UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Nevada 88-0472860
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7341 West Charleston Boulevard
#140, Las Vegas, Nevada 89117
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(Address of principal executive (zip code)
offices)
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Issuer's telephone number: (702)-338-6109
Securities to be registered under section 12(b) of the Act:
Title of Each Class to be so Name on each exchange on which
registered each class is to be registered
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Securities to be registered under section 12(g) of the Act:
Common Stock, $.001 par value per share, 20,000,000 shares authorized, 2,908,400 issued and 9,149,188 outstanding as of March 31, 2003.
TABLE OF CONTENTS
Part I 3
Item 1. Description of Business 3
Item 2. Management's Discussion and Plan of Operation 8
Item 3. Description of Property 10
Item 4. Security Ownership of Certain Beneficial Owners and Management 10
Item 5. Directors and Executive Officers, Promoters and Control
Persons 11
Item 6. Executive Compensation 12
Item 7. Certain Relationships and Related Transactions 12
Item 8. Description of Securities 13
Part II 14
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Related Stockholder Matters 14
Item 2. Legal Proceedings 15
Item 3. Changes in and Disagreements with Accountants 15
Item 4. Recent Sale of Unregistered Securities 15
Item 5. Indemnification of Directors and Officers 16
Part F/S 18
Part III 31
SIGNATURES 32
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INTRODUCTORY STATEMENT
Galaxy Championship Wrestling, Inc. ("Galaxy" or the "Company") has elected to file this Form 10-SB registration statement on a voluntary basis in order to become a reporting company under the Securities Exchange Act of 1934. The Company is currently listed on the "Pink Sheets" as maintained by the National Quotation System, Inc. under the ticker symbol GXCW. The Company intends to eventually pursue listing on the Over the Counter Bulletin Boardr (OTCBBr). Under the current rules, in order to obtain such listing a company must be a reporting company under the Securities Exchange Act of 1934. The Company cannot assure such listing may in fact transpire given that the Securities and Exchange Commission (the "SEC") and the National Association of Securities Dealers (the "NASD") are collectively responsible for authorizing such listing and such authorization may not be forthcoming due to circumstances not presently known to the Company.
This registration statement, including the information that may be incorporated herein by reference, contains forward-looking statements including statements regarding, among other items, the Company's business and growth strategies, and anticipated trends in the Company's business. These forward-looking statements are subject to a number of risks and uncertainties, some of which are beyond the Company's control. Actual results could differ materially from these forward-looking statements. For this purpose, any statements contained in the registration statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "expect," believe," anticipate," "intend," "could," "estimate," or "continue," or the negative or other variations thereof are intended to identify forward-looking statements.
Part I
Item 1. Description of Business
A.Business Development
Galaxy Championship Wrestling, Inc., hereinafter referred to as the "Company" or "Galaxy," was organized by the filing of Articles of Incorporation with the Secretary of State in the State of Nevada on September 13, 2000 (NV# C24685-2000). The Articles of Incorporation of the Company authorized the issuance of twenty million (20,000,000) shares of $0.001 par value Common Stock and five million (5,000,000) shares of Preferred Stock. As of March 31, 2003, the Company has issued approximately 9,149,188 shares of Common Stock to approximately seventy-three (73) shareholders of record.
Galaxy is a development stage company that has a primary business to develop, produce, and market live entertainment in the forum of professional wrestling.
Galaxy is a media and entertainment company. We plan, promote, manage and coordinate professional wrestling events for entertainment purposes for live audiences and broadcast viewers. Our principal market(s) include local markets in the state of Arkansas though we anticipate growth in regional markets in the mid-west and south and expect to broaden our market exposure further over time. We have secured limited television programming on local television station(s) in the state of Arkansas specifically with Comcast Cable Channel 18 of Little Rock Arkansas. Our plan is to broaden our viewer audience and appeal such that additional broadcast stations in other markets may consider broadcasting our events and thereby increase our exposure. There are significantly larger market participants
engaged in the promotion and marketing of entertainment style wrestling. Specifically there is one dominant entity providing similar events. Our approach however, is significantly different. The entertainment we provide the live and television audience is tailored to provide individuals or families traditional professional wrestling without undue violence, (blood and gore) or borderline obscenity or sex of a prurient nature prevalent to the events produced by our competitor(s). We believe a significant market exists for professional wrestling events geared toward family entertainment consistent with family values espoused by a higher degree of morality. Our target audience is families and individuals concerned with these issues and therefore precluded from enjoying professional wrestling events offered by our competitors. We believe the traditional roots of this form of entertainment focused on themes and values more appealing to the family. We believe our approach appeals to a broad segment of the population who would otherwise enjoy professional wrestling events but for the prurient and violent nature of such events as offered by our competitors.
Galaxy so far has limited its operations primarily to startup, development activities, and initial revenue producing operations. Moreover, we have limited capital resources. In the approximately two years of operation from September 13, 2000 (Date of Inception) to December 31, 2002, the Company generated revenues amounting to $6,644 and posted a net loss of $314,838 resulting from cost of goods sold, general and administrative expenses, legal expense, and depreciation expense. The Company is considered a development stage company.
The Company's executive offices are located at 7341 West Charleston Boulevard, Suite 140, Las Vegas, Nevada 89117 (702)- 338-6109. The Company has corporate events office at 16913 North Landmark Circle, Little Rock, Arkansas 72206, phone: (501)-261- 6033.
The Company's fiscal year end is December 31.
B.Business of Issuer
(1) Principal Products Or Services And Their Markets
Overview
Galaxy Championship Wrestling is a sports entertainment company. We have created a team of respected management, promotion, and "talent" personalities that provide our Company complementary experiences in the wrestling entertainment field. Galaxy Championship Wrestling utilizes a balanced integration of all forms of media in its marketing efforts. The Company out sources all production, logistics, and licensed product functions.
Current Operations
While we have commenced principal operations with 20 plus events, over half three of which were televised locally, we anticipate a gradual but steady increase in the number of events we sponsor and the number of events that are televised locally. We have been successful in securing the appearance of certain well-known professional wrestling personalities including:
* Jerry "The King" Lawler
* Viscera
* Koko B Ware
* Prince Iaukea
* Brickhouse Brown
* Moondog Spot
* James Ladd
* Ky-Ote
* Kevin Douglass
* Joey Dreamer
* The Nasty Boys
* Jett Logan
* Hacksaw Jim Duggan
* Rodney Redd Dogg Begnard
* Robert Gibson
* Skandor Akbar
* Onyx
As our roster of talent increases, story lines advance and characters develop, and we create the drama and excitement that drive our business without undue violence or sex and thereby attract new viewers to the world of Galaxy Championship Wrestling.
Wrestling has weathered adversity to become not just a "fringe" promotion, but rather, a multi-billion dollar entertainment industry. Wrestling has abandoned the pretense of legitimate sport, and attached the moniker entertainment as a way of letting the audience in on the secret. Top wrestling personalities have become true celebrities.
Company performers are independent contractors who are highly trained and motivated and portray popularized characters. Management will constantly seek to identify, recruit and develop additional performers. Once recruited, established performers are immediately incorporated into Galaxy story lines while less experienced performers are invited to participate in an extensive training program. Under agreements with local spot promoters of wrestling events in various states promising candidates are "loaned" to the local spot promoters allowing these new performers to hone their skills by working in front of live audiences and appearing on local television programs. The most successful and popular performers will then be incorporated into the Company's live events, television programming, and pay-per- view events as their characters are more fully developed.
Marketing Activities
The function of the Company is primarily that of a marketing organization. The success of Galaxy Championship Wrestling will depend on marketing. All other activities are secondary in nature. There are several priority requirements for marketing dominance including:
* A strong marketing team
* Hard hitting, family-friendly marketing materials
* Produce and consistently upgrade ad layouts and productions
* Produce and support an internet presence
* National advertising and public relations
* Licensed product allies
* Joint Venture events and promotions
* Strong relationships with marketing allies
Product Marketing Strategy
The Company's four point plan covers methods of (a) refining the marketing prototype, (b) establishing a larger pool of "name" talent, (c) creating a "niche" marketplace acceptance and distribution utilizing an integrated balance of broadcast, print, and internet media, and (d) support the product "branding" with initial pay-per-view events. The primary strategy of the Company is to fully utilize an integration of the all form of broadcast and print media, supplemented by the Internet.
(2) Distribution Methods Of The Products Or Services
Our objectives are to further broaden our exposure in the creation, production and promotion of our form of televised and live entertainment events and to eventually pursue complementary, entertainment-based business opportunities.
Galaxy Championship Wrestling operations are organized around two
principal activities:
the creation, marketing and distribution of both live and
televised entertainment, which includes the sale of advertising
time on Company's television programs; and the marketing and
promotion of Galaxy branded merchandise.
Live Events
Live events are the cornerstone of Company business and provide the content for both television and pay-per-view programming. Each event is a highly theatrical production, which involves a significant degree of audience participation and employs various special effects, including lighting, pyrotechnics, powerful entrance music, and a variety of props. Galaxy will promote live events through a variety of media, including television, radio, print, and the Internet. Revenues from the live events are primarily derived from ticket sales, with prices for most live events averaging approximately $15.00 per ticket.
Licensed and Direct Sale Products
The Company has developed several domestic and licensing programs using its trademarks and logo, copyrighted works and characters on retail products consisting primarily of apparel and give away items such as individual venue souvenirs and programs. As part of the strategic positioning, the Company intends to intensify building the pool of licensees. In all of such licensing agreements, Galaxy will retain creative approval over the design, packaging and location of, and the promotional material associated with, all licensed products to maintain the distinctive style, look and quality of Company intellectual property and branding. These licensing agreements provide for the payment of a percentage of the wholesale revenues as a royalty and require minimum guarantees with periodic advances. In addition to in-house staff, the Company will contract with outside agents to identify, develop and monitor such licensing arrangements.
Home Video
Galaxy is building a video library containing hundreds of hours of programming from its live events and television shows. This library has begun to be used in the production and sale of home videos. In addition to producing videos from Company library footage, Galaxy can create new videos utilizing original footage produced specifically for this purpose. The Company will create master tapes and anticipates contracting with a third party to duplicate and distribute the videos to retailers nationwide.
(3) Status Of Any Publicly Announced New Product Or Service
Galaxy has not publicly announced any products or services.
(4) Competitive Business Conditions And The Small Business Issuer's Competitive Position In The Industry And Methods Of Competition
Wrestling has evolved into one of the most popular forms of entertainment today. This sector has experienced significant growth in many aspects of business. This growth has been driven by a series of industry management initiatives to reposition the industry. These initiatives included:
* Expanding story lines through the integration of
contemporary themes;
* Increasing focus on the continuous development of talented
young performers to supplement our pool of established talent;
* Developing additional weekly television programming and
intensifying pay-per-view marketing efforts to expand audience;
* Bringing the distribution of home videos and the publication
and distribution of direct mail catalogs in-house;
* Expanding the licensing and direct sale of branded
merchandise;
* Negotiating agreements to expand rights to sell advertising
time on television programming; and
* Establishing a presence on the Internet to further promote
brands, generate additional revenue streams, and provide fans
with a channel for interactive communication.
