INFOTEC BUSINESS SYSTEMS, INC.
444 COLUMBIA STREET EAST, NEW WESTMINSTER, BC V3L 3W9
TELEPHONE (604) 681-2210 FACSIMILE (604) 929-0339
VIA EDGAR
SECURITIES AND EXCHANGE COMMISSION June 17, 2002
Judiciary Plaza
450 Fifth Street, N.W.
WASHINGTON, DC 20549
Attention: Filing Desk
Dear Sir/Madam:
RE: INFOTEC BUSINESS SYSTEMS, INC. (THE "COMPANY")
FORM SB-2 REGISTRATION STATEMENT
Pursuant to the requirements of the Securities Act of 1933, as amended (the
"Act"), and the general rules and regulations promulgated thereunder,
enclosed for electronic filing is the Company's Registration Statement on
Form SB-2.
Please be advised that we have forwarded via FEDWIRE the sum of $100.00 in
under CIK Number 1164012 in respect of this filing.
If you should have any questions, please do not hesitate to contact the
undersigned collect at (604) 777-1707.
Yours very truly,
INFOTEC BUSINESS SYSTEMS, INC.
______________________________________
ROBERT DANVERS.
President
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 2002
Registration No. 333-
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INFOTEC BUSINESS SYSTEMS, INC.
(Name of small business issuer in its charter)
NEVADA 7380 98- 0358149
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No)
444 Columbia Street E.
New Westminster, British Columbia, V3L 3W9,CANADA
(604) 777-1707
(Address and telephone number of principal executive offices)
Robert Danvers, President
444 Columbia Street E.
New Westminster, British Columbia, V3L 3W9, CANADA
(604) 777-1707
(Name, address and telephone number of agent for service)
___________________________
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
|__|____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
|__|____________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
|__|____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box.
|__|____________
CALCULATION OF REGISTRATION FEE
___________________________________________________________________________
Title of each Proposed Proposed
class of maximum maximum
securities Amount to be offering price aggregate offering Amount of
to be registered per unit(1) price (2) registration
registered fee(2)
___________________________________________________________________________
Common Stock 1,200,000 $0.05 $60,000 $5.52
shares
___________________________________________________________________________
(1) Based on last sales price on May 14, 2002 and the anticipated price
selling security holders will offer and sell their common shares.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
Note: Specific details relating to the fee calculation shall be furnished in
notes to the table, including references to provisions of Rule 457 (Section
230.457 of this chapter) relied upon,if the basis of the calculation is not
otherwise evident from the information presented in the table. If the filing
fee is calculated pursuant to Rule 457(o) under the Securities Act, only the
title of the class of securities to be registered, the proposed maximum
aggregate offering price for that class of securities and the amount of
registration fee needed to appear in the Calculation of Registration Fee
table. Any difference between the dollar amount of securities registered for
such offerings and the dollar amount of securities sold may be carried
forward on a future registration statement pursuant to Rule 429 under the
Securities Act.
_____________________________________________________________________________
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any state in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state.
SUBJECT TO COMPLETION, Dated June 14, 2002
PROSPECTUS
INFOTEC BUSINESS SYSTEMS, INC.
444 Columbia Street E.
New Westminster, British Columbia V3L 3W9,Canada
(604) - 777-1707
1,200,000 SHARES OF COMMON STOCK
----------------
This prospectus covers the 1,200,000 shares of common stock of Infotec
Business Systems, Inc. being offered by certain selling security holders.
See "Selling Security Holders" beginning on page 6. We will not receive
any proceeds from the sale of the shares by the selling security holders.
There is presently no public market for our shares. The selling security
holders will offer and sell the shares of common stock at prices between
$.04 to $.05 per share until our shares are quoted on the OTC Bulletin
Board and thereafter at prevailing market prices or privately negotiated
prices. See "Risk Factors" beginning on page 2.
----------------
The purchase of the securities offered through this prospectus involves a
high degree of risk. You should purchase shares only if you can afford a
complete loss of your investment. See section entitled "Risk Factors" on
pages 5 - 8.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
The Date of This Prospectus Is: __________,2002.
TABLE OF CONTENTS
PART I PROSPECTUS
Page No.
PROSPECTUS
SUMMARY.........................................................1
RISK
FACTORS..........................................................2
Need for Additional.......................................2
No Market for Our Common Stock............................2
Lack of Operating History.................................3
Doubt as to Our Ability to Continue as a Going Concern....3
Marketable Product........................................3
Part Time Management......................................3
Competition......................................................3
Customer Base..... .......................................4
Program Errors and Defects................................4
Rapid Technology Change...................................4
Management Control........................................4
Market Volatility if Common Stock Trades..................4
Penny Stock Rules........ ................................5
Phase-out of OTC Bulletin Board...... ....................5
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS.....................................6
USE OF PROCEEDS................................................6
SELLING SECURITY HOLDERS.......................................6
PLAN OF DISTRIBUTION...........................................9
LEGAL PROCEEDINGS..............................................9
DIRECTORS,EXECUTIVE OFFICERS,PROMOTERS AND CONTROL PERSONS....10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.........................................10
DESCRIPTION OF SECURITIES.....................................11
INTEREST OF NAMED EXPERTS AND COUNSEL.........................12
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES................................12
ORGANIZATION WITHIN LAST FIVE YEARS...........................12
DESCRIPTION OF BUSINESS.......................................13
PLAN OF OPERATION.............................................19
DESCRIPTION OF PROPERTY.......................................21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................22
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS......23
EXECUTIVE COMPENSATION........................................24
FINANCIAL STATEMENTS.........................................F-1
AVAILABLE INFORMATION.........................................26
REPORTS TO SECURITY HOLDERS...................................26
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS.....................27
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION...................27
RECENT SALES OF UNREGISTERED SECURITIES.......................27
EXHIBITS........................................................28
UNDERTAKINGS....................................................28
PROSPECTUS SUMMARY
Infotec Business Systems, Inc.
Infotec Business Systems, Inc. is a corporation formed under the laws
of the State of Nevada, whose principal executive offices are located at 444
Columbia Street E., New Westminster, British Columbia, V3L 3W9 Canada. Our
telephone number is (604) 777-1707.
Our Business and Business Strategy
We are engaged in the development of Internet accessible systems for
conducting business processes in real time. Our current objective is the
development and commercialization of a system which provides remote users
with access via a Java enabled web browser to their software applications,
corporate data storage and integrated business applications for contact,
document, time and project management. We plan to develop our virtual office
system as easy to use, functional, responsive and integrated and to focus on
the needs of small and medium businesses. The virtual office system will be
hosted and maintained on our server and network infrastructure. For each
business we create a virtual office complete with email, calendar and
scheduling, task and project management, client, document, time, project
and task management. In addition, businesses will be able to run their
existing software from within their virtual office. Users will access their
virtual office securely from any location that has Internet access. While
using their virtual office, users can work with programs they are familiar
with and also with our integrated productivity application programs. Our
approach is to provide integration of the various components of our system
and our users' data and documents.
Our plan is to earn revenue from monthly services fees,
usage fees and consulting.
We have acquired the prior development and test implementations of
the virtual office system in October 2001 and have thereafter continued our
development and testing. Our development plan calls for completion of the
virtual office system, a web and demonstration site, the development of an
internal management information system and network infrastructure. To
complete our plan we will need to hire additional staff and consultants and
invest in certain equipment and software licenses.
We have not as yet engaged in revenue producing activities and
accordingly we would be considered a development company.
We incurred a loss in the amount of $92,438 for the period from
incorporation to April 30,2002. At May 31, 2002, working capital was
approximately $25,500. Our business plan calls for spending of approximately
$437,300 over the next twelve month period. Accordingly, we do not have
sufficient resources to proceed with our business plan at this time without
additional financing.
Securities Being Offered 1,200,000 shares of common stock.
Securities Issued
And to be Issued 4,500,000 shares of common stock
are issued and outstanding as of
the date of this prospectus. All
of the common stock to be sold
under this prospectus will be sold
by existing stockholders.
Use of Proceeds We will not receive any proceeds
from the sale of the common stock
by the selling stockholders.
-1-
References in this registration statement to INFOTEC, us, we and our
are to INFOTEC BUSINESS SYSTEMS. INC. or our wholly owned subsidiary INFOTEC
BUSINESS SOLUTIONS, INC.
RISK FACTORS
An investment in us involves a high degree of risk. You should
carefully consider the risks described below and the other information in
this prospectus before investing. If any of the following risks occur, our
business, operating results and financial condition could be seriously
harmed. Our value could decline due to any of these risks, and you could
lose all or part of your investment.
We Will Need To Obtain Additional Financing Which May Not Be
Available, Or Which May Dilute The Ownership Interests Of Investors.
As at May 31, 2002, we had approximately $25,500 of working capital on
hand. Our business plan calls for significant expenses in connection with
the development of our virtual office system. In addition, we anticipate
that revenues, if any, from operations will not be realized until sometime
after development of our virtual office system is complete. Our business
plan is to complete development of the virtual office system within a period
of four months, provided that we can achieve the financing that we require
in order to implement our business plan.
We do not have any arrangements for financing and we can provide no
assurance that we will be able to obtain the required financing when needed.
Obtaining additional financing will be subject to a number of factors,
including:
* Market conditions;
* Investor acceptance of our business plan; and
* Investor sentiment.
These factors may make the timing, amount, terms and conditions of
additional financing unattractive or unavailable to us. If we are not
successful in achieving financing our business will be severely limited
and we will not be able to implement our business plan.
There Is Currently No Market For Our Common Stock And There Can Be No
Assurance A Market For Our Common Stock Will Develop.
There is currently no market for our common stock. We anticipate
applying for trading of our common stock on the OTC Bulletin Board upon
the effectiveness of this registration statement of which this prospectus
forms part. There can be no assurance our common stock will be traded on
the bulletin board or, if traded, that a market will materialize.
Because We Have Only Recently Commenced Business Operations, We Face
A High Risk of Business Failure.
We are presently in the process of developing a virtual office system
that will be required to complete our business plan. We have not yet earned
any revenues and we will not be able to earn any revenues until development
of our virtual office system is complete. Accordingly, we have no operating
history from which investors can evaluate our business. An investor should
consider the risks,expenses and uncertainties that an early stage company
like ours faces. These risks include our ability to:
* Develop a functioning system;
* Develop a web site and product demonstration to market the virtual
office systems;
* Successfully market the virtual office system once development is
complete;
* Convince potential customers to use the virtual office system;
* Respond effectively to competitive pressures; and
-2-
* Continue to develop and upgrade our virtual office system.
We have never been profitable or made any income whatsoever. As of
the date hereof, we had an accumulated deficit. Prior to completion of our
virtual office system, we anticipate that we will incur increased operating
expenses without realizing any revenues from sales. We therefore expect to
incur significant losses throughout the next 12 months and recognize that if
we are unable to generate significant revenues from our planned virtual
office system, we will not be able to achieve profitability or continue
operations.
Because Of Our Financial Condition and Our Business Plans, Our Financial
Statements Disclose That There Is Substantial Doubt As To Our Ability To
Continue As A Going Concern and Accordingly Our Business Has A High Risk
Of Failure.
We are a development stage company that is currently developing an
integrated virtual office system. Due to our present financial condition
and our business plans, there is substantial doubt as to our ability to
continue as a going concern. To date, we have not completed the development
or marketed a virtual office system and we can provide no assurance that
the service we are currently developing will have a commercial application.
The success of our business operations will depend upon our ability to obtain
further financing to complete successful development of the system and to
attain profitable operations. It is not possible at this time for us to
predict with assurance the outcome of these matters. If we are not able to
complete successful development of the system and attain profitable
operations, then our business would fail.
If We Are Unable to Develop A Marketable Product Our Business Would Fail.
