
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may be enacted in the future. Any such developments could have a material adverse effect on our business, operating results and financial condition.
RISKS ASSOCIATED WITH OUR COMMON STOCK
THERE IS NO ACTIVE TRADING MARKET FOR OUR COMMON STOCK AND IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, OUR INVESTORS WILL BE UNABLE TO SELL THEIR SHARES
There is currently no active trading market for our common stock and such a market may not develop or be sustained. We currently plan to apply to have our common stock quoted on the National Association of Securities Dealers Inc.'s Over the Counter Bulletin Board upon the effectiveness of this registration statement of which this prospectus forms a part. However, we cannot provide our investors with any assurance that our common stock will be traded on the Over the Counter Bulletin Board or, if traded, that a public market will materialize. If our common stock is not quoted on the Over the Counter Bulletin Board or if a public market for our common stock does not develop, then investors may not be able to resell the shares of our common stock that they have purchased and may lose all of heir investment. If we establish a trading market for our common stock, the market price of our common stock may be significantly affected by factors such as actual or anticipated fluctuations in our operation results, general market conditions and other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the shares of developmental stage companies, which may materially adversely affect the market price of our common stock.
Trading of Our Stock May Be Restricted by the SEC's Penny Stock Regulations Which May Limit a Stockholder's Ability to Buy and Sell our Stock.
The U.S. Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. If we establish a trading market for our common stock, our common stock will most likely be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors." The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standarized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.
SINCE THE MARKET FOR STOCKS OF INTERNET COMPANIES HISTORICALLY HAS EXPERIENCED EXTREME PRICE FLUCTUATIONS, OUR SHARES MAY EXPERIENCE EXTREME PRICE AND VOLUME FLUCTUATIONS.
The market for the stocks of Internet-related companies has experienced extreme price and volume fluctuations. If we ever establish a trading market for our common stock, the market price of our common stock may be volatile and may decline. In the past, securities class action litigation has often been initiated against companies following periods of volatility in the market price of their securities. If initiated against us, regardless of the outcome, litigation
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could result in substantial costs and a diversion of our management's attention and resources and would have a significant adverse effect on our ongoing operations.
BECAUSE WE DO NOT INTEND TO PAY ANY DIVIDENDS ON OUR COMMON STOCK, INVESTORS SEEKING DIVIDEND INCOME OR LIQUIDITY SHOULD NOT PURCHASE SHARES OF OUR COMMON STOCK.
We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future. Investors seeking dividend income or liquidity should not invest in our common stock.
BECAUSE WE CAN ISSUE ADDITIONAL SHARES OF COMMON STOCK, PURCHASERS OF OUR COMMON STOCK MAY INCUR IMMEDIATE DILUTION AND MAY EXPERIENCE FURTHER DILUTION.
We are authorized to issue up to 25,000,000 shares of common stock, of which 2,500,000 shares are issued and outstanding. Our board of directors has the authority to cause the company to issue additional shares of common stock without consent of any of our stockholders. Consequently, the stockholders may experience more dilution in their ownership of Titanium in the future.
RISKS ASSOCIATED WITH POLITICAL, ECONOMIC AND REGULATORY UNCERTAINTY IN CHINA
POLITICAL AND ECONOMIC POLICIES OF THE PEOPLE'S REPUBLIC OF CHINA GOVERNMENT COULD AFFECT OUR BUSINESS
Our business depends largely on the participation of textile products manufacturers and exporters in the People's Republic of China and accordingly, our business, results of operations and financial conditions are affected to a significant degree by economic, political and legal developments in China.
Since the establishment of the People's Republic of China in 1949, the Communist Party has been the only governing political party in China. The highest bodies of leadership are the Politburo, the Central Committee and the National People's Congress. The State Council, which is the highest institution of government administration, reports to the National People's Congress and has under its supervision various commissions, agencies and ministries, including the Ministry of Information Industry, the regulatory agency responsible for the Internet in China.
Since the late 1970s, the government of the People's Republic of China has been reforming its economic system. Although we believe that economic reform and the macroeconomic measures adopted by the People's Republic of China government have had and will continue to have a positive effect on the economic development in China, there can be no assurance that the economic reform strategy will not from time to time be modified or revised. Some modifications or revisions, if any, could have a material adverse effect on the overall economic growth of China and use of Internet services in China. Any such changes would have a material adverse effect on our business. Furthermore, there is no guarantee that the People's Republic of China government will not impose other economic or regulatory controls that would have a material adverse effect on our business. Changes in political, economic and social conditions in China, adjustments in policies by the People's Republic of China government or changes in laws and regulations on the Internet could adversely affect our results of operations and financial conditions and may adversely affect our ongoing operations.
THERE ARE SIGNIFICANT ECONOMIC RISKS ASSOCIATED WITH DOING BUSINESS IN CHINA
The Chinese economy has experienced significant growth in the past decade, but such growth has been uneven across geographic and economic sectors and has recently been slowing. There can be no assurance that such growth will not continue to decrease or that any slow down will not have a negative effect on our business. The Chinese economy is also currently experiencing deflation, which may continue in the future.
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LAWS AND REGULATIONS APPLICABLE TO THE INTERNET IN CHINA REMAIN UNSETTLED AND COULD HAVE A MATERIAL ADVERSE EFFECT ON INTERNET GROWTH AND THEREBY HAVE MATERIALLY ADVERSE EFFECT ON OUR BUSINESS
Growth of the Internet in China could be materially adversely affected by governmental regulation of the industry. Due to the increasing popularity and use of the Internet and other online services, it is possible that regulations may be adopted with respect to the Internet or other services covering issues such as user privacy, pricing, content, copyrights, distribution, antitrust and characteristics and quality of products and services. Furthermore, the growth and development of the market for electronic commerce may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies conducting business online. The adoption of additional laws and regulations applicable to the Internet may slow the growth of the Internet, which could in turn lead to reduced demand for our Internet textile trade center.
The Ministry of Information Industry in China is currently reviewing its telecommunications regulations, particularly as they relate to activities on the Internet. While we are not aware of any existing or proposed regulations that have a significant direct adverse effect on our business, a restrictive regulatory policy toward the Internet industry in China would have a material direct adverse effect on our business.
IF RELATIONS BETWEEN THE UNITED STATES AND CHINA WORSEN, THE PRICE OF OUR COMMON STOCK MAY DECREASE AND WE MAY HAVE DIFFICULTY ACCESSING THE U.S. CAPITAL MARKETS
At various times during recent years, the United States and China have had significant disagreements over political and economic issues. Controversies may arise in the future between the two countries. Any political or trade controversies between the United States and China, whether or not directly related to our business, could adversely affect the price of our common stock and our ability to access the U.S. capital markets.
OTHER RISKS
WE ARE REQUIRED BY SECTION 78.7502 OF THE NEVADA GENERAL CORPORATION LAW TO INDEMNIFY OUR OFFICERS AND DIRECTORS IN CERTAIN CIRCUMSTANCES FOR CLAIMS AGAINST THEM.
We are required to indemnify our officers, directors, employees and agents against liability to the company or in any proceeding in which such person wholly prevails on the merits. Generally, we may indemnify our officers and directors against such liability if the officer or director acted in good faith believing his or her actions to be in the best interests of the company. Our Articles of Incorporation provides that a director or officer has no liability for monetary damage for breach of fiduciary duty unless such person committed fraud or engaged in intentional misconduct. These provisions may limit our recovery for any claims against our officers and directors.
WE HAVE NOT ADOPTED ANY ANTI-TAKEOVER PROVISIONS.
We do not currently have a stockholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.
BECAUSE SOME OF OUR OFFICERS AND DIRECTORS ARE LOCATED IN NON-U.S. JURISDICTIONS, YOU MAY HAVE NO EFFECTIVE RECOURSE AGAINST THE MANAGEMENT FOR MISCONDUCT AND MAY NOT BE ABLE TO ENFORCE JUDGEMENT AND CIVIL LIABILITIES AGAINST OUR OFFICERS, DIRECTORS, EXPERTS AND AGENTS.
All of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our officers or directors, including
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judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.
SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE
Any member of the public may read and copy any materials filed by us with the Securities and Exchange Commission (the "SEC") at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet web site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
THE OFFERING
This prospectus covers the resale by the selling stockholders described in this prospectus of 2,500,000 shares of common stock which were issued pursuant to a private placement offering made by Titanium pursuant to Regulation S promulgated under the Securities Act.
USE OF PROCEEDS
The shares of common stock offered hereby are being registered for the account of the selling stockholders named in this prospectus. As a result, all proceeds from the sales of the common stock will go to the respective selling stockholders and we will not receive any proceeds from the resale of the common stock by the selling stockholders.
DETERMINATION OF OFFERING PRICE
The offering price of the 2,500,000 shares of common stock being offered by the selling stockholders will be determined by market factors and the independent decisions of the selling stockholders. We will not determine the offering price of the common stock. The offering price may not have any relationship to any established criteria of value, such as book value or earning per share. Additionally, because we have no significant operating history and have not generated any material revenue to date, the price of the common stock is not based on past earnings, nor is the price of the common stock indicative of the current market value of the assets owned by us. No valuation or appraisal has been prepared for our business and potential business expansion.
DILUTION
The common stock to be sold by the selling stockholders is the common stock that is currently issued and outstanding. Accordingly, there will be no dilution to our existing stockholders.
DIVIDEND POLICY
We have not declared or paid any cash dividends since inception. We intend to retain future earnings, if any, for use in the operation and expansion of our business and do not intend to pay any cash dividends in the foreseeable future. Although there are no restrictions that limit our ability to pay dividends on our common stock, we intend to retain future earnings for use in our operations and the expansion of our business.
MANAGEMENT'S PLAN OF OPERATION
Since we have not generated revenue and have only recently commenced construction of our Internet textile trade center, our independent auditors have issued an opinion about our ability to continue as a going concern in connection with our audited financial statements for the period ended December 31, 2001. Our deficit is $5,061 as of the period ended on December 31, 2001. The discussion below provides an overview of our operations and discusses our plan of operation.
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The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this prospectus. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this prospectus, particularly in the section entitled "Risk Factors" beginning on page 7 of this prospectus.
General
From the date of our incorporation on August 20, 2001 to now, we have been a start up company that has no revenues. Our operating activities during this period consist primarily of developing an Internet textile trade center website to facilitate the trade of textile products manufactured in China. Parts of our website at http://www.titanium-intelligence.com commenced operation on April 2, 2002 and until our website become fully operational we will not generate any revenues from our operation of our website.
Our financial statements are prepared in conformity with generally accepted accounting principles of the United States of America. Our operating expenses are classified into four categories:
- audit fees, which consists primarily of accounting and auditing fees for the year end audit (estimated to be approximately $10,000 for the 12 months ending December 31, 2002);
- bank charges, which consist primarily of charges by our bank for processing transactions through our checking account (estimated to be approximately $500 for the 12 months ending December 31, 2002);
- legal and organizational fees, which consist primarily of legal fees paid by us regarding securities advice and organizing the company (estimated to be approximately $35,000 for the 12 months ending December 31, 2002); and
- operating expenses, which consist primarily of the expenses incurred for developing and operating our Internet textile trade center, including expenses incurred in the setting up of the website, designing of the various functions of the website, promote awareness of our Internet textile trade center in the Chinese textile industries, solicitation of interests among Chinese textile manufacturers to register as members onto our website and other administrative expenses (estimated to be approximately $47,000 for the 12 months ending December 31, 2002).
Plan of Operation
Our primary objective in the 12 months ending December 31, 2002 will be to further develop our Internet textile trade center on our website http://www.titanium-intelligence.com. We have only recently commenced construction of our Internet trade center in February, 2002. Part of the website is now operational but our website currently still does not allow users to purchase the textile products listed on our website because we feel our website does not contain adequate security features to protect information given to us by the users of our website. We intend to continue construction of our website and incorporate security features to secure information given to us through the Internet. We anticipate that our Internet textile trade center will be fully operational in the June, 2002.
Our Internet textile trade center will be an online showroom where our members can list their textile products for sale. Textile products may include semi-finished products such as thread, knit fabrics, woven clothes and finished products and such as dresses, shirts and other clothing and apparel. During the initial stage of the development of our Internet textile trade center, we will focus on finished textile products. We plan to target the Chinese textile manufacturers and exporters because we want to take advantage of our management's Chinese language ability and their existing contacts in the Chinese textile industry. Three of our directors were born and educated in China and they speak fluent Chinese. Two of these directors, Qi (Alan) Zhuang and Hai Feng Zhang, have also worked in the textile industry in the Zhejiang Province of China. Through their business experience they have established many business contacts in the textile industry in China and have an intimate understanding of the Chinese business practices and customs.
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We have not generated any revenues and our operating activities have used cash resources of approximately $3,361 from August 20, 2001 to the period ending December 31, 2001. This negative cash flow is attributable to the costs incurred in the set up of our corporate structure, establishment of our bank accounts, payment of our audit fees and legal fees, and registration of our domain name for our website http://www.titanium-intelligence.com. We anticipate that our operating expenses will increase as we develop more sophisticate security and other functions for our Internet textile trade center. We estimate our expenses in completing and developing the functionality of our website to be $10,000 for the 12 months ending December 31, 2002. We also intend to promote our Internet textile trade center through traditional advertising and promotional media, such as newspaper and trade publications, and advanced media, such as targeted electronic mail, internet banner advertising and internet webpage links. We also anticipate conducting a series of "road shows" for key trade organizations and consultants in major cities in China in the summer of 2002. The costs of these marketing activities in the 12 months ending December 31, 2002 will be approximately $25,000, which will make up the bulk of our operating expenses. In addition to these expense, we expect that our Internet textile trade center will cost approximately $1,000 per month to operate. We have the necessary cash resources from our private placement fund raising of $100,000 in November of 2001 that regardless of revenue we have sufficient funds to operate for a 12 month period.
We plan to generate revenues from our Internet textile trade center primarily through the transactional fees we will charge our members for the sale of their textile products through the use of our Internet textile center. A schedule of fees will be contained in the membership agreement that each member will be required to execute when they first register with our Internet textile trade center. Depending on the size of the member company, we may adjust the rate of our transactional fees, which we estimate will be between 1% to 5% of the total value of the textile products sold for each transaction. We will charge a higher transactional fee for assisting our members in the sale of their textile products to a wholesale buyer through the use of our Internet textile trade center. We believe we can provide significant value added services to our members in wholesale transactions as we can utilize our language skills and business expertise to assist our members in the negotiation and completion of the transaction. Because most of our members will be textile products manufacturers in China, our ability to communicate with them in their native language and our understanding of business culture in China will be useful in assisting them to complete such transactions.
Attracting and retaining members as well as attracting traders and wholesale buyers to our Internet textile trade center are the key elements for us to achieve in order to continue as a going concern. We believe that commerce on the Internet will continue to grow in both China and around the world. Despite the highly competitive nature of this market, the continued growth of commerce on the Internet and our ability to leverage our language skills and local understanding of Chinese textile industry will increase the likelihood that we will be able to attract and retained qualified members to list their products with us as well as attract interested retail customers and wholesale buyers to use our Internet textile trade center as a key tool in their business.
Purchase or Sale of Equipment
We do not anticipate that we will expend any significant amount on equipment for our present or future operations. We may purchase computer hardware and software for our ongoing operations.
Research and Development
Since February, 2002, our Chief Financial Officer, Chen (Jason) Wu, has been providing us with technical services in the basic design and setting up of our Internet textile trade center. We entered into a service agreement with Mr. Chen (Jason) Wu for his technical services. In the 12 months ending December 31,2002, we plan to complete the construction of website and further develop features and functionality of our Internet textile trade center. We intend to incorporate security features to our website so we can protect information given to us by the users of our Internet textile trade center. Furthermore, as the number of products listed on our website increases, we will upgrade and expand our database so products can be organized by manufacturers as well as by category. With the expansion of our database, we may be required to upgrade our search function to make searching for a product on our website more user friendly. After our Internet textile trade center achieves a level of satisfactory acceptance
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among the Chinese textile manufacturers, we may sell advertising space on our website to allow banner and click through advertisements to be purchased by members and users of our website.
As we are targeting textile products manufacturers and exporters in China to register as members on our website, we plan to construct parts of our Internet textile trade center in Chinese to provide easy access to our prospective members. Currently, however, we have not begun construction of the Chinese portion of our Internet textile trade center. Furthermore, our members are currently responsible for arranging credit card payments for the payment of textile products purchased as a result of being listed on our website between themselves and the purchasers. As the number of sales through the use of our website increases, we may add the ability to process credit card payments from the users directly on our website. Finally, we intend to proactively seek feedback from our members and develop upgrades and modifications to our Internet textile trade center as recommended by our members.
As the tasks become more difficult and complex, we expect to retain assistance from professional consultants other than Mr. Chen (Jason) Wu. We estimate our expenses in completing construction of our website and further develop functions of our Internet textile trade center to be $10,000 for the 12 months ending December 31, 2002.