Objectives are to broaden position in the creation, production and promotion of sector televised and live entertainment events and to leverage technical and operating skills to pursue complementary entertainment-based business opportunities. Some of the key elements of industry strategy have been to:
* Continue to produce high quality, branded programming, live
events and consumer products for worldwide distribution;
* Expand television and pay-per-view distribution
relationships and develop broader distribution arrangements for
branded programming worldwide;
* Increase the licensing and direct sales of branded products
through distribution channels;
* Further develop the Internet as an entertainment and
advertising platform; and
* Form strategic relationships with other media and
entertainment companies.
* These actions have created a formidable economic force in
the entertainment industry dominated by a few giants but with a
seemingly insatiable demand for more "product."
(5) Sources And Availability Of Raw Materials And The Names Of Principal Suppliers
Not applicable.
(6) Dependence On One Or A Few Major Customers
The Company does not foresee that its business in the future will depend on one or a few major customers.
(7) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements Or Labor Contracts, Including Duration
The Company currently does not have any patents, trademarks, franchises, concessions, royalty agreements, or labor contracts.
(8) Need For Any Government Approval Of Principal Products Or Services. If Government Approval Is Necessary And The Small Business Issuer Has Not Yet Received That Approval, Discuss The Status Of The Approval Within The Government Approval Process
None.
(9) Effect Of Existing Or Probable Governmental Regulations On The Business
There is currently no direct federal regulatory burden that would materially affect the Company or its products. The primary regulatory requirements in the wrestling industry come through state licensing agencies.
(10) Estimate Of The Amount Spent During Each Of The Last Two Fiscal Years On Research And Development Activities, And If Applicable The Extent To Which The Cost Of Such Activities Are Borne Directly By Customers
None.
(11) Costs And Effects Of Compliance With Environmental Laws
(Federal, State And Local)
None.
(12) Number Of Total Employees And Number Of Full Time Employees
Excluding officers, the Company presently has no employees. Only one (1) officer of the Company who is actively engaged as an employee for the Company. He devotes approximately 15-20 hours a week to Company. The Company anticipates relying solely on the efforts of its officers and directors in the near short term.
C.Reports to Security Holders
(1) Annual Reports
Although Galaxy has not been required to do so, the Company intends voluntarily to deliver annual reports to security holders. Such annual reports will include audited financial statements.
(2) Periodic Reports with the SEC
As of the date of this Registration Statement, Galaxy has not been filing periodic reports with the SEC. However, the purpose of this Registration Statement is to become a fully reporting company on a voluntary basis. Hence, Galaxy will file periodic reports with the SEC as required by laws and regulations applicable to fully reporting companies.
(3) Availability of Filings
The public may read and copy any materials Galaxy files with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1- 800-SEC-0330. Additionally, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Item 2.Management's Discussion and Plan of Operation
A.Management's Discussion
This section should be read in conjunction with the audited financial statements included in Part F/S of this filing.
The Company financed its operations during the period from September 13, 2000 to December 31, 2002 by issuing capital stock to its founder and officers and private investors in exchange for cash. Galaxy so far has limited its operations primarily to startup and development activities. Moreover, we have limited capital resources. In the approximately four years of operation from September 13, 2000 (Date of Inception) to December 31, 2002, the Company generated revenues amounting to $6,664 from ongoing operations and posted a net loss of $311,150 resulting from start- up, general administrative expenses, general administrative expenses for related parties, and legal expense. The Company is considered a development stage company.
The Company is authorized to issue 20,000,000 shares of its $0.001 par value Common Stock and 5,000,000 shares of its $0.001 Preferred Stock. During September 2000, the Company issued 5,750,000 shares of its $0.001 par value common stock to a former officer and current director in exchange for cash and a vehicle in the amount of $22,949. During December 2000, the Company issued 600,000 shares of its $0.001 par value common stock in exchange for consulting services valued. The consulting services were valued at $60,000. During December 2000, the Company completed an offering pursuant to Regulation D, Rule 505 of the Securities Act of 1933, as amended, and issued a total of 1,303,000 shares of its $0.001 par value common stock in exchange for cash of $65,150. The funds were released to the Company on December 15, 2002. On May 31, 2002, the Company completed its offering pursuant to Regulation D, Rule 504 of the Securities Act of 1933, as amended, and issued a total of 633,250 shares of its $0.001 par value common stock in exchange for cash of $63,325. The funds were released to the Company in May 2002. During June 2002, the Company issued 310,000 shares of its $0.001 par value common stock in exchange for consulting services. The consulting services were valued at $31,000. During June 2002, the Company issued 552,938 shares of its $0.001 par value common stock in exchange for consulting services. The consulting services were valued at $55,294. There have been no other issuances of common and/or preferred stock.
B.Plan of Operation
The Company believes that it has sufficient resources to support its operations for the next twelve to eighteen months. This conclusion is based upon the fact that fixed costs for the Company are negligible, consisting primarily of basic office expenses and supplies. The Company does not pay salaries and does not anticipate paying salaries for the foreseeable future. However, without realizing revenues, the Company will eventually face financial difficulties and may need to raise additional capital. It is the intent of the Company, in the next twelve months, to generate revenues sufficient to operate and grow as a going concern. The Company's audited financial statements clearly indicate concern on the part of the auditor as to the viability of the Company as a going concern. If the Company does not realize significant revenues in the near-term and the Company does not secure additional capital, it may be difficult to continue operations notwithstanding the fact that our fixed costs are nominal. The level of operations we anticipate supporting over the next 12-18 months is directly proportional to the number of real estate acquisitions (if any) successfully consummated by the Company. The source of this revenue is anticipated to emanate from (i) the purchase and re-sale real estate in Pahrump and southern Nevada; and (ii) the acquisition of rental properties and subsequent management thereof.
C.Segment Data
As of December 31, 2002, the Company has generated limited sales revenues of $2,527 sales revenue for twelve months ended for calendar year 2002 under a single business segment. Accordingly, no table showing percentage breakdown of revenue by business segment or product line is included.
Item 3. Description of Property
A.Description of Property
The Company's principal offices are located at 7341 West Charleston Boulevard, Suite 140, Las Vegas, Nevada 89117 telephone (702)-338-6109. The Company has a corporate events office located at 16913 North Landmark Circle, Little Rock, Arkansas 89107, telephone: (501)-315-1333.
B. Investment Policies
The Company does not presently hold any investments or interests in real estate, investments in real estate mortgages or securities of or interests in persons primarily engaged in real estate activities.
Item 4. Security Ownership of Certain Beneficial Owners and Management
A.Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of the date of this Registration Statement with respect to the beneficial ownership of the Common Stock of the Company by (i) each director, (ii) each executive officer, (iii) the directors and officers of the Company as a group, (iv) and each person known by the Company to own beneficially more than five percent (5%) of the Common Stock. Unless otherwise indicated, the owners have sole voting and investment power with respect to their respective shares.
Title of Class Name of Beneficial Owner Number % of Class
of Shares
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Common Stock Jerome Jolly, President, 4,312,500 47.14%
and Director (1)
Common Stock Grady Johnson, Treasurer 1,437,500 15.71%
and Director (2)
Common Stock Frank Danesi Jr., Director (3) 731,469 8.00%
Common Stock Ted D. Campbell II (4) 731,469 8.00%
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Common Stock Officers and Directors 5,750,000 62.85%
as a Group
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Footnotes:
(1). The address for Jerome Jolly is 16913 North Landmark Circle, Little Rock,
Arkansas 89107.
(2). The address for Grady Johnson is 16913 North Landmark Circle, Little
Rock, Arkansas 89107.
(3). The Address for Frank Danesi Jr. is 8787 West Washburn Road, Las Vegas,
Nevada 89149.
(4). The Address for Ted D. Campbell II is 9508 Royal Lamb Drive, Las Vegas,
Nevada 89145.
B.Change in Control
No arrangements exist that may result in a change of control of Galaxy.
Item 5. Directors and Executive Officers, Promoters and Control Persons
A.Directors, Executive Officers and Significant Employees
The names, ages, and positions of the Company's directors, executive officers, and significant employees are as follows:
NAME AGE POSITION DIRECTOR SINCE
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Jerome Jolly 39 President, Treasurer, September 2000
Secretary, and Director
Grady Johnson 62 Executive-VP, September 2000
Treasurer, Director
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Jerome Jolly, Chairman of the Board of Directors, CEO and
President Mr. Jolly is also known as (AKA) Crazy Luke Graham Jr.
and has been involved in the professional wrestling industry
since 1987. He has wrestled for many independent wrestling
promotions including United States Wrestling Association (USWA),
NWA- Georgia, NWA-Southwest, Central States Wrestling Alliance,
Superstars of Wrestling, Main Event Championship Wrestling,
Southern Championship Wrestling, American Wrestling Federation,
American Championship Wrestling Association, Southwest
Championship Wrestling, Intercontinental Pro Championship
Wrestling, Mid South Wrestling and several other federations. He
has experience as a wrestler, event promoter, booker/ shot
caller, and trainer and is a respected "in ring" veteran by his
peers in the industry, normally working in upper card/main event
matches. He has wrestled with or against many of the top name
performers of the past and present in the industry today. He has
held many independent championship titles as a singles and Tag
Team wrestler. His background outside the wrestling industry
includes:
* 10 years of service in the United States Navy, where he
advanced through the ranks in a timely fashion, attaining the
rank of E-6, and was awarded numerous citations, awards and
medals
* Senior Sales Management in the Oil and Natural Gas industry
* Management / Sales consulting and General Management of
small private businesses
* Executive Recruitment, specializing in senior management and
board level executives for the Hospitality and Gaming industries.
James Grady Johnson, Executive Vice President, Mr. Johnson, AKA Crazy Luke Graham, was one of the original Golden Grahams (Graham Brothers of Professional Wrestling notoriety). He originally teamed with Dr. Jerry Graham, and Eddie Graham and entered the wrestling industry in 1957. He wrestled against and retired the legendary Lou Thesz in Mr. Thesz' retirement match in the United States. Mr. Johnson held the WWF U.S. Tag Team Title with Dr. Jerry Graham, and tagged with Tarzan Tyler to become the WWF Tag Team Champions. He has wrestled in every state in the United States and in many countries around the world, holding titles in too many federations to list. He made several runs in the WWF/WWWF and in most recognized territories during his career. Today, he is recognized as one of the true legends of the industry, and is well respected by newcomers and veterans alike, and is well connected to many other legends of the industry. He is also well known and connected to major talent in the WWF/WCW. He initially retired in 1986, but has recently begun to make appearances across the country with Luke Graham Jr. as the last living member of the original Graham brothers. Since his retirement from the wrestling industry, he has worked with a railroad transportation company in various positions.
B.Family Relationships
None.
C.Involvement on Certain Material Legal Proceedings During the Last Five Years
No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations. No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities. No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.
Item 6. Executive Compensation
A.Remuneration of Directors, Executive Officers, and Significant
Employees
NAME POSITION COMPENSATION
-----------------------------------------------------------------
Jerome Jolly President, Treasurer, None
Secretary, and Director
Grady Johnson Executive VP, None
Treasurer, and Director
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As of the date of this Registration Statement, no salary has been paid to the Company's officers and directors. Officers and directors of the Company will not receive any compensation until the Company becomes profitable from revenue producing operations. The Board of Directors will determine the amount of their compensation, which will depend on the profitability of the Company.
In the future, the Board of Directors may set annual bonuses based on profitability and performance of the Company.
B.Employment Contracts
The Company has no employment agreements with any of its officers or directors.
Item 7. Certain Relationships and Related Transactions
On September 13, 2000, an officer, director and shareholder of the Company donated capital of $125.