The virtual office system, management information system, web site
and system demonstration are currently in the development stage. In order
to commence sales of our virtual office system, we will have to complete
development. In addition, we will have to integrate our systems, staff and
infrastructure prior to realizing any sales revenue. We will also have to
complete testing of both our virtual office system, our web site and
demonstration site prior to commencing commercial operations in order to
ensure that the system is functioning properly and is capable of being
marketed to the public. If we are unable to develop a final system or if
we are unable to successfully integrate the infrastructure, business
systems and systems software into the virtual office system, web and
demonstration site, we will not be able to earn any revenues. Our failure
to earn revenues would cause our business to fail.
We Rely On Our President Who Does Not Devote His Full Business Time To
Our Business For All Decisions And The Design And Development Of Our
System. If Our President Is Not Available, We May Not Be Able To Implement
Our Business Plan And Our Business May Fail.
We have only two directors and we rely principally on Mr. Robert
Danvers our President for his entrepreneurial skills and experience and to
implement our business plan. Presently Mr. Danvers does not devote full
time and attention to our affairs which could result in delays in
implementing our business plan. Moreover, we do not have an employment
agreement with any of our directors or officers including Mr. Danvers.
Accordingly, there are no assurances Mr. Danvers will continue to manage
our affairs, that he will be able to devote sufficient amounts of his
business time to enable us to implement our business plan or that he would
not decide to join a competitor or otherwise compete directly or indirectly
with us. If Mr. Danvers were not to devote a sufficient amount of his time
to the management of our business or he was to compete with us and we were
not able to replace Mr. Danvers, then our business may fail.
If We Are Not Able To Effectively Respond To Competition, We Will Suffer
Adverse Effect On Our Business, Financial Condition And Results Of Operation.
We will face competition from competitors who are presently engaged
in the business of offering different implementations for online application
services. These competitors include large, well-established companies and
companies with greater financial, human and customer resources than us and
will also include companies that are presently able to supply their own
software and those who write and develop the software and middleware we rely
on for the support of the virtual office system. We will attempt to compete
against these competitors by developing our virtual office system to provide
users an easy functional system to access their offices' information systems
from any computer, anywhere, anytime. However, there is no assurance that
competitors will not develop competing systems prior to completing
-3-
development of our services. In addition, we may face competition based on
price. If our competitors reduced the fees charged for their application and
office offerings, then it may not be possible for us to market our virtual
office system at a price that is economically viable. Our inability to
achieve sales and revenue due to competition will have an adverse effect
on our business, financial condition and results of operations.
If We Are Not Able To Develop A Customer Base For Our Services Once
Development Is Complete, Then Our Business Will Not Earn Revenues And
Would Fail.
We will commence marketing of our virtual office system once the
development of our infrastructure and software licensing is completed. If
we are not able to achieve a customer base, then we will not be able to
achieve revenues. Establishing a base of customers will require that we
undertake marketing efforts that are successful in bringing users to our
virtual office system that will pay to use our system. We anticipate that
we will incur substantial costs in marketing our services once the
development stage is complete. These costs may include hiring sales and
marketing personnel and advertising expenses. If we are not successful in
achieving revenues as a result of our marketing efforts, then will not earn
revenues and our business will be unsuccessful and will fail.
As The Virtual Office System Will Involve Systems Integration And
Computer Programming, Our Business Will Be Harmed If Our System Contains
Programming Errors Or Defects Or If We Cause Loss Or Harm To Our Users Data.
The development of our virtual office requires that we undertake
system integration and computer programming. There is a risk that the system
integration and software programming that we complete as part of the
development process will contain errors and defects including errors and
defects in the system's security subsystem that we will not be able to
discover until we commence operations. There is also the risk that once
developed, we may develop system errors or defects or security failures that
cause harm to our users' data or systems or may fail to protect the users'
data or systems from harm. Disruptions to our services, problems experienced
by users and loss of users' data and business processes could adversely
impact our reputation and ability to earn revenues, to retain
existing customers and to develop new customers and could cause our
business to fail.
If We Are Unable To Adapt To Rapid Technological Change Once Development
Of The Virtual Office System Is Complete, Then Our Services Could Become
Obsolete And Our Business Could Fail.
We will be required to continually update and refine the virtual
office system, web and demonstration site once we complete development in
order to address technological change. The market for systems such as ours
is characterized by rapid technological changes, frequent new product
introductions and changes in consumer requirements. We may be unable to
respond quickly or effectively to these developments, as we may not have
sufficient resources or money required to develop or acquire new
technologies or to introduce new services capable of addressing these
developments. If we are unable to continually update and refine our
technology and services once development is complete in response to
technological change, then consumers may not use our services with the
result that our services could become obsolete and our business may fail.
Because Robert Danvers, Our President And a Director, Controls
approximately 73% Of Our Outstanding Common Stock, He Will Control And Make
Corporate Decisions That May Be Disadvantageous To Minority Stockholders.
Mr. Robert Danvers owns or controls approximately 73% of the
outstanding shares of our common stock. Accordingly, he will have a
significant influence in determining the outcome of all corporate
transactions, including mergers, consolidations and the sale of all or
substantially all of our assets, and also the power to prevent or cause a
change in control. The interests of Mr. Danvers may differ from the
interests of the other stockholders and thus result in corporate
decisions that are disadvantageous to other stockholders.
If A Market For Our Common Stock Develops, Our Stock Price May Be Volatile.
If a market for our common stock develops, we anticipate that the
market price of our common stock will be subject to wide fluctuations in
response to several factors, including:
(1) actual or anticipated variations in our results of operations;
-4-
(2) our ability or inability to generate revenue;
(3) increased competition; and
(4) conditions and trends in the application services industry.
Further, if our common stock is traded on the OTC Bulletin Board,
our stock price may be impacted by factors that are unrelated or
disproportionate to our operating performance. These market fluctuations,
as well as general economic, political and market conditions, such as
recessions, interest rates or international currency fluctuations may
adversely affect the market price of our common stock.
Our Securities May Be Subject To Penny Stock Regulations.
If a market for our securities develops and the price of our
common stock falls below $5.00 per share, then we will be subject to
"penny stock" regulation. "Penny stock" rules impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally those
with assets in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 together with a spouse). For transactions covered by these rules,
the broker-dealer must make a special suitability determination for the
purchase of such securities and have received the purchaser's written consent
to the transaction prior to the purchase. Additionally, for any transaction
involving a penny stock, unless exempt, the rules require the delivery,
prior to the transaction, of a disclosure schedule prescribed by the
Commission relating to the penny stock market. The broker-dealer also must
disclose the commissions payable to both the broker-dealer and the
registered representative and current quotations for the securities.
Finally, monthly statements must be sent disclosing recent price
information on the limited market in penny stocks. Consequently, the
"penny stock" rules may restrict the ability of broker-dealers to sell our
shares of common stock. The market price of our shares would likely suffer
as a result.
If Plans To Phase-out The OTC Bulletin Board Are Implemented, We May
Not Qualify For Listing On The Proposed Bulletin Board Exchange Or Any
Other Marketplace, In Which Event Investors May Have Difficulty Buying
And Selling Our Securities.
We understand that, in 2003, subject to approval of the Securities
and Exchange Commission, The NASDAQ Stock Market intends to phase out the
OTC Bulletin Board, and replace it with the "Bulletin Board Exchange" or
"BBX". As proposed, the BBX will include an electronic trading system
to allow order negotiation and automatic execution. The NASDAQ Stock
Market has indicated its belief that the BBX will bring increased speed and
reliability to trade execution, as well as improve the overall transparency
of the marketplace. Specific criteria for listing on the BBX have not yet
been announced, and the BBX may provide for listing criteria which we do not
meet. If the OTC Bulletin Board is phased out and we do not meet the
criteria established by the BBX, there may be no transparent market on which
our securities may be included. In that event, investors may have difficulty
buying and selling our securities and the market for our securities may be
adversely affected thereby.
-5-
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Prospectus Summary", "Risk Factors",
"Plan of Operation", "Description of Business", and elsewhere in this
prospectus constitute forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as "may", "will",
"should", "expects", "plans", "anticipates", "believes", "estimated",
"predicts", "potential", or "continue" or the negative of such terms or
other comparable terminology. These statements are only predictions and
involve known and unknown risks, uncertainties, and other factors that
may cause our actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels
of activity, performance, or achievements expressed or implied by such
forwardlooking statements. These factors include, among other things, those
listed under "Risk Factors" and elsewhere in this prospectus. Although we
believe that the expectations reflected in the forwardlooking
statements are reasonable, factors previously noted could cause our actual
results to differ materially from those contained in any forward looking
statements.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered through this prospectus by the selling stockholders.
SELLING SECURITY HOLDERS
The selling stockholders named in this prospectus are offering all
of the 1,200,000 shares of common stock offered through this prospectus. The
shares include the following:
1. 1,200,000 shares of our common stock that the selling stockholders
acquired from us in an offering that was exempt from registration
under Regulation S of the Securities Act of 1933 and completed on
May 14, 2002.
The following table provides information regarding the beneficial
ownership of our common stock held by each of the selling stockholders,
including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon
completion of the offering;
4. the percentage owned by each; and
5. the identity of the beneficial holder of any entity that owns the
shares.
Total number Total shares to
Shares shares to be owned Percent
owned be offered upon owned upon
prior for selling completion completion
Selling to this security holders of this of this
security holder offering account offering offering
_____________________________________________________________________________
Albert Amar
1546 Hope Road
North Vancouver, 2,000 2,000 NIL NIL
BC V7P 1W9
Robert Cherniack
301 - 4838
Fraser St.
Vancouver, BC
V5V 4H4 90,000 90,000 NIL NIL
-6-
Table is continued from page 6
Total number Total shares to
Shares shares to be owned Percent
owned be offered upon owned upon
prior for selling completion completion
Selling to this security holders of this of this
security holder offering account offering offering
____________________________________________________________________________
Stephen Bass
120 - 6450
East Boulevard
North Vancouver,
BC V6M 3V9 90,000 90,000 NIL NIL
Evelyn Cable
1400 - 400
Burrard Street
Vancouver, BC
V6C 3G2 86,000 86,000 NIL NIL
Doreen Danvers
315 - 7122
Mary Ave.
Burnaby, BC
5E 4N23 2,000 2,000 NIL NIL
Morris Ergas
840 Younette
Drive
West Vancouver,
BC V7T 1S9 2,000 2,000 NIL NIL
Carol Hill
5537 Marine Drive
West Vancouver, BC
V7W 2R4 30,000 30,000 NIL NIL
Peter Hill
5537 Marine Drive
West Vancouver, BC
V7W 2R4 90,000 90,000 NIL NIL
Faouzi Kossentini
506 - 1323
Homer Street
Vancouver, BC
V6B 5T1 2,000 2,000 NIL NIL
Phillip Levy
10771 Swinton
Crescent
Richmond, BC
V7A 3T2 2,000 2,000 NIL NIL
Debra MacArthur
8170 Muirfield Cres.
Whistler, BC
V0N 1B8 95,000 95,000 NIL NIL
Maxwell Capital Inc.
1400 - 400
Burrard Street
Vancouver, BC
V6C 3G2 85,000 85,000 NIL NIL
Beneficial owner:
Bram Solloway
Susan Miller
4060 Goldie Court
North Vancouver,
BC V7G 2P4 90,000 90,000 NIL NIL
Sheila Milstein
3062 Spencer Drive
West Vancouver,
BC V7V 3C7 2,000 2,000 NIL NIL
Alberto Moscona
701 - 2288
Bellvue Ave.
West Vancouver,
BC V7V 1C6 90,000 90,000 NIL NIL
-7-
Table is continued from page 7
Total number Total shares to
Shares shares to be owned Percent
owned be offered upon owned upon
prior for selling completion completion
Selling to this security holders of this of this
security holder offering account offering offering
_____________________________________________________________________________
Carolynne Newcombe
11B - 6128
Patterson Ave.