Personnel
As of March 31, 2002, our Chief Executive Officer, Paulo Martins, and Chief Financial Officer, Chen (Jason) Wu, are the only employees of our company. They handle all of the responsibilities in the area of corporate administration, business development and research. In addition, they also provide us with capital raising services. In the 12 months ending December 31, 2002 we plan to expand our total number of permanent employees to approximately four: one in system administration, two in the area of sales and marketing and one in general administration.
BUSINESS
We plan to operate an Internet textile trade center through the development of our website http://www.titanium-intelligence.com. We intend to develop our Internet textile trade center into an online market place linking Chinese manufacturers and exporters of textile products to buyers around the world. Our plan is to target the textile products manufacturers and exporters in the People's Republic of China to register as sellers on our Internet textile trade center. Textile products may include semi-finished products such as thread, knit fabrics, woven clothes and finished products and such as dresses, shirts and other clothing and apparel. During the initial stage of the development of our Internet textile trade center, we will focus on manufacturers of finished textile products.
We are targeting the Chinese textile manufacturers and exporters because we want to take advantage of our management's Chinese language ability and their existing contacts in the Chinese textile industry. Three of our directors were born and educated in China and they speak fluent Chinese. Two of these directors, Qi (Alan) Zhuang and Hai Feng Zhang, have also worked in the textile industry in the Zhejiang Province of China. Through their business experience they have established many business contacts in the textile industry in China and have an intimate understanding of Chinese business practices and customs. Our directors intend on actively promoting awareness of our Internet trade center among their business contacts and on soliciting interests from Chinese textile manufacturers to register as members of our Internet textile trade center.
Manufacturers and exporters of textile products in China will be able to register as members on our website free of charge. On our website they can showcase their textile products and specify the availability and price of each of their products. Our Internet textile trade center will simplify the access to foreign markets for these Chinese textile manufacturers and exporters. We do not plan to charge our members for registration or listing of their products on our Internet textile trade center. Rather, we will charge our members a service fee for each sale made through our Internet textile trade center. A schedule of service fees will be contained in the membership agreement that each member will be required to execute when they first register with our Internet textile trade center.
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We commenced construction of our website http://www.titanium-intelligence.com in February, 2002. Only parts of the website are currently functional and our website currently still does not allow users to complete a purchase because we feel our website does not contain adequate security features to protect information given to us by the users. We intend to continue construction of our website and incorporate security features to secure information given to us through the Internet. We anticipate that our Internet textile trade center will be fully operational in the June, 2002.
When our Internet textile trade center become fully operational, it will be divided into two major section, one for sellers and one for buyers. Both of these sections will be accessible through our homepage. In the section for buyers, buyers may browse through the textile products listed by our members. Both retail and wholesale buyers are welcomed to purchase textile products listed on our Internet textile trade center When a retail buyer is interested in buying a certain item listed in the for buyers area, the buyer may simply click on the item, specify the quantity and add the item to the buyer's shopping cart. When the buyer is ready to complete the purchase, the buyer can click on the checkout icon and an online form will appear to ask the buyer for shipping information, billing information and credit card information. Once a purchase order is transmitted to us from a retail buyer, we will forward the purchase order and the credit card information of the retail buyer to our member. Our member will be responsible for arranging the shipment of the products to the buyer and for processing the credit card payment from the buyer. A wholesale buyer can indicate its interest in buying products from one of our members on a wholesale basis by completing an online form. Once we receive an indication of interest from a wholesale buyer, we will forward the notice to our member and assist our member in going through the negotiation process and in completion of the sale of such textile products. We will be able to utilize our Chinese language ability and our understanding of Chinese business practices and customs to facilitate the negotiation between our member and the wholesale buyer. Our Chief Financial Office who is also one of our directors, Chen (Jason) Wu, has extensive experience in establishing collaboration between Chinese businesses and businesses in the North America. His unique background and abilities will enable us to assist our members in term of reducing the language, customs and trust barriers frequently encountered in an international trade transaction.
In the section for sellers on our Internet textile trade center, we will encourage Chinese manufacturers and exporters of textile products to register as members free of charge by completing an online registration form. Upon our receipt of a registration form from a new member, complete with company name, contact person, address, telephone and fax numbers, email address and information on their products, we will issue to the new member an username and a password. A member may log into members' section only if they have first obtained an username and password. Once the member has entered the members' only section, it may add, revise, delete information about the products it wishes to list on our Internet textile trade center.
At the same time when we issue an username and password to a new member, we will enter into a membership agreement with the new member. The membership agreement will contain a schedule of services fees we will charge for each sale transaction completed through the use of our Internet textile trade center. On March 28, 2002, we entered into a membership agreement with Zhejiang Weilai Group Company for the use of our Internet textile trade center to list its textile products. However, because users of our Internet textile trade center still cannot complete a purchase through the use our website, we have not generated any revenues. Under the membership agreement with Zhejiang Weilai Group Company, Zhejiang Weilai Group Company will pay us service fees ranging from 1% to 3% of the total value of the textile products sold, depending on the total value of a particular transaction, for sales of their textile products to retail buyers. For each wholesale transaction completed through the use of our Internet textile trade center, Zhejiang Weilai Group Company will pay us a service fee equal to 5% of the total value of the textile products sold.
Users of our Internet textile trade center may also access the search function from our homepage to search the textile products listed on our Internet textile trade center. Members can also access the sign in function directly from our homepage. Users of our website may also find information on our company, our partners and our contact information by clicking on the respective icons on our home page. We want to attract manufacturers and exporters of textile products in China to register as members on our Internet textile trade center. Accordingly, we are planning to construct parts of our Internet textile trade center in Chinese to provide easy access to our members. Currently, however, we have not begun construction of the Chinese portion of our Internet textile trade center.
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Growth of Internet Usage in China
According to the China Internet Network Information Center, which began conducting surveys on Internet development in China in 1997, there were only 620,000 Internet users in China in October of 1997. But by the end of 1999, the number of Internet users in China had climbed to 8.9 million. The rate of increase continued in years 2000 and 2001. By June of 2001, the number of Internet users in China reached 26.5 million, up 56.8 percent from the same period the year before. Zhou Guangzhao, the chairman of the Third Asia-Pacific Symposium on Press and Scientific and Social Progress held in Beijing in November of 2001, stated that Internet media in China has become the fastest growing means of information transmission. Furthermore, according to a survey conducted by Nielsen/NetRatings service which was reported in April 2002 by People's Daily, a major Chinese newspaper, China has surpassed Japan to become the second largest global at-home Internet population.
As businesses in China increasingly seek to grow and expand their markets, they will inevitably recognize the need to serve suppliers, partners and buyers by allowing them easy access to product information on the Internet. The Internet can serve the world business communities by providing them with the necessary information instantaneously. We believe that websites with information presented in users' native languages will be even more valuable in the facilitation of the Internet business to business commerce.
Textile Industry in China
In the three decades after the establishment of People's Republic of China in 1949, China's textile industry developed into a modern industry with markedly improved production capacity, structure and distribution. China's textile industry developed even faster after 1978 when the People's Republic of China government decided to shift its focus of work onto economic reconstruction and introduced the policy of reform and opening to the outside world on the Third Plenary Session of the Eleventh Central Committee. Since then, the People's Republic of China government has introduced a series of incentive policies to stimulate the development of the textile industry. China's textile industry has forged new economic ties with other countries and it has renovated itself with modern technology and equipment imported from abroad. In recent years, China's textile industry also attracted a large amount of foreign investment. All of the foregoing factors have contributed greatly to the rapid development of the Chinese textile industry.
According to the China National Textile Industry Council, the textile industry in China is under strategic restructuring. In the past, a principal part of the achievements of the textile industry were made under the planned economy. Under such system, raw materials were allocated with low prices set by the government, production tasks were assigned by administrative orders and the marketing of finished products was monopolized by government owned commercial departments. As noted by the China National Textile Industry Council, because China is now shifting from a planned economy to a market economy, many serious symptoms such as irrational structure and duplication of projects that had been covered under the planned economy are now fully revealed and handicap the healthy development of the textile industry. Accordingly to the China National Textile Industry Council, additional external unfavorable factors such as the rising price of raw materials, declining demand on both domestic and overseas markets and the weakened competitiveness in international market due to the Asian monetary crisis in the recent years have caused the Chinese textile industry to suffer. To extricate the textile industry from difficulties, during the Economic Working Conference of China's Central Committee held at the end of 1997, the Chinese government chose the textile industry as a pilot project for the reform of government owned enterprises, targeting to revitalize the textile industry by transforming the structure of the industry and establishing a rational industrial structure. To carry out this strategy, the Chinese textile industry decided to make a breakthrough by shutting down 10 million cotton spindles and laying off 1.2 million workers in three years up to 2000.
According to the China National Textile Industry Council, by end of the 1999 fiscal year, China's textile and garment exports had recovered from the recession arising from the Asian financial crisis, with export of such products worth US$38.85 million. Furthermore, the China State Textile Industrial Bureau has set objectives for the coming five years, with stress put on updating the industry through accelerating technical reform and strategic restructuring of textile enterprises.
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Competition
The size of Chinese market for Internet services attracts considerable attention from foreign companies seeking to expand the market for their goods and services. We believe our primary competitors are other Internet trade portals focusing on the Chinese market, which also allow businesses to list their products and post their offers on their websites. Some examples of these Internet trade portals are chinaproducts.com, chinaexporters.com and made-in-china.com.
Most of these Internet trade portals allow every kind of business to list their products on their wesbites. The products listed on these websites range from electronics to consumer products. Because these websites do not have a targeted audience, users may easily get frustrated by the inability to access the industry specific information they wish to obtain. We believe that our Internet textile trade center, by focusing on textile products only, will be easier to use. By focusing only on the textile industry, it will be easier for us to capture a reasonable number of textile products manufacturers and exporters in China. We expect that by capturing a reasonable number of textile products manufacturers and exporters, we will be well positioned to grow the Chinese Internet business to business commerce market for the sale of textile products successfully.
Furthermore, even though some websites compete with us for membership and product listings, they have a completely different revenue model from our Internet textile trade center. Some of the websites that act as Internet intermediaries for Chinese products generate their revenues by selling advertising space on their websites such as advertising banners or by charging their members a premium for featuring their products in a prominent location of their websites. On the other hand, our members will have full access to every feature of our website free of charge. We only charge our members when a sale of their products is completed through the use of our services. Our ability to act as a liaison between our members and potential retail and wholesale buyers after the buyers have expressed interest on our website will provide added value to our members. After a buyer has expressed interest in purchasing products listed on our website, we will assist our member in contacting the buyer, following up on the lead, negotiating a final deal and completing the transaction. We are unique in that we can utilize our language ability and our understanding of business culture in China in helping our members to negotiate and complete of their sale transactions.
Marketing
Two of our directors, Qi (Alan) Zhuang and Hai Feng Zhang, have developed many business contacts through their past and current employment in the textile industry in the Zhejiang Province of China and have developed an intimate understanding of Chinese business practices and customs. They intend on actively promoting interest in our Internet Textile trade center among their business contacts in the Chinese textile industry. In addition, we intend to promote our Internet textile trade center through traditional advertising and promotional media, such as newspaper and trade publications, and advanced media, such as targeted electronic mail, internet banner advertising and internet webpage links, to effect maximum exposure and penetration in the textile products marketplace. We also anticipate conducting a series of "road shows" for key trade publications, consultants and textile industry businesses in major cities in China in the summer of 2002. During the roadshow, our directors plan to visit major textile manufacturers in Zhejiang and other provinces to introduce our Internet textile trade center and services to the Chinese textile manufacturers.
Research and Development
Since February, 2002, our Chief Financial Officer, Chen (Jason) Wu, has been providing us with technical services in the basic design and setting up of our Internet textile trade center website. We entered into a services agreement with Mr. Wu for his technical services and under the services agreement, we will pay Mr. Wu such amount as our directors determine in view of Mr. Wu's contributions to our company and the funds available to us for compensation of contractors and employees. We plan to complete the construction of website in the 12 months ending December 31, 2002. We also intend to incorporate security features to our website so we can protect information given to us by the users of our Internet textile trade center. Furthermore, as the number of products listed on our website increases, we will upgrade and expand our database so products are organized by
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manufacturers as well as by category. With the expansion of our database, we may be required to upgrade our search function to make searching for a product on our website more user friendly. After our Internet textile trade center achieves a level of satisfactory acceptance among the Chinese textile manufacturers, we will contemplate selling advertising space on our website to allow banner and click through advertisements.
As we are targeting textile products manufacturers and exporters in China to register as members on our website, we also plan to construct parts of our Internet textile trade center in Chinese to provide easy access to our prospective members. Currently, however, we have not begun construction of the Chinese portion of our Internet textile trade center. Furthermore, our members are currently responsible for arranging credit card payments for the payment of textile goods purchased as a result of being listed on our website. As the number of sales through the use of our website increases, we may add the ability to process credit card payments from the users directly on our website. Finally, we intend to proactively seek feedback from our members and develop upgrades and modifications to our Internet textile trade center as recommended by our members.
As the tasks become more difficult and complex, we expect to retain assistance from outside professional consultants.
Intellectual Property
Other than registering our domain name "titanium-intelligence.com" with the domain registration service offered by MDI Internet Inc. in Vancouver, British Columbia, Canada, and by entering into service agreements containing restrictive covenants with current and prospective technical service providers, we have not taken any active steps to protect our intellectual property rights and trade secret rights. We do not own any patents or trademark and have not filed any patent or trademark applications, as we do not believe that the benefits of these protections outweigh the costs of filing and updating the patent and trademark applications. It may be possible for a third party to copy our Internet textile trade center without authorization. In addition, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others, which could result in substantial costs and diversion of our resources and could have a detrimental effect on our business, results of operations and financial conditions.
Government Regulations
There is, and will likely continue to be, an increasing number of laws and regulations pertaining to the Internet. These laws or regulations may relate to liability for information retrieved from or transmitted over the Internet, online content regulation, user privacy, taxation and the quality of products and services. Furthermore, the growth and development of electronic commerce may prompt calls for more stringent consumer protection laws that may impose additional burdens on electronic commerce companies as well as companies like ours that provide electronic commerce services. Moreover, the applicability to the Internet of existing laws governing intellectual property ownership and infringement, copyright, trademark, trade secret, obscenity, libel, employment, personal privacy, advertising and other issues is uncertain and developing. We will file tax returns in such jurisdictions as required by law based on principles applicable to traditional businesses. However, one or more jurisdictions could seek to impose additional income tax obligations or sales tax collection obligations on companies, such as ours, that engage in or facilitate electronic commerce. A number of proposals have been made at state and local levels in the United States that could impose such taxes on the sale of products and services through the Internet. Such proposals, if adopted, could substantially impair the growth of electronic commerce and adversely affect our opportunity to generate revenues and become profitable. The United States Congress has enacted legislation limiting the ability of the states to impose taxes on Internet-based transactions. This legislation, known as the Internet Tax Freedom Act was enacted on October 1, 1998 and was scheduled to expire on October 21, 2001. The legislation imposed a three-year moratorium on state and local taxes on (1) electronic commerce where such taxes are discriminatory and (2) Internet access unless such taxes were generally imposed and actually enforced prior to October 1, 1998. This tax moratorium has been renewed for two more years. However, failure to renew this legislation in the future would allow various states of the United States to impose taxes on Internet-based commerce. The imposition of such taxes could adversely affect our ability to become profitable. Due to the global nature of the Internet, it is possible that the governments of other states and foreign countries, including China, might attempt to regulate its transmissions or
- 24 -
prosecute for violations of their laws. We might unintentionally violate such laws, such laws may be modified, and new laws may be enacted in the future. Any such developments could have a material adverse effect on our business, operating results and financial condition.
Furthermore, our growth could be materially adversely affected by governmental regulation of the Internet in China. Due to the increasing popularity and use of the Internet and other online services, it is possible that regulations may be adopted by the Chinese government with respect to the Internet or other services covering issues such as user privacy, pricing, content, copyrights, distribution, antitrust and characteristics and quality of products and services. Furthermore, the growth and development of the market for electronic commerce may prompt calls for more stringent consumer protection laws in China that may impose additional burdens on companies conducting business online. The adoption of additional laws and regulations applicable to the Internet may slow the growth of the Internet, which could in turn lead to reduced demand for our Internet textile trade center.
The Ministry of Information Industry in China is currently reviewing its telecommunications regulations, particularly as they relate to activities on the Internet. While we are not aware of any existing or proposed regulations that have a significant direct adverse effect on our business, a restrictive regulatory policy toward the Internet industry in China would have a material direct adverse effect on our business.
Growth Strategy
We will continue to focus on growing http://www.titanium-intelligence.com into an Internet market place for textile products manufactured and to be exported from China through our contacts within the textile industry in China and through our internal marketing efforts. However, as one potential future growth strategy, we may consider acquiring other established Internet trade portals or other textile products manufacturing business to maximize the potential synergies and efficiencies in our business operations.