On September 14, 2000, the Company issued 5,750,000 shares of its $0.001 par value common stock to two individuals, who are officers and directors of the Company in exchange for cash in the amount of $8,000 and fixed assets valued at $14,949.
During the year ended December 31, 2000, the Company paid $10,225 to the president of the Company as compensation.
During the year ended December 31, 2000, the Company paid $26,000 to Go Public Central for consulting services rendered.
During the year ended December 31, 2001, the Company paid $7,885 to the president of the Company as compensation.
During the year ended December 31, 2001, the Company paid $772 to an officer, director and shareholder of the Company as compensation.
On June 30, 2002, an officer, director and shareholder of the Company donated fixed assets in the amount of $5,550.
During the year ended December 31, 2002, the Company received $6,504 from the president of the Company as a loan. The loan bears no interest and is due upon demand.
Office space and services are provided without charge by Jerome Jolly, President of the Company. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolutions of such conflicts.
Item 8. Description of Securities
The Company, a Nevada corporation, is authorized to issue 20,000,000 shares of Common Stock, $0.001 par value and 5,000,000 shares of Preferred Stock, $0.001 par value. The Company has currently issued approximately 9,149,188 shares of Common Stock to approximately seventy-three (73) shareholders of record, including officers, directors, and employees of the Company and unaffiliated private investors. The holders of Common Stock (i) have equal rights to dividends from funds legally available therefore, ratably when as and if declared by the Board of Directors of the Company; (ii) are entitled to share ratably in all assets of the Company available for distribution to holders of Common Stock upon liquidation, dissolution, or winding up of the affairs of the Company; (iii) do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions applicable thereto; (iv) are entitled to one non-cumulative vote per share of Common Stock, on all matters which stockholders may vote on at all meetings of Shareholders. There is no cumulative voting for the election of directors.
Part II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters
A. Market for the Registrant's Equity
The Company is currently listed on the "Pink Sheets" as maintained by the National Quotation System, Inc. under the ticker symbol GXCW. As of the date of this registration statement, management has not undertaken any discussions, preliminary or otherwise, with any prospective market maker concerning the participation of such market maker in the aftermarket for the Company's securities, but the Company may initiate such discussions in the future.
B. Outstanding Options, Conversions, and Planned Issuance of Common Stock
As of March 31, 2003, the Company issued 53,325 warrants to Nevwest Securities Corporation pursuant to an Investment Banking Agreement executed during 2001. These warrants allow Nevwest Securities Corporation to purchase the Company's $0.001 par value common stock on a one-for-one basis. The warrant exercise price is $0.11 per share of common stock and substantially all warrants will expire on or before May 31, 2005. There are no other outstanding options, conversions, or planned issuances of common stock of the Company.
C. Security Holders
The Company has currently issued approximately 9,149,188 shares of Common Stock to approximately seventy-three (73) shareholders of record.
D. Securities that Could Be Sold Pursuant to Rule 144
There are 7,212,938 shares of our common stock held by affiliates
that Rule 144 of the Securities Act of 1933 defines as restricted
securities. To date, no shares have been sold pursuant to Rule
144 of the Securities Act of 1933. Of the shares owned by
affiliates, all 7,212,938 are currently freely transferable, but
are subject to the resale limitations as outlined under Rule
144(e)(1)-(3). In general, under Rule 144 as currently in effect,
any of our affiliates and any person or persons whose sales are
aggregated who has beneficially owned his or her restricted
shares for at least one year, may be entitled to sell in the open
market within any three-month period a number of shares of common
stock that does not exceed the greater of (i) 1% of the then
outstanding shares of our common stock, or (ii) the average
weekly trading volume in the common stock during the four
calendar weeks preceding such sale. Sales under Rule 144 are also
affected by limitations on manner of sale, notice requirements,
and availability of current public information about us. Non-
affiliates who have held their restricted shares for two years
may be entitled to sell their shares under Rule 144 without
regard to any of the above limitations, provided they have not
been affiliates for the three months preceding such sale.
Further, Rule 144A as currently in effect, in general, permits
unlimited resales of restricted securities of any issuer provided
that the purchaser is an institution that owns and invests on a
discretionary basis at least $100 million in securities or is a
registered broker-dealer that owns and invests $10 million in
securities. Rule 144A allows our existing stockholders to sell
their shares of common stock to such institutions and registered
broker-dealers without regard to any volume or other
restrictions. Unlike under Rule 144, restricted securities sold
under Rule 144A to non-affiliates do not lose their status as
restricted securities. The availability for sale of substantial
amounts of common stock under Rule 144 could reduce prevailing
market prices for our securities. Holders as of the date of this
registration statement, we had 73 holders of record of our common
stock.
E. Dividends
To the date of this Registration Statement, the Company has not declared nor paid any dividends on its Common Stock. As of the date of this Registration Statement, the Company does not have a formal dividend policy.
F. Transfer Agent and Registrar
The Transfer Agent for the shares of common voting stock of the Company is Pacific Stock Transfer Company, 500 East Warm Springs Road, Suite 240, Las Vegas, Nevada 89119 - (702)-433-1979.
Item 2. Legal Proceedings
As of the date of this Registration Statement, the Company is not and has not been a party to any pending legal proceeding involving any private party or federal, state, or local authority.
Item 3. Changes in and Disagreements with Accountants
During the two most recent fiscal years and any later interim period, no principal independent accountant of Galaxy resigned (or declined to stand for re-election) or was dismissed. To the best of management's knowledge, no disagreements exist between Galaxy and its principal accountant.
Item 4. Recent Sale of Unregistered Securities
The Company is authorized to issue 20,000,000 shares of its $0.001 par value common stock and 5,000,000 shares of it $0.001 par value preferred stock.
On September 13, 2000, an officer, director and shareholder of the Company donated capital of $125.
On September 14, 2000, the Company issued 5,750,000 shares of its $0.001 par value common stock to Jerome Jolly and Grady Johnson, who are officers and directors of the Company in exchange for cash in the amount of $8,000 and fixed assets valued at $14,949. On the basis of these facts, the Company claims that the issuance of the stock to Mr. Danesi was qualified for the available exemption from registration contained in Section 4(2) of the Securities Act of 1933.
On December 15, 2000, the Company issued 600,000 shares of its $0.001 par value common stock to a corporate affiliate, GoPublicCentral.com, Inc. ("GPC"), a Nevada corporation, for consulting services rendered. At the time of the issuance, GPC was in possession of all available material information regarding the issuer. Also, GPC had a degree of financial sophistication sufficient to allow it to formulate an independent assessment of the investment merits of the issuer. On the basis of these facts, the Company claims that the issuance of the stock to GPC was qualified for the available exemption from registration contained in Section 4(2) of the Securities Act of 1933.
On December 15, 2000, the Company closed its private placement offering and issued 1,303,000 of its $0.001 par value common stock for cash of $65,150. The private offering was exempt from federal registration pursuant to Regulation D, Rule 505 of the 1933 Securities and Exchange Act, as amended.
During the year ended December 31, 2001, the Company received $63,325 in cash for shares that were issued in the offering pursuant to Regulation D, Rule 504, of the Securities Act of 1933, as amended. This amount is considered a subscription payable.
On June 26, 2001, the State of Nevada issued a permit to Galaxy to sell securities pursuant to registration by qualification in the state (Permit # R01-67). The offering was exempt from federal registration pursuant to Regulation D, Rule 504 of the 1933 Securities and Exchange Act, as amended. On May 31, 2002, the Company closed its offering and issued 633,250 of its $0.001 par value common stock for total of $63,325 pursuant to an offering pursuant to Regulation D, Rule 504, of the Securities Act of 1933, as amended.
On June 10, 2002, the Company issued 310,000 shares of its $0.001 par value common stock to Go Public First, Inc. ("GPF"), a Nevada corporation, for consulting services rendered valued at $31,000. At the time of the issuance, GPF was in possession of all available material information regarding the issuer. Also, GPF had a degree of financial sophistication sufficient to allow it to formulate an independent assessment of the investment merits of the issuer. On the basis of these facts, the Company claims that the issuance of the stock to GPF was qualified for the available exemption from registration contained in Section 4(2) of the Securities Act of 1933.
On June 10, 2002, the Company issued 552,938 shares of its $0.001 par value common stock to Go Public First, Inc. for consulting services valued at $55,294, of which $10,000 is considered deferred compensation. At the time of the issuance, GPF was in possession of all available material information regarding the issuer. Also, GPF had a degree of financial sophistication sufficient to allow it to formulate an independent assessment of the investment merits of the issuer. On the basis of these facts, the Company claims that the issuance of the stock to GPF was qualified for the available exemption from registration contained in Section 4(2) of the Securities Act of 1933.
On June 30, 2002, an officer, director and shareholder of the Company donated fixed assets in the amount of $5,550.
There have been no other issuances of common and/or preferred stock.
Item 5. Indemnification of Directors and Officers
The Bylaws of the Company provide for indemnification of its directors, officers and employees as follows:
Every director, officer, or employee of the Corporation shall be indemnified by the Corporation against all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon him/her in connection with any proceeding to which he/she may be made a party, or in which he/she may become involved, by reason of being or having been 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 the Corporation, partnership, joint venture, trust or enterprise, or any settlement thereof, whether or not he/she is a director, officer, employee or agent at the time such expenses are incurred, except in such cases wherein the director, officer, employee or agent is adjudged guilty of willful misfeasance or malfeasance in the performance of his/her duties; provided that in the event of a settlement the indemnification herein shall apply only when the Board of Directors approves such settlement and reimbursement as being for the best interests of the Corporation.
The Bylaws of the Company further state that the Company shall provide to any person who 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 the corporation, partnership, joint venture, trust or enterprise, the indemnity against expenses of a suit, litigation or other proceedings which is specifically permissible under applicable Nevada law. The Board of Directors may, in its discretion, direct the purchase of liability insurance by way of implementing the provisions of this Article. However, the Company has yet to purchase any such insurance and has no plans to do so.
The Articles of Incorporation of the Company state that 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 the law or (ii) the unlawful payment of dividends. Any repeal or modification of this Article by 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.
The Articles of Incorporation of the Company further state that every person who was or is a party to, or is threatened to be made a party to, or is involved in any such action, suit or proceeding, whether civil, criminal, administrative or investigative, by the reason of the fact that he or she, or a person with whom he or she is a legal representative, is or was a director of the corporation, or who is serving at the request of the corporation as a director or officer of another corporation, or is a 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 a settlement) reasonably incurred or suffered by him or her 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 suit or proceeding must be paid by the corporation as incurred and in advance of the final disposition of the action, suit, or proceeding, under 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 or she is not entitled to be indemnified by the corporation. Such right of indemnification shall not be exclusive of any other right of 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 bylaw, agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under this article.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Part F/S
Item 1. Financial Statements
Galaxy Championship Wrestling, Inc.
(A Development Stage Company)
Balance Sheet
as of
December 31, 2002 and 2001
and
Statement of Operations,
Changes in Stockholders' Equity, and
Cash Flows
for the year ended
December 31, 2002 and 2001
and
for the period
September 13, 2000 (Date of Inception)
through
December 31, 2002
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1 Balance Sheet 2 Statements of Operations 3 Statements of Changes in Stockholders' Equity 4 Statements of Cash Flows 5 Footnotes 6 |
Beckstead and Watts, LLP
Certified Public Accountants
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984
702.362.0540 (fax)
INDEPENDENT AUDITORS' REPORT
Board of Directors
Galaxy Championship Wrestling, Inc.