Burnaby, BC
V5H 4P3 2,000 2,000 NIL NIL
Lita Nuguid
10 - 10980
No. 2 Road
Richmond, BC
V7E 2E3 90,000 90,000 NIL NIL
Richard Paisley
2221 Inglewood Ave.
West Vancouver,
BC V7V 1Z7 2,000 2,000 NIL NIL
Neil Pollock
3938 Braemar Place.
North Vancouver,
BC V7N 4M8 2,000 2,000 NIL NIL
Julius Roitman
1530 Boundry Road
Burnaby, BC
V5K 4V4 90,000 90,000 NIL NIL
Alan Sacks
3625 Bluebonnet
Road
North Vancouver,
BC V7R 4C9 2,000 2,000 NIL NIL
Bram Solloway
5476 Monte
Bre Crescent
West Vancouver,
BC V7W 3A7 95,000 95,000 NIL NIL
Maureen Solloway
5476 Monte
Bre Crescent
West Vancouver,
BC V7W 3A7 4,000 4,000 NIL NIL
Robert Thompson
102 - 1040
Hamilton Street
Vancouver, BC
V6B 2R9 60,000 60,000 NIL NIL
Barrie Weiner
605 - 815
Hornby Street
Vancouver, BC
V6Z 2E6 95,000 95,000 NIL NIL
_____________________________________________________________________________
Except as otherwise noted in this list, the named party beneficially
owns and has sole voting and investment power over all shares or rights to
these shares. The numbers in this table assume that none of the selling
stockholders sells shares of common stock not being offered in this
prospectus or purchases additional shares of common stock, and assumes that
all shares offered are sold. The percentages are based on 4,500,000 shares
of common stock outstanding on the date hereof.
Other than Bram Solloway, none of the selling stockholders or
their beneficial owners (a) has had a material relationship with us other
than as a stockholder at any time within the past three years; or (b) has
ever been an officer or director of ourselves or any of our predecessors
or affiliates. Mr. Bram Solloway is the beneficial owner of Maxwell Capital
Corporation. Mr. Solloway was our Secretary and Treasurer during the period
November 1, 2001 to May 20, 2002.
None of the selling stockholders is a broker-dealer or an affiliate
of a broker-dealer to our knowledge.
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PLAN OF DISTRIBUTION
The selling shareholders will offer and sell their shares at
prices between $0.04 and $0.05 per share until our shares are quoted on the
OTC Bulletin Board or a national securities exchange and thereafter at
prevailing market prices or privately negotiated prices. Our common stock
is presently not traded on any market or securities exchange, although a
market maker has informed us of its interest to file an application for us
to become eligible for quotation on the OTC Bulletin Board. The selling
shareholders may sell our common stock in the over-the-counter market, or
on any securities exchange on which our common stock is or becomes listed or
traded, in negotiated transactions or through sales to one or more broker-
dealers for resale of these shares as principals, at market prices existing
at the time of sale, at prices related to existing market prices, through
Rule 144 transactions or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the
selling security holders in connection with sales of securities. The shares
will not be sold in an underwritten public offering.
The selling security holders may sell the securities in one or
more of the following methods:
- in the "pink sheets" or in the over-the-counter market or on
such exchanges on which our shares may be listed from time-to-
time, in transactions which may include special offerings,
exchange distributions and/or secondary distributions, pursuant
to and in accordance with the rules of such exchanges, including
sales to underwriters who acquire the shares for their own
account and resell them in one or more transactions or through
brokers, acting as principal or agent;
- in transactions other than on such exchanges or in the over-
the-counter market, or a combination of such transactions,
including sales through brokers, acting as principal or agent,
sales in privately negotiated transactions, or dispositions for
value by any selling security holder to its partners or members,
subject to rules relating to sales by affiliates; or
- through the issuance of securities by issuers other than us,
convertible into, exchangeable for, or payable in our shares.
In making sales, brokers or dealers used by the selling security
holders may arrange for other brokers or dealers to participate. The selling
security holders and others through whom such securities are sold may be
"underwriters" within the meaning of the Securities Act for the securities
offered, and any profits realized or commission received may be considered
underwriting compensation.
At the time a particular offer of the securities is made by or on
behalf of a selling security holder, to the extent required, a prospectus
is to be delivered. The prospectus will include the number of shares of
common stock being offered and the terms of the offering, including the
name or names of any underwriters, dealers or agents, the purchase price
paid by any underwriter for the shares of common stock purchased from the
selling security holder, and any discounts, commissions or concessions
allowed or reallowed or paid to dealers, and the proposed selling price to
the public.
We have told the selling security holders that the anti-
manipulative rules under the Securities Exchange Act of 1934, including
Regulation M, may apply to their sales in the market. With certain
exceptions, Regulation M precludes any selling security holders, any
affiliated purchasers and any broker-dealer or other person who participates
in the distribution from bidding for or purchasing, or attempting to induce
any person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchase made in order to stabilize the price of a
security in connection with an at the market offering such as this offering.
We have provided each of the selling security holders with a copy of these
rules. We have also told the selling security holders of the need for
delivery of copies of this prospectus in connection with any sale of
securities that are registered by this prospectus. All of the foregoing may
affect the marketability of our common stock.
LEGAL PROCEEDINGS
We are not currently a party to any material litigation, nor to
the knowledge of management, is there any material litigation threatened or
contemplated against us. Our agent for service of process in 10 Nevada is
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Nevada Agency and Trust Company, 50 West Liberty Street, Suite 880, Reno
Nevada 89501.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the names, positions and the ages
of our directors and executive officers. Directors are elected at our annual
meeting of stockholders and serve for a one year term or until removed from
office in accordance with our bylaws or their successors are elected and
qualify. Officers are appointed by the board of directors and their terms
of office are, except to the extent governed by employment contract, at the
direction of the board of directors. Directors do not currently receive any
compensation for their services in acting as directors.
Director
Name Age Position Since
Robert Danvers 49 Chief ExecutiveOfficer, 2001
President and Director
Stephen Jackson 48 Secretary, Treasurer 2002
and Director
Robert Danvers, our founder, has served as the our President,
Chief Executive Officer, Secretary and Treasurer from August 30, 2001 to
November 1, 2001 and thereafter to date as a director, President and Chief
Executive Officer. Since 1982, Mr. Danvers has provided business consulting
services to development businesses and public reporting companies
principally in the field of financial management and business information
systems. For the preceding five years, Mr. Danvers has served as President
and a director of Danby Financial Management Corp. and Danby Technologies
Corporation. These businesses operate respectively in the fields of
financial management and information systems consulting.
Stephen Jackson has served as a director since April 12, 2002 and
our Secretary and Treasurer since May 20, 2002. Mr. Jackson has been active
in general consulting to business; private, corporate and publicly reporting
since 1980, He is a past director of the British Columbia Taxi Association
and has served during 2000 through 2002 as a director and President,
Secretary and Treasurer of Phoenix Star Ventures, Inc. (formerly wowtown.com,
Inc.), a Delaware reporting company trading on the OTC Bulletin Board.
During the period 1995 through 1997, Mr. Jackson served as Vice President
Investor Relations for Athabaska Gold Resources, a Canadian reporting
company, then trading on the Toronto Stock Exchange and Breckenridge
Resources Ltd., a Canadian reporting company, then trading on the Vancouver
Stock Exchange. During 1998 and 1999 Mr. Jackson consulted for the Vancouver
International Airport Authority.
There are no family relationships between any of our directors,
executive officers and/or directors, nominees herefore or significant
employees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding our
common stock beneficially owned as of the date of this prospectus, by:
(i) each stockholder known by us to be the beneficial owner of
five (5%) percent or more of our outstanding common stock;
(ii) each of the our executive officers and directors; and
(iii) all executive officers and directors as a group.
As at the date hereof, there were 4,500,000 shares of our common
stock issued and outstanding.
Name and Address of Amount and Nature of Percent
Beneficial Owner (1) Beneficial Owner (2) of Class
Robert Danvers (3),(4),(5), 3,274,000 72.8%
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Danby Technologies Corporation 1,180,000 26.2%
Chantal Trudeau 450,000 10.0%
Simon Danvers 450,000 10.0%
Nicholas Danvers 450,000 10.0%
Stephen Jackson 6,000 0.1%
All Executive Officers
and Directors as a group
(2 persons) 3,280,000 72.9%
_____________________
(1) Unless otherwise indicated the address of each of the listed beneficial
owners identified is 444 Columbia Street E, New Westminster, BC V3L 3W9.
(2) Under securities law, a person is considered a "beneficial owner" of a
security if that person has or shares power to vote or direct the voting of
such security or the power to dispose of such security. A person is also
considered to be a beneficial owner of any securities of which the person
has a right to acquire beneficial ownership within 60 days.
(3) Includes 450,000 common shares held in the name of Chantal Trudeau.
Robert Danvers is the spouse of Chantal Trudeau. Each disclaims beneficial
ownership of the shares beneficially owned by the other.
(4) Includes 900,000 common shares held in the name of Danby Investment
Corp., a British Columbia corporation on behalf of Simon Danvers as to
450,000 common shares and Nicholas Danvers as to 450,000 common shares.
Simon Danvers and Nicholas Danvers are the minor children of Robert Danvers
and Chantal Trudeau. Simon Danvers and Nicholas Danvers shares are held in
trust by Danby Investment Corp. for their benefit. Robert Danvers is the
President and sole shareholder of Danby Investment Corp. and disclaims
beneficial ownership of the shares beneficially owned by Simon Danvers and
Nicholas Danvers. As trustee, Robert Danvers has full direction and control
of the shares held beneficially for Simon Danvers and Nicholas Danvers.
(5) Includes 1,180,000 common shares held in the name of Danby
Technologies Corporation, a British Columbia corporation. Robert Danvers is
the President and sole shareholder of Danby Technologies Corporation.
Change of Control
There are currently no arrangements known to us, which will or in
the future could, result in a change of control.
DESCRIPTION OF SECURITIES
General
The following description of our capital stock is a summary of the
material terms and is subject to and qualified in its entirety by our
articles of incorporation, our bylaws and Nevada Law. Our authorized capital
stock consists of 75,000,000 shares consisting of two classes of stock as
follows:
Common Stock
Our articles of incorporation authorize the issuance of 50,000,000
shares of common stock, par value $0.001. Each holder of common stock is
entitled to one vote for each share held on all matters properly submitted
to the stockholders for their vote. Cumulative voting for the election of
directors is not permitted by the articles of incorporation.
Holders of outstanding shares of common stock are entitled to such
dividends as may be declared from time to time by the board of directors out
of legally available funds and, in the event of liquidation, dissolution or
winding up of the our affairs. In the event that any of the aforementioned
situations occur holders are entitled to receive, ratably, our net assets
available to stockholders after distribution is made to the preferred
stockholders, if any, who are given preferred rights upon liquidation.
Holders of outstanding shares of common stock have no preemptive, conversion
or redemptive rights. All of the issued and outstanding shares of common
stock are, and all unissued shares when offered and sold will be, duly
authorized, validly issued, fully paid, and nonassessable. To the extent
that additional shares of our common stock are issued, the relative
interests of then existing stockholders may be diluted.
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As of the date of this prospectus, there were 4,500,000 shares of
our common stock issued and outstanding, held by thirty-one (31)
stockholders of record.
Preferred Stock
Our articles of incorporation authorize the issuance of 25,000,000
shares of preferred stock, par value $0.001. Our board of directors is
authorized to issue the preferred stock from time to time in series and is
further authorized to establish such series, to fix and determine the
variations in the relative rights and preferences as between series, to fix
voting rights, if any, for each series, and to allow for the conversion of
preferred stock into common stock. No preferred stock has been issued by us.
We anticipate that our preferred stock would be utilized in making
acquisitions.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion upon the
validity of the securities being registered or upon other legal matters in
connection with the registration or offering of the common stock was employed
on a contingency basis, or had, or is to receive, in connection with the
offering, a substantial interest, direct or indirect, in the registrant or
any of its parents or subsidiaries. Nor was any such person connected
with the registrant or any of its parents or subsidiaries as a promoter,
managing or principal underwriter, voting trustee, director, officer,
or employee.