PROPERTY
Titanium currently shares office space located at 14th Floor, 265 West 37 Street, New York, New York 10018 with Weilai America Co., Ltd. These facilities are provided to us at no charge by our director, Mr. Qi (Alan) Zhuang.
Since February 2002, we have also used office space located at 1413 Lynwood Avenue, Port Coquitlam, British Columbia, Canada V3B 4Y1. These facilities are provided to us at no charge by our President, Chief Executive Officer and director, Mr. Paulo Martins. The telephone number is (604) 377-5201 and the fax number is (604) 552-3539.
MANAGEMENT
Directors and Executive Officers of Titanium
All directors of our company hold office until the next annual meeting of the stockholders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.
Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
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Name
Position Held with the Company
Age
Date First
Paulo Martins
Director, President, Treasurer and
30
Director since August 20,
Chen (Jason) Wu
Director, Chief Financial Officer and
27
Director since August 20,
Qi (Alan) Zhuang
Director
28
Director since November 26,
Hai Feng Zhang
Director
25
Director since November 26,
Elected or Appointed
Chief Executive Officer
2001, President and Chief
Executive Officer since
September 25, 2001
Secretary
2001, Chief Financial Officer
and Secretary since
September 25, 2001
2001
2001
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee, indicating the principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Paulo Martins, Director, President, Treasurer and Chief Executive Officer
Paulo Martins is a director and the President and Chief Operating Officer of Titanium Intelligence, Inc. Mr. Martins has extensive experience in financial and business management including developing fund raising strategies and securing credit lines for start up companies, operating companies in the early development stage and negotiating business combination transactions such as mergers, acquisitions and joint ventures. Mr. Martins is also the Chairman of the Board and the President of Titanium Development, Inc., a property and construction company. He was also one of the major investors of Avance Venture Corp., a company whose common shares are listed on the Canadian Venture Exchange.
Chen (Jason) Wu, Director, Chief Financial Officer and Secretary
Chen (Jason) Wu was educated in Shanghai, China and obtained a bachelor degree in 1997 in International Trade and Economy from the Shanghai Maritime University. Mr. Wu has served as the e-commerce project manager for the China Chamber of Commerce of Medicines & Health Products Importers & Exporters and assisted the organization to set up one of the first e-commerce websites in China. He also worked as a business consultant and was responsible for introducing the fingerprint based technology for employee management & data collection system to the Chinese market. Since 1997, Mr. Wu has developed extensive experience in establishing collaborations between Chinese businesses and American and Canadian enterprises.
Qi (Alan) Zhuang, Director
Qi (Alan) Zhuang graduated from Zhejiang Institute of Finance and Economy with major in Chinese and International Accounting in 1995. Upon the completion of his studies in 1995, he joined the finance department of the Huzhou City Committee of Ministry of Foreign Trade and Co-operation. From 1996 to 1999, Mr. Zhuang worked as an in house accountant for the finance department of the Import and Export Corporation of Huzhou City. From 1999 to 2000, Mr. Zhuang moved to the finance department of the Foreign Trade and Economic Co-operation Corporation of Huzhou City and was responsible for its overall accounting function. From 2000 to the present, Mr.
- 26 -
Zhuang has been employed by Zhejiang Weilai Group Company, business conglomerate in the Province of Zhejiang. Mr. Zhuang has recently been promoted to the position of Chief Financial Officer of Zhejiang Weilai Group Company and is in charge of its overall financial operations.
Hai Feng Zhang, Director
Hai Feng Zhang graduated from Zheiang Institute of Engineering in 1998. Since his graduation, Mr. Zhang has been employed by Zhejiang Weilai Import and Export Co., a silk textile manufacturing company, and has served as its Chief Operating Officer. As the Chief Operating Officer, Mr. Zhang is in charge of the day to day business operation of Zhejiang Weilai Import and Export Co. Mr. Zhang is intimately familiar with the operation of a textile business in China and has established a valuable network in the textile industry in China.
Committees of the Board
We do not have an audit or compensation committee at this time.
Family Relationships
There are no family relationships between any director or executive officer.
EXECUTIVE COMPENSATION
The following table summarizes the compensation of our President and Chief Executive Officer and other officers and directors who received annual compensation in excess of $100,000 during the period from August 20, 2001 (incorporation) to December 31, 2001.
|
SUMMARY COMPENSATION TABLE |
||||||||||
|
|
|
|
||||||||
|
|
|
|
|
|
Securities
|
|
|
|
||
|
Paulo Martins
|
2001 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
||
We have not entered into any employment agreement or consulting agreement with our directors and executive officers. There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.
Directors Compensation
We reimburse our directors for expenses incurred in connection with attending board meetings but did not pay director's fees or other cash compensation for services rendered as a director in the period ended December 31, 2001.
We have no formal plan for compensating our directors for their service in their capacity as directors. We may grant to our directors in the future options to purchase shares of common stock as determined by our board of
- 27 -
directors or a compensation committee which may be established in the future. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. The board of directors may award special remuneration to any director undertaking any special services on behalf of Titanium other than services ordinarily required of a director. Other than indicated in this prospectus, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments.
DISCLOSURE OF SEC POSITION OF
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The General Corporate Law of Nevada empowers a company incorporated in Nevada, such as Titanium, to indemnify its directors and officers under certain circumstances.
Our Articles of Incorporation provide that no director or officer shall be personally liable to Titanium or any of its stockholders for damages for breach of fiduciary duty as a director or officer involving any act or omission of such director or officer unless such acts or omissions involve a knowing violation of law or the payment of dividends in violation of the General Corporate Law of Nevada.
Our Bylaws provide that no officer or director shall be personally liable for any obligations of Titanium or for any duties or obligations arising out of any acts or conduct of the officer or director performed for or on behalf of Titanium. We will reimburse each such person for all legal and other expenses reasonably incurred by him in connection with any such claim or liability, including power to defend such persons from all suits or claims as provided for under the provisions of the General Corporate Law of Nevada; provided, however, that no such persons shall be indemnified against, or be reimbursed for, any expense incurred in connection with any claim or liability arising out of his (or her) own negligence or wilful misconduct.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Titanium under Nevada law or otherwise, Titanium has been advised that the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
SECURITY OWNERSHIP OF CERTAIN
Principal Stockholders
The following table sets forth, as of April 30, 2002, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
|
Name and Address of Beneficial Owner |
Amount and Nature of
|
Percentage
|
|
Paulo Martins
|
125,000 common shares |
5% |
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(1)
Based on 2,500,000 shares of common stock issued and outstanding as of April 30, 2002. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.Changes in Control
We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of Titanium.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have not been a party to any transaction, proposed transaction, or series of transactions in which the amount involved exceeds $60,000, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holder, or any member of the immediate family of the foregoing persons has had or will have a direct or indirect material interest.
The promoters of our company are our President, Chief Executive Officer who is also one of our directors, Paulo Martin, our Chief Financial Officer, corporate secretary who is also one of our directors, Chen (Jason) Wu, and our two other directors, Qi (Alan) Zhuang and Hai Feng Zhang.
On November 30, 2002, we issued 125,000 shares of our common stock at $0.04 per share to Mr. Paulo Martins in a private placement transaction. Mr. Martins paid the same per share price as every other subscriber in the private placement.
On November 30, 2002, we issued 56,250 shares of our common stock at $0.04 per share to Mr. Chen (Jason) Wu in a private placement transaction. Mr. Wu paid the same per share price as every other subscriber in the private placement.
On November 30, 2002, we issued 125,000 shares of our common stock at $0.04 per share to Mr. Qi (Alan) Zhuang in a private placement transaction. Mr. Zhuang paid the same per share price as every other subscriber in the private placement.
- 29 -
On November 30, 2002, we issued 25,000 shares of our common stock at $0.04 per share to Mr. Hai Feng Zhang in a private placement transaction. Mr. Zhang paid the same per share price as every other subscriber in the private placement.
Since February of 2002, our Chief Financial Officer who is also one of our directors, Chen (Jason) Wu, has been providing us with technical services in the basic design and setting up of our Internet textile trade center. We entered into a services agreement with Mr. Chen (Jason) Wu for his technical services and under the services agreement we will pay Mr. Chen (Jason) Wu an amount as determined by our directors in view of Mr. Chen (Jason) Wu's contribution to our company and the funds available to us for compensation of contractors and employees.
PLAN OF DISTRIBUTION
The selling stockholders may, from time to time, sell all or a portion of the shares of common stock on any market upon which the common stock may be quoted, in privately negotiated transactions or otherwise. Our common stock is not currently listed on any national exchange or electronic quotation system. These sales may be at fixed prices or at negotiated prices. The shares of common stock may be sold by the selling stockholders by one or more of the following methods, without limitation:
(a) block trades in which the broker or dealer so engaged will attempt to sell the shares of common stock as agent but may position and resell a portion of the block as principal to facilitate the transaction;
(b) purchases by broker or dealer as principal and resale by the broker or dealer for its account pursuant to this prospectus;
(c) an exchange distribution in accordance with the rules of the exchange;
(d) ordinary brokerage transactions and transactions in which the broker solicits purchasers;
(e) privately negotiated transactions;
(g) a combination of any aforementioned methods of sale; and
(h) any other method permitted pursuant to applicable law.
The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144.
In the event of the transfer by any selling stockholder of his or her shares to any pledgee, donee or other transferee, we will amend this prospectus and the registration statement of which this prospectus forms a part by the filing of a post-effective amendment in order to have the pledgee, donee or other transferee in place of the selling stockholder who has transferred his or her shares.
In effecting sales, brokers and dealers engaged by the selling stockholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from the selling stockholders or, if any of the broker-dealers act as an agent for the purchaser of such shares, from the purchaser in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. Broker-dealers may agree with the selling stockholders to sell a specified number of the shares of common stock at a stipulated price per share. Such an agreement may also require the broker-dealer to purchase as principal any unsold shares of common stock at the price required to fulfil the broker-dealer commitment to the selling stockholders if such broker-dealer is unable to sell the shares on behalf of the selling stockholders. Broker-dealers who acquire shares of common stock as principal may thereafter resell the shares of common stock from time to time in transactions which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above. Such sales by a broker-dealer could be at prices and on terms then prevailing at the time of sale, at
- 30 -
prices related to the then-current market price or in negotiated transactions. In connection with such resales, the broker-dealer may pay to or receive from the purchasers of the shares, commissions as described above.
The selling stockholders and any broker-dealers or agents that participate with the selling stockholders in the sale of the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act in connection with these sales. In that event, any commissions received by the broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
From time to time, the selling stockholders may pledge their shares of common stock pursuant to the margin provisions of their customer agreements with their brokers. Upon a default by a selling stockholder, the broker may offer and sell the pledged shares of common stock from time to time. Upon a sale of the shares of common stock, the selling stockholders intend to comply with the prospectus delivery requirements, under the Securities Act, by delivering a prospectus to each purchaser in the transaction. We intend to file any amendments or other necessary documents in compliance with the Securities Act which may be required in the event any selling stockholder defaults under any customer agreement with brokers.
To the extent required under the Securities Act, a post effective amendment to this registration statement will be filed, disclosing, the name of any broker-dealers, the number of shares of common stock involved, the price at which the common stock is to be sold, the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable, that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus and other facts material to the transaction.
We and the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations under it, including, without limitation, Rule 10b-5 and, insofar as the selling stockholders are distribution participants and we, under certain circumstances, may be a distribution participant, Regulation M. All of the foregoing may affect the marketability of the common stock.
All expenses of the registration statement including, but not limited to, legal, accounting, printing and mailing fees are and will be borne by us. Any commissions, discounts or other fees payable to brokers or dealers in connection with any sale of the shares of common stock will be borne by the selling stockholders, the purchasers participating in such transaction, or both.
Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Pacific Corporate Trust Company (10th Floor, 625 Howe Street, Vancouver, B.C. V6C 3B8).
SELLING STOCKHOLDERS
All of the shares of common stock issued are being offered by the selling stockholders listed in the table below. We issued the shares of common stock in a private placement transaction exempt from registration under the Securities Act pursuant to Regulation S.
The selling stockholders may offer and sell, from time to time, any or all of their common stock. Because the selling stockholders may offer all or only some portion of the shares of common stock listed in the table, no estimate can be given as to the amount or percentage of these shares of common stock that will be held by the selling stockholders upon termination of the offering.
The following table sets forth certain information regarding the beneficial ownership of shares of common stock by the selling stockholders as of April 30, 2002, and the number of shares of common stock covered by this
- 31 -
prospectus. The number of shares in the table represents an estimate of the number of shares of common stock to be offered by the selling stockholders.
|
Name of Selling
|
Number of
|
Percent of Total
|
Total Shares
|
Number of Shares
|
|
|
# of Shares |
% of Class |
||||
|
Feng Li Lu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Gen Mei Xu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Guo Qiang Zhu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Lai Gen Yao |
25,000 |
1% |
25,000 |
0 |
0% |
|
Fa Mei Chen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Jie Min Qian |
25,000 |
1% |
25,000 |
0 |
0% |
|
Bao Kun Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Hui Zhen Hong |
25,000 |
1% |
25,000 |
0 |
0% |
|
Shui Wen Bian |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xin Qin Qiu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xin Quan Shi |
25,000 |
1% |
25,000 |
0 |
0% |
|
Qun Huang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xing Fang Liu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Qin Fang Zhong |
25,000 |
1% |
25,000 |
0 |
0% |
|
Fa Ming Wu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Qin Fang Chen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xin Mei Yang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Ju Fen Yao |
25,000 |
1% |
25,000 |
0 |
0% |
|
Min Yuan |
25,000 |
1% |
25,000 |
0 |
0% |
|
Qi Zhuang, Director |
125,000 |
5% |
125,000 |
0 |
0% |
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|
Name of Selling
|
Number of
|
Percent of Total
|
Total Shares
|
Number of Shares
|
|
|
Xing Hua Shi |
25,000 |
1% |
25,000 |
0 |
0% |
|
Jian Ping Zhou |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xiao Jie Cai |
25,000 |
1% |
25,000 |
0 |
0% |
|
Zhong Hua |
25,000 |
1% |
25,000 |
0 |
0% |
|
Le Yan Wang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Mei Ling Yao |
25,000 |
1% |
25,000 |
0 |
0% |
|
Li Ying Yang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Ping Qiu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xin Wen Zhang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xiao Mao Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Lin Mei Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
He Ping Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Jin Lian Qiu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Wen Bin Xu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Quan Rong Pan |
25,000 |
1% |
25,000 |
0 |
0% |
|
Yue Hua Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Yue Qiao Huang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Quan Mei Fang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Zhen Na Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Hui Qin Shi |
25,000 |
1% |
25,000 |
0 |
0% |
|
Hai Feng Zhang, Director |
25,000 |
1% |
25,000 |
0 |
0% |
|
Mei Lin Fei |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xia Xiao |
25,000 |
1% |
25,000 |
0 |
0% |
- 33 -
|
Name of Selling
|
Number of
|
Percent of Total
|
Total Shares
|
Number of Shares
|
|
|
Yan Hong Wang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Luo Jin Ying |
25,000 |
1% |
25,000 |
0 |
0% |
|
Ling Mei Ma |
25,000 |
1% |
25,000 |
0 |
0% |
|
Yong Mei Hu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Ji Rong Yang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Wei Xiang Zheng |
25,000 |
1% |
25,000 |
0 |
0% |
|
Jiang Min Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Jian Hua Jiang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xin Quan Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Gen Zhu Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Ju Mei Zhou |
25,000 |
1% |
25,000 |
0 |
0% |
|
Jian Mei Shi |
25,000 |
1% |
25,000 |
0 |
0% |
|
Ming Fang Xu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xiang Ting Li |
25,000 |
1% |
25,000 |
0 |
0% |
|
Hong Xue Wu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Zhong Zhen Hua |
25,000 |
1% |
25,000 |
0 |
0% |
|
Ji Wei Wang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Jin Feng Lu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Hong Xu |
25,000 |
1% |
25,000 |
0 |
0% |
|
Li Hua Zhou |
25,000 |
1% |
25,000 |
0 |
0% |
|
Hua Ying Shi |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xiang Lin Shen |
25,000 |
1% |
25,000 |
0 |
0% |
|
Jian Jun Qian |
25,000 |
1% |
25,000 |
0 |
0% |
- 34 -
|
Name of Selling
|
Number of
|
Percent of Total
|
Total Shares
|
Number of Shares
|
|
|
Shui Ling Jiang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Chen Yang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Mo Fa bao |
25,000 |
1% |
25,000 |
0 |
0% |
|
Ling Li Zhang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xin Gen Zhang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Mao Mao Shi |
25,000 |
1% |
25,000 |
0 |
0% |
|
Wen Long Ru |
25,000 |
1% |
25,000 |
0 |
0% |
|
Feng Xiang Yang |
25,000 |
1% |
25,000 |
0 |
0% |
|
Hong Mei Shi |
25,000 |
1% |
25,000 |
0 |
0% |
|
Xin Ping Yuan |
25,000 |
1% |
25,000 |
0 |
0% |
|
Paulo Martins, Director, Chief Executive Officer, President and Treasurer |
125,000 |
5% |
125,000 |
0 |
0% |
|
Maria Martins |
120,000 |
4.8% |
120,000 |
0 |
0% |
|
Emily Read |
5,000 |
0.2% |
5,000 |
0 |
0% |
|
Udaya Madanayake |
25,000 |
1% |
25,000 |
0 |
0% |
|
Yi Jian Chen |
56,250 |
2.25% |
56,250 |
0 |
0% |
|
Wen Jie Zhao |
56,250 |
2.25% |
56,250 |
0 |
0% |
|
Kai Kang |
56,250 |
2.25% |
56,250 |
0 |
0% |
|
Chen (Jason) Wu, Director, Chief Financial Officer and Secretary |
56,250 |
2.25% |
56,250 |
0 |
0% |
(1) Assumes all of the shares of common stock offered are sold. The percentage are based upon 2,500,000 shares of common stock issued and outstanding on April 30, 2002.