We have audited the Balance Sheet of Galaxy Championship Wrestling, Inc. (the "Company") (A Development Stage Company), as of December 31, 2002 and 2001, and the related Statement of Operations, Stockholders' Equity, and Cash Flows for the year then ended and for the period September 13, 2000 (Date of Inception) to December 31, 2002. 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 the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement presentation. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Galaxy Championship Wrestling, Inc. (A Development Stage Company) as of December 31, 2002 and 2001, and the results of its operations and cash flows for year then ended and for the period September 13, 2000 (Date of Inception) to December 31, 2002, in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has had limited operations and have not commenced planned principal operations. This raises substantial doubt about its ability to continue as a going concern. Management's plan in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Beckstead and Watts LLP ---------------------------- April 1, 2003 |
PAGE-20- F1
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Balance Sheets
December 31,
---------------------
2002 2001
Assets ---------------------
Current assets:
Cash $ 185 $ -
Deposits 2,000 2,000
Deferred tax asset 3,688 3,688
Note receivable 1,800 1,800
Marketable Securities 100 -
---------------------
Total current assets 7,773 7,488
---------------------
Fixed assets, net 12,273 9,364
$ 20,046 $ 16,852
=====================
Liabilities and Stockholders' Equity
(Deficit)
Current liabilities:
Accounts payable $ 12,000 $ -
Notes payable 18,500 13,500
Notes payable - related party 7,303 661
---------------------
Total current liabilities 37,803 14,161
---------------------
Stockholders' equity (deficit):
Preferred stock, $0.001 par value, - -
5,000,000 shares authorized, no shares
issued or outstanding
Common stock, $0.001 par value, 9,149 7,653
20,000,000 shares authorized,
9,149,188 and 7,653,000 shares issued
and outstanding as of 12/31/02 and
12/31/01, respectively
Additional paid-in capital 294,244 140,571
Subscriptions payable - 63,325
Deferred compensation (10,000) -
(Deficit) accumulated during development stage (311,150) (208,858)
---------------------
(17,757) 2,691
---------------------
$ 20,046 $ 16,852
=====================
|
The accompanying notes are an integral part of these financial statements.
PAGE-21- F2
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Statements of Operations
For the years ended September 13,
December 31, 2000(Inception)
to December 31,
2002 2001 2002
Revenue $ 2,527 $ 4,117 $ 6,644
Cost of goods sold 2,665 - 2,665
-------------------------------------
Gross profit (loss) (138) 4,117 3,979
-------------------------------------
Expenses:
General & administrative expenses 99,518 88,369 202,241
General & administrative expenses - RPT - 8,682 18,907
Legal Expense - - 86,000
Depreciation expense 2,641 1,039 4,472
-------------------------------------
Total expenses 102,159 98,090 311,620
-------------------------------------
Other income:
Interest income 5 - 5
(Loss) on sale of fixed asset - (7,202) (7,202)
-------------------------------------
Total other income (expense) 5 (7,202) (7,197)
-------------------------------------
Net (loss) before income tax benefit (102,292) (101,175) (314,838)
Income tax benefit - - 3,688
-------------------------------------
Net (loss) $ (102,292) $ (101,175) $(311,150)
Weighted average number of common 8,562,722 7,653,000
shares outstanding - basic and fully
diluted
Net (loss) per share - basic and $ (0.01) $ (0.00)
fully diluted
|
The accompanying notes are an integral part of these financial statements.
PAGE-22- F3
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
|
Statements of Changes in Stockholders' Equity (Deficit)
Common Stock (Deficit) Total
Accumulated Stockholders'
-------------------- During Equity
Development (Deficit)
Stage
Shares Amount Additional Subscriptions Deferred
Paid-in Payable Compensation
Capital
----------------------------------------------------------------------------------------------
September 2000
Donated Capital - $ - $ 125 $ $ $ - $ 125
September 2000
Issued 5,750,000 5,750 17,199 22,949
for cash and
A vehicle
December 2000
Issued 600,000 600 59,400 60,000
for services
December 2000
Issued 1,303,000 1,303 63,847 65,150
for cash
Net (loss)
September 13, (107,683) (107,683)
2000 (Inception) ----------------------------------------------------------------------------------------------
to December 31,
2000
Balance, 7,653,000 7,653 140,571 - - (107,683) 40,541
December 31, 2000
December 2001
Cash 63,325 63,325
received for
504 offering
Net (loss)
For the (101,175) (101,175)
year ended ----------------------------------------------------------------------------------------------
December 31, 2001
Balance, 7,653,000 7,653 140,571 63,325 - (208,858) 2,691
December 31, 2001
May 2002
504 633,250 633 62,692 (63,325) -
offering
issued for
cash
June 2002
Issued 310,000 310 30,690 31,000
for services
June 2002
Issued for 552,938 553 54,741 (10,000) 45,294
services
June 2002
Donated 5,550 5,550
capital
Net (loss)
For the year (102,292) (102,292)
ended ----------------------------------------------------------------------------------------------
December 31, 2002
9,149,188 9,149 294,244 - (10,000) (311,150) (17,757)
==============================================================================================
|
The accompanying notes are an integral part of these financial statements.
PAGE-23- F4
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Statements of Cash Flows
|
Common Stock (Deficit) Total
Accumulated Stockholders'
-------------------- During Equity
Development (Deficit)
Stage
Shares Amount Additional Subscriptions Deferred
Paid-in Payable Compensation
Capital
----------------------------------------------------------------------------------------------
September 2000
Donated Capital - $ - $ 125 $ $ $ - $ 125
Capital
September 2000
Issued 5,750,000 5,750 17,199 22,949
for cash and
A vehicle
December 2000
Issued 600,000 600 59,400 60,000
for services
December 2000
Issued 1,303,000 1,303 63,847 65,150
for cash
Net (loss)
September (107,683) (107,683)
13, 2000 ----------------------------------------------------------------------------------------------
(Inception)
to December
31, 2000
Balance, 7,653,000 7,653 140,571 - - (107,683) 40,541
December 31,
2000
December 2001
Cash 63,325 63,325
received for
504 offering
Net (loss)
For the (101,175) (101,175)
year ended ----------------------------------------------------------------------------------------------
December
31, 2001
Balance, 7,653,000 7,653 140,571 63,325 - (208,858) 2,691
December 31,
2001
May 2002
504 633,250 633 62,692 (63,325) -
offering
issued for cash
June 2002
Issued 310,000 310 30,690 31,000
for services
June 2002
Issued for 552,938 553 54,741 (10,000) 45,294
services
June 2002
Donated 5,550 5,550
capital
Net (loss)
For the year (102,292) (102,292)
ended ----------------------------------------------------------------------------------------------
December 31, 2002
9,149,188 9,149 294,244 - (10,000) (311,150) (17,757)
==============================================================================================
|
The accompanying notes are an integral part of these financial statements.
PAGE-24- F5
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Notes
|
Note 1 - History and organization of the company
The Company was organized September 13, 2000 (Date of Inception) under the laws of the State of Nevada, as Galaxy Championship Wrestling, Inc. The Company has minimal operations and in accordance with SFAS #7, the Company is considered a development stage company. The Company is authorized to issue 20,000,000 shares of $0.001 par value common stock and 5,000,000 shares of $0.001 par value preferred stock.
Note 2 - Accounting policies and procedures
Cash and cash equivalents
For the purpose of the statements of cash flows, all highly
liquid investments with an original maturity of three months or
less are considered to be cash equivalents. Cash equivalents
include funds held in a money market account. There are cash
equivalents of $185 and $0 as of December 31, 2002 and 2001.
Revenue recognition
The Company reports revenue as invoiced on an accrued basis.
Advertising costs
The Company expenses all costs of advertising as incurred.
There were no advertising costs included in general and
administrative expenses as of December 31, 2002 and 2001.
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain
market assumptions and pertinent information available to
management as of December 31, 2002 and 2001. The respective
carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These financial
instruments include cash and accounts payable. Fair values
were assumed to approximate carrying values for cash and
payables because they are short term in nature and their
carrying amounts approximate fair values or they are payable on
demand.
Fixed assets
The cost of fixed assets is depreciated over the following
estimated useful life of the equipment utilizing the straight-
line method of depreciation:
Vehicle 5 years Equipment 5 years Tools 5 years |
Impairment of long-lived assets
Long-lived assets held and used by the Company are reviewed for
possible impairment whenever events or circumstances indicate
the carrying amount of an asset may not be recoverable or is
impaired. No such impairments have been identified by
management at December 31, 2002 and 2001.
PAGE-25- F6
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Notes
|
Reporting on the costs of start-up activities Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up Activities," which provides guidance on the financial reporting of start-up costs and organizational costs, requires most costs of start-up activities and organizational costs to be expensed as incurred. SOP 98-5 is effective for fiscal years beginning after December 15, 1998. With the adoption of SOP 98-5, there has been little or no effect on the Company's financial statements.
Loss per share
Basic loss per share is computed by dividing the net loss by
the weighted average number of common shares outstanding
available to common stockholders during the period. The
weighted average number of common shares outstanding was
8,562,722 and 7,653,000 for the years ended December 31, 2002
and 2001, respectively. The computation for loss per common
share, assuming dilution, for the years ended December 31, 2002
and 2001, was antidilutive, and therefore is not included.
Outstanding warrants as of December 31, 2002 totaled 53,325.
Dividends
The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid or declared since
inception.
Segment reporting
The Company follows Statement of Financial Accounting Standards
No. 130, "Disclosures About Segments of an Enterprise and
Related Information." The Company operates as a single segment
and will evaluate additional segment disclosure requirements as
it expands its operations.
Income taxes
The Company follows Statement of Financial Accounting Standard
No. 109, "Accounting for Income Taxes" ("SFAS No. 109") for
recording the provision for income taxes. Deferred tax assets
and liabilities are computed based upon the difference between
the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when
the related asset or liability is expected to be realized or
settled. Deferred income tax expenses or benefits are based on
the changes in the asset or liability each period. If
available evidence suggests that it is more likely than not
that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the
deferred tax assets to the amount that is more likely than not
to be realized. Future changes in such valuation allowance are
included in the provision for deferred income taxes in the
period of change.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
Recent pronouncements
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities", which addresses
financial accounting and reporting for costs associated with exit
or disposal activities and supersedes EITF No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." SFAS No. 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized
when the liability is incurred. Under EITF No. 94-3, a liability
for an exit cost was recognized at the date of an entity's
commitment to an exit plan. SFAS No. 146 also establishes that
the liability should initially be measured
PAGE-26- F7
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Notes
|
and recorded at fair value. The provisions of SFAS No. 146 will be adopted for exit or disposal activities that are initiated after December 31, 2002.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS No. 123." This Statement amends SFAS No. 123, "Accounting for Stock-Based Compensation", to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock- based employee compensation and the effect of the method used on reported results. The adoption of SFAS No. 148 is not expected to have a material impact on the company's financial position or results of operations.
In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45, "Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees and Indebtedness of Others", an interpretation of FIN No. 5, 57 and 107, and rescission of FIN No. 34, "Disclosure of Indirect Guarantees of Indebtedness of Others". FIN 45 elaborates on the disclosures to be made by the guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also requires that a guarantor recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002; while, the provisions of the disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The company believes that the adoption of such interpretation will not have a material impact on its financial position or results of operations and will adopt such interpretation during fiscal year 2003, as required.