Adorno & Yoss, P.A., our independent legal counsel, has provided
an opinion on the legality of the issuance of the securities being offered
herein.
The financial statements included in this prospectus and
registration statement have been audited by Morgan & Company, Chartered
Accountants, to the extent and for the period set forth in their report
appearing elsewhere herein and in the registration statement, and are
included in reliance upon such report given upon the authority of said firm
as experts in auditing and accounting.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Our directors and officers are indemnified as provided by the
Nevada Revised Statutes and our articles of incorporation and bylaws. We
have been advised that in the opinion of the Securities and Exchange
Commission indemnification for liabilities arising under the Securities Act
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 is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we
will, unless in the opinion of our legal counsel the matter has been settled
by controlling precedent, submit the question of whether such
indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the court's decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated under the laws of the State of Nevada on August
30, 2001, and are in the early developmental stage. Effective October 3,
2001, we entered into an agreement to acquire the prior development, designs
and implementation of a virtual office system from Danby Technologies
Corporation in consideration for a purchase price of $60,000, due December
31, 2002 and a royalty on our net revenues from the system or products or
services which use the system. Royalties are determined at the rate of 2%
of net revenues until the amount paid or payable aggregates $250,000 and
thereafter, at the rate of 1%. Management believes that this royalty rate
is favorable in relationship to the software licensing fees normally paid
in transactions of this sort.
In May 2002, we issued Danby Technologies Corporation and a staff
member an aggregate of 1,200,000 common shares in settlement of the
principal amount of $60,000 due under the terms of the purchase agreement
of October 3, 2001. Mr. Danvers, our President, Chief Executive Officer and
director beneficially owns Danby Technologies Corporation. Since 1997,
Danby Technologies Corporation has provided computer and network system
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consulting and development services and has undertaken internal development
of a number of software development projects. The virtual office system is
one of Danby Technologies Corporation's development projects which include
developments for the travel and entertainment industries, labour and
information management and online accounting systems. Mr. Danvers has been
our sole promotor since inception.
Except as previously described, we have not been involved in any
bankruptcy, receivership or similar proceeding, nor have we been involved in
any material reclassification, merger, consolidation, or purchase or sale of
a significant amount of assets not in the ordinary course of business.
DESCRIPTION OF BUSINESS
Business of Issuer
We are engaged in the development of Internet accessible systems
for conducting business processes in real time. Our current objective is the
development and commercialization of a system which provides remote users
with access via a Java enabled web browser to their software applications,
corporate data storage and integrated business applications for contact,
document, time and project management. We refer to our project as a "virtual
office" and use the term herein to denote our proposed product offering.
We also refer to the term "online" in ou business description to
denote a service or business process that is accessible via the Internet,
24 hours a day. We are currently in the development stage and have not
engaged in revenue producing activities.
Management identified the online hosting industry as exhibiting
strong potential for reasons including:
- the increasing availability and reducing cost of high speed
Internet connections;
- the cost of deploying computer software and computer systems;
- the cost of maintaining computer systems and providing system
help;
- the trend toward employees working away from their primary
office;
- the cost of experienced system managers; and
- the large market represented by small and medium businesses.
Online Host or Application Service Provider ("ASP")
The ASP model is an outgrowth of the growing practice of
outsourcing. ASPs deliver and manage applications and computer services for
many thousands of users from remote data centers via the Internet or a
private network. An ASP provides its customers with the infrastructure and
services such as application hosting, subscription management, service
level monitoring, network delivery, backup and recovery services, version
management, help desk, integration and consulting services. Customers can,
as with other forms of outsourcing, then concentrate their energies and focus
on their core business processes.
Under the ASP model, users do not pay the initial costs of
software, hardware, or systems development but pay on the basis of use, on
a pay as you use or rental basis. ASP's may charge customers initial
establishment or setup fees, monthly service fees and fees based on
additional usage or volumes of storage or throughput.
Business Plan For Development of The Virtual Office
Following an evaluation of relevant circumstances, we concluded
that we could create a viable and successful business by developing and
commercializing a full service virtual office system for small and medium
businesses. Our business model would emphasize a single, integrated approach
backed up with service and customer training.
A virtual office can be viewed as a computer system with user
applications, security and network communications, just as you would find
in most businesses' offices. The distinguishing feature of a virtual office
system is that the computer systems and applications are hosted on a
supplier's system and are accessible from outside the supplier's office.
In our implementation, access is via the Internet through virtually any
Java enabled web browser. This would allow customers to access our system
securely using most any computer and many forms of personal digital
assistants and cellular telephones. Our virtual office system will not
require specialized software to be installed on the device our customer
uses to access our system.
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Our virtual office is based on the ASP model, however we believe
that small and medium business require their technology to be provided in
the form of a service. The focus of our development has been toward the view
that our virtual office needs to provide our users with a central source for
data and to provide for users to work together and collaborate on projects
or daily tasks. It should also enable our users to build and maintain their
business' knowledgebase. Our objective for development is for clients to be
able to capture business information centrally and have it available to
authorized persons in real time. We use the term "knowledgebase" to refer
to a store of written and other data forms and formats that make up a
businesses' knowledge. A knowledgebase would include accounting data, secret
processes or communications and quotations to customers, discussions between
engineers on a development problem, project and job tracking, policy and
procedure manuals to name but a few examples. To obtain value from such a
knowledgebase, our proposed system will include standard reporting and
viewing capabilities so users can locate information quickly and in context.
To be successful and attract users, we will need to:
* develop our virtual office so that users can readily access
the features they wish to use;
* provide online help and training tutorials and provide users
with access to staff for solving other technical issues;
* develop our systems so that they are robust and capable of
handling many users simultaneously without affecting other
users; and
* provide privacy and security for our customer's data and
their communications to and from our system.
The elements of our business plan for the development of the
virtual office are summarized as follows:
1. Development of Virtual Office System
The business model that we have created requires us to develop
and commercialize a system that is easy to use, responsive, provides
functionality customers are seeking and is cost effective. We will also need
to provide assistance, training and support to our customers so they are
able to gain maximum benefit from our virtual office system. We believe our
ultimate success will be measured by the extent our customers use our system
and derive value from it.
The virtual office system has been in development for over two
years. The virtual office system is currently designed to include the
following capabilities or functionality:
* Email, calendar, address book, to-do lists and reminders
Each user will have fully enabled email including a personal
name and address book and the ability to use folders to
categorize e-mails, a personal to-do list and personal
reminders. Calenders allow for appointments and recurring
meetings.
* Group calendar and schedule
Each user within a company will have the ability if permissions
have been granted to make appointments and meetings with other
members of the company and to determine available time, book
meeting rooms and other resources company-wide.
* Web site
We will host our customers' web site and Internet domain as an
integral part of their virtual office.
* Data storage and access, document sharing, cut and paste
Each of our clients will be provided with disk storage space
for their data and business applications. Our virtual office
will provide the ability to segregate data in directory
structures and to have different permissions applied. Our
system will provide users with the ability to transfer data to
and from our system to their local machines and will also
allow most of our client's applications to share data through
the system's clipboard.
* Business productivity applications:
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Each of our customers will be provided with a suite of business
productivity programs which integrate with the other features
of the virtual office. The following productivity application
modules will be offered:
Client and contact management - includes the ability to maintain
contacts throughout the business which are accessible from a
user's email and from other productivity application modules.
Provides businesses with the ability to track contacts made via
telephone,email,include scanned in letters or other correspondence,
prepare client notes and maintain discussions. The contact
information is readily accessible with views and reports and the
ability to search headings and within the information maintained.
Document and resource management - provides a common store,
management, access control and the ability to categorize and to
view summaries and list of documents. The document management
application will provide a review cycle including the
notification of reviewers, document versioning to segregate
changes and the ability to attach comments, review notes and
discussions to draft documents. Users will also have the ability
to develop and separately post documents related to their
business as resources such as policy and procedures manuals,
benefits manuals, marketing materials reference materials,
how-to information, and just about any other file or information
that a business may use as a common resource. The resource
section of this module stores and provides easy access to
information in the manner of a corporate library.
Task and project management - includes the ability to track
projects and tasks throughout the business. Reports and views will
allow staff and management to see the ongoing progress of work and
for management to track and assign tasks. This module will allow
detailed work requests to be tied to customer quotes and files and
to be available to the assigned staff member in a view of work
assignments and to managers in views of completed and incomplete
jobs or tasks.
Time, expense tracking and billing - working in conjunction with
our other modules, particularly the task and project tracking,
business will have the ability to enable time tracking including
time associated with jobs and tasks. This module will provide for
approval of time records and the association with a customer, job
or internal task. It will also allow expenses associated with
customer work and billings to be tracked, approved and ultimately
billed. Users can bill and track receipts based on time, expense
and job records developed. In addition to printing of invoices,
our users will be able to send electronic invoices via email and
automated billing through direct charging to major charge cards.
All of our proposed productivity applications will be integrated
and have the ability to share information. We will enable within
these productivity applications, the ability to control user
access and the ability to control creation, change or deletion of
information in our modules.
All productivity applications will be search-enabled so users can
search for relevant documents by headers and by the content of the
document or information itself.
* Local printing
Users of the virtual office will be able to print to virtually any
local or network printer.
* Backup and security
Our system will provide security for our users' data and their
communication into and out of the virtual office. We will use 128
bit SSL encryption for any communication between our servers and
client machines. To protect from system failures, we will provide
a data backups on a daily and weekly rotation. Clients will be able
to request additional backups of their data and offsite storage
through backups to CDROM.
* Run user applications
Users will have the ability to run their existing Win32, Linux
and UNIX commercial software as part of their virtual office.
Businesses will be able to run their existing software within our
system and access such applications through a Java enabled web
browser. Applications we host for clients will be able to access
all applicable data files maintained in our system or on a user's
computer hard drive or shared hard drive. We will establish 16
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support policies for user applications based on our testing
and on our client's needs. We envision supporting only certain
applications which would include a selection of the most popular
software applications.
* Help desk, maintenance and upgrades
To enable our users to realize the benefits of our virtual office
system and to enable them to use all its features, we will provide
users with a web based help system and tutorial and access to our
help desk staff who can interact with users over the Internet
through our system to determine user issues and problems. We expect
to additionally provide context driven help on the main user entry
points in our productivity applications and to build a help
database providing general information on using the system,
frequently asked questions as well as providing a forum for
customers to contact our staff to resolve technical problems they
may encounter. We plan to include a general tutorial for first
time customers to familiarize them with the system and setting up
of their office.
We currently have a test implementation of our virtual office and
have developed designs for the commercialization of our development. Our
system is currently incomplete and requires additional development
principally in respect of the productivity applications modules, our help
system and the related interoperation and testing of these functions and
modules. See estimates of costs to complete the virtual office system as
set forth in the section titled "Plan of Operation" herein.
We presently do not have sufficient funds to engage additional
employees or contractors to undertake the remaining development planned for
our virtual office system. Commencement of such development is conditional
upon our obtaining funding.
2. Development of Internal Systems
The virtual office is composed of three components or layers which
we describe as the hardware and operating system layer, the middleware layer
and the business processes layer.
Hardware and Operating System
Our virtual system will require network servers and operating system
software. We will also require internet connections and an internal network.
Our virtual office will require approximately eight servers and will require
networking and full interoperation. The operating system layer is responsible
for all hardware and storage operations and for all network communications
and authentication of users. We use a combination of servers running UNIX,
Linux and Windows. We will require licenses for the UNIX and Windows operating
system software from their respective suppliers. Operating system software is
priced per server with additional fees for each user. We are able to acquire
the operating system licenses readily without lead time, in the normal
course of business.
Middleware Software
On our servers, we run middleware software to provide specialized
functionality such as firewall, web management, database, name services,
security, mail and communications. Middleware is the term we use herein to
describe the system services and development environment upon which our
virtual office is developed. Middleware is generally implemented as a
software server. We use a combination of public domain middleware for which
we pay no license fees and commercial middleware for which we pay licensing
fees which are generally priced per server with additional fees for each
user. We are able to acquire the required middleware licenses readily
without lead time, in the normal course of business.