We may require the selling security holders to suspend the sales of the securities offered by this prospectus upon the occurrence of any event that makes any statement in this prospectus or the related registration statement
- 35 -
untrue in any material respect or that requires the changing of statements in these documents in order to make statements in those documents not misleading.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 25,000,000 shares of common stock, $0.001 par value. As of April 30, 2002, there were 2,500,000 shares of common stock issued and outstanding. All outstanding shares of common stock are fully paid and non-assessable. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders, including the election of directors.
Each stockholder is entitled to receive the dividends as may be declared by our board of directors out of funds legally available for dividends and, in the event of liquidation, to share pro rata in any distribution of our assets after payment of liabilities. Our board of directors is not obligated to declare a dividend. Any future dividends will be subject to the discretion of our board of directors and will depend upon, among other things, future earnings, the operating and financial condition of Titanium, its capital requirements, general business conditions and other pertinent factors. It is not anticipated that dividends will be paid in the foreseeable future.
Stockholders do not have preemptive rights to subscribe for additional shares of common stock if issued by us. There are no conversion, redemption, sinking fund or similar provisions regarding the common stock.
LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholders are an adverse party or has a material interest adverse to us.
LEGAL MATTERS
The validity of the shares of common stock offered by the selling stockholders will be passed upon by the law firm of Woodburn and Wedge, Nevada, United States.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
We engaged Davidson & Company, chartered accountants, to audit our financial statements for the period ended December 31, 2001. There has been no change in the accountants and no disagreements with Davidson & Company on any matter of accounting principles or practices, financial statement disclosure, or auditing scope procedure.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis or had, or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents, subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer or employee.
EXPERTS
Our financial statements for the period ended December 31, 2001 included in this prospectus and registration statement have been audited by Davidson & Company, independent chartered accountants, as set forth in their report accompanying the financial statements (which contains an explanatory paragraph regarding
- 36 -
Titanium's ability to continue as a going concern) and are included in reliance upon the report, given on the authority of the firm, as experts in accounting and auditing.
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Currently there is no established public trading market for our common stock. We do not have any common stock subject to outstanding options or warrants to purchase and there are no securities outstanding that are convertible into our common stock. We are registering 2,500,000 shares of our common stock under the Securities Act for sale by the selling securities holders named in this prospectus. There are current 84 holders of record of our common stock. A total of 2,500,000 shares of our common stock will be available for resale to the public after November 30, 2002 in accordance with the volume and trading limitation of Rule 144 under the Securities Act.
We have not declared any dividend on our common stock since the inception of our company on August 20, 2001. There is no restriction in our Articles of Incorporation and Bylaws that will limit our ability to pay dividends on our common stock. However, we do not anticipate declaring and paying dividends to our shareholders in the near future.
WHERE YOU CAN FIND MORE INFORMATION
We are not required to deliver an annual report to our stockholders but will voluntarily send an annual report, together with our annual audited financial statements. We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. Our Securities and Exchange Commission filings are available to the public over the Internet at the SEC's website at http://www.sec.gov.
You may also read and copy any materials we file with the Securities and Exchange Commission at the SEC's public reference room at 450 Fifth Street N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms.
We have filed with the Securities and Exchange Commission a registration statement on Form SB-2, under the Securities Act with respect to the securities offered under this prospectus. This prospectus, which forms a part of that registration statement, does not contain all information included in the registration statement. Certain information is omitted and you should refer to the registration statement and its exhibits. With respect to references made in this prospectus to any contract or other document of Titanium, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract or document. You may review a copy of the registration statement at the SEC's public reference room, and at the SEC's regional offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, 13th Floor, New York, New York 10048. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our filings and the registration statement can also be reviewed by accessing the SEC's website at http://www.sec.gov.
No finder, dealer, sales person or other person has been authorized to give any information or to make any representation in connection with this offering other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by Titanium Intelligence, Inc. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that the information contained herein is correct as of any time subsequent to the date of this prospectus.
- 37 -
FINANCIAL STATEMENTS
Our financial statements are stated in United States Dollars (US$) and are prepared in conformity with generally accepted accounting principles of the United States of America.
The following Financial Statements pertaining to Titanium are filed as part of this Prospectus:
|
Name |
Pages |
|
Titanium Intelligence, Inc. (audited) |
|
|
Independent Auditors' Report, dated April 19, 2002 |
F-2 |
|
Balance Sheet as at December 31, 2001 |
F-3 |
|
Statement of Operations for the period ended December 31, 2001 |
F-4 |
|
Statement of Stockholders' Equity for the period ended December 31, 2001 |
F-5 |
|
Statement of Cash Flows for the period ended December 31, 2001. |
F-6 |
|
Notes to the Financial Statements. |
F-7 |
TITANIUM INTELLIGENCE, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
(Expressed in United States Dollars)
DECEMBER 31, 2001
F-2
DAVIDSON & COMPANY
Chartered Accountants
A Partnership of Incorporated Professionals
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of
Titanium Intelligence, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Titanium Intelligence, Inc. as at December 31, 2001 and the related statements of operations, stockholders' equity and cash flows for the period from incorporation on August 20, 2001 to December 31, 2001. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards in the United States of America. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2001 and the results of its operations and its cash flows for the period from incorporation on August 20, 2001 to December 31, 2001 in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company is dependent upon financing to continue operations. This matter raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regards to this matter are discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
"DAVIDSON & COMPANY"
|
Vancouver, Canada |
Chartered Accountants |
|
April 19, 2002 |
TITANIUM INTELLIGENCE, INC.
(A Development Stage Company)
BALANCE SHEET
(Expressed in United States Dollars)
AS AT DECEMBER 31, 2001
History and organization of the Company (Note 1)
The accompanying notes are an integral part of these financial statements.
F-4
TITANIUM INTELLIGENCE, INC.
EXPENSES
Professional fees
$ (5,125)
OTHER ITEM
Interest income
64
Loss for the period
$ (5,061)
Basic and diluted loss per share
$ (0.01)
Weighted average number of shares of common stock outstanding
601,504
The accompanying notes are an integral part of these financial statements.
F-5
TITANIUM INTELLIGENCE, INC.
|
|
|
|
|
|
|
|
|
|
|
Paid-in
|
Development
|
Stockholders'
|
|
Balance, August 20, 2001 |
- |
$ - |
$ - |
- |
$ - |
|
(Date of incorporation) |
|||||
|
Common stock issued for cash |
|||||
|
at $0.04 per share |
2,500,000 |
2,500 |
97,500 |
- |
100,000 |
|
Loss for the period |
- |
- |
- |
(5,061 ) |
(5,061 ) |
|
Balance, December 31, 2001 |
2,500,000 |
$ 2,500 |
$ 97,500 |
$ (5,061) |
$ 94,939 |
The accompanying notes are an integral part of these financial statements.
F-6
TITANIUM INTELLIGENCE, INC.
The accompanying notes are an integral part of these financial statements.
F-7
TITANIUM INTELLIGENCE, INC.
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on August 20, 2001 under the Laws of the State of Nevada. The Company intends to develop a website into an online marketplace linking manufacturers and exporters of textile products in China to traders and wholesale buyers around the world. The Company is considered to be a development stage company as it has not generated revenues from operations.
2. GOING CONCERN
These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America with the on-going assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. However, certain conditions noted below currently exist which raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
The operations of the Company have primarily been funded by the issuance of capital stock. Continued operations of the Company are dependent on the Company's ability to complete equity financings or generate profitable operations in the future. Management's plan in this regard is to secure additional funds through future equity financings. Such financings may not be available or may not be available on reasonable terms.
Deficit accumulated during the development stage
$ (5,061)
Working capital
94,939
December 31,
2001
3. SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America. The significant accounting policies adopted by the Company are as follows:
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
F-8
TITANIUM INTELLIGENCE, INC.
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Foreign currency translation
Transaction amounts denominated in foreign currencies are translated at exchange rates prevailing at transaction dates. Carrying values of monetary assets and liabilities are adjusted at each balance sheet date to reflect the exchange rate at that date. Non-monetary assets and liabilities are translated at the exchange rate on the original transaction date. Gains and losses from restatement of foreign currency monetary and non-monetary assets and liabilities are included in the statement of operations. Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in the statement of operations.
Cash and cash equivalents
The Company considers cash held at banks and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents.
Income taxes
A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expenses (benefit) result from the net change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Loss per share
Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share takes into consideration shares of common stock outstanding (computed under basic loss per share) and potentially dilutive shares of common stock.
F-9
TITANIUM INTELLIGENCE, INC.
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Recent accounting pronouncements
In June 2001, the Financial Accounting Standards Board ("FASB") approved the issuance of Statements of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141") and Statements of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141 requires that all business combinations be accounted for using the purchase method of accounting making the use of the pooling-of-interest method prohibited. This statement also establishes criteria for separate recognition of intangible assets acquired in a purchase business combination. SFAS 141 is effective for business combinations completed after June 30, 2001. SFAS 142 requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment. The statement is effective for fiscal years beginning after December 15, 2001, and is required to be applied at the beginning of an entity's fiscal year and to be applied to all goodwill and other intangible assets recognized in its financial statements at that date. Impairment losses for goodwill and indefinite-lived intangible assets that arise due to the initial application of this statement (resulting from a transitional impairment test) are to be reported as resulting from a change in accounting principle. Under an exception to the date at which this statement becomes effective, goodwill and intangible assets acquired after June 30, 2001, will be subject immediately to the non-amortization and amortization provisions of this statement.
In July 2001, FASB issued Statements of Financial Accounting Standards No. 143 "Accounting for Asset Retirement Obligations" ("SFAS 143") that records the fair value of the liability for closure and removal costs associated with the legal obligations upon retirement or removal of any tangible long-lived assets. The initial recognition of the liability will be capitalized as part of the asset cost and depreciated over its estimated useful life. SFAS 143 is required to be adopted effective January 1, 2003.
In October 2001, FASB issued Statements of Financial Accounting Standards No. 144, "Accounting for the Impairment on Disposal of Long-lived Assets" ("SFAS 144"), which supersedes Statements of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of". SFAS 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less cost to sell. Additionally, SFAS 144 expands the scope of discontinued operations to include all components of an entity with operations that (1) can be distinguished from the rest of the entity and (2) will be eliminated from the ongoing operations of the entity in a disposal transaction. SFAS 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001, and, generally, its provisions are to be applied prospectively.
The adoption of these new pronouncements is not expected to have a material effect on the Company's financial position or results of operations.
4. DUE TO RELATED PARTY
|
|
||
|
Due to the President of the Company, unsecured, non-interest bearing with no fixed terms of repayment |
|
F-10
TITANIUM INTELLIGENCE, INC.
5. COMMON STOCK
On November 30, 2001, the Company issued 2,500,000 shares of common stock at a price of $0.04 per share for total proceeds of $100,000.
Common shares
The common shares of the Company are all of the same class, are voting and entitle stockholders to receive dividends. Upon liquidation or wind-up, stockholders are entitled to participate equally with respect to any distribution of net assets or any dividends which may be declared.
Additional paid-in capital
The excess of proceeds received for shares of common stock over their par value of $0.001, less share issue costs, is credited to additional paid-in capital.
6. INCOME TAXES
A reconciliation of income taxes at statutory rates with the reported taxes is as follows:
|
Loss before income taxes |
(5,061) |
|
|
Income tax recovery |
$ 1,800 |
|
|
Unrecognized benefit of operating loss carryforwards |
(1,800 ) |
|
|
Income tax recovery |
$ - |
Significant components of the Company's deferred tax assets based on statutory tax rates are as follows:
Deferred tax assets:
Operating loss carryforwards
$ 1,800
Valuation allowance
(1,800
Net deferred tax assets
$ -
The Company has approximately $5,200 of operating loss carryforwards which expire beginning in 2021.
The Company has provided a valuation allowance against its deferred tax assets given that it is in the development stage and it is more likely than not that these benefits will not be realized.
F-11
TITANIUM INTELLIGENCE, INC.
7. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents, accounts payable and accrued liabilities and due to related party. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximate their carrying values, unless otherwise noted.
8. SUBSEQUENT EVENT
On February 1, 2002, the Company entered into an agreement with a director of the Company whereby the director will provide technical services in connection with the design and set-up of the Company's website in exchange for fees to be determined based on the director's contributions to and the funds available in the Company.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24 Indemnification of Directors and Officers.
Nevada corporation law provides that:
- a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful;
- a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper; and
- to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense.
We may make any discretionary indemnification only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made:
- by our stockholders;
- by our board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding;
- if a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion;
- if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion; or
- by court order.
II-2
Our Certificate of Incorporation and Articles provide that no director or officer shall be personally liable to Titanium or any of its stockholders for damages for breach of fiduciary duty as a director or officer involving any act or omission of such director or officer unless such acts or omissions involve material misconduct, fraud or a knowing violation of law, or the payment of dividends in violation of the General Corporate Law of Nevada.
Our Bylaws provide that no officer or director shall be personally liable for any obligations of Titanium or for any duties or obligations arising out of any acts or conduct of the officer or director performed for or on behalf of Titanium. The Bylaws also state that we will indemnify and hold harmless each person and their heirs and administrators who shall serve at any time hereafter as a director or officer from and against any and all claims, judgments and liabilities to which such persons shall become subject by reason of their having heretofore or hereafter been a director or officer, or by reason of any action alleged to have heretofore or hereafter taken or omitted to have been taken by him or her as a director or officer. We will reimburse each such person for all legal and other expenses reasonably incurred by him in connection with any such claim or liability, including power to defend such persons from all suits or claims as provided for under the provisions of the General Corporate Law of Nevada; provided, however, that no such persons shall be indemnified against, or be reimbursed for, any expense incurred in connection with any claim or liability arising out of his (or her) own negligence or wilful misconduct. Our By-Laws also provide that we, our directors, officers, employees and agents will be fully protected in taking any action or making any payment, or in refusing so to do in reliance upon the advice of counsel.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Titanium under Nevada law or otherwise, Titanium has been advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities (other than payment by Titanium for expenses incurred or paid by a director, officer or controlling person of Titanium in successful defense of any action, suit, or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered, Titanium 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 of whether such indemnification by it is against public policy in said Act and will be governed by the final adjudication of such issue.
Item 25 Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses payable by us in connection with the issuance and distribution of the securities being registered hereunder. No expenses shall be borne by the selling stockholders. All of the amounts shown are estimates, except for the SEC Registration Fees.
|
SEC registration fees |
$123.90 |
|
Printing and engraving expenses |
$5,000 (1) |
|
Accounting fees and expenses |
$10,000 (1) |
|
Legal fees and expenses |
$35,000 (1) |
|
Transfer agent and registrar fees |
$5,000 (1) |
|
Fees and expenses for qualification under state
|
$0 |
|
Miscellaneous |
$1,000 (1) |
|
Total |
$56,123.90 |
(1)
We have estimated these amounts
II-3
Item 26 Recent Sales of Unregistered Securities - Last Three Years.