In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities", an interpretation of Accounting Research Bulletin No. 51. FIN No. 46 requires that variable interest entities be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or is entitled to receive a majority of the entity's residual returns or both. FIN No. 46 also requires disclosures about variable interest entities that companies are not required to consolidate but in which a company has a significant variable interest. The consolidation requirements of FIN No. 46 will apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements will apply to entities established prior to January 31, 2003 in the first fiscal year or interim period beginning after June 15, 2003. The disclosure requirements will apply in all financial statements issued after January 31, 2003. The company will begin to adopt the provisions of FIN No. 46 during the first quarter of fiscal 2003.
Stock-Based Compensation
The Company accounts for stock-based awards to employees in
accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related
interpretations and has adopted the disclosure-only alternative
of SFAS No. 123, "Accounting for Stock-Based Compensation."
Options granted to consultants, independent representatives and
other non-employees are accounted for using the fair value
method as prescribed by SFAS No. 123.
Year end
The Company has adopted December 31 as its fiscal year end.
Note 3 - Going concern
The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not commenced its planned principal
PAGE-27- F8
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Notes
|
operations and has generated minimal revenues. In order to obtain the necessary capital, the Company raised funds via a private placement offering and an offering pursuant to Regulation D, Rule 504, of the Securities Act of 1933, as amended. If the securities offering did not provide sufficient capital, some of the shareholders of the Company have agreed to provide sufficient funds as a loan over the next twelve-month period. However, the Company is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, without sufficient financing it would be unlikely for the Company to continue as a going concern.
The officers and directors are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.
Note 4 - Income taxes
The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which requires use of the liability method. SFAS No. 109 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
--------
Total -%
========
|
As of December 31, 2002, the Company has a net operating loss carry forward as follows:
Year Amount Expiration ------ -------- ---------- 2000 $107,683 2020 2001 $101,175 2021 2002 $102,292 2022 |
Note 5 - Note receivable
During the year ended December 31, 2001, the Company loaned $1,800 to Gerry Sadler. The note bears no interest and is due upon demand.
Note 6 - Fixed assets
On February 16, 2001, the Company sold a vehicle for $7,000 and recorded $7,202 as a loss on the sale of the fixed asset.
PAGE-28- F9
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Notes
|
During the year ended December 31, 2001, the Company purchased a vehicle, equipment and tools in the amount of $7,050. The Company recorded depreciation expense in the amount of $1,039 during the year ended December 31, 2001.
On June 30, 2002, an officer, director and shareholder of the Company donated equipment in the amount of $5,550. The Company recorded depreciation expense in the amount of $2,641 during the year ended December 31, 2002.
Note 7 - Notes payable
On October 3, 2001, the Company purchased a vehicle in the amount of $6,000 from Rick Olive, of which the Company paid $3,500 as a down payment. The amount due to Mr. Olive is $2,500 which bears no interest and is due on October 3, 2002. As of December 31, 2002, the Company has made no payments to Mr. Olive.
During the year ended December 31, 2002 and 2001, the Company received $5,000 and $7,500, respectively, from Frank Danesi as a loan. The loan bears no interest and is due upon demand. As of December 31, 2002, the balance is $12,500.
During the year ended December 31, 2001, the Company received $3,500 from Bradford Barker as a loan. The loan bears no interest and is due upon demand. As of December 31, 2002, the balance is $3,500.
Note 8 - Notes payable - related party
During the years ended December 31, 2002 and 2001, the Company received $661 and $6,642, respectively, from the president of the Company as a loan. The loan bears no interest and is due upon demand. As of December 31, 2002, the total amount due to the president of the Company is $7,303.
Note 9 - Stockholder's equity
The Company is authorized to issue 20,000,000 shares of its $0.001 par value common stock and 5,000,000 shares of it $0.001 par value preferred stock.
On September 13, 2000, an officer, director and shareholder of the Company donated capital of $125.
On September 14, 2000, the Company issued 5,750,000 shares of its $0.001 par value common stock to two individuals, who are officers and directors of the Company in exchange for cash in the amount of $8,000 and fixed assets valued at $14,949.
On December 15, 2000, the Company issued 600,000 shares of its $0.001 par value common stock to Go Public Central for consulting services rendered.
On December 15, 2000, the Company closed its private placement offering and issued 1,303,000 of its $0.001 par value common stock for cash of $65,150.
During the year ended December 31, 2001, the Company received $63,325 in cash for shares that were issued in the offering pursuant to Regulation D, Rule 504, of the Securities Act of 1933, as amended. This amount is considered a subscription payable.
PAGE-29- F10
Galaxy Championship Wrestling, Inc.
(a Development Stage Company)
Notes
|
On May 31, 2002, the Company closed its offering and issued 633,250 of its $0.001 par value common stock for total of $63,325 pursuant to an offering pursuant to Regulation D, Rule 504, of the Securities Act of 1933, as amended.
On June 10, 2002, the Company issued 310,000 shares of its $0.001 par value common stock to Go Public First, Inc. for consulting services rendered valued at $31,000.
On June 10, 2002, the Company issued 552,938 shares of its $0.001 par value common stock to Go Public First, Inc. for consulting services valued at $55,294, of which $10,000 is considered deferred compensation.
On June 30, 2002, an officer, director and shareholder of the Company donated fixed assets in the amount of $5,550.
There have been no other issuances of common and/or preferred stock.
Note 10 - Warrants and options
As of May 31, 2002, the Company issued 53,325 warrants to purchase the Company's $0.001 par value common stock on a one-for- one basis. The warrant exercise price is $0.11 per share of common stock and substantially all warrants will expire on or before May 31, 2005. During the year ended December 31, 2002, no warrants have been exercised.
Note 11 - Related party transactions
On September 13, 2000, an officer, director and shareholder of the Company donated capital of $125.
On September 14, 2000, the Company issued 5,750,000 shares of its $0.001 par value common stock to two individuals, who are officers and directors of the Company in exchange for cash in the amount of $8,000 and fixed assets valued at $14,949.
During the year ended December 31, 2000, the Company paid $10,225 to the president of the Company as compensation.
During the year ended December 31, 2000, the Company paid $26,000 to Go Public Central for consulting services rendered.
During the year ended December 31, 2001, the Company paid $7,885 to the president of the Company as compensation.
During the year ended December 31, 2001, the Company paid $772 to an officer, director and shareholder of the Company as compensation.
On June 30, 2002, an officer, director and shareholder of the Company donated fixed assets in the amount of $5,550.
During the year ended December 31, 2002, the Company received $6,504 from the president of the Company as a loan. The loan bears no interest and is due upon demand.
PAGE-30- F11
Part III
Item 1. Index to Exhibits
Exhibit Number Name and/or Identification of Exhibit
-------------- -------------------------------------
3 Articles of Incorporation & By-Laws
|
a. Articles of Incorporation of the Company filed
December 10, 1998 and Amendments Thereto
b. By-Laws of the Company adopted September 14, 2000
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
Galaxy Championship Wrestling, Inc.
-----------------------------------
(Registrant)
Date: April 29, 2003
By: /s/ Jerome Jolly
----------------
Jerome Jolly, President, Secretary, and Director
|
Exhibit 3(a): Articles of Incorporation of the Company filed September 13, 2000 and Amendments Thereto
ARTICLES OF INCORPORATION
OF
Galaxy Championship Wrestling, Inc.
1. Name of Company:
Galaxy Championship Wrestling, Inc.
2. Resident Agent:
The resident agent of the Company is:
GoPublicCentral.com, Inc.
500 N. Rainbow Boulevard, Suite 300
Las Vegas, Nevada 89107
3. Board of Directors:
The Company shall initially have one director (1) who shall be Jerome Jolly; 500 North Rainbow Boulevard, Suite 300, Las Vegas, NV 89107. This individual shall serve as director until their successor or successors have been elected and qualified. The number of directors may be increased or decreased by a duly adopted amendment to the By-Laws of the Corporation.
4. Authorized Shares:
The aggregate number of shares which the corporation shall have authority to issue shall consist of 20,000,000 shares of Common Stock having a $.001 par value, and 5,000,000 shares of Preferred Stock having a $.001 par value. The Common and/or Preferred Stock of the Company may be issued from time to time without prior approval by the stockholders. The Common and/or Preferred Stock may be issued for such consideration as may be fixed from time to time by the Board of Directors. The Board of Directors may issue such share of Common and/or Preferred Stock in one or more series, with such voting powers, designations, preferences and rights or qualifications, limitations or restrictions thereof as shall be stated in the resolution or resolutions.
5. Preemptive Rights and Assessment of Shares:
Holders of Common Stock or Preferred Stock of the corporation shall not have any preference, preemptive right or right of subscription to acquire shares of the corporation authorized, issued, or sold, or to be authorized, issued or sold, or to any obligations or shares authorized or issued or to be authorized or issued, and convertible into shares of the corporation, nor to any right of subscription thereto, other than to the extent, if any, the Board of Directors in its sole discretion, may determine from time to time.
The Common Stock of the Corporation, after the amount of the subscription price has been fully paid in, in money, property or services, as the directors shall determine, shall not be subject to assessment to pays the debts of the corporation, nor for any other purpose, and no Common Stock issued as fully paid shall ever be assessable or assessed, and the Articles of Incorporation shall not be amended to provide for such assessment.
-PAGE-
Incorporation Continued
6. 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 the law or (ii) the unlawful payment of dividends. Any repeal or modification of this Article by 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.
7. Indemnity
Every person who was or is a party to, or is threatened to be made a party to, or is involved in any such action, suit or proceeding, whether civil, criminal, administrative or investigative, by the reason of the fact that he or she, or a person with whom he or she is a legal representative, is or was a director of the corporation, or who is serving at the request of the corporation as a director or officer of another corporation, or is a 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 a settlement) reasonably incurred or suffered by him or her 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 suit or proceeding must be paid by the corporation as incurred and in advance of the final disposition of the action, suit, or proceeding, under 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 or she is not entitled to be indemnified by the corporation. Such right of indemnification shall not be exclusive of any other right of 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 bylaw, 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 Board of Directors may adopt By-Laws from time to time without 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 or maintain insurance on behalf of any person who is or was a director or officer
8. Amendments
Subject at all times to the express provisions of
Section 5 on the Assessment of Shares, this corporation reserves
the right to amend, alter, change, or repeal any provision
contained in these Articles of Incorporation or its By-Laws, in
the manner now or hereafter prescribed by statute or the Articles
of Incorporation or said By-Laws, and all rights conferred upon
shareholders are granted subject to this reservation.
9. Power of Directors
In furtherance, and not in limitation of those powers conferred by statute, the Board of Directors is expressly authorized:
(a) Subject to the By-Laws, if any, adopted by the shareholders, to make, alter or repeal the By-Laws of the corporation;
-PAGE-
Incorporation Continued
(b) To authorize and caused to be executed mortgages and liens, with or without limitations as to amount, upon the real and personal property of the corporation;
(c) To authorize the guaranty by the corporation of the securities, evidences of indebtedness and obligations of other persons, corporations or business entities;
(d) To set apart out of any funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve;
(e) By resolution adopted by the majority of the whole board, to designate one or more committees to consist of one or more directors of the of the corporation, which, to the extent provided on the resolution or in the By-Laws of the corporation, shall have and may exercise the powers of the Board of Directors in the management of the 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 name and names as may be stated in the By-Laws of the corporation or as may be determined from time to time by resolution adopted by the Board of Directors.