Business Processes
Our virtual office is developed and implemented in this layer.
There are no additional licensing fees or charges applicable to our own
development. Where we include modules or programs in our virtual office
which others have written, we may be required to pay licensing or royalty
fees to the author of such program or module. We will also develop and
implement our internal management information system in this layer,
consisting of system sign-up and tracking of client installations, change
orders, service calls, customization requests, other services and overall
usage of the system. Our management information system will need to provide
real-time information on the status of client orders and system usage and
provide automated billing and accounting.
We currently have no hardware of our own nor have we acquired any
operating system or middleware software licenses. We currently have, however,
rented a shared Internet connected network from Danby Technologies
Corporation to provide the hardware, software and middleware layers in which
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we operate our current development and test operations. We presently do not
have sufficient funds to acquire hardware or software and commence
development of our network infrastructure and internal management information
system. Commencement of such development is conditional upon our obtaining
financing.
3. Development of Web Site and Virtual Office Demonstration
For marketing of our service, our plan includes the development
of a web site and web-based demonstration of our virtual office system. Our
web site will incorporate information about ourselves and our products and
services. The demonstration will allow potential customers the ability to
tryout the features and usability of our virtual office prior to purchasing.
We plan to outsource the development of the web site to a firm
with expertise in designing web sites and have identified companies that have
the capability to complete this development. We have not as yet identified the
environment or method for developing the system demonstration, nor have we
identified companies or individuals that have the ability to complete such a
system demonstration.
We presently do not have sufficient funds to commence development
of our web site and system demonstration. Commencement of such development
is conditional upon our obtaining financing.
4. Marketing of the Virtual Office
Our objective will be to commence marketing upon completion of
development of the virtual office system, web site and demonstration system.
Our marketing strategy is proposed to be directed toward businesses with the
following attributes:
* employees and contractors working away from the office;
* home office market; and
* rapidly growing and start-up enterprises requiring
scalable computer systems.
We plan to outsource the development of our marketing, including
the development of logos, art and design work for our brochures and web site.
We also expect to outsource our marketing functions for the launch of our
virtual office and ongoing marketing functions for the foreseeable future.
We believe an independent marketing team, paid under a fair commission
program with channels for reporting customer contacts will provide the best
value and allow our management to concentrate on developing and managing the
virtual office system.
We presently do not have sufficient funds to commence our
marketing program. Commencement of our marketing program including artwork,
design and brochures and other marketing materials is contingent on our
obtaining funding.
Revenue Sources
The successful implementation of our business model will enable
us to generate revenues from:
- setup or implementation fees;
- monthly system fees;
- monthly system usage fees;
- consulting and training fees; and
- customizing fees;
Competition
We will compete with numerous providers of online or Internet
accessible business applications and services companies, many of which have
far greater financial and other resources than we do. Many of these companies
have established histories and relationships in providing online
applications or systems that enable them to attract talent, marketing support,
the interest of decision makers and financing. Moreover, proven track records
are of paramount consideration in selecting vendors.
We plan to compete through the development of an integrated,
fully managed and easy to use "virtual office" as a complete online system for
small and medium businesses. We also plan to aggressively market the virtual
office through successful marketers.
-17-
While our management team has significant business experience,
we, as a company, have no proven track record in the application service
provider or online services industry. There is no assurance that we will be
able to successfully complete development of a commercial system or compete
in this industry.
Government Regulations
Due to the increasing popularity and use of the Internet, it is
possible that a number of laws and regulations may be adopted with respect
to the Internet generally, covering issues such as user privacy, pricing,
and characteristics and quality of products and services. Similarly, the
growth and development of the market for Internet commerce may prompt calls
for more stringent consumer protection laws that may impose additional
burdens on those companies conducting business over the Internet. The
adoption of any such laws or regulations may decrease the growth of commerce
over the Internet, increase our cost of doing business or otherwise have a
harmful effect on our business.
Currently, governmental regulations have not materially restricted
the use or expansion of the Internet. However, the legal and regulatory
environment that pertains to the Internet is uncertain and may change. New
and existing laws may cover issues that include:
* Sales and other taxes;
* User privacy;
* Pricing controls;
* Characteristics and quality of products and services;
* Consumer protection;
* Cross-border commerce;
* Libel and defamation;
* Copyright, trademark and patent infringement; and
* Other claims based on the nature and content of Internet
materials.
These new laws may impact our ability to develop and market our
virtual office system in accordance with our business plan.
We may have to qualify to do business in other jurisdictions. If
we commence our virtual office business, we anticipate that our sales and
our customers will be in multiple states and foreign countries. As our
customers may be resident in such states and foreign countries, such
jurisdictions may claim that we are required to qualify to do business as a
foreign company in each such state and foreign country. Failure to qualify
as a foreign company in a jurisdiction where required, could subject us to
fines, penalties or other prosecutions.
Research and Development Expenditures
We have not expended any money on research and development. We
have however spent $60,000 on expenses associated with the acquisition of
prior development costs and plan to expend in the next 12 month period the
sum of $184,200 on expenses associated with the development of our proposed
virtual office system.
We expect to continue to develop our virtual office system and
expect to devote a significant proportion of our revenues and capital funds
to developing enhancements to our virtual office system and maintaining our
competitive positioning.
Environmental Regulations
We are not aware of any environmental laws that will be applicable
to the operation of our business.
Employees
We currently have no full-time employees, one part-time employee
and one part-time contractor. Mr. Robert Danvers, our President and Chief
Executive Officer is a part-time employee and Mr. Tim Sproule is a part-time
consultant. As prospects and circumstances warrant, we will engage additional
full-time and part-time employees, as well as consultants, to perform
required services.
-18-
PLAN OF OPERATION
Current Operation Development
In furtherance of our business model:
- In October 2001, we acquired the prior development and
implementations of the virtual office from Danby Technologies
Corporation, a company controlled by our founder and President.
Danby Technologies Corporation developed the original plans and
test implementations over a period of two year prior to our
acquisition.
- In October 2001, we organized a British Columbia, Canada
corporation to enable us to conduct our development and to service
the Canadian market after commercialization of our virtual office
system.
- We have engaged Mr. Tim Sproule of Danby Technologies Corporation
on a part-time basis since October 2001 to provide computer and
system services on a monthly basis and to act as our technical
consultant. Mr. Sproule is a computer system specialist with
extensive experience with system management, programming and
development. As a consultant, Mr. Sproule has managed large UNIX
based distributed systems and played a key role in project
developments.
- We have rented a share of an Internet accessible server based
system from Danby Technologies Corporation since October 2001.
This hardware, network infrastructure and internet connectivity
has enabled us to deploy our test implementation of the
virtual offic system and continue development and testing.
- Stephen Jackson joined as a member of our board of directors in
April 2002. Mr. Jackson is a businessman, engaged in providing
business consulting to private and public companies since 1980.
Since our acquisition of prior development and designs, we have
continued to progress our development plan focusing on continued testing in
a live business environment with multiple users and completing our designs
and upgrades for a commercial virtual office system. Our testing the scale-up
of the virtual office system has identified development issues related to
customer segregation. We have identified potential software solutions to
address these issues and as part of our upgrade plan, we will implement a
test development to confirm our approach.
Our plan of operations for the twelve months following the date of
this registration statement is to complete the following objectives within
the time period specified, subject to our obtaining funding for the
development and marketing of our virtual office system:
* Complete development of the virtual office system;
* Complete development of our internal systems;
* Complete development of our web and demonstration site; and
* Market our virtual office system;
To accomplish our objectives, we will need to undertake significant
development work and wil accordingly need to hire additional employees,
contractors and further, engage consultants to enable us to undertake
marketing. Progress in development and the hiring of additional staff is
conditional upon our obtaining financing.
The projected time to complete each of the elements of our plan of
operations and its anticipated cost are discussed below:
1. Complete Development of Virtual Office System
We are currently testing and upgrading the virtual office system
however we require additional design, programming and testing to develop a
commercial version of our virtual office system including help and user
support systems. We anticipate this development could be completed within a
four month period after we obtain funding. We anticipate that the development
costs will be approximately $60,000 and will consist primarily of payments
-19-
to consultants for programming and software development services and the cost
of help desk training and staff management.
2. Complete Development of Our Network Infrastructure
We anticipate that development of our network system and Internet
infrastructure, including additional security features and our internal
management information system to be completed over a three month period during
the development of the virtual office at a budgeted cost of $12,500. To
complete our infrastructure for commercial operations, we estimate software
licensing costs of approximately $29,700 will be required. We also anticipate
that costs for the acquisition of additional equipment, prepayments for high
speed internet connection services and other costs including fees for the
development and implementation of this infrastructure will be approximately
$62,000.
3. Complete Development of Web and Demonstration Site
We plan to commence development of our web site and web-based
system demonstration during the final month of the virtual office development
program. Provided funds are available, we anticipate that this component
could be completed in a period of less than 45 days. We anticipate development
costs will be approximately $20,000.
4. Marketing
We plan to undertake the development of a logo and other art and
to developa look and feel for our brochures and web site and which we will
incorporate into an advertising and marketing campaign once the development
of our virtual office system and web site are approaching completion. We
anticipate that initial marketing expenses, including travel for the first
year will be approximately $75,000. We anticipate that the marketing materials
and campaign would be designed by an outside marketing consulting firm.
Employees and Consultants
We currently have no full-time employees, one part-time employee,
Mr. Robert Danvers, our President and Chief Executive Officer and one
part-time contractor, Mr. Tim Sproule. Our full-time employee and consulting
positions are not expected to exceed six persons in the near future, including
Mr. Robert Danvers, our President, a technical and systems manager, an
administration assistant, a senior programmer and two technical support staff.
We will contract with other consultants for specialized development to the
extent required. The cost of employees or consultants over the next twelve
months has been estimated as $106,000. The estimated cost of employees or
consultants engaged in development and marketing has been included in the
estimates contained within other items of this plan.
Working Capital Requirements
In addition to the above, we will incur additional expenses on
account of overhead and administration. These costs will include fees payable
for rent, office expenses, travel, legal and accounting services. We
anticipate spending approximately $44,000 on these expenditures over the next
twelve months. In addition to the amounts noted above, we are seeking an
additional amount of funding aggregating approximately $50,000 for unalocated
working capital.
Results of Operations
We have not yet engaged in any revenue-producing activities, nor
are we a party to any binding agreements that will generate revenues. However,
we continue to seek and evaluate various opportunities consistent with our
business model that we believe will, over time, allow us to become profitable
and enhance stockholder values. Due to our lack of revenue-production to
date, and our lack of contractual commitments to generate revenue, there is
no basis at this time for investors to make an informed determination as to
the prospects for our future success. For similar reasons, our auditors have
included in their report covering our financial statements for the period
from incorporation to April 30, 2002, that there is substantial doubt about
our ability to continue as a going concern.
For the period from incorporation August 30, 2001 through April
30, 2002 we incurred a deficit of $92,438. Our principal areas of expenditure
during the period were for prior development costs of $60,000, rent and
occupancy costs of $10,500, system rental of $10,308 and technical
subcontracts of $10,308. As at April 30, 2002, we had a working capital
deficit of $85,438.
-20-
Through April 30, 2002, we funded our operations through a
combination of supplier finance and the sale of our equity securities.
In October 2001, we completed the sale of 2,100,000 shares of
common stock for proceeds to us of $7,000. The sale of these shares was
effected off-shore, pursuant to SEC rules, regulations and interpretations,
including Regulation S.
Subsequent to April 30, 2002 we completed the sale of an
additional 1,200,000 shares of common stock resulting in net proceeds
to us of $60,000 and settled the $60,000 debt due to Danby Technologies
Corporation under the terms of the October 3, 2001 purchase agreement by
the issuance of 1,200,000 shares of our common stock. The sale of these
shares was effected off-shore, pursuant to SEC rules, regulations and
interpretations, including Regulation S. At May 31, 2002 our working
capital position was approximately $25,500.