On November 30, 2001, we accepted subscription agreements that sold the following shares, having a par value of $0.001 per share, to the following persons, at the offering price of $0.04 per share for gross offering proceeds of $100,000, in offshore transactions pursuant to Regulation S of the Securities Act. The offering price for the offshore transactions was established on an arbitrary basis. All of the following persons are not U.S. persons, as the term is defined under Regulation S and the sales of our common stock to the following person are made in offshore transactions as the term is defined under Regulation S:
|
Name of Stockholder |
Residency |
Number of Shares Subscribed |
|
Feng Li Lu |
Zhejiang, China |
25,000 |
|
Gen Mei Xu |
Zhejiang, China |
25,000 |
|
Guo Qiang Zhu |
Zhejiang, China |
25,000 |
|
Lai Gen Yao |
Zhejiang, China |
25,000 |
|
Fa Mei Chen |
Zhejiang, China |
25,000 |
|
Jie Min Qian |
Zhejiang, China |
25,000 |
|
Bao Kun Shen |
Zhejiang, China |
25,000 |
|
Hui Zhen Hong |
Zhejiang, China |
25,000 |
|
Shui Wen Bian |
Zhejiang, China |
25,000 |
|
Xin Qin Qiu |
Zhejiang, China |
25,000 |
|
Xin Quan Shi |
Zhejiang, China |
25,000 |
|
Qun Huang |
Zhejiang, China |
25,000 |
|
Xing Fang Liu |
Zhejiang, China |
25,000 |
|
Qin Fang Zhong |
Zhejiang, China |
25,000 |
|
Fa Ming Wu |
Zhejiang, China |
25,000 |
|
Qin Fang Chen |
Zhejiang, China |
25,000 |
|
Xin Mei Yang |
Zhejiang, China |
25,000 |
|
Ju Fen Yao |
Zhejiang, China |
25,000 |
|
Min Yuan |
Zhejiang, China |
25,000 |
|
Qi Zhuang |
Zhejiang, China |
125,000 |
II-4
|
Name of Stockholder |
Residency |
Number of Shares Subscribed |
|
Xing Hua Shi |
Zhejiang, China |
25,000 |
|
Jian Ping Zhou |
Zhejiang, China |
25,000 |
|
Xiao Jie Cai |
Zhejiang, China |
25,000 |
|
Zhong Hua |
Zhejiang, China |
25,000 |
|
Le Yan Wang |
Zhejiang, China |
25,000 |
|
Mei Ling Yao |
Zhejiang, China |
25,000 |
|
Li Ying Yang |
Zhejiang, China |
25,000 |
|
Ping Qiu |
Zhejiang, China |
25,000 |
|
Xin Wen Zhang |
Zhejiang, China |
25,000 |
|
Xiao Mao Shen |
Zhejiang, China |
25,000 |
|
Lin Mei Shen |
Zhejiang, China |
25,000 |
|
He Ping Shen |
Zhejiang, China |
25,000 |
|
Jin Lian Qiu |
Zhejiang, China |
25,000 |
|
Wen Bin Xu |
Zhejiang, China |
25,000 |
|
Quan Rong Pan |
Zhejiang, China |
25,000 |
|
Yue Hua Shen |
Zhejiang, China |
25,000 |
|
Yue Qiao Huang |
Zhejiang, China |
25,000 |
|
Quan Mei Fang |
Zhejiang, China |
25,000 |
|
Zhen Na Shen |
Zhejiang, China |
25,000 |
|
Hui Qin Shi |
Zhejiang, China |
25,000 |
|
Hai Feng Zhang |
Zhejiang, China |
25,000 |
|
Mei Lin Fei |
Zhejiang, China |
25,000 |
|
Xia Xiao |
Zhejiang, China |
25,000 |
|
Yan Hong Wang |
Zhejiang, China |
25,000 |
|
Luo Jin Ying |
Zhejiang, China |
25,000 |
II-5
|
Name of Stockholder |
Residency |
Number of Shares Subscribed |
|
Ling Mei Ma |
Zhejiang, China |
25,000 |
|
Yong Mei Hu |
Zhejiang, China |
25,000 |
|
Ji Rong Yang |
Zhejiang, China |
25,000 |
|
Wei Xiang Zheng |
Zhejiang, China |
25,000 |
|
Jiang Min Shen |
Zhejiang, China |
25,000 |
|
Jian Hua Jiang |
Zhejiang, China |
25,000 |
|
Xin Quan Shen |
Zhejiang, China |
25,000 |
|
Gen Zhu Shen |
Zhejiang, China |
25,000 |
|
Ju Mei Zhou |
Zhejiang, China |
25,000 |
|
Jian Mei Shi |
Zhejiang, China |
25,000 |
|
Ming Fang Xu |
Zhejiang, China |
25,000 |
|
Xiang Ting Li |
Zhejiang, China |
25,000 |
|
Hong Xue Wu |
Zhejiang, China |
25,000 |
|
Zhong Zhen Hua |
Zhejiang, China |
25,000 |
|
Ji Wei Wang |
Guangdong, China |
25,000 |
|
Jin Feng Lu |
Zhejiang, China |
25,000 |
|
Hong Xu |
Zhejiang, China |
25,000 |
|
Li Hua Zhou |
Zhejiang, China |
25,000 |
|
Hua Ying Shi |
Zhejiang, China |
25,000 |
|
Xiang Lin Shen |
Zhejiang, China |
25,000 |
|
Jian Jun Qian |
Zhejiang, China |
25,000 |
|
Shui Ling Jiang |
Zhejiang, China |
25,000 |
|
Chen Yang |
Zhejiang, China |
25,000 |
|
Mo Fa Bao |
Zhejiang, China |
25,000 |
|
Ling Li Zhang |
Zhejiang, China |
25,000 |
II-6
|
Name of Stockholder |
Residency |
Number of Shares Subscribed |
|
Xin Gen Zhang |
Zhejiang, China |
25,000 |
|
Mao Mao Shi |
Zhejiang, China |
25,000 |
|
Wen Long Ru |
Zhejiang, China |
25,000 |
|
Feng Xiang Yang |
Zhejiang, China |
25,000 |
|
Hong Mei Shi |
Zhejiang, China |
25,000 |
|
Xin Ping Yuan |
Zhejiang, China |
25,000 |
|
Paulo Martins |
Linda A Velha, Portugal |
125,000 |
|
Maria Martins |
Linda A Velha, Portugal |
120,000 |
|
Emily Read |
Rome, Italy |
5,000 |
|
Udaya Madanayake |
Pannipitiya, Sri Lanka |
25,000 |
|
Yi Jian Chen |
Zhejiang, China |
56,250 |
|
Wen Jie Zhao |
Beijing, China |
56,250 |
|
Kai Kang |
Beijing, China |
56,250 |
|
Chen Wu |
Jiangsu, China |
56,250 |
Item 27 Exhibits.
The following Exhibits are filed with this Prospectus:
Exhibit
Number Description
3.1 Our Articles of Incorporation dated August 20, 2001
3.2. Bylaws
4.1 Specimen ordinary share certificate
5.1 Opinion of Woodburn and Wedge regarding the legality of the securities being registered
10.1 Services Agreement between Titanium Intelligence, Inc. and Chen (Jason) Wu dated February 1, 2002
10.2 Membership Agreement between Titanium Intelligence, Inc. and Zhejiang Weilain Group Company dated March 28, 2002
23.2 Consent of Davidson & Company
II-7
24.1 Power of Attorney (contained on the signature pages of this registration statement)
Item 28 Undertakings.
The undersigned Company hereby undertakes that it will:
(1) file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include:
(a) any prospectus required by Section 10(a)(3) of the Securities Act;
(b) reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(c) any additional or changed material information with respect to the plan of distribution not previously disclosed in the registration statement;
(2) for the purpose of determining any liability under the Securities Act, each of the post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof; and
(3) remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Titanium pursuant to the foregoing provisions, or otherwise, Titanium has been advised that in the opinion of the Commission that type of indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against said liabilities (other than the payment by Titanium of expenses incurred or paid by a director, officer or controlling person of Titanium in the successful defense of any action, suit or proceeding) is asserted by the director, officer or controlling person in connection with the securities being registered, Titanium will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of the issue.
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
II-8
SIGNATURES
In accordance with the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Vancouver, British Columbia on May 13, 2002.
TITANIUM INTELLIGENCE, INC.
a Nevada corporation
/s/ Paulo Martins
___________________________
By: Paulo Martins, President and CEO
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person who signature appears below constitutes and appoints Paulo Martins as his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or any of them, or of their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates stated.
Signatures
/s/ Paulo Martins
Paulo Martins, President, CEO and Director
May 13, 2002
/s/ Chen (Jason) Wu
Chen (Jason) Wu, CFO, Secretary and Director
May 13, 2002
/s/ Qi (Alan) Zhuang
Qi (Alan) Zhuang, Director
May 13, 2002
/s/ Hai Feng Zhang
Hai Feng Zhang, Director
May 13, 2002
ARTICLES OF INCORPORATION
OF
TITANIUM INTELLIGENCE, INC.
I, the undersigned, being the original incorporator herein named, for the purpose of forming a Corporation under the General Corporation Laws of the State of Nevada, to do business both within and without the State of Nevada, do make and file these Articles of Incorporation, hereby declaring and certifying that the facts herein stated are true:
ARTICLE I
NAME
The name of the Corporation is TITANIUM INTELLIGENCE, INC.
ARTICLE II
RESIDENT AGENT & REGISTERED OFFICE
Section 2.01. Resident Agent . The name and address of the Resident Agent for service of process is Nevada Corporate Headquarters, Inc., 101 Convention Center Driver, Suite 700, Las Vegas, NV 89109. Mailing Address: P.O. Box 27740, Las Vegas, NV 89126.
Section 2.02. Registered Office . The address of its Registered Office is 101 Convention Center Drive, Suite 700, Las Vegas, Nevada 89109.
Section 2.03. Other Offices . The Corporation may also maintain offices for the transaction of any business at such other places within or without the State of Nevada as it may from time to time determine. Corporate business of every kind and nature may be conducted, and meetings of Directors and Stockholders held outside the State of Nevada with the same effect as if in the State of Nevada.
ARTICLE III
PURPOSE
The Corporation is organized for the purpose of engaging in any lawful activity, within or without the State of Nevada.
ARTICLE IV
SHARES OF STOCK
Section 4.01 Number and Class . The Corporation shall authorize the issuance of a single class of Capital Stock in the amount of twenty-five million (25,000,000) shares of Common Stock, at $.001 par value.
I Notwithstanding the foregoing these Articles hereby vest the Board of Directors of the Corporation with such authority as may be necessary to prescribe such classes, series and numbers of each class or series of Stock. In addition the Board is hereby vested with such authority as may be necessary to prescribe the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of Stock created. All classes of Stock may be issued from time to time without action by the Stockholders.
Section 4.02. No Preemptive Rights . Unless otherwise determined by the Board of Directors, holders of the Stock of the Corporation shall not have any preference, preemptive right, or right of subscription to acquire any shares of the Corporation authorized, issued or sold, or to be authorized, issued or sold, and convertible into shares of the Corporation, nor to any right of subscription thereto.
Section 4.03. Non-Assessability of Shares . The Shares of the Corporation, after the amount of the subscription price has been paid, in money, property or services, as the Directors shall determine, shall not be subject to assessment to pay the debts of the Corporation, nor for any other purpose, and no Stock issued as fully paid shall ever be assessable or assessed, and the Articles of Incorporation shall not be amended in this particular.
ARTICLE V
DIRECTORS
Section 5.01. Governing Board . The members of the Governing Board of the Corporation shall be styled as Directors.
Section 5.02. Initial Board of Directors . The initial Board of Directors shall consist of not less than one (1), and not more than seven (7) members. The name and address of an initial member of the Board of Directors is as follows:
|
NAME |
ADDRESS |
|
Cort W. Christie |
P.O. Box 27740
|
This individual shall serve as Director until the first annual meeting of the Stockholders or until his successor(s) shall have been elected and qualified.
Section 5.03. Change in Number of Directors . The number of Directors may be increased or decreased by a duly adopted amendment to the Bylaws of the Corporation.
ARTICLE VI
INCORPORATOR
The name and address of the incorporator is Nevada Corporate Headquarters, Inc., P.O. Box 27740, Las Vegas, Nevada 89126.
ARTICLE VIl
PERIOD OF DURATION
The Corporation is to have a perpetual existence.
ARTICLE VIII
DIRECTORS' AND OFFICERS' LIABILITY
A Director or Officer of the Corporation shall not be personally liable to this Corporation or its Stockholders for damages for breach of fiduciary duty as a Director or Officer, but this Article shall not eliminate or limit the liability of a Director or Officer for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law or (ii) the unlawful payment of distributions. Any repeal or modification of this Article by the Stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a Director or Officer of the Corporation for acts or omissions prior to such repeal or modification.
ARTICLE IX
INDEMNITY
Every person who was or is a party to, or is threatened to be made a party to, or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he, or a person of whom he is the legal representative, is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another Corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability and loss (including attorneys' fees, judgments, fines and amounts paid or to be paid in settlements reasonably incurred or suffered by him in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of Officers and Directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the Director or Officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the Corporation. Such right of indemnification shall not be exclusive of any other right which such Directors, Officers or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any by-law, agreement, vote of Stockholders, provision of law, or otherwise, as well as their rights under this Article.
Without limiting the application of the foregoing, the Stockholders or Board of Directors may adopt by-laws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a Direct-or or Officer of the Corporation, or is or was serving at the request of the Corporation as Director or Officer of another Corporation, or as its representative in a partnership, joint venture, trust or other enterprises against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person.
The indemnification provided in this Article shall continue as to a person who has ceased to be a Director, Officer, Employee or Agent, and shall inure to the benefit of the heirs, executors and administrators of such person.
ARTICLE X
AMENDMENTS
Subject at all times to the express provisions of Section 4.03 which cannot be amended, this Corporation reserves the right to amend, alter, change, or repeal any provision contained in these Articles of Incorporation or its Bylaws, in the manner now or hereafter prescribed by statute or by these Articles of Incorporation or said Bylaws, and all rights conferred upon the Stockholders are granted subject to this reservation.
ARTICLE XI
POWERS OF DIRECTORS
In furtherance and not in limitation of the powers conferred by statute the Board of Directors is expressly authorized:
(1) Subject to the Bylaws, if any, adopted by the Stockholders, to make, alter or repeal the Bylaws of the Corporation;
(2) To authorize and cause to be executed mortgages and liens, with or
without limit as to amount, upon the real and personal property of the Corporation;
(3) To authorize the guaranty by the Corporation of securities, evidences of indebtedness and obligations of other persons, Corporations and business entities;
(4) To set apart out of any of the funds of the Corporation available for distributions a reserve or reserves for any proper purpose and to abolish any such reserve;
(5) By resolution, to designate one or more committees, each committee to consist of at least one Director of the Corporation, which, to the extent provided in the resolution or in the Bylaws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the Bylaws of the Corporation or as may be determined from time to time by resolution adopted by the Board of Directors; and
(6) To authorize the Corporation by its Officers or agents to exercise all such powers and to do all such acts and things as may be exercised or done by the Corporation, except and to the extent that any such statute shall require action by the Stockholders of the Corporation with regard to the exercising of any such power or the doing of any such act or thing.
In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the Board of Directors may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, except as otherwise provided herein and by law.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of August, 2001, hereby declaring and certifying that the facts stated hereinabove are true.
/s/ signed
Cort W. Christie
(For Nevada Corporate Headquarters, Inc.)
I, NEVADA CORPORATE HEADQUARTERS, INC. hereby accept as Resident Agent for the previously named Corporation on 20th day of August, 2001.
/s/ signed
Dianna R. Temple-Office Administrator
On behalf of Nevada Corporate Headquarters, Inc.
BYLAWS
OF
TITANIUM INTELLIGENCE, INC.