All the corporate powers of the corporation shall be exercised by the Board of Directors except as otherwise herein or in the By-Laws or by law.
IN WITNESS WHEREOF, I hereunder set my hand this Thursday, December 10, 1998, hereby declaring and certifying that the facts stated hereinabove are true.
Signature of Incorporator
Name: Ted D. Campbell II
Address: 500 N. Rainbow Boulevard, Suite 300
Las Vegas, Nevada 89109
Signature: /s/ Ted D. Campbell II
----------------------
|
State of Nevada )
County of Clark )
This instrument was acknowledged before me on Thursday, May 01, 2003, by Ted D. Campbell II.
/s/ Tina M. McCombs ----------------------- Notary Public Signature |
Certificate of Acceptance of Appointment as Resident Agent: I, Ted D. Campbell II, as the President of GoPublicCentral.com, Inc. (GPC) hereby accept appointment of GPF as the resident agent for the above referenced company.
Signature: /s/ Ted D. Campbell II
--------------------------------
Ted D. Campbell II for GPC
|
-PAGE-
Exhibit 3(b): By-Laws of the Company adopted September 14, 2000
By-Laws
OF
Galaxy Championship Wrestling, Inc.
ARTICLE I
STOCKHOLDERS
Section 1.01 Annual Meeting. The annual meeting of the stockholders of the corporation shall be held on such date and at such time as designated from time to time for the purpose or electing directors of the corporation and to transact all business as may properly come before the meeting. If the election of the directors is not held on the day designated herein for any annual meeting of the stockholders, or at any adjournment thereof, the president shall cause the election to be held at a special meeting of the stockholders as soon thereafter as is convenient.
Section 1.02 Special Meeting. Special meetings of the stockholders may be called by the president or the Board of Directors and shall be called by the president at the written request of the holders of not less than 51% of the issued and outstanding voting shares of the capital stock of the corporation. All business lawfully to be transacted by the stockholders may be transacted at any special meeting or at any adjournment thereof. However, no business shall be acted upon at a special meeting except that referred to in the notice calling the meeting, unless all of the outstanding capital stock of the corporation is represented either in person or in proxy. Where all of the capital stock is represented, any lawful business may be transacted and the meeting shall be valid for all purposes.
Section 1.03 Place of Meetings. Any meeting of the stockholders of the corporation may be held at its principal office in the State of Nevada or at such other place in or our of the United States as the Board of Directors may designate. A waiver of notice signed by the Stockholders entitled to vote may designate any place for the holding of the meeting.
Section 1.04 Notice of Meetings.
(a) The secretary shall sign and deliver to all stockholders of record written or printed notice of any meeting at least ten (10) days, but not more than sixty (60) days, before the date of such meeting; which notice shall state the place, date, and time of the meeting, the general nature of the business to be transacted, and, in the case of any meeting at which directors are to be elected, the names of the nominees, if any, to be presented for election.
(b) In the case of any meeting, any proper business may be presented for action, except the following items shall be valid only if the general nature of the proposal is stated in the notice or written waiver of notice:
(1) Action with respect to any contract or transaction between the corporation and one or more of its directors or officers or another firm, association, or corporation in which one of its directors or officers has a material financial interest;
(2) Adoption of amendments to the Articles of Incorporation;
(3) Action with respect to the merger, consolidation, reorganization, partial or complete liquidation, or dissolution of the corporation.
(c) The notice shall be personally delivered or mailed by first class mail to each stockholder of record at the last known address thereof, as the same appears on the books of the corporation, and giving of such notice shall be deemed delivered the date the same is deposited in the United State mail, postage prepaid. If the address of any stockholders does not appear upon the books of the corporation, it will be sufficient to address such notice to such stockholder at the principal office of the corporation.
(d) The written certificate of the person calling any meeting, duly sworn, setting forth the substance of the notice, the time and place the notice was mailed or personally delivered to the stockholders, and the addresses to which the notice was mailed shall be prima facie evidence of the manner and the fact of giving such notice.
Section 1.05 Waiver of Notice. If all of the stockholders of the corporation waive notice of a meeting, no notice shall be required, and, whenever all stockholders shall meet in person or by proxy, such meeting shall be valid for all purposes without call or notice, and at such meeting any corporate action may be taken.
Section 1.06 Determination of Stockholders of Record.
(a) The Board of Directors may at any time fix a future date as a record date for the determination of the stockholders entitled to notice of any meeting or to vote 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 other lawful action. The record date so fixed shall not be more than sixty (60) days nor less than ten (10) days prior to the date of such meeting nor more than sixty (60) days nor less than ten (10) days prior to any other action. When a record date is so fixed, only stockholders of record on that date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution or allotment of rights, or to exercise their rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date.
(b) If no record date is fixed by the Board of Directors, then (I) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived at the close of business on the next day preceding the day on which the meeting is held; (ii) the record date for action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the written consent is given; and (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day in which the Board of Directors adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such other action, whichever is later.
Section 1.07 Voting.
(a) Each stockholder of record, or such stockholder's duly authorized proxy or attorney-in-fact shall be entitled to one (1) vote for each share of voting stock standing registered in such stockholder's name on the books of the corporation on the record date.
(b) Except as otherwise provided herein, all votes with respect to shares standing in the name of an individual on that record date (including pledged shares) shall be cast only by that individual or that individual's duly authorized proxy or attorney- in-fact. With respect to shares held by a representative of the estate of a deceased stockholder, guardian, conservator, custodian or trustee, votes may be cast by such holder upon proof of capacity, even though the shares do not stand in the name of such holder. In the case of shares under the control of a receiver, the receiver may cast in the name of the receiver provided that the order of the court of competent jurisdiction which appoints the receiver contains the authority to cast votes carried by such shares. If shares stand in the name of a minor, votes may be cast only by the duly appointed guardian of the estate of such minor if such guardian has provided the corporation with written notice and proof of such appointment.
(c) With respect to shares standing in the name of a corporation on the record date, votes may be cast by such officer or agent as the bylaws of such corporation prescribe or, in the absence of an applicable bylaw provision, by such person as may be appointed by resolution of the Board of Directors of such corporation. In the event that no person is appointed, such votes of the corporation may be cast by any person (including the officer making the authorization) authorized to do so by the Chairman of the Board of Directors, President, or any Vice- President of such corporation.
(d) Notwithstanding anything to the contrary herein contained, no votes may be cast by shares owned by this corporation or its subsidiaries, if any. If shares are held by this corporation or its subsidiaries, if any in a fiduciary capacity, no votes shall be cast with respect thereto on any matter except to the extent that the beneficial owner thereof possesses and exercises either a right to vote or to give the corporation holding the same binding instructions on how to vote.
(e) With respect to shares standing in the name of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, husband and wife as community property, tenants by the entirety, voting trustees, persons entitled to vote under a stockholder voting agreement or otherwise and shares held by two or more persons (including proxy holders) having the same fiduciary relationship with respect to the same shares, votes may be cast in the following manner:
(1) If only one person votes, the vote of such person binds all.
(2) If more than one person votes, the act of the majority so voting binds all.
(3) If more than one person votes, but the vote is evenly split on a particular matter, the votes shall be deemed cast proportionately, as split.
(f) Any holder of shares entitled to vote on any matter may cast a portion of the votes in favor of such matter and refrain from casting the remaining votes or cast the same against the proposal, except in the case in the election of directors. If such holder entitled to vote fails to specify the number of affirmative votes, it will be conclusively presumed that the holder is casting affirmative votes with respect to all shares held.
(g) If a quorum is present, the affirmative vote of the holders of a majority of the voting shares represented at the meeting and entitled to vote on the matter shall be the act of the stockholders, unless a vote of greater number by classes is required by the laws of the State of Nevada, the Articles of Incorporation or these Bylaws.
Section 1.08 Quorum; Adjourned Meetings.
(a) At any meeting of the stockholders, a majority of the issued and outstanding voting shares of the corporation represented in person or by proxy, shall constitute a quorum.
(b) If less than a majority of the issued and
outstanding voting shares are represented, a majority of shares
so represented may adjourn from time to time at the meeting,
until holders of the amount of stock required to constitute a
quorum shall be in attendance. At such adjourned meeting at
which a quorum shall be present, any business may be transacted
which might have been transacted as originally called. When a
stockholder's meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and
place thereof are announced to the meeting to which the
adjournment is taken, unless the adjournment is for more than ten
(10) days in which event notice thereof shall be given.
Section 1.09 Proxies. At any meeting of stockholders, any
holder of shares entitled to vote may authorize another person or
persons to vote by proxy with respect to the shares held by an
instrument in writing and subscribed to by the holder of such
shares entitled to vote. No proxy shall be valid after the
expiration of six (6) months from or unless otherwise specified
in the proxy. In no event shall the term of a proxy exceed seven
(7) years from the date of its execution. Every proxy shall
continue in full force and effect until expiration or revocation.
Revocation may be effected by filing an instrument revoking the
same or a duly executed proxy bearing a later date with the
secretary of the corporation.
Section 1.10 Order of Business. At the annual stockholder's meeting, the regular order of business shall be as follows:
1. Determination of stockholders present and existence of quorum;
2. Reading and approval of the minutes of the previous meeting
or meetings;
3. Reports of the Board of Directors, the president, treasurer and
secretary of the corporation, in the order named;
4. Reports of committees;
5. Election of directors;
6. Unfinished business;
7. New business; and
8. Adjournment.
Section 1.11 Absentees' Consent to Meetings. Transactions of any meetings of the stockholders are valid as though had at a meeting duly held after regular call and notice of a quorum is present, either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy (and those who, although present, either object at the beginning of the meeting to the transaction of any business because the meeting has not been lawfully called or convened or expressly object at the meeting to consideration of matters not included in the notice which are legally required to be included there), signs a written waiver of notice and/or consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents, and approvals shall be filed with the corporate records and made a part of the minutes of the meeting. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except that when the person objects at the beginning of the meeting is not lawfully called or convened and except that attendance at the meeting is not a waiver of any right to object to consideration of matters not included in the notice is such objection is expressly made at the beginning. Neither the business to be transacted at nor the purpose of any regular or special meeting of stockholders need be specified in any written waive of notice, except as otherwise provided in section 1.04(b) of these bylaws.
Section 1.12 Action Without Meeting. Any action, except the election of directors, which may be taken by the vote of the stockholders at a meeting, may be taken without a meeting if consented to by the holders of a majority of the shares entitled to vote or such greater proportion as may be required by the laws of the State of Nevada, the Articles of Incorporation, or these Bylaws. Whenever action is taken by written consent, a meeting of stockholders need not be called or noticed.
Section 1.13 Telephonic Messages. Meeting of the stockholders may be held through the use of conference telephone or similar communications equipment as long as all members participating in such meeting can hear one another at the time of such meeting. Participation in such meeting constitutes presence in person at such meeting.
ARTICLE II
DIRECTORS
Section 2.01 Number, Tenure, and Qualification. Except as otherwise provided herein, the Board of Directors of the corporation shall consist of at least Two (2) and no more than Seven (7) persons, who shall be elected at the annual meeting of the stockholders of the corporation and who shall hold office or one (1) year or until his or her successor or successors are elected and qualify. If, at any time, the number of the stockholders of the corporation is less than one hundred (100), the Board of Directors may consist of one person, but shall not be less than the number of stockholders. A director need not be a stockholder of the corporation.