Financial Plan & Operation
We anticipate we will spend approximately $437,300 over the next
twelve month period pursuing our stated plan of operations. Of these
expenditures, we anticipate that approximately $287,000 will be spent
within the next six month period.
The funds available to us currently are insufficient to carry
out our plan of operations and complete our development program and as we
will be unable to generate revenues until such time as development is
completed, we will require additional financing in order to pursue our plan
of operations and our business plan. We believe that the funds currently
available will enable us to sustain operations for the immediate future,
however we will not be able to undertake development of the virtual system
without additional financing. There is no assurance additional financing,
if required, will be available to us upon acceptable terms.
Our actual expenditures and business plan may differ from this
plan of operations. Our board of directors may decide not to pursue this
plan, or may decide to modify it based on new information or limits in the
amount of available financing.
We anticipate incurring continuing operating losses for the
foreseeable future. We base this expectation, in part, on the fact that we
will incur substantial operating expenses in completing our development
program and do not anticipate earning any revenues until after development
is completed and marketing has commenced. Our future financial results are
also uncertain due to a number of factors, some of which are outside our
control. These factors include, but are not limited to:
(a) our ability to develop a commercially marketable virtual
office system with the features and functionality sought by
our potential customers;
(b) our ability to successfully market our virtual office system
to potential customers;
(c) our ability to charge fees for use of our virtual office
system that will enable us to generate revenues that exceed
our operating costs; and (d) the introduction and availability
of competing services.
We believe the above discussion contains a number of forward-
looking statements. Our actual results and our actual plan of operations
may differ materially from what is stated above. Factors which may cause
our actual results or our actual plan of operations to vary include, among
other things, decisions of our board of directors not to pursue a specific
course of action based on its reassessment of the facts or new facts,
changes in the application hosting business or general economic conditions
and those other factors identified in this prospectus.
DESCRIPTION OF PROPERTY
We do not own or lease any real property. Our principal executive
offices are located in property of Danby Technologies Corporation, a company
controlled by Mr. Robert Danvers, our President and a director, at 444
Columbia Street E., New Westminster, B.C. V3L 3W9. Our telephone number is
(604) 777-1707. We pay on a month to month arrangement since October,
2001, for our office rent at this location at a rate of US$1,500 per month.
-21-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as set forth below, there have been no material
transactions, series of similar transactions, currently proposed
transactions, or series of similar transactions, to which we are or will be
a party, in which the amount involved exceeded $60,000 and in which any of
our directors or executive officers, any security holder who is known by us,
to own of record or beneficially more than five percent of our common stock
any promoter, or any member of the immediate family of any of the foregoing
persons, had a material interest.
During the year ended April 30. 2002:
We acquired from Danby Technologies Corporation, a company owned
and controlled by Robert Danvers, the prior development, designs
and implementations for a virtual office system for the
reimbursement of $60,000 of Danby Technologies Corporation's prior
out of pocket development expenses and a royalty on future sales
of 2%, to an aggregate $250,000 and thereafter at the rate of 1%
of net revenues.
We issued 2,100,000 common shares in a private transaction at the
price of $0.00333 per share to Mr. Robert Danvers, Mr. Danvers
spouse, Chantal Trudeau and their minor children Nicholas and
Simon Danvers for an aggregate consideration of $7,000.
We rented our office premise for our British Columbia subsidiary
and our executive offices from Danby Technologies Corporation at
the rate of $1,500 per month on a month to month basis. In the
period from incorporation to April 30, 2002, we incurred rental
charges aggregating $10,500 of which the outstanding balance
was $7,971 at April 30, 2002.
We engaged Danby Technologies Corporation as contractor to
provide us with a shared internet enabled network system for
deploying and testing our development and to provide
professional staff to maintain our implementation and undertake
development. Fees of $3,000 per month are based on fees Danby
Technologies Corporation charges other firms for comparable
services. In the period from incorporation to April 30, 2002,
we incurred fees related to systems and professional fees
aggregating $20,616 of which the outstanding balance was
$20,616 at April 30, 2002.
Danby Technologies Corporation, advanced various operating
expenses on our behalf, the outstanding balance of which was
$70 at April 30, 2002.
Danby Financial Management Corp., a company controlled by Robert
Danvers, advanced various operating expenses on our behalf, the
outstanding balance of which was nil at April 30, 2002.
Subsequent to the year ended April 30. 2002:
We issued 1,200,000 common shares to Danby Technologies
Corporation and a member of their staff in settlement of the
principal amount of $60,000 due Danby Technologies Corporation
under the October 3, 2001 purchase agreement.
At this time we have not formulated any corporate policies for
entering into transactions with affiliated parties.
Members of our management team are not employed by us on a
full-time basis. They are involved in other business activities and may,
in the future become involved in other businesses. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between our business and their other business interests. We do
not have and do not intend in the future to formulate a policy for the
resolution of such conflicts. We currently have no agreements with members
of our management team. We have not determined when an employment
agreement would be entered into with Robert Danvers, our President however
we have determined to review entering into an agreement after a public market
for our common shares develops.
-22-
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Public Market for Common Stock
There is presently no public market for our common stock. We
anticipate applying for trading of our common stock on the OTC Bulletin
Board upon the effectiveness of the registration statement of which this
prospectus forms a part. However, we can provide no assurance that our
shares will be traded on the bulletin board or, if traded, that a
public market will materialize.
Holders of Our Common Stock
As of the date of this registration statement, we had
thirty-one (31) registered stockholders.
Rule 144 Shares
A total of 3,300,000 shares of our common stock will be
available for resale to the public after October 6, 2003,(2,094,000 shares),
April 12, 2004 (6,000 shares) and May 13, 2004 (1,200,000 shares) in
accordance with the volume and trading limitations of Rule 144 of the Act.
In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares of a company's common stock for at least one
year is entitled to sell within any three month period a number of shares
that does not exceed the greater of:
1. 1% of the number of shares of our common stock then
outstanding which, in our case, will equal approximately
45,000 shares as of the date of this prospectus; or
2. the average weekly trading volume of our common stock
during the four calendar weeks preceding the filing of
a notice on form 144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions
and notice requirements and to the availability of current public information
about us.
Under Rule 144(k), a person who is not one of our affiliates at
any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least 2 years, is entitled to
sell shares without complying with the manner of sale, public information,
volume limitation or notice provisions of Rule 144.
As of the date of this prospectus, persons who are our affiliates
hold 1,930,000 shares that may be sold pursuant to Rule 144 after October 6,
2003, April 12, 2004 and May 13, 2004.
Stock Option Grants
To date, we have not granted any stock options.
Registration Rights
We have not granted registration rights to the selling
stockholders or to any other persons.
Dividends
There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect
to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in
the usual course of business; or
2. our total assets would be less than the sum of our total
liabilities plus the amount that would be needed to satisfy
the rights of stockholders who have preferential rights
superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare
any dividends in the foreseeable future.
-23-
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information relating to all
compensation awarded to, earned by or paid by us during each of the
preceding three fiscal years to: (a) all individuals serving as our Chief
Executive Officer in the fiscal year ended April 30, 2002; and (b) each of
our executive officers who earned more than $100,000 during the fiscal year
ended April 30, 2002:
Other Securities
Annual Underlying All
Name and Fiscal Compen- Options/ LTIP Other
Principal Year Salary Bonus sation SARs (#) Payouts Compen-
Position sation
Robert Danvers 2002 - - - - - -
President, CEO
Stephen Jackson 2002 - - - - - -
Secretary,
Treasurer
Option Grants in Last Fiscal Year
We did not grant any stock options to the executive officers
during our most recent fiscal year ended April 30, 2002. We have also not
granted any stock options to executive officers since April 30, 2002.
Compensation of Directors
There are no standard arrangements pursuant to which directors
are compensated for any services provided as director. No additional
amounts are payable to directors for committee participation or special
assignments performed for and on our behalf through to April 30, 2002.
Employment Contracts and Termination of Employment
and Change-in-Control Arrangements
There are no employment contracts, compensatory plans or
arrangements, including payments to be received from us, with respect
to any of our directors or executive officers which would in any way
result in payments to any such person because of his or her resignation,
retirement or other termination of employment with us, any change in
control of us, or a change in the person's responsibilities following such
a change in control.
-24-
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2002
(Stated in U.S. Dollars)
AUDITORS' REPORT
To the Shareholders
Infotec Business Systems, Inc.
(A development stage company)
We have audited the consolidated balance sheet of Infotec
Business Systems, Inc. (a development stage company) as at
April 30, 2002 and the consolidated statements of
operations, cash flows, and stockholders' deficiency for the
period from August 30, 2001 (date of inception) to April 30,
2002. These consolidated financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these
consolidated financial statements based on our audit.
We conducted our audit in accordance with United States
generally accepted auditing standards. Those standards
require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements
present fairly, in all material respects, the financial
position of the Company as at April 30, 2002 and the results
of its operations and cash flows for the period from August
30, 2001 (date of inception) to April 30, 2002 in accordance
with United States generally accepted accounting principles.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. The Company is in the development stage and will
need additional working capital for its planned activity,
which raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these
matters are described in Note 1(c). These consolidated
financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Vancouver, B.C. "Morgan & Company"
May 27, 2002 Chartered Accountants
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
APRIL 30, 2002
(Stated in U.S. Dollars)
ASSETS
Current
Cash $ 2,066
Amounts receivable 2,094
Prepaid expenses 633
------
$ 4,793
------
LIABILITIES
Current
Accounts payable - related company $ 90,227
Accounts payable - other 4
------
90,231
------
STOCKHOLDERS' DEFICIENCY
Capital Stock
Authorized:
50,000,000 common shares, par value $0.001 per share
25,000,000 preferred shares, par value $0.001 per share
Issued and outstanding:
2,100,000 common shares at April 30, 2002 2,100
Additional paid-in capital 4,900
Deficit Accumulated During The Development Stage (92,438)
--------
(85,438)
--------
$ 4,793
---------
Nature Of Operations (Note 1)
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
PERIOD FROM AUGUST 30, 2001 (DATE OF INCEPTION) TO APRIL 30,2002
(Stated in U.S. Dollars)
- ---------------------------------------------------------------
Expenses
Office and miscellaneous $ 1,322
Rent and occupancy 10,500
Equipment rental 10,308
Software development costs 70,308
-------
Loss For The Period $(92,438)
-------
Basic Loss Per Share $ (0.05)
-------
Weighted Average Number Of Shares Outstanding 1,745,679
---------
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
PERIOD FROM AUGUST 30, 2001 (DATE OF INCEPTION) TO APRIL 30,2002
(Stated in U.S. Dollars)
Cash Flows From Operating Activities
Loss for the period $(92,438)
Changes in non-cash working capital balances related
to operations:
Prepaid expenses (633)
Amounts receivable (2,094)
Accounts payable - related company 90,227
Accounts payable - other 4
-------
(4,934)
-------
Cash Flows From Financing Activity
Issuance of share capital 7,000
-------
Increase In Cash During The Period 2,066
Cash, Beginning Of Period -
----------
Cash, End Of Period $ 2,066
----------
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
APRIL 30, 2002
(Stated in U.S. Dollars)
ADDITIONAL
COMMON STOCK PAID-IN
SHARES AMOUNT CAPITAL DEFICIT
TOTAL
October 2002 -
Issued for cash 2,100,000 $ 2,100 $ 4,900 $(92,438) $
(85,438)
--------- ------- -------- -------- ----
- ------
Balance,
April 30, 2002 2,100,000 $ 2,100 $ 4,900 $(92,438) $
(85,438)
2002 --------- ------- ------- --------- ----
- ------
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2002
(Stated in U.S. Dollars)
1.NATURE OF OPERATIONS
a)Organization
The Company was incorporated in the State of Nevada,
U.S.A. on August 30, 2001. The Company's wholly owned
subsidiary, Infotec Business Strategies, Inc., was
incorporated under the laws of the Province of British
Columbia on October 1, 2001.
b)Development Stage Activities
The Company is engaged in the development of internet
accessible ("online") systems for conducting business
processes in real time. The development is currently
focused on a "virtual office" system for small and
medium businesses which provides remote users with
access via a web browser to their software
applications, corporate data storage and integrated
business applications for contact management, time and
project management, and client management.