A Nevada Corporation
TABLE OF CONTENTS
TO THE
BYLAWS OF
TITANIUM INTELLIGENCE, INC.
|
Page |
|
|
ARTICLE 1 - OFFICES |
1 |
|
1.1. Registered Office |
1 |
|
1.2 Principal Executive Office |
1 |
|
1.3 Change of Location |
1 |
|
1.4 Other Offices |
1 |
|
ARTICLE 2 - MEETINGS OF SHAREHOLDERS |
1 |
|
2.1 Place of Meetings |
1 |
|
2.2. Annual Meetings |
1 |
|
2.3 Special Meetings |
2 |
|
2.4 Notice of Shareholders' Meetings |
2 |
|
2.5 Manner of Giving Notice; Affidavit of Notice |
3 |
|
2.6 Adjourned Meetings and Notice Thereof |
3 |
|
2.7 Voting at Meetings of Shareholders |
4 |
|
2.8 Record Date for Shareholder Notice, Voting and Giving Consents |
4 |
|
2.9 Quorum |
5 |
|
2.10 Waiver of Notice or Consent by Absent Shareholders |
5 |
|
2.11 Shareholder Action by Written Consent Without Meeting |
6 |
|
2.12 Proxies |
7 |
|
2.13 Inspectors of Election |
7 |
|
ARTICLE 3 - DIRECTORS |
8 |
|
3.1 Powers |
8 |
|
3.2 Number and Qualification of Directors |
9 |
|
3.3 Election and Term of Office |
9 |
|
3.4 Vacancies |
9 |
|
3.5 Removal of Directors |
10 |
|
3.6 Resignation of Director |
10 |
|
3.7 Place of Meeting |
10 |
|
3.8 Annual Meeting |
11 |
|
3.9 Special Meetings |
11 |
|
3.10 Adjournment |
11 |
|
3.11 Notice of Adjournment |
11 |
|
3.12 Waiver of Notice |
12 |
|
3.13 Quorum and Voting |
12 |
|
3.14 Fees and Compensation |
12 |
|
3.15 Action Without Meeting |
12 |
|
ARTICLE 4 - OFFICERS |
13 |
|
4.1 Officers |
13 |
|
4.2 Election |
13 |
|
4.3 Subordinate Officers |
13 |
|
4.4 Removal and Resignation |
13 |
|
4.5 Vacancies |
14 |
|
4.6 Chairman of the Board |
14 |
|
4.7 President |
14 |
|
4.8 Vice Presidents |
14 |
|
4.9 Secretary |
14 |
|
4.10 Assistant Secretaries |
15 |
|
4.11 Chief Financial Officer (Treasurer) |
15 |
|
4.12 Assistant Financial Officers |
15 |
|
4.13 Salaries |
16 |
|
ARTICLE 5 - SHARES OF STOCK |
16 |
|
5.1 Share Certificates |
16 |
|
5.2 Transfer of Shares |
16 |
|
5.3 Lost or Destroyed Certificate |
16 |
|
ARTICLE 6 - COMMITTEES |
17 |
|
6.1 Committees |
17 |
|
ARTICLE 7 - INDEMNIFICATION OF DIRECTORS, OFFICERS,
|
17 |
|
7.1 Agents, Proceedings and Expenses |
17 |
|
7.2 Indemnification |
18 |
|
7.3 Insurance |
18 |
|
ARTICLE 8 - RECORDS AND REPORTS |
18 |
|
8.1 Shareholder Inspection of Articles and Bylaws |
18 |
|
8.2 Maintenance and Inspection of Records and Shareholders |
18 |
|
8.3 Shareholder Inspection of Corporate Records |
19 |
|
8.4 Inspection by Directors |
19 |
|
8.5 Annual Statement of General Information |
20 |
|
ARTICLE 9 - MISCELLANEOUS |
20 |
|
9.1 Checks, Drafts, Evidence of Indebtedness |
20 |
|
9.2 Contracts, Etc., How Executed |
20 |
|
9.3 Representation of Shares of Other Corporations |
20 |
|
ARTICLE 10 - AMENDMENTS TO BYLAWS |
21 |
|
10.1 Amendment by Shareholders |
21 |
|
10.2 Amendment by Directors |
21 |
BYLAWS
OF
The registered office of the Corporation shall be in ____ _______ in the State of Nevada.
1.2 Principal Executive Office
The board of directors is hereby granted full power and authority to fix the location of the principal executive office for the transaction of the business of the Corporation.
1.3 Change of Location
The board of directors is hereby granted full power and authority to change the registered office from one location to another, and to fix the location of the principal executive office of the Corporation at any place within or outside the State of Nevada.
1.4 Other Offices
Branch or subordinate offices may at any time be established by the board of directors at any place or places where the Corporation is qualified to do business.
ARTICLE 2 - MEETINGS OF SHAREHOLDERS
2.1 Place of Meetings
All annual and all other meetings of shareholders shall be held at the location designated by the board of directors pursuant to a resolution or as set forth in a notice of the meeting, within or outside of the State of Nevada.
2.2 Annual Meetings
The annual meetings of shareholders shall be held on the first Tuesday of ____________ of each year, or on such other date or such other time as may be fixed by the board of directors.
2.3 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 of directors or the chairman of the board. Special meetings may not be called by any other person or persons. Each special meeting shall be held on such date and at such time as is determined by the person or persons calling the meeting.
2.4 Notice of Shareholders' Meetings
All notices of meetings of shareholders shall be sent or otherwise given in accordance with Section 2.5 hereof not less than ten (10) or more than sixty (60) days before the date of the meeting to each shareholder entitled to vote thereat. The notice shall specify the place, date and hour of the meeting.
In the case of a special meeting the notice shall specify the general nature of the business to be transacted and no other business may be transacted at the meeting.
In the case of the annual meeting the notice shall specify those matters which the board of directors, at the time of the mailing of the notice, intends to present for action by the shareholders, but any proper matter may be presented at the meeting. The notice shall also state the general nature of the business or proposal to be considered or acted upon at such meeting before action may be taken at such meeting for approval of (i) any transaction governed by section 78.140 of the General Corporation Law of Nevada including a proposal to enter into a contract or other transaction between the Corporation and one or more of its directors, or between the Corporation and any Corporation, firm or association in which one or more of the Corporation's directors has a material financial interest or in which one or more of its directors are directors; or (ii) a proposal to amend the articles of incorporation in any manner other than may be accomplished by the board of directors alone as permitted by section 78.380 of the General Corporation Law of Nevada; or (iii) a proposal to reorganize the Corporation under sections 78.411 through 78.466 of the General Corporation Law of Nevada; or (iv) a proposal to wind up and dissolve the Corporation under section 78.580 of the General Corporation Law of Nevada; or (v) if the Corporation is in the process of winding up and has both preferred and common shares outstanding, a proposal for a plan of distribution of the shares, obligations or securities of any other Corporation, domestic or foreign, or assets other than money which is not in accordance with the liquidation rights of the preferred shares as specified in the articles of incorporation of this Corporation.
The notice of any meeting at which directors are to be elected shall include the name of any candidates intended at the time of the notice to be presented by the board of directors for election. Shareholders who intend to present their own slate of candidates must give notice to the board of directors of the name(s), address(es) and telephone number(s) of such candidate(s) not less than seventy (70) days prior to the meeting date as set forth in these bylaws or by resolution of the board. Notice shall be deemed submitted to the board if it is delivered to the Secretary of the Corporation personally or by first-class mail, by telegraph, facsimile or other form of written communication, charges prepaid, addressed to the Corporation's registered office or principal executive office as designated by board of directors. Notice shall be deemed to have been given at the time delivered personally, deposited in the mail, delivered to a common carrier for transmission to the recipient, or actually transmitted by facsimile or electronic means to the recipient by the person given the notic e.
2.5 Manner of Giving Notice; Affidavit of Notice
Notice of any shareholders' meeting or any distribution of reports required by law to be given to shareholders shall be given to shareholders either personally or by first-class mail, by telegraph, facsimile or other form of written communication, charges prepaid, sent to each shareholder at the address of that shareholder appearing on the books of the Corporation or given by the shareholder to the Corporation for the purpose of notice. If no such address appears on the Corporation's books or has been so given, notice shall be deemed to have been given if sent to that shareholder by first-class mail, by telegraph, facsimile or other written communication to the Corporation's principal executive office, or if published at least once in a newspaper of general circulation in the county where that office is located. Notice shall be deemed to have been given at the time when delivered personally, deposited in the mail, delivered to a common carrier for transmission to the recipient, or actually transmitted by facsimile or other electronic means to the recipient by the person giving the notice.
If any notice or report sent to a shareholder at the address of that shareholder appearing on the books of the Corporation is returned to the Corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice or report to the shareholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if these shall be available to the shareholder on written demand of the shareholder at the principal executive office of the Corporation for a period of one year from the date of the giving of the notice or report to all other shareholders.
An affidavit of the mailing or other means of giving any notice of any shareholders' meeting or report may be executed by the secretary, assistant secretary, or any transfer agent of the Corporation giving the notice, and filed and maintained in the minute book of the Corporation.
2.6 Adjourned Meetings and Notice Thereof
Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the 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 such meeting except in the case of the withdrawal of a shareholder from a quorum as provided in Section 2.9 hereof.
When any shareholders' meeting, either annual or special, is adjourned for more than forty-five (45) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the provisions of Sections 2.4 and 2.5 hereof. Except as provided above, 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. The Corporation may transact any business at any adjourned meetings that might have been tra nsacted at the regular meeting.
2.7 Voting at Meetings of Shareholders
The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with the provisions of Section 2.8 hereof, subject to the provisions of sections 78.350 to 78.365, inclusive, of the General Corporation Law of Nevada. Each shareholder shall be entitled to one vote for each share of stock registered on the books of the Corporation in his name, whether represented in person or by proxy. Every shareholder entitled to vote shall have the right to vote in person, or as provided in Section 2.12 hereof, by proxy. The shareholders' vote may be by voice vote or by ballot; provided, however, that any election for directors must be by ballot if demanded by any shareholder before the voting has begun. On any matter other than the election of directors, any shareholder may vote part of the shares in favor of or in opposition to the proposal and refrain from voting the remaining shares, but if the shareholder fails to specify the number of shares which the shareholder is voting, it will be conclusively presumed that the shareholder's vote is with respect to all shares that the shareholder is entitled to vote.
The affirmative vote of a majority of the shares represented at the meeting and entitled to vote on any matter (which shares voting affirmatively also constitute at least a majority of the required quorum) shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the General Corporation Law of Nevada or by the articles of incorporation.
2.8 Record Date for Shareholder Notice, Voting and Giving Consents
In order that the Corporation may determine the shareholders entitled to notice of or to vote at, any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which record date: (1) in the case of determination of shareholders entitled to vote at any meeting of shareholders or adjournment thereof, shall, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting; (2) in the case of determination of shareholders entitled to express consent to corporate action in writing without a meeting, shall not be more than 10 days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (3) in the case of any other action, shall not be more than 60 days prior to such other action. If no record date is fixed: (1) the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the date next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining shareholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (3) the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
2.9 Quorum
A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at the meeting of shareholders. The shareholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum and by any greater number of shares otherwise required to take such action by applicable law or in the articles of incorporation. In the absence of a quorum, any meeting of shareholders may be adjourned from time to time by the vote of a majority of the shares represented either in person or by proxy, but no business may be transacted except as hereinabove provided.
2.10 Waiver of Notice or Consent by Absent Shareholders
The transactions of any meeting of shareholders, either annual or special, however called and noticed and wherever held, shall be as valid as though had 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 or after the meeting, each of the shareholders entitled to vote, who was not present in person or by proxy, signs a written waiver of notice or a consent to the holding of such meeting or an approval of the minutes thereof. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of shareholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in the second paragraph of Section 2.4 hereof, the waiver of notice or consent shall state the general nature of the proposal. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Attendance by a person at a meeting shall also constitute a waiver of notice of that meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice of the meeting if the objection is expressly made at the meeting.
2.11 Shareholder Action by Written Consent Without Meeting
Any action which may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Notwithstanding the previous sentence, directors may be elected by written consent without a meeting only if the unanimous written consent of all outstanding shares entitled to vote is obtained, except that a vacancy in the board (other than a vacancy created by removal of a director) not filled by the board may be filled by the written consent of the holders of a majority of the outstanding shares entitled to vote.
Unless the consents of all shareholders entitled to vote have been solicited in writing, the secretary shall give to those shareholders entitled to vote who have not consented in writing notice of such approval at least ten (10) calendar days before the consummation of the action authorized by such approval for any of the following:
(i) Any transaction governed by section 78.140 of the General Corporation Law of Nevada including contracts or other transactions between the Corporation and one or more of its directors, or between the Corporation and any Corporation, firm or association in which one or more of its directors has a direct or indirect financial interest or in which one or more of its directors are directors;
(v) In case the Corporation in the process of winding up has both preferred and common shares outstanding, a plan of distribution of the shares, obligations or securities of any other Corporation, domestic or foreign, or assets other than money which is not in accordance with the liquidation rights of the preferred shares as specified in the articles of incorporation.
Unless the consents of all shareholders entitled to vote have been solicited in writing, prompt notice shall be given of the taking of any other corporate action approved by shareholders without a meeting by less than unanimous written consent, to those shareholders entitled to vote who have not consented in writing. Such notice shall be given in accordance with Section 2.5 hereof.
All such waivers, consents or approvals shall be filed with the secretary of the Corporation and shall be maintained in the corporate records. Any shareholder giving a written consent, or the shareholder's proxyholders, or a transferee of the shares or a personal representative of the shareholder or their respective proxyholders, may revoke the consent by a writing received by the Corporation prior to the time that written consent of the number of shares required to authorize the proposed action has been filed with the secretary of the Corporation, but may not do so thereafter. Such revocation is effective upon its receipt by th e secretary of the Corporation.
2.12 Proxies
Every shareholder entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the shareholder. A proxy shall be deemed signed if the shareholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, facsimile or other electronic transmission, or otherwise) by the shareholder or the shareholder's attorney in fact. A validly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the Corporation stating that the proxy is revoked, or by a subsequent proxy executed by, or as to any meeting by attendance at the meeting and voting in person by, the person executing the proxy; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the Corporation before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of eleven (11) months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of section 78.355 of the Gen eral Corporation Law of Nevada.
2.13 Inspectors of Election
Before any meeting of shareholders, the board of directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If inspectors of election are not so appointed, the chairman of the meeting may, and on the request of any shareholder or a shareholder's proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (1) or three (3). If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one (1) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any shareholder or a shareholder's proxy shall, appoint a person to fill that vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.
Subject to the provisions of section 78.120 et seq. of the General Corporation Law of Nevada and any limitations in the articles of incorporation and the bylaws of this Corporation relating to action required to be approved by the shareholders or by the outstanding shares, or by a less than majority vote of a class or series of preferred shares, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors. The board may delegate the management of the day-to-day operation of the business of the Corporation to a management company or other person provided that the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the board.
3.2 Number and Qualification of Directors
The authorized number of directors of the Corporation shall not be less than one nor more than five with the exact number of directors to be fixed, within the limits specified, by approval of the board. Each director must be at least eighteen (18) years of age. A director need not be a shareholder of this Corporation or a resident of the State of Nevada. After the issuance of shares, a bylaw specifying or changing a fixed number of directors or the maximum or minimum number or changing from a fixed to a variable board or vice versa may only be adopted by approval of the majority of the outstanding shares entitled to vote; provided that an amendment reducing the number to less than five cannot be adopted if the votes cast against its adoption at a meeting or the shares not consenting in the case of action by written consent are equal to more than 16 2 / 3 percent of the outstanding shares entitled to vote.
3.3 Election and Term of Office
Except as provided in section 78.330 of the General Corporation Law of Nevada, at each annual meeting of shareholders, directors shall be elected to hold office until the next annual meeting. Each director, including the director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified.
Vacancies in the board of directors may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. Each director so elected shall hold office until his successor is elected at an annual or special meeting of the shareholders.
A vacancy or vacancies in the board of directors shall be deemed to exist in case of the death, resignation or removal of any director, or if the board of directors by resolution declares vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony, or if the authorized number of directors is 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.
The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors. If, after the filling of any vacancy by the directors, the directors then in office who have been elected by the shareholders shall constitute less than a majority of the directors then in office, any holder or holders of an aggregate of five percent (5%) or more of the total number of shares at the time outstanding having the right to vote for such directors may call a special meeting of the shareholders, to be held to elect the entire board of directors. If the board of directors accepts the resignation of a director tendered to take effect at a future time, the board or the shareholders shall have the power to elect a successor to take office when the resignation is to become effective.
No reduction of the authorized number of directors or amendment reducing the number of classes of directors shall have the effect of removing any director prior to the expiration of such director's term of office.
Any or all of the directors may be removed without cause if any such removal is approved by the outstanding shares, subject to the following: (1) Except for a Corporation whose board of directors is classified pursuant to section 78.330 of the General Corporation Law of Nevada, no director may be removed (unless the entire board of directors is removed) when the votes cast against removal, or not consenting in writing to the removal, would be sufficient to elect the director if voted cumulatively at an election at which the same total number of votes were cast, (or, if the action is taken by written consent, all shares entitled to vote were voted) and the entire number of directors authorized at the time of the directors' most recent election were then being elected, (2) When by the provisions of the articles of incorporation of this Corporation the holders of the shares of any class or series, voting as a class or series, are entitled to elect one or more directors, any director so elected may be removed only by the applicable vote of the holders of the shares of that class or series.
A director of a Corporation whose board of directors is classified pursuant to section 78.330 of the General Corporation Law of Nevada may not be removed if the votes cast against removal of the director, or not consenting in writing to the removal, would be sufficient to elect the director if voted cumulatively (without regard to whether shares may otherwise be voted cumulatively) at an election at which the same total number of votes were cast (or, if the action is taken by written consent, all shares entitled to vote were voted) and either the number of directors elected at the most recent annual meeting of shareholders, or if greater, the number of directors for whom removal is being sought, were then being elected.
Any director may resign effective upon giving written notice to the chairman of the board, the president, the secretary or the board of directors of the Corporation, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future date, a successor may be elected to take office when the resignation becomes effective.
Regular meetings of the board of directors shall be held at any place within or outside the State of Nevada which has been designated from time to time by resolution of the board of directors.
Special meetings of the board may be held either at a place within or outside the State of Nevada which has been designated by resolution of the board of directors or as set forth in a notice of the meeting.
Members of the board may participate in a meeting through use of a conference telephone or similar communication equipment, so long as all members participating in such meeting can hear one another. Participation in a meeting by means of the above-described procedure shall constitute presence in person at such meeting.
Immediately following each annual meeting of shareholders, the board of directors shall hold a regular meeting for the purpose of organization, election of officers and the transaction of other business. Notice of such meeting is hereby dispensed with.
Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairman of the board or the president or vice president or the secretary or any two directors.
Written notice of the date, time and place of special meetings shall be delivered personally to each director or sent to each director by first-class mail, telegraph, facsimile, e-mail or by other form of written communication, charges prepaid, sent to him at his address as it appears upon the records of the Corporation or, if it is not so shown or is not readily ascertainable, at the place in which the meetings of directors are regularly held. The notice need not state the purpose for the meeting. In case such notice is mailed, it shall be deposited in the United States mail at least four (4) days prior to the time of the meeting. In case such notice is delivered personally, transmitted by facsimile or other electronic means, or telegraphed, it shall be so delivered, deposited with the telegraph company or electronically transmitted at least twenty-four (24) hours prior to the time of the meeting. Such delivery, mailing, telegraphing, or transmitting as above provided, shall be due, legal and personal notice to such director. Notice of a meeting need not be given to any director who signs a waiver of notice, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such director.
A majority of the directors present, whether or not a quorum is present, may adjourn any directors' meeting to another time and place.
3.11 Notice of Adjournment
If a meeting is adjourned for more than twenty-four (24) hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of adjournment.
The transactions at any meeting of the board of directors, however called and noticed, or wherever held, shall be as valid as though such transactions had occurred at a meeting 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 signs a written waiver of notice of or consent to holding the 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. The waiver of notice need not state the purpose for which the meeting is or was held.
A majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinabove provided. In no event shall a quorum be less than two (2) unless the authorized number of directors is one (1), in which case one (1) director constitutes a quorum. Every act or decision done or made by a majority of the directors at a meeting duly held at which a quorum is present shall be regarded as an act of the board of directors subject to the provisions of section 78.140 of the General Corporation Law of Nevada requiring shareholder approval of a contract or other transaction in which a director has a direct or indirect financial interest, section 78.125 of that Law as to appointment of committees, and section 78.751 of that Law requiring shareholder approval of indemnification of directors, officers, employees or other agents of the Corporation. However, a meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting.
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 to directors not receiving monthly compensation for attendance at each meeting. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity, as an officer, agent, employee or otherwise, from receiving compensation therefor.
Any action required or permitted to be taken by the board of directors under the General Corporation Law of Nevada may be taken without a meeting if all members of the board individually or collectively consent in writing to such action. Such consent or consents shall be filed with the minutes of the meetings of the board. Such action by written consent shall have the same force and effect as a unanimous vote of such directors. Any certificate or other document filed under the provision of the General Corporation Law of Nevada which relates to action so taken shall state that the action was taken by unanimous written consent of the board of directors without a meeting and that the bylaws authorized the directors to so do.
The officers of the Corporation shall be a president, a secretary, and a chief financial officer (treasurer) and such other officers with such titles and duties as may be appointed in accordance with the provisions of Section 4.3 hereof, including chairman of the board. Any number of offices may be held by the same person. All officers must be natural persons and any natural person may hold two or more offices.
The officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 4.3 or Section 4.5 hereof, shall be chosen annually by the board of directors, and each shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve or until his successor shall be elected and qualified.
The board of directors 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 the bylaws or as the board of directors may from time to time determine.
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, or, except in the case of an officer chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors.
Any officer may resign at any time by giving written notice to the board of directors or to the president or to the secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the bylaws for regular appointments to such office.
The chairman of the board, if there shall be such an officer, shall, if present, preside at all meetings of the board of directors and shareholders and exercise and perform all such other powers and duties as may from time to time be assigned to him by the board of directors or prescribed by the bylaws.
The president, or if there is no president the chairman of the board, shall be the general manager and chief executive officer of the Corporation and shall, subject to the board of directors, have general supervision, direction and control of the business and of other officers and employees of the Corporation. He shall preside at all meetings of the shareholders and, if there is no regular, appointed chairman of the board or if such chairman is absent, at all meetings of the board of directors. He shall be an ex officio member of all standing committees, including the executive committee, if any, and shall have general powers and duties of management usually vested in the office of the president of a Corporation, and shall have such other powers and duties as may be prescribed by the board of directors or the bylaws.
In the absence or disability of the president and the chairman of the board, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, the vice president designated by the board of directors, 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 and chairman of the board. Each vice president shall have such other powers and shall perform such other duties as from time to time may be prescribed for him by the board of directors or the bylaws, and the president or the chairman of the board.
The secretary shall keep, or cause to be kept, at the principal executive office, or such other place as the board of directors may order, a book of 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 at directors' meetings, the number of shares present or represented at shareholders' meeting and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the Corporation's transfer agent, a share register or a duplicate share register showing the names of the shareholders and their addresses, the number and classes of shares held by each, the number and the date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all the meetings of the shareholders and of the board of directors required by the bylaws or by law to be given, shall keep the seal of the Corporation in safe custody and shall have such other powers and shall perform such other duties as from time to time may be prescribed by the board of directors or the bylaws.
In the absence or disability of the secretary, the assistant secretaries in order of their rank as fixed by the board of directors or, if not ranked, the assistant secretary designated by the board of directors shall perform all the duties of the secretary and, when so acting, shall have all the powers of and be subject to all the restrictions upon the secretary. Each assistant secretary shall have such other powers and shall perform such other duties as from time to time may be prescribed for him by the board of directors or the bylaws.
4.11 Chief Financial Officer (Treasurer)
The chief financial officer shall be the treasurer. 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.
The treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositaries as may be designated by the board of directors. He shall be responsible for the proper disbursement of the funds of the Corporation as may be ordered by the board of directors and shall render to the president or directors, whenever they request it, an account of all of his transactions as treasurer and of the financial condition of the Corporation. The treasurer shall prepare a proper annual budget of income and expenses for each calendar year, revised quarterly, for approval of or revision by the board of directors and shall be responsible for the handling of finances in connection therewith. He shall have such other powers and shall perform such other duties as may be prescribed by the board of directors. He shall see that all officers signing checks are bonded in such amounts as may be fixed from time to time by the board of directors.
4.12 Assistant Financial Officers
In the absence of or disability of the treasurer, the assistant financial officers in order of their rank or, if not ranked, the assistant financial officer designated by the board of directors shall perform all the duties of the treasurer and, when so acting, shall have the powers of and be subject to all the restrictions upon the treasurer. Each assistant financial officer shall have such other powers and perform such other duties as from time to time may be prescribed for him by the board of directors or the bylaws.
Salaries of officers and other shareholders employed by the Corporation shall be fixed periodically by the board of directors or established under agreements with the officers or shareholders approved by the board of directors. No officer shall be prevented from receiving this salary because he is also a director of the Corporation.
The certificates of shares of the Corporation shall be in such form consistent with the articles of incorporation and the laws of the State of Nevada as shall be approved by the board of directors. A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any of these shares are fully paid, and the board of directors may authorize the issuance of certificates or shares as partly paid provided that these certificates shall state the amount of the consideration to be paid for them and the amount paid. All such certificates shall be signed by the chairman or vice chairman of the board or the president or a vice president, and by the treasurer or an assistant financial officer or the secretary or any assistant secretary, certifying the number of shares and the class or series of shares owned by the shareholder. Any or all of the signatures on the certificate may be facsimile.
Subject to the provisions of law, upon the surrender to the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
5.3 Lost or Destroyed Certificate
The holder of any shares of stock of the Corporation shall immediately notify the Corporation of any loss or destruction of the certificate therefor, and the Corporation may issue a new certificate in the place of any certificate theretofore issued by it alleged to have been lost or destroyed, upon approval of the board of directors. The board may, in its discretion, as a condition to authorizing the issue of such new certificate, require the owner of the lost or destroyed certificate, or his legal representative, to make proof satisfactory to the board of directors of the loss or destruction thereof and to give the Corporation a bond or other security, in such amount and with such surety or sureties as the board of directors may determine, as indemnity against any claim that may be made against the Corporation on account of any such certificate so alleged to have been lost or destroyed.
The board of directors may, by resolution adopted by a majority of the authorized number of directors, designate one or more committees, each consisting of one (1) or more directors, to serve at the pleasure of the board. The board may designate one or more directors as alternate members of any committee, who may replace any absent member at any meeting of the committee.
Any such committee, to the extent provided by resolution of the board, shall have all authority of the board, except with respect to: (i) the approval of any action requiring shareholder approval as enumerated in Subsection (i) through (v) of Section 2.11 hereof and requiring notice to shareholders of such action; (ii) the filling of vacancies on the board of directors or on any committee; (iii) the fixing of compensation of the board of directors for serving on the board or on any committee; (iv) the amendment or repeal of bylaws or the adoption of new bylaws; (v) the amendment or repeal of any resolution of the board of directors which by its expressed terms is not so amenable or repealable; (vi) a distribution to the shareholders of the Corporation, except at a rate or in a periodic amount within a price range determined by the board of directors; or (vii) the appointment of other committees of the board of directors or the members of these committees.
The provisions of these bylaws for notice to directors of meetings, place of meetings, regular meetings, special meetings and notice, quorum, waiver of notice, adjournment, notice of adjournment, and actions without meetings, without such changes in the context of those bylaws as may be necessary to substitute the committee and its members for the board of directors and its members, apply also to the committees of the board of directors and action by such committees, except that the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the committee.
ARTICLE 7 - INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES, AND OTHER AGENTS
7.1 Agents, Proceedings and Expenses
For purposes of this Article, an "agent" of the Corporation includes any person who is or was a director, officer, employee or other agent of the Corporation; or is or was serving at the request of the Corporation as a director, officer, employee or agent of another foreign or domestic Corporation, partnership, joint venture, trust or other enterprise; or was a director, officer, employee or agent of a foreign or domestic Corporation which was a predecessor Corporation of the Corporation or of another enterprise at the request of such predecessor Corporation; "proceeding" means any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative; and "expenses" include, without limitation, attorneys' fees, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact any such person is or was an agent of the Corporation.
The Corporation shall, to the maximum extent permitted by Nevada law, have the power to indemnify each of its agents against expenses and shall have the power to advance to each such agent expenses incurred in defending any such proceeding to the maximum extent permitted by that law.
The Corporation may, upon the resolution of the directors, purchase and maintain insurance on behalf of any agent of the Corporation against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such, whether or not the Corporation would have the power to indemnify the agent against such liability under the provisions of this Article VII.
ARTICLE 8 - RECORDS AND REPORTS
8.1 Shareholder Inspection of Articles and Bylaws
The Corporation shall keep at its registered office in Nevada, a copy certified by the secretary of state of its articles of incorporation and any amendments thereto, a copy certified by the Corporation's secretary of the bylaws and any amendments thereto, which shall be open to inspection by shareholders at all reasonable times during office hours.
8.2 Maintenance and Inspection of Records of Shareholders
The Corporation shall keep at its registered office, or at the office of its transfer agent or registrar, if either be appointed and as determined by resolution of the board of directors, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each shareholder.
Any person who has been a shareholder of record of the Corporation for at least six months preceding his demand, or any shareholder or shareholders holding at least five percent (5%) in the aggregate of the outstanding voting shares of the Corporation, or any shareholder or shareholders who hold at least one percent (1%) of such voting shares and have filed a Schedule 14B with the United States Securities and Exchange Commission relating to the election of directors of the Corporation shall have an absolute right to do either or both of the following: (i) inspect and copy the records of shareholders' names, addresses and shareholdings, during usual business hours on five (5) days' prior written demand on the Corporation, or (ii) obtain from the transfer agent of the Corporation, on written demand and on the tender of such transfer agent's usual charges for such list (the amount of which charges shall be stated to the shareholder by the transfer agent upon request), a list of the shareholders' names and addresses, who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which that list has been compiled or as of a date specified by the shareholder after the date of demand. This list shall be made available to any such shareholder or shareholders by the transfer agent on or before the later of five (5) days after the demand is received or the date specified in the demand as the date as of which the list is to be compiled. The record of shareholders shall also be open to inspection on the written demand of any shareholder or holder of a voting trust certificate, at any time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or as the holder of a voting trust certificate. Any inspection and copying under this Section 8.2 may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand.
8.3 Shareholder Inspection of Corporate Records
The accounting books and records and minutes of proceedings of the shareholders and the board of directors and any committee or committees of the board of directors shall be kept at such place or places designated by the board of directors, or, in the absence of such designation, at the principal executive office of the Corporation. The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in any other form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection upon the written demand on the Corporation of any shareholder or holder of a voting trust certificate, at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or as the holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary Corporation of the Corporation and may not be limited by the articles and bylaws.
Every director shall have the absolute right at any reasonable time to inspect all books, records and documents of every kind and to inspect the physical properties of the Corporation and each of its subsidiary Corporations, domestic or foreign. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.
8.5 Annual Statement of General Information
The Corporation shall, each year during the calendar month in which its articles of incorporation originally were filed with the Nevada Secretary of State, file with the Secretary of State, on the prescribed form, a statement setting forth the names and complete business or residence addresses of all incumbent directors, the names and complete business or residence addresses of the president, secretary and treasurer, and the Corporation's duly appointed resident agent in charge of the registered office in the State of Nevada upon whom process can be served, all in compliance with section 78.150 of the General Corporation Law of Nevada.
9.1 Checks, Drafts, Evidence of Indebtedness
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 of directors.
9.2 Contracts, Etc., How Executed
The board of directors, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances; and, unless so authorized by the board of directors, 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 to render it liable for any purpose or to any amount.
9.3 Representation of Shares of Other Corporations
The president or, in the event of his absence or inability to serve, any vice president and the secretary or assistant secretary of this Corporation are authorized to vote, represent and exercise, on behalf of this Corporation, all rights incidental to any and all shares of any other Corporation standing in the name of this Corporation. The authority herein granted to the officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other Corporation may be exercised either by such officers in person or by any person authorized to do so by proxy or power of attorney duly executed by the officers.
ARTICLE 10 - AMENDMENTS TO BYLAWS
10.2 Amendment by Shareholders
New bylaws may be adopted or these bylaws may be amended or repealed by the vote or written consent of the shareholders entitled to exercise a majority of the voting power of the Corporation; except as provided in these bylaws, a bylaw amendment reducing the number or the minimum number of directors cannot be adopted if the votes cast against its adoption at a meeting or the shares not consenting in the case of action by written consent would be sufficient to elect at least one (1) director if voted cumulatively at an election at which all of the outstanding shares entitled to vote were voted and the entire number of previously authorized directors were then being elected.
Subject to the rights of the shareholders as provided in Section 10.1 hereof to adopt, amend or repeal bylaws, bylaws may be adopted, amended, or repealed by the board of directors; except as provided in these bylaws, a bylaw specifying or changing a fixed number of directors or the maximum or minimum number or changing from a fixed to variable Board or vice versa may only be adopted by the affirmative vote of a majority of the outstanding shares entitled to vote.
CERTIFICATE OF SECRETARY
OF
I hereby certify that I am the duly appointed and acting Secretary of the Corporation, and that the foregoing is a true and correct copy of the Bylaws of the Corporation adopted on the 25th day of September, 2001, and amended by resolutions of directors on the 26th day of November, 2001.
DATED: November 26, 2001.
/s/ signed
Chen (Jason) Wu
Secretary
|
CERT. # |
CLASS |
NUMBER of SHARES |
PAR VALUE |
DATE of ISSUE |
|
COMMON |
US$0.001 PER SHARE |
THIS CERTIFIES THAT
of is the registered holder
of Shares,
in the Authorized Capital of
TITANIUM INTELLIGENCE INC.
INCORPORATED IN THE STATE OF NEVADA
transferable only in the Shareholders, and in accordance with the Articles of the Corporation, by completion of the Form of Transfer endorsed hereon and surrender of this Certificate.
IN WITNESS WHEREOF the Company has caused this certificate to be signed by its duly authorized officer(s) this
_______
day of__________________
,_______
.
TRANSFER OF THESE SHARES IS RESTRICTED
DIRECTOR
|
THERE ARE SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO THESE SHARES, AND A COPY OF THE FULL TEXT THEREOF IS OBTAINABLE FROM THE RECORDS OFFICE OF THE COMPANY ON DEMAND AND WITHOUT CHARGE. |
|
The undersigned, for valuable consideration received, hereby transfers to
(transferee)
(number and class) share(s) in the authorized capital of the within Company to hold unto the transferee, his heirs, administrators and assigns, subject to the Memorandum and Articles of the Company. date signature witness |
WOODBURN AND WEDGE
ATTORNEYS AND COUNSELORS AT LAW
SIERRA PLAZA
6100 NEIL ROAD, SUITE 500
RENO, NEVADA 89511-1149
TELEPHONE (775) 688-3000
FACSIMILE (775) 688-3088
May 10, 2002
Titanium Intelligence, Inc.