Section 2.02 Resignation. Any director may resign effective upon giving written notice to the Chairman of the Board of Directors, the president or the secretary of the corporation, unless the notice specified at a later time for effectiveness of such resignation. If the Board of Directors accepts the resignation of a director tendered o take effect at a future date, the Board of Directors or the stockholders may elect a successor to take office when the resignation becomes effective.
Section 2.03 Change in Number. Subject to the limitations of the laws of the State of Nevada, the Articles of Incorporation or Section 2.01 of these Bylaws, the number of directors may be changed from time to time by resolution adopted by the Board of Directors.
Section 2.04 Reduction in Number. No reduction of the number of directors shall have the effect of removing any director prior to the expiration of his term of office.
Section 2.05 Removal.
(a) The Board of Directors of the corporation, by majority vote, may declare vacant the office of a director who has been declared incompetent by an order of a court of competent jurisdiction or convicted of a felony.
(b) Any director may be removed from office, with or without cause, by the vote or written consent of stockholders representing not less than two-thirds of the issued and outstanding voting capital stock of the corporation.
Section 2.06 Vacancies.
(a) A vacancy in the Board of Directors because of death, resignation, removal, change in the number of directors, or otherwise may be filled by the stockholders at any regular or special meeting or any adjourned meeting thereof (but not by written consent) or the remaining director(s) of the affirmative vote of a majority thereof. Each successor so elected shall hold office until the next annual meeting of stockholders or until a successor shall have been duly elected and qualified.
(b) If, after the filling of any vacancy by the directors, the directors then in office who have been elected by the stockholders 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 entitled to vote may call a special meeting of the stockholders to be held to elect the entire Board of Directors. The term of office of any director shall terminate upon the election of a successor.
Section 2.07 Regular Meetings. Immediately following the adjournment of, and at the same place as, the annual meeting of the stockholders, the Board of Directors, including directors newly elected, shall hold its annual meeting without notice other than the provision to elect officers of the corporation and to transact such further business as may be necessary or appropriate. The Board of Directors may provide by resolution the place, date, and hour for holding additional regular meetings.
Section 2.08 Special Meetings. Special meeting of the Board of Directors may be called by the Chairman and shall be called by the Chairman upon request of any two (2) directors or the president of the corporation.
Section 2.09 Place of Meetings. Any meeting of the directors of the corporation may be held at the corporation's principal office in the State of Nevada or at such other place in or out of the United States as the Board of Directors may designate. A waiver of notice signed by the directors may designate any place for holding of such meeting.
Section 2.10 Notice of Meetings. Except as otherwise
provided in Section 2.07, the Chairman shall deliver to all
directors written or printed notice of any special meeting, at
least 48 hours before the time of such meeting, by delivery of
such notice personally or mailing such notice first class mail or
by telegram. If mailed, the notice shall be deemed delivered two
(2) business days following the date the same is deposited in the
United States mail, postage prepaid. Any director may waive
notice o such a meeting, and the attendance of a director at such
a meeting shall constitute a waiver of notice of such meeting,
unless such attendance is for the express purpose of objecting to
the transaction of business thereat because the meeting is not
properly called or convened.
Section 2.11 Quorum; adjourned Meetings.
(a) A majority of the Board of Directors in office shall constitute a quorum.
(b) At any meeting of the Board of Directors where a quorum is present, a majority of those present may adjourn, from time to time, until a quorum is present, and no notice of such adjournment shall be required. At any adjourned meeting where a quorum is present, any business may be transacted which could have been transacted at the meeting originally called.
Section 2.12 Action without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof ma be taken without a meeting if a written consent thereto is signed by all of the members of the Board of Directors or of such committee. Such written consent or consents shall be filed with the minutes of the proceedings of the Board of Directors or committee. Such action by written consent shall have the same force and effect as the unanimous vote of the Board of Directors or committee.
Section 2.13 Telephonic Meetings. Meetings of the Board of Directors may be held through the use of a conference telephone or similar communications equipment so long as all members participating in such meeting can hear one another at the time of such meeting. Participation in such a meeting constitutes presence in person at such meeting. Each person participating in the meeting shall sign the minutes thereof, which may be in counterparts.
Section 2.14 Board Decisions. The affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
Section 2.15 Powers and Duties.
(a) Except as otherwise provided in the Articles of Incorporation or the laws of the State of Nevada, the Board of Directors is invested with complete and unrestrained authority to manage the affairs of the corporation, and is authorized to exercise for such purpose as the general agent of the corporation, its entire corporate authority in such a manner as it sees fit. The Board of Directors may delegate any of its authority to manage, control or conduct the current business of the corporation to any standing or special committee or to any officer or agent and to appoint any persons to be agents of the corporation with such powers including the power to subdelegate, and upon such terms as my be deemed fit.
(b) The Board of Directors shall present to the stockholders at annual meetings of the stockholders, and when called for by a majority vote of the stockholders at a special meeting of the stockholders, a full and clear statement of the condition of the corporation, and shall, at request, furnish each of the stockholders with a true copy thereof.
(c) The Board of Directors, in its discretion, may submit any contract or act for approval or ratification at any annual meeting of the stockholders or any special meeting properly called for the purpose of considering any such contract or act, provide a quorum is preset. The contract or act shall be valid and binding upon the corporation and upon all stockholders thereof, if approved and ratified by the affirmative vote of a majority of the stockholders at such meeting.
(d) The Board of Directors may ratify a "Related Transaction" by a majority vote of the disinterested directors that are voting at any Special or Regularly scheduled board meeting. A Related Transaction is defined as a material agreement, contract, or other transaction between a current officer, director, or shareholder of the Corporation and the Corporation itself. Additionally, under no circumstances may the Related Transaction that is ratified be on less favorable terms to the Company that it would have it been negotiated with an unrelated third party.
Section 2.16 Compensation. The directors shall be allowed and paid all necessary expenses incurred in attending any meetings of the Board of Directors, and shall be entitle to receive such compensation for their services as directors as shall be determined form time to time by the Board of Directors of any committee thereof.
Section 2.17 Board of Directors.
(a) At its annual meeting, the Board of Directors shall elect, from among its members, a Chairman to preside at meetings of the Board of Directors. The Board of Directors may also elect such other board officers as it may, from time to time, determine advisable.
(b) Any vacancy in any board office because of death, resignation, removal or otherwise may be filled b the Board of Directors for the unexpired portion of the term of such office.
Section 2.18 Order of Business. The order of business at any meeting of the Board of Directors shall be as follows:
1. Determination of members present and existence of
quorum;
2. Reading and approval of minutes of any previous meeting
or meetings;
3. Reports of officers and committeemen;
4. Election of officers (annual meeting);
5. Unfinished business;
6. New business; and
7. Adjournment.
ARTICLE III
OFFICERS
Section 3.01 Election. The Board of Directors, at its first meeting following the annual meeting of shareholders, shall elect a President, a Secretary and a Treasurer to hold office for a term of one (1) year and until their successors are elected and qualified. Any person may hold two or more offices. The Board of Directors may, from time to time, by resolution, appoint one or more Vice-Presidents, Assistant Secretaries, Assistant Treasurers and transfer agents of the corporation, as it may deem advisable; prescribe their duties; and fix their compensation.
Section 3.02 Removal; Resignation. Any officer or agent elected or appointed by the Board of Directors may be removed by it with or without cause. Any office may resign at any time upon written notice to the corporation without prejudice to the rights, if any, of the corporation under contract to which the resigning officer is a party.
Section 3.03 Vacancies. Any vacancy in any office because of death, resignation, removal or otherwise may be filled by the Board of Directors for the unexpired term or such office.
Section 3.04 President. The President shall be deemed the general manager and executive officer of the corporation, subject to the supervision and control of the Board of Directors, and shall direct the corporate affairs, with full power to execute all resolutions and orders of the Board of Directors not especially entrusted to some other officer of the corporation. The President shall preside at all meetings of the stockholders and shall perform such other duties as shall be prescribed by the Board of Directors.
Unless otherwise ordered by the Board of Directors, the President shall have the full power and authority on behalf of the corporation to attend and to act and to vote at meetings of the stockholders of any corporation in which the corporation may hold stock and, at such meetings, shall possess and may exercise any and all rights and powers incident to the ownership of such stock. The Board of Directors, by resolution from time to time, may confer like powers on an person or persons in place of the President to represent the corporation for these purposes.
Section 3.05 Vice President. The Board of Directors may elect one or more Vice Presidents who shall be vested with all the powers and perform all the duties of the President whenever the President is absent or unable to act, including the signing of the certificates of stock issued by the corporation, and the Vice President shall perform such other duties as shall be prescribed by the Board of Directors.
Section 3.06 Secretary. The Secretary shall keep the minutes of all meetings of the stockholders and the Board of Directors in books provide for that purpose. The secretary shall attend to the giving and service of all notices of the corporation, may sign with the President in the name of the corporation all contracts authorized by the Board of Directors or appropriate committee, shall have the custody of the corporate seal, shall affix the corporate seal to all certificates of stock duly issued by the corporation, shall have charge of stock certificate books, transfer books and stock ledgers, and such other books and papers as the Board of Directors or appropriate committee may direct, and shall, in general, perform all duties incident to the office of the Secretary. All corporate books kept by the Secretary shall be open for examination by any director at any reasonable time.
Section 3.07 Assistant Secretary. The Board of Directors may appoint an Assistant Secretary who shall have such powers and perform such duties as may be prescribed for him by the Secretary of the corporation or by the Board of Directors.
Section 3.08 Treasurer. The Treasurer shall be the chief financial officer of the corporation, subject to the supervision and control of the Board of Directors, and shall have custody of all the funds and securities of the corporation. When necessary or proper, the Treasurer shall endorse on behalf of the corporation for collection checks, notes, and other obligations, and shall deposit all moneys to the credit of the corporation in such bank or banks or other depository as the Board of Directors may designate, and shall sign all receipts and vouchers for payments by the corporation. Unless otherwise specified by the Board of Directors, the Treasurer shall sign with the President all bills of exchange and promissory notes of the corporation, shall also have the care and custody of the stocks, bonds, certificates, vouchers, evidence of debts, securities, and such other property belonging to the corporation as the Board of Directors shall designate, and shall sign all papers required by law, by these Bylaws, or by the Board of Directors to be signed by the Treasurer. The Treasurer shall enter regularly in the books of the corporation, to be kept for that purpose, full and accurate accounts of all moneys received and paid on account of the corporation and, whenever required by the Board of Directors, the Treasurer shall render a statement of any or all accounts. The Treasurer shall at all reasonable times exhibit the books of account to any directors of the corporation and shall perform all acts incident to the position of the Treasurer subject to the control of the Board of Directors.
The Treasurer shall, if required by the Board of Directors, give bond to the corporation in such sum and with such security as shall be approved by the Board of Directors for the faithful performance of all the duties of Treasurer and for restoration to the corporation, in the event of the Treasurer's death, resignation, retirement or removal from office, of all books, records, papers, vouchers, money and other property belonging to the corporation. The expense of such bond shall be borne by the corporation.
Section 3.09. Assistant Treasurer. The Board of Directors may appoint an Assistant Treasurer who shall have such powers and perform such duties as may be prescribed by the Treasurer of the corporation or by the Board of Directors, and the Board of Directors may require the Assistant Treasurer to give a bond to the corporation in such sum and with such security as it may approve, for the faithful performance of the duties of Assistant Treasurer, and for restoration to the corporation, in the event of the Assistant Treasurer's death, resignation, retirement or removal from office, of all books, records, papers, vouchers, money and other property belonging to the corporation. The expense of such bond shall be borne by the corporation.