The Company is in the development stage; therefore,
recovery of its assets is dependent upon future events,
the outcome of which is indeterminable. In addition,
successful completion of Infotec Business Systems,
Inc.'s development program and its transition,
ultimately to the attainment of profitable operations
is dependent upon obtaining adequate financing to
fulfil its development activities and achieve a level
of sales adequate to support its cost structure.
c)Going Concern
The Company will need additional working capital to be
successful in its planned development activities and to
service its current liabilities for the coming year,
and, therefore, continuation of the Company as a going
concern is dependent upon obtaining the additional
working capital necessary to accomplish its objective.
Management has developed a strategy, which it believes
will accomplish this objective, and is presently
engaged in seeking various sources of additional
working capital including equity funding through a
private placement and long term financing.
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2002
(Stated in U.S. Dollars)
2.SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of the Company has
been prepared in accordance with generally accepted
accounting principles in the United States. Because a
precise determination of many assets and liabilities is
dependent upon future events, the preparation of
consolidated financial statements for a period
necessarily involves the use of estimates which have been
made using careful judgement.
The consolidated financial statements have, in
management's opinion, been properly prepared within
reasonable limits of materiality, and within the
framework of the significant accounting policies
summarized below:
a)Consolidation
These consolidated financial statements include the
accounts of the Company and its wholly owned Canadian
subsidiary, Infotec Business Strategies, Inc.
b)Software Development Costs
Software development costs are charged to expense as
incurred unless the development project meets the
criteria under United States generally accepted
accounting principles for capitalization.
Capitalization of software development costs begins
upon the establishment of technological feasibility and
ceases when the product is available for general
release. The Company has no capitalized software
development costs at April 30, 2002.
c)Development Stage Company
The Company is a development stage company as defined
in the Statements of Financial Accounting Standards No.
7. The Company is devoting substantially all of its
present efforts to establish a new business and none of
its planned principal operations have commenced. All
losses accumulated since inception have been considered
as part of the Company's development stage activities.
d)Income Taxes
The Company has adopted Statement of Financial
Accounting Standards No. 109 - "Accounting For Income
Taxes" (SFAS 109). This standard requires the use of
an asset and liability approach for financial
accounting and reporting on income taxes. If it is
more likely than not that some portion, or all if a
deferred tax asset, will not be realized, a valuation
allowance is recognized.
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2002
(Stated in U.S. Dollars)
2.SIGNIFICANT ACCOUNTING POLICIES (Continued)
e)Foreign Currency Translation
The operations of the Company's subsidiary, Infotec
Business Strategies, Inc., are located in Vancouver,
Canada and its functional currency is the Canadian
dollar. The consolidated financial statements have
been translated using the current method whereby the
assets and liabilities are translated at the year end
exchange rate, capital accounts at the historical
exchange rate, and revenues and expenses at the average
exchange rate for the period.
f)Financial Instruments
The Company's financial instruments consist of cash,
amounts receivable, prepaid expenses and accounts
payable.
Unless otherwise noted, it is management's opinion that
this Company is not exposed to significant interest or
credit risks arising from these financial instruments.
The fair value of these financial instruments
approximate their carrying values, unless otherwise
noted.
g)Basic Loss Per Share
Basic loss per share is calculated using the weighted
average number of common shares outstanding during the
period.
3.COMMITMENT
Pursuant to a purchase agreement dated October 3, 2001,
the Company acquired computer software development costs
for the consideration of $60,000, and a royalty of 2% on
the net sales revenue of any product or service that uses
all or any portion of the software until the amount paid
totals $250,000, after which the royalty drops to 1%.
The royalty is payable quarterly following the first
commercial sale of products or services.
The software development costs were acquired from Danby
Technologies Corporation ("Danby"), a company controlled
by a majority shareholder, and was recorded at Danby's
historical cost base.
INFOTEC BUSINESS SYSTEMS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2002
(Stated in U.S. Dollars)
4.RELATED PARTY TRANSACTIONS
During the period, the Company entered into transactions
(recorded at exchange values) with related parties as
follows:
i)The Company engages Danby Technologies Corporation to
provide a shared internet enabled network system for
deploying and testing, and to provide professional
staff to maintain implementation and undertake
development. In the period from inception to April 30,
2002, the Company has incurred fees related to systems
rental aggregating $20,616.
ii) The Company rents its office premise from Danby
Technologies Corporation at the rate of $1,500 per
month on a month to month basis. In the period from
inception to April 30, 2002, the Company has incurred
rental charges aggregating $10,500.
5.SUBSEQUENT EVENTS
a)Subsequent to April 30, 2002, the Company entered into
a debt settlement agreement whereby it settled the
$60,000 arising from the purchase of software
development costs by the issuance of 1,200,000 common
shares at a price of $0.05 per share.
b)Subsequent to April 30, 2002, the Company completed a
private placement of 1,200,000 common shares at $0.05
per share, resulting in proceeds to the Company of
$60,000.
26
AVAILABLE INFORMATION
Availability of Additional Information
We have filed a registration statement on form SB-2 under the Securities
Act of 1933 with the Securities and Exchange Commission with respect to the
shares of our common stock offered through this prospectus. This prospectus
is filed as a part of that registration statement and does not contain all
of the information contained in the registration statement and exhibits.
Statements contained in the registration statement are summaries of the
material terms of the referenced contracts, agreements or documents and
are not necessarily complete. In each instance, we refer you to the copy
of the contracts or other documents filed as exhibits to this registration
statement, and the statements we have made in this prospectus are
qualified in their entirety by reference to the referenced contracts,
agreements or documents.
The registration statement, including all exhibits, may be inspected
without charge at the SEC's Public Reference Room at 450 Fifth Street,
N.W. Washington, D.C. 20549, and at the SEC's regional offices located
at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of these materials may also be obtained from the SEC's
Public Reference at 450 Fifth Street, N.W., Room 1024, Washington D.C.
20549, upon the payment of prescribed fees. You may obtain information
on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330.
The registration statement, including all exhibits, has beenfiled
with the SEC through the Electronic Data Gathering, Analysis and
Retrieval system. Following the effective date of the registration
statement, we will become subject to the reporting requirements of the
Exchange Act and in accordance with these requirements, will file annual,
quarterly and special reports, and other information with the SEC. We
also intend to furnish our stockholders with annual reports containing
audited financial statements and other periodic reports as we think
appropriate or as may be required by law.
This registration statement and other filings made by us with the
SEC through its Electronic Data Gathering, Analysis and Retrieval
Systems are publicly available through the SEC's site on the World
Wide Web located at http//www.sec.gov.
REPORTS TO SECURITY HOLDERS
We will voluntarily send a report annually to stockholders
including our annual audited financial statements.
27
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Nevada General Corporation Law permits the indemnification of
directors, employees, officers and agents of Nevada corporations.
Our articles of incorporation and bylaws provide that we indemnify
our directors and officers to the fullest extent permitted by the
Nevada General Corporation Law. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to
directors, officers or persons controlling us pursuant to the
foregoing provisions, we are 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.
As authorized by the Nevada General Corporation Law, our
articles of incorporation provide that none of our directors shall be
personally liable to us or our shareholders for monetary damages for
breach of fiduciary duty as a director, except liability for:
- acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law; or
- the payment of dividends in violation of the Nevada Revised
Statutes.
This provision limits our rights and the rights of our
shareholders to recover monetary damages against a director for
breach of the fiduciary duty of care except in the situations
described above. This provision does not limit our rights or
the rights of any shareholder to seek injunctive relief
or rescission if a director breaches his duty of care.
These provisions will not alter the liability of directors
under federal securities laws.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 100.00
Federal Taxes NIL
State Taxes and Fees NIL
Transfer Agent Fees 1,000.00
Accounting fees and expenses 10,000.00
Legal fees and expenses 15,000.00
Blue Sky fees and expenses 2,000.00
Miscellaneous NIL
_______
Total $ 28,100.00
-------
All amounts are estimates other than the Commission's registration
fee.
We are paying all expenses of the offering listed above. No portion
of these expenses will be borne by the selling stockholders. The selling
stockholders, however, will pay any other expenses incurred in selling
their common stock, including any brokerage commissions or costs of sale.
RECENT SALES OF UNREGISTERED SECURITIES
We issued 2,100,000 shares of common stock on October 11, 2001 to Mr.
Robert Danvers, Mrs. Chantal Trudeau and their minor children. Mr. Danvers
is our President and a director. Mrs. Trudeau is the spouse of Mr. Danvers.
These shares were issued pursuant to Section 4(2) of the Securities Act
of 1933 at a price of $0.00333 per share, for total proceeds of $7,000. The
2,100,000 shares of
28
common stock are restricted shares as defined in the Securities Act.
On May 13, 2002, we converted liabilities amounting to $60,000 through the
issuance of 1,200,000 shares, at a price of $0.05 per share, to 2 persons
(one of whom was an affiliate). These shares were issued pursuant to
Regulation S of the Securities Act. Each creditor represented to us that
he was a non-U.S. person as defined in Regulation S. We did not engage in a
distribution of this offering in the United States. Each creditor represented
his intention to acquire the securities for investment only and not with a
view toward distribution. Appropriate legends were affixed to the
stock certificate issued to each purchaser in accordance with Regulation S.
The creditors had access to financial and other information about us and were
afforded the opportunity to ask questions concerning our operations and the
terms of the debt conversion. No registration rights were granted to
any of the purchasers.
We completed an offering of 1,200,000 shares of our common stock at a price
of $0.05 per share to a total of 25 purchasers on May 14, 2002. The total
amount received from this offering was $60,000. We completed the offering
pursuant to Regulation S of the Securities Act. Each purchaser
represented to us that he was a non-U.S. person as defined in Regulation S.
We did not engage in a distribution of this offering in the United States.
Each purchaser represented his intention to acquire the securities for
investment only and not with a view toward distribution. Appropriate
legends were affixed to the stock certificate issued to each purchaser in
accordance with Regulation S. Each investor was given adequate access to
sufficient information about us to make an informed investment decision.
None of the securities were sold through an underwriter and accordingly,
there were no underwriting discounts or commissions involved. No registration
rights were granted to any of the purchasers.
We did not utilize an underwriter for any of the foregoing. Other
than the securities mentioned or referenced above, we have not issued
or sold any securities since incorporation.
EXHIBITS
Number Description of exhibit
3.1 Articles of Incorporation
3.2 Bylaws
5.1 Opinion of Adorno & Yoss, P.A., with consent to use (to be
supplied by amendment)
10.1 Purchase Agreement with Danby Technologies Corporation
10.2 Debt Settlement Agreement with Danby Technologies Corporation
21 Subsidiaries of the Issuer
23.1 Consent of Morgan and Company, Chartered Accountants
23.2 Consent of Adorno & Yoss, P.A. (See Exhibit 5.1)
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post- effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the aggregate,
represent a fundamental change in the information set forth in
this reg-
29
istration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such posteffective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered hereby which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant
to the provisions above, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable.
In the event that a claim for indemnification against such liabilities,
other than the payment by us of expenses incurred or paid by one of our
directors, officers, or controlling persons in the successful defense of
any action, suit or proceeding, is asserted by one of our directors,
officers, or controlling person sin connection with the securities being
registered, we will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against public
policy as expressed in the Securities Act, and we will be governed by the
final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form SB-2 and authorized
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New Westminster,
British Columbia, Canada, on June 14, 2002.
Infotec Business Systems, Inc.