14
th
Floor
265 West 37
th
Street
New York, New York 10018
Dear Sir or Madam:
We have acted as special counsel to Titanium Intelligence, Inc., a Nevada corporation (the "Company"), in connection with its filing of a registration statement on Form SB-2 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Registration Statement"), to which this opinion is an exhibit, covering an aggregate of 2,500,000 shares of common stock, par value $.001 per share of the Company which the Selling Stockholders named in the Registration Statement propose to sell pursuant to the Registration Statement (the "Shares").
In our capacity as counsel to the Company, we have examined originals or copies, satisfactory to us, of the Company's (i) Articles of Incorporation (ii) Bylaws, as amended, and (iii) resolutions of the Company's board of directors. We have also reviewed such other matters of law and examined and relied upon all such corporate records, agreements, certificates and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies or facsimiles. As to any facts material to such opinion, we have, to the extent that relevant facts were not independently established by us, relied on certificates of public officials and certificates of officers or other representatives of the Company.
Based upon and subject to the foregoing, we are of the opinion that the Shares were duly issued and are fully paid and non-assessable.
Our opinion is limited to the date hereof and we do not in any event undertake to advise you of any facts or circumstances occurring or coming to our attention subsequent to the date hereof.
Titanium Intelligence, Inc.
May 10, 2002
Page 2
Finally, we are counsel admitted to practice in the State of Nevada, and we express no opinions as to the applicable laws of any jurisdiction other than those of the State of Nevada and the United States of America.
We hereby consent to the use of our name under the caption "Legal Matters" in the prospectus constituting a part of the Registration Statement and to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act, the rules and regulations of the Securities and Exchange Commission promulgated thereunder or Item 509 of Regulation SBA promulgated under the Act.
Very truly yours,
WOODBURN and WEDGE
By /s/ Kirk S. Schumacher
Kirk S. Schumacher, Esq.
TITANIUM INTELLIGENCE, INC.
February 1, 2002
Chen (Jason) Wu
Dear Mr. Wu:
|
Re: Services to Titanium Intelligence, Inc. (" TII ") |
This letter agreement sets out the terms and conditions upon which TII will engage you to provide Services (as defined herein). The execution of this letter agreement by yourself constitutes your acceptance of the following terms and conditions.
1. Interpretation . In this letter agreement, the following terms will have the following meanings:
(a) "Development " or " Developments " includes, without limitation, all developments of and enhancements, modifications, additions or other improvements to the website http://www.titanium-intelligence.com that are developed, created, generated, contributed to or reduced to practice by yourself, whether alone or jointly with others, which results from the Services or which results from the use of the premises or property (including equipment or supplies) owned, leased or licensed by TII; and
(b) " Intellectual Property Rights " means any and all legal protection recognized by the law (whether by statute, common law or otherwise, in the United States, Canada and all other countries world-wide) in respect of the Developments, including trade secret and confidential information protection, patents, copyright and copyright registration, industrial design registration, trade dress, trade-marks and trade-mark registrations and other registrations or grants of rights analogous thereto.
2. Engagement . TII hereby engages yourself to provide the Services, and you hereby accept such engagement, upon and subject to the terms of this letter agreement.
(a) You will provide technical services in connection with the design, set up and enhancements, modifications, additions or other improvements to the website http://www.titanium-intelligence.com (the " Services "), as directed and prioritized by TII. TII will have the right to amend the definition of the Services from time to time without your consent in order to reflect TII's operational requirements, provided that TII will not make any amendment that would result in the Services being substantially different than those in this Section on the effective date of this letter agreement without your prior written consent.
(b) You acknowledge and agree that the operational requirements of TII may require yourself to travel from time to time.
4. Term, Renewal and Termination .
(a) The term (" Term ") of this letter agreement will commence on February 1, 2002 and, subject to earlier termination as provided herein, will continue until June 30, 2002.
(b) This Term may be extended or renewed upon the written agreement of the parties not less than 30 days prior to the end of the Term and if no arrangements have been made to formally terminate or extend the Term of this agreement by June 30, 2002 but the relationship of the parties continues, the Term will be deemed to be extended for additional sequential two month periods until terminated as provided in Section 4(c).
(c) This letter agreement will be terminated in the following manner and in the following circumstances:
(i) whenever the parties agree in writing to terminate this letter agreement;
(ii) if either party terminates this letter agreement by written notice upon a material breach of this letter agreement by the other party, which breach is not cured to the satisfaction of the other party, acting reasonably, within 10 days after written notice to the breaching party specifying the breach in reasonable detail ; or
(iii) if either party issues a notice terminating this letter agreement without cause upon giving not less than 60 days' written notice to the other party.
(d) All rights and obligations arising prior to the effective date of termination and all provisions which by their terms state that they will survive termination will survive any termination of this letter agreement.
(e) Upon any termination of this letter agreement, you will have no claim against TII for damages, remuneration or otherwise, except in respect of payment of Fees which are accrued to the effective date of termination, pro-rated to the effective date of termination or such earlier date that you actually cease to perform Services, whichever is earlier.
5. Fees . In consideration of the performance of the Services by yourself in the manner contemplated by this letter agreement, TII will pay fees (the " Fees ") to you for the period from February 1, 2002 to and including June 30, 2002, in such amounts as the Directors of TII determine, in view of your contributions to TII and the funds available to TII for compensation to its contractors and employees.
6. Expenses . In accordance with policies formulated by TII from time to time, TII will reimburse you for all reasonable expenses actually and properly incurred by yourself in connection with the performance of the Services, including travel and accommodation expenses. For all such expenses, you will be required to keep proper accounts and to furnish statements and vouchers to TII within 30 days after the date the expenses are incurred.
7. Obligations of TII . In order to enable yourself to provide the Services, TII will:
(a) provide yourself with such working space and access to telephones, photocopying equipment, printers, administrative support staff and the like as you may reasonably request; and
(b) provide such TII information and data, including information relating to TII service offerings, as you may reasonably determine.
8. Your Representations and Warranties . You must represent and warrant to TII as follows, and acknowledges that TII is relying on such representations and warranties in entering into this letter agreement:
(a) You have the skills, experience and ability to enable yourself to provide the Services in the manner contemplated by this letter agreement; and
(b) as at the date of this letter agreement, you are not engaged, directly or indirectly, as an employee, consultant, partner, principal, agent or advisor in a business that develops, or markets the services competitive with those services developed or marketed by TII.
9. Reporting . You will provide to TII information concerning the results of the Services and your activities under this letter agreement at such times and in such manner as TII may determine from time to time.
10. Indemnity by You . You will, at your own expense, defend, indemnify and hold harmless TII and its directors, officers, shareholder, employees, other contractors and agents from and against any losses, claims, damages, interest charges, penalties, judgements, liabilities or expenses (including reasonable legal fees and expenses) resulting from or in any way relating to:
(a) any misrepresentation, breach of warranty or breach or non-fulfillment of any covenant on the part of yourself contained in this letter agreement;
(b) any of your negligent or dishonest act or omission or wilful misconduct;
(c) your failure to exercise the care and responsibility that a prudent and careful person would exercise;
(d) any of your actions exceeding the authority granted to yourself under this letter agreement or otherwise by TII; and
(e) the non-payment by TII of any local, provincial or federal payroll-related taxes or assessments required to be remitted by TII on your behalf.
This Section will survive the termination or expiration of this letter agreement.
(a) Throughout the Term, you will disclose promptly and fully to TII all Developments that are developed, created, generated, contributed to or reduced by practice, by yourself alone or jointly with others. You acknowledge and agree that all records of such disclosure will be and remain the property of TII. The determination of whether you have made sufficient disclosure to TII in the manner and to the extent required by this Section will be made by TII, acting reasonably.
(b) TII will have sole and exclusive right, title and interest world-wide in and to the Developments and the related intellectual property rights, all of which right, title and interest will continue after the Term. You hereby irrevocably assign and transfer (and hereby confirms that you have assigned and transferred) to TII, without the requirement for any further remuneration or consideration, and agrees that TII will be the exclusive owner of all of your right, title and interest in and to each Development throughout the world, including all related intellectual property rights therein.
12. Restrictive Covenants . During the Term of this letter agreement, you covenant and agree that you will not, without the prior written approval of TII, become engaged, directly or indirectly, as an employee, consultant, partner, principal, agent or advisor in a business anywhere that develops or markets services competitive with those services developed or marketed by TII.
13. No Subcontracting . You will not subcontract all or any portion of the Services without TII's express written consent. If TII approves a subcontracting by yourself, performance by your contractors will be deemed to be performance by yourself, and your will be responsible for ensuring that all such performance complies with the provisions of this letter agreement.
14. Notices . Any notice permitted or required under this letter agreement must be in writing. Any such notice will be deemed delivered: (a) on the day of delivery in person; (b) one day after deposit with an overnight courier, fully prepaid; (c) on the date sent by facsimile transmission; or (d) on the date sent by e-mail, if confirmed by first-class mail, properly posted, or by facsimile transmission; to the address to whom it is directed or in the case of a for at such other reasonable address, fax number or e-mail address at which personal delivery may be effected of which a party may from time to time give notice in accordance with this Section.
15. Severability . If any provision of this letter agreement is held to be unenforceable, then such provision will be deleted from the letter agreement and the remaining provisions will continue in full force and effect. The parties will in good faith negotiate a mutually acceptable and enforceable substitute for the unenforceable provision, which substitute will be as consistent as possible with the original intent of the parties.
16. Entire Agreement . This letter agreement contains the entire agreement between yourself and TII with respect to the delivery of Services to TII, and there are no representations, warranties, collateral terms or conditions, express or implied, other than as set forth in this letter agreement. This letter agreement supersedes any other written or oral agreement or understanding between yourself and TII.
17. Amendment . Except for TII's rights pursuant to Section 3(a), no change or modification of this letter agreement will be valid unless it is in writing and initialled by both yourself and TII.
19. Time . Time is of the essence of this letter agreement.
20. Currency . Unless otherwise expressly stated in this letter agreement, all dollar amounts to be paid by the parties pursuant to this letter agreement are in United States funds.
21. Counterparts . This letter agreement may be executed in counterparts, both of which together will constitute one and the same instrument and either party may deliver a counterpart copy by facsimile transmission.
Kindly confirm your acceptance and agreement to the terms of this letter agreement by signing the enclosed duplicate copy of this letter where indicated and returning one copy to TII.
We ask you to fully consider all of the above terms and to obtain any advice you feel is necessary, including legal advice, before you execute this letter agreement.
Yours very truly,
TITANIUM INTELLIGENCE, INC.
/s/ signed
President
ACCEPTED AND AGREED TO THIS 1ST DAY OF FEBRUARY, 2002. THE UNDERSIGNED HAS READ AND UNDERSTANDS THE TERMS AND CONDITIONS OF ENGAGEMENT SET OUT IN THIS LETTER AGREEMENT. THE UNDERSIGNED HAS BEEN GIVEN FULL OPPORTUNITY TO CONSULT ANY ADVISORS HE DEEMED NECESSARY.
/s/ signed
Chen (Jason) Wu
MEMBERSHIP AGREEMENT
THIS AGREEMENT made the 28th day of March, 2002.
BETWEEN:
TITANIUM INTELLIGENCE, INC. , a Nevada corporation with an office at 14th Floor, 265 West 37th Street, New York, New York 10018
("Titanium")
AND:
ZHEJIANG WEILAI GROUP COMPANY , a limited company formed in the People's Republic of China in the Province of Zhejiang.
(the "member")
WHEREAS:
A. Titanium operates an Internet textile trade center on its website http://www.titanium-intelligence.com to promote textile products manufactured in China;
B. Titanium is seeking textile products manufacturers in China to register as members to showcase their textile products on its Internet textile trade center;
C. Titanium, through the use of its Internet textile trade center, can accept orders to purchase textile products from users; and
D. Member wishes to use the services of Titanium's Internet textile trade center and list its textile products on Titanium's Internet textile trade center.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the covenants and agreements herein contained, Titanium and the member covenant and agree as follows:
1. USE OF INTERNET TEXTILE TRADE CENTER
1.1 Upon the completion of an online application form and execution this membership agreement, the member will be allowed to use Titanium's Internet textile trade center to showcase its textile products for sale.
1.2 The member will be given a user name and a password to log into the members only area of Titanium's Internet textile trade center, within which the member may add its textile products for listing on Titanium's Internet textile trade center.
2. TRANSMISSION OF PURCHASE ORDER TO MEMBER
2.1 Whenever Titanium receives a purchase order from an user of its Internet textile trade center for a product listed by the member, Titanium will forward the purchase order, including credit card information of the purchaser, to the member through email at the email address provided by the member on the application form.
2.2 The member shall be solely responsible for arranging for the shipment of products purchased by users of Titanium's Internet trade center to the purchaser.
2.3 The member shall be solely responsible for processing credit card payments by the purchasers for the purchase of its textile products through the use of Titanium's Internet textile trade center.
3. ASSISTANCE IN WHOLESALE TRANSACTIONS
3.1 Whenever Titanium receives an indication of interest from a wholesale buyer to purchase a product listed by the member, Titanium will contact the member and assist the member in:
(a) establishing communication with the prospective wholesale buyer;
(b) gathering company information on the prospective wholesale buyer;
(c) negotiating pricing and delivery terms for the products with the prospective wholesale buyer;
(d) finalization of sales agreement between the member and the prospective wholesale buyer; and
(e) promoting other related products of the member to the prospective wholesale buyer.
3.2 The member shall be solely responsible for arranging for the shipment of products purchased by the wholesale buyer.
3.3 The member shall be solely responsible for processing payments by the wholesale buyer for the purchase of its textile products through the use of Titanium's Internet textile trade center.
4. OBLIGATIONS OF THE MEMBER
4.1 For services provided by Titanium and Titanium's Internet textile trade center, the member agrees to pay Titanium the service fees in accordance with Schedule "A". The service fees will be due and payable by the member at the end of each month when Titanium submits its invoice to the member.
4.2 The member shall promptly fulfil the purchase orders forwarded by Titanium to the member. In the event that the member cannot fulfil a particular purchase order, the member shall notify Titanium by email or telephone within 48 hours of the dispatch of purchase order by Titanium.
4.3 The member shall maintain the confidentiality of purchasers' credit card information forwarded to it by Titanium. The member shall charge to the purchasers' credit cards only the total amount of purchase price plus any shipping and handling charge. If Titanium receives any dispute from a purchaser, the member agrees to resolve its dispute with the purchaser directly and reimburse Titanium for any costs incurred in connection with the dispute.
5. DEFAULT
5.1 Upon default of the member in the performance of its obligations in this Agreement, Titanium may unilaterally terminate its services to the member and may remove the member's products from its Internet textile trade center.
5.2 The remedies to which Titanium hereto may resort are cumulative and not exclusive of any other remedies allowed by law or equity to which such party may be entitled, and Titanium will be entitled to pursue any and all of its remedies concurrently, consecutively, and alternatively.
6. TIME OF THE ESSENCE
6.1 Time is of the essence of this Agreement.
7. ARBITRATION
7.1 Should there be a disagreement or a dispute between the parties hereto with respect to this Agreement or the interpretation thereof, the same will be referred to a single arbitrator pursuant to the Foreign Trade Arbitration Commission of the China Council for the Promotion of International Trade, and the determination of such arbitrator will be final and binding upon the parties hereto.
8. VALIDITY OF AGREEMENT
8.1 This agreement after its execution by the parties involved shall remain in force for 10 years or until it is terminated earlier by the parties involved in writing. If either party wishes to extend this Agreement, the party shall provide notice in writing to the other party one month prior to the expiration of the Agreement.
9. ENTIRE AGREEMENT
9.1 The provisions herein contained constitute the entire agreement between the parties and supersede all previous communications, representations, and agreements, whether oral or written, between the parties with respect to the subject matter hereof, there being no representations, warranties, terms, conditions, undertakings, or collateral agreements (express, implied, or statutory), between the parties other than as expressly set forth in this Agreement.
10. COUNTERPARTS
10.1 This Agreement may be executed in several counterparts, each of which will be deemed to be an original and all of which will together constitute one and the same instrument.
11. ELECTRONIC MEANS
11.1 Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date set forth on page one of this Agreement.
WITNESS whereof the parties have executed this Agreement as of the date set forth on page one of this Agreement.
TITANIUM INTELLIGENCE, INC.
Per:/s/ signed
Authorized Signatory
ZHEJIANG WEILAI GROUP COMPANY
Per: /s/ signed
Authorized Signatory
SCHEDULE "A"
Transactional Service Fees
|
Amount of Purchase in a Purchase Order |
Percentage Service Fee |
|
$0 - $500 |
1% |
|
$500 - $3,000 |
3% |
|
Wholesale |
5% |
DAVIDSON & COMPANY
INDEPENDENT AUDITOR'S CONSENT
We consent to the use in this Registration Statement on Form SB-2 of Titanium Intelligence, Inc. of our report dated April 19, 2002 appearing in the Prospectus, which is part of such Registration Statement, and to the reference to us under the heading "Experts" in such Prospectus.
/s/ DAVIDSON & COMPANY
Chartered Accountants
Vancouver, Canada
May 10, 2002