ARTICLE IV
CAPITAL STOCK
Section 4.01 Issuance. Shares of capital stock of the corporation shall be issued in such manner and at such times and upon such conditions as shall be prescribed by the Board of Directors.
Section 4.02 Certificates. Ownership in the corporation shall be evidenced by certificates for shares of the stock in such form as shall be prescribed by the Board of Directors, shall be under the seal of the corporation and shall be signed by the President or a Vice-President and also by the Secretary or an Assistant Secretary. Each certificate shall contain the then name of the record holder, the number, designation, if any, class or series of shares represented, a statement of summary of any applicable rights, preferences, privileges or restrictions thereon, and a statement that the shares are assessable, if applicable. All certificates shall be consecutively numbered. The name, address and federal tax identification number of the stockholder, the number of shares, and the date of issue shall be entered on the stock transfer books of the corporation.
Section 4.03 Surrender; Lost or Destroyed Certificates. All certificates surrendered to the corporation, except those representing shares of treasury stock, shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares hall have been canceled, except that in case of a lost, stolen, destroyed or mutilated certificate, a new one may be issued therefor. However, any stockholder applying for the issuance of a stock certificate in lieu of one alleged to have been lost, stolen, destroyed or mutilated shall, prior to the issuance of a replacement, provide the corporation with his, her or its affidavit of the facts surrounding the loss, theft, destruction or mutilation and if required by the Board of Directors, an indemnity bond in any amount and upon such terms as the Treasurer, or the Board of Directors, shall require. In no case shall the bond be in an amount less than twice the current market value of the stock and it shall indemnify the corporation against any loss, damage, cost or inconvenience arising as a consequence of the issuance of a replacement certificate.
Section 4.04 Replacement Certificate. When the Articles
of Incorporation are amended in any way affecting the statements
contained in the certificates for outstanding shares of capital
stock of the corporation or it becomes desirable for any reason,
including, without limitation, the merger or consolidation of the
corporation with another corporation or the reorganization of the
corporation, to cancel any outstanding certificate for shares and
issue a new certificate for shares, the corporation shall issue
an order for stockholders of record, to surrender and exchange
the same for new certificates within a reasonable time to be
fixed by the Board of Directors. The order may provide that a
holder of any certificate (s) ordered to be surrendered shall not
be entitled to vote, receive dividends or exercise any other
rights of stockholders until the holder has complied with the
order, provided that such order operates to suspend such rights
only after notice and until compliance.
Section 4.05 Transfer of Shares. No transfer of stock
shall be valid as against the corporation except on surrender and
cancellation of the certificates therefor accompanied by an
assignment or transfer by the registered owner made either in
person or under assignment. Whenever any transfer shall be
expressly made for collateral security and not absolutely, the
collateral nature of the transfer shall be reflected in the entry
of transfer on the books of the corporation.
Section 4.06 Transfer Agent. The Board of Directors may appoint one or more transfer agents and registrars of transfer and may require all certificates for shares of stock to bear the signature of such transfer agent and such registrar of transfer.
Section 4.07 Stock Transfer Books. The stock transfer books shall be closed for a period of at least ten (10) days prior to all meetings of the stockholders and shall be closed for the payment of dividends as provided in Article V hereof and during such periods as, from time to time, may be fixed by the Board of Directors, and, during such periods, no stock shall be transferable.
Section 4.08 Miscellaneous. The Board of Directors shall have the power and authority to make such rules and regulations not inconsistent herewith as it may deem expedient concerning the issue, transfer, and registration of certificates for shares of the capital stock of the corporation.
ARTICLE V
DIVIDENDS
Section 5.01 Dividends. Dividends may be declared,
subject to the provisions of the laws of the State of Nevada and
the Articles of Incorporation, by the Board of Directors at any
regular or special meeting and may be paid in cash, property,
shares of the corporation stock, or any other medium. The Board
of Directors may fix in advance a record date, as provided in
Section 1.06 of these Bylaws, prior to the dividend payment for
purpose of determining stockholders entitled to receive payment
of any dividend. The Board of Directors may close the stock
transfer books for such purpose for a period of not more than ten
(10) days prior to the payment date of such dividend.
ARTICLE VI
OFFICES; RECORDS, REPORTS; SEAL AND FINANCIAL MATTERS
Section 6.01 Principal Office. The principal office of the corporation is in the State of Nevada at 500 N. Rainbow Boulevard, Suit 300, Las Vegas, Nevada 89107. The Board of Directors may from time to time, by resolution, change the location of the principal office within the State of Nevada. The corporation may also maintain an office or offices at such other place or places, either within or without the State of Nevada, as may be resolved, from time to time, by the Board of Directors.
Section 6.02 Records. The stock transfer books and a certified copy of the Bylaws, Articles of Incorporation, any amendments thereto, and the minutes of the proceedings of stockholders, the Board of Directors, and Committees of the Board of Directors shall be kept at the principal office of the corporation for the inspection of all who have the right to see the same and for the transfer of stock. All other books of the corporation shall be kept at such places as may be prescribed by the Board of Directors.
Section 6.03 Financial Report on Request. Any stockholder
or stockholders holding at least five percent (5%) of the
outstanding shares of any class of stock may make a written
request for an income statement of the corporation for the three
(3) month, six (6) month or nine (9) month period of the current
fiscal year ended more than thirty (30) days prior to the date of
the request and a balance sheet of the corporation as of the end
of such period. In addition, if no annual report of the last
fiscal year has been sent to stockholders, such stockholder or
stockholders may make a request for a balance sheet as of the end
of such fiscal year and an income statement and statement of
changes in financial position for such fiscal year. The
statements shall be delivered or mailed to the person making the
request within thirty (30) days thereafter. A copy of the
statements shall be kept on file in the principal office of the
corporation for twelve (12) months, and such copies shall be
exhibited at all reasonable times to any stockholder demanding an
examination of them or a copy shall be mailed to each
stockholder. Upon request by any stockholder, there shall be
mailed to the stockholder a copy of the last annual, semiannual
or quarterly income statement which it has prepared and a balance
sheet as of the end of the period. The financial statements
referred to in this Section 6.03 shall be accompanied by the
report thereon, if any, of any independent accountants engaged by
the corporation or the certificate of an authorized officer of
the corporation that such financial statements were prepared
without audit from the books and records of the corporation.
Section 6.04 Right of Inspection.
(a) The accounting and records and minutes of proceedings of the stockholders and the Board of Directors shall be open to inspection upon the written demand of any stockholder or holder of a voting trust certificate at any reasonable time during usual business hours for a purpose reasonably related to such holder's interest as a stockholder or as the holder of such voting trust certificate. This right of inspection shall extend to the records of the subsidiaries, if any, of the corporation. Such inspection may be made in person or by agent or attorney, and the right of inspection includes the right to copy and make extracts.
(b) Every director shall have the absolute right at any reasonable time to inspect and copy all books, records, and documents of every kind and to inspect the physical properties of the corporation and/or its subsidiary corporations. Such inspection may be made in person or by agent or attorney, and the right of inspection includes the right to copy and make extracts.
Section 6.05 Corporate Seal. The Board of Directors may, by resolution, authorize a seal, and the seal may be used by causing it, or a facsimile, to be impressed or affixed or reproduced or otherwise. Except when otherwise specifically provided herein, any officer of the corporation shall have the authority to affix the seal to any document requiring it.
Section 6.06 Fiscal Year-End. The fiscal year-end of the corporation shall be such date as may be fixed from time to time by resolution by the Board of Directors.
Section 6.07 Reserves. The Board of Directors may create, by resolution, out of the earned surplus of the corporation such reserves as the directors may, from time to time, in their discretion, think proper to provide for contingencies, or to equalize dividends or to repair or maintain any property of the corporation, or for such other purpose as the Board of Directors may deem beneficial to the corporation, and the directors may modify or abolish any such reserves in the manner in which they were created.
Section 6.08 Payments to Officers or Directors. Any payments made to an officer or director of the corporation, such as salary, commission, bonus, interest, rent or entertainment expense, which shall be disallowed by the Internal Revenue Service in whole or in part as a deductible expense by the corporation, shall be reimbursed by such officer or director to the corporation to the full extent of such disallowance. It shall be the duty of the Board of Directors to enforce repayment of each such amount disallowed. In lieu of direct reimbursement by such officer or director, the Board of Directors may withhold future compensation to such officer or director until the amount owed to the corporation has been recovered.
ARTICLE VII
INDEMNIFICATION
Section 7.01 In General. Subject to Section 7.02, the corporation shall indemnify any director, officer, employee or agent of the corporation, or any person serving in any such capacity of any other entity or enterprise at the request of the corporation, against any and all legal expenses (including attorneys' fees), claims and/or liabilities arising out of any action, suit or proceeding, except an action by or in the right of the corporation.
Section 7.02 Lack of Good Faith; Criminal Conduct. The corporation may, by shall not be required to, indemnify any person where such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, where there was not reasonable cause to believe the conduct was unlawful. The termination of any action, suit or proceeding by judgment, order or settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, there was reasonable cause to believe that the conduct was unlawful.
Section 7.03 Successful Defense of Actions. The corporation shall reimburse or otherwise indemnify any director, officer, employee, or agent against legal expenses (including attorneys' fees) actually and reasonably incurred in connection with defense of any action, suit, or proceeding herein above referred to, to the extent such person is successful on the merits or otherwise.
Section 7.04 Authorization. Indemnification shall be made by the corporation only when authorized in the specific case and upon a determination that indemnification is proper by:
(1) The stockholders;
(2) A majority vote of a quorum of the Board of Directors, consisting of directors who were not parties to the action, suit, or proceeding; or
(3) Independent legal counsel in a written opinion, if a quorum of disinterested directors so orders or if a quorum of disinterested directors so orders or if a quorum of disinterested directors cannot be obtained.
Section 7.05 Advancing Expenses. Expenses incurred in defending any action, suit, or proceeding may be paid by the corporation in advance of the final disposition, when authorized by the Board of Directors, upon receipt of an undertaking by or on behalf of the person defending to repay such advances if indemnification is not ultimately available under these provisions.
Section 7.06 Continuing Indemnification. The indemnification provided by these Bylaws shall continue as to a person who has ceased to be director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
Section 7.07 Insurance. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation or who is or was serving at the request of the corporation in any capacity against any liability asserted.
ARTICLE VIII
BYLAWS
Section 8.01 Amendment. These Bylaws may be altered, amended or repealed at any regular meeting of the Board of Directors without prior notice, or at any special meeting of the Board of Directors if notice of such alteration, amendment or repeal be contained in the notice of such alteration, amendment or repeal be contained in the notice of such special meeting. These Bylaws may also be altered, amended, or repealed at a meeting of the stockholders at which a quorum is present by the affirmative vote of the holders of 51% of the capital stock of the corporation entitled to vote or by the consent of the stockholders in accordance with Section 1.12 of these Bylaws. The stockholders may provide by resolution that any Bylaw provision repealed, amended, adopted or altered by them may not be repealed amended, adopted or altered by the Board of Directors.
CERTIFICATION
I, the undersigned, being the duly elected secretary of the corporation, do hereby certify that the foregoing Bylaws were adopted by the Board of Directors the 14th day of September 2000.
/s/ Grady Johnson ------------------------- Grady Johnson, Secretary |
CORPORATE SEAL