(Registrant)
By: _________________________________
/s/Robert Danvers
Robert Danvers
President
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
Signature Title Date
_____________________________________President, Chief
Executive June 14,2002
/s/Robert Danvers
Robert Danvers Officer and Director
(Principal Executive,
Financial and Accounting
Officer)
Secretary, Treasurer and
______________________________________ Director June 14, 2002
/s/Stephen Jackson
Stephen Jackson
EXHIBITS
3.1 Articles of Incorporation
ARTICLES OF INCORPORATION
OF
INFOTEC BUSINESS SYSTEMS, INC.
The undersigned, acting as incorporator, pursuant to the
provisions of the laws of the State of Nevada relating to
private corporations, hereby adopts the following Articles
of Incorporation:
ARTICLE ONE. (NAME). The name of the corporation is:
INFOTEC BUSINESS SYSTEMS, INC.
ARTICLE TWO. (RESIDENT AGENT). The initial agent for service of process
is The Nevada Agency and Trust, 50 West Liberty Street,Suite 880, State
of Nevada 89501.
ARTICLE THREE. (PURPOSES). The purposes for which the corporation is
organized are to engage in any activity or business not in conflict
with the laws of the State of Nevada or of the United States of America,
and without limiting the generality of the foregoing, specifically:
I. (OMNIBUS). To have to exercise all the powers now or
hereafter conferred by the laws of the State of Nevada upon corporations
organized pursuant to the laws under which the corporation is organized
and any and all acts amendatory thereof and supplemental thereto.
II. (CARRYING ON BUSINESS OUTSIDE STATE). To conduct and carry on its
business or any branch thereof in any state or territory of the United
States or in any foreign country in conformity with the laws of such
state, territory, or foreign country, and to have and maintain in any
state, territory,or foreign country a business office, plant, store
or other facility.
III. (PURPOSES TO BE CONSTRUED AS POWERS). The purposes specified
herein shall be construed both as purposes and powers and shall be in
no ways limited or restricted by reference to, or inference from,the
terms of any other clause in this or any other article, but the purposes
and powers specified in each of the clauses herein shall be regarded as
independent purposes and powers, and the enumeration of specific purposes
and powers shall not be construed to limit or restrict in any manner the
meaning of general terms or of the general powers of the corporation;
nor shall the expression of one thing be deemed to exclude another,
although it be of like nature not expressed.
1
ARTICLE FOUR. (CAPITAL STOCK). The corporation shall have authority
to issue an aggregate of SEVENTY FIVE MILLION (75,000,000) shares of
capital stock, consisting of two (2) classes of stock as follows
for
a total capitalization of SEVENTY FIVE THOUSAND DOLLARS ($75,000).
NONASSESSABLE COMMON STOCK: FIFTY MILLION (50,000,000)
shares of Common Stock, Par Value ONE MILL ($0.001) per share, and
PREFERRED STOCK: TWENTY FIVE MILLION (25,000,000) shares of
Preferred stock, Par Value ONE MILL ($0.001) per share.
All capital stock when issued shall be fully paid and nonassessable.
No holder of shares of capital stock of the corporation shall be
entitled as such to any pre-emptive or preferential rights to subscribe
to any unissued stock, or any other securities, which the corporation
may now or hereafter be authorized to issue.
The corporation's capital stock may be issued and sold from time to
time for such consideration as may be fixed by the Board of Directors,
provided that the consideration so fixed is not less than par value.
The Preferred Stock may be issued from time to time, with such designations,
preferences, conversion rights, cumulative, relative, participating, optional
or other rights, including voting rights, qualifications, limitations or
restrictions thereof as shall be stated and expressed in the resolution or
resolutions providing for the creation and issuance of such series of
Preferred Stock as adopted by the Board of Directors pursuant to the authority
in this paragraph given.
Holders of the corporation's Common Stock shall not possess cumulative voting
rights at any shareholders meetings called for the purpose of electing a
Board of Directors or on other matters brought before stockholders
meetings, whether they be annual or special.
ARTICLE FIVE. (DIRECTORS). The affairs of the corporation shall be
governed by a Board of Directors of not more than twelve (12) nor less than
one (1) person. The name and address of the persons constituting the
first Board of Directors are:
NAME ADDRESS
Robert Danvers 444 Columbia Street E.
New Westminster, B.C. Canada V3L 3W9
ARTICLE SIX. (ASSESSMENT OF STOCK). The capital stock of the corporation,
after the amount of the subscription price or par value has been paid in,
shall not be subject to pay debts of the corporation, and no paid
up stock and no stock issued as fully paid up shall ever be assessable or
assessed.
ARTICLE SEVEN. (INCORPORATOR). The name and address of the incorporator
of the corporation is as follows:
NAME ADDRESS
Robert Danvers 444 Columbia Street E.
New Westminster, B.C. Canada V3L 3W9
2
ARTICLE EIGHT. (PERIOD OF EXISTENCE). The period of existence of the
Corporation shall be perpetual.
ARTICLE NINE. (BYLAWS). The Board of Directors shall adopt the initial
Bylaws of the corporation. The power to alter, amend, or repeal the Bylaws,
or to adopt new Bylaws, shall be vested in the Board of Directors, except
as otherwise may be specifically provided in the Bylaws.
ARTICLE TEN. (CONTRACTS OF CORPORATION). No contract or other transaction
between the corporation and any other corporation, whether or not a majority
of the shares of the capital stock of such other corporation is owned by this
corporation, and no act of this corporation shall be any way be affected or
invalidated by the fact that any of the directors of this corporation are
pecuniarily or otherwise interested in, or are directors or officers of such
other corporation. Any director of this corporation, individually, or any firm
of which such director may be a member, may be a party to, or may be pecuniarily
or otherwise interested in any contract or transaction of the corporation;
provided, however, that the fact that he or such firm is so interested shall be
disclosed or shall have been known to the Board of Directors of this
corporation,or a majority thereof; and any director of this corporation who
is also a director or officer of such other corporation, or who is so
interested, may be counted in determining the existence of a quorum at any
meeting of the Board of Directors of this corporation that shall authorize
such contract or transaction, and may vote there at to authorize such
contract or transaction, with like force and effect as if he were no such
director or officer of such other corporation or not so interested.
ARTICLE ELEVEN. (LIABILITY OF DIRECTORS AND OFFICERS). No director or officer
shall have any personal liability to the corporation or its stockholders for
damages for breach of fiduciary duty as a director or officer, except that
this Article Eleven shall not eliminate or limit the liability of a director
or officer for (I) acts or omissions which involve intentional misconduct,
fraud or a knowing violation of law, or (ii) the payment of distributions in
violation of the Nevada Revised Statutes.
ARTICLE TWELVE. (INDEMNIFICATION). The corporation may indemnify any director,
officer, employee or agent of the corporation to the fullest extent permitted
by Nevada law.
ARTICLE THIRTEEN. (CHANGE OF CONTROL). The corporation expressly elects not to
be governed by the provisions of NRS 78.378 to NRS 78.3793 of the Nevada
Revised Statutes, as amended from time to time, relating to the acquisition of
a controlling interest in the corporation.
IN WITNESS WHEREOF. The undersigned incorporator has hereunto affixed
her/her signature at New Westminster, B.C. Canada, this 25th day
of August, 2001.
__________________________________
/s/ROBERT DANVERS
ROBERT DANVERS
3
EXHIBIT
3.2 Bylaws
BYLAWS
OF
INFOTEC BUSINESS SYSTEMS, INC.
A Nevada corporation
INDEX
ARTICLE I
OFFICES
Section 1.01 Registered Office 1
Section 1.02 Other Offices 1
ARTICLE II
CORPORATE SEAL
Section 2.01 Corporate Seal 1
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 3.01 Place of Meetings 1
Section 3.02 Annual Meeting 1
Section 3.03 Special Meetings 3
Section 3.04 Notice of Meeting 4
Section 3.05 Quorum 4
Section 3.06 Adjournment and Notice of Adjourned Meetings 4
Section 3.07 Voting Rights 5
Section 3.08 Joint Owners of Stock 5
Section 3.09 List of Stockholders 5
Section 3.10 Action Without Meeting 5
Section 3.11 Organization 5
ARTICLE IV
DIRECTORS
Section 4.01 Number and Qualification 6
Section 4.02 Powers 6
Section 4.03 Election and Term of Office of Directors 6
Section 4.04 Vacancies 6
Section 4.05 Resignation 7
Section 4.06 Remova 7
Section 4.07 Meetings 7
Section 4.08 Quorum and Voting 8
Section 4.09 Action without Meeting 8
Section 4.10 Fees and Compensation 8
Section 4.11 Committees 8
Section 4.12 Organization 9
ARTICLE V
OFFICERS
Section 5.01 Officers Designated 10
Section 5.02 Tenure and Duties of Officers 10
Section 5.03 Delegation of Authority 11
Section 5.04 Resignations 11
Section 5.05 Removal 11
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 6.01 Execution of Corporate Instrument 11
Section 6.02 Voting of Securities Owned by the
Corporation 12
ARTICLE VII
SHARES OF STOCK
Section 7.01 Form and Execution of Certificates 12
Section 7.02 Lost Certificates 13
Section 7.03 Transfers 13
Section 7.04 Fixing Record Date 13
Section 7.05 Registered Stockholders 13
Section 7.06 Share Options 14
Section 7.07 Terms and Conditions of Stock Rights and
Options 14
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 8.01 Execution of Other securities 14
ARTICLE IX
DIVIDENDS
Section 9.01 Declaration of Dividends 15
Section 9.02 Dividend Reserve 15
ARTICLE X
INDEMNIFICATION
Section 10.01 Indemnification of Directors, Executive
Officers,Other Officers, Employees and
Other Agents 15
ARTICLE XI
NOTICES
Section 11.01 Notices 18
ARTICLE XII
LOANS TO OFFICERS
Section 12.01 Loans to Officers 19
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Amendments 19
Section 13.02 Fiscal Year 19
Section 13.03 Conflicts with Articles of Incorporation 19
ARTICLE I
OFFICES
Section 1.01 Registered Office. The registered office of the
corporation in the State of Nevada shall be at the office of the
registered agent as stated in the articles of incorporation
or as the Board of Directors shall from time to time determine.
Section 1.02 Other Offices. The corporation shall also have
and maintain an office or principal place of business at such
place as may be fixed by the Board of Directors, and may also have
offices at such other places, both within and without the State of Nevada
as the Board of Directors may from time to time determine or
the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 2.02 Corporate Seal. The corporate seal if adopted by the
Board of Directors shall consist of a die bearing the name of the
corporation and the inscription, "Corporate Seal-Nevada". Said
seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 3.01 Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Nevada, as may be designatedfrom time to time
by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to Section
1.02 hereof.
Section 3.02 Annual Meeting.
(a) The annual meeting of the stockholders of the corporation, for
the purpose of election of directors and for such other business as may
lawfully come before it, shall be held on such date and at such time as
may be designated from time to time by the Board of Directors.
(b) At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To
be properly brought before an annual meeting, business must be:
(A) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors,
(B) otherwise properly brought before the meeting by or at
the direction of the Board of Directors, or
(C) otherwise properly brought before the meeting by a
stockholder or stockholders of the corporation holding not less than 10%
of all votes entitled to vote in the annual general meeting.
For business to be properly brought before an annual meeting
by a stockholder, the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not later than the close
of business on the sixtieth (60th) day nor earlier than the close of
business on the ninetieth (90th) day prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the event
that no annual meeting was held in the previous year or the date of the
annual meeting has been changed by more than thirty (30) days from the
date contemplated at the time of the previous year's proxy statement,
notice by the stockholder to be timely must be so received not earlier
than the close of business on the ninetieth (90th) day prior to such
annual meeting and not later than the close of business on the later of
the sixtieth (60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first made by
the corporation fewer than seventy (70) days prior to the date of such
annual meeting, the close of business on the tenth (10th) day following
the day on which public announcement of the date of such meeting is first
made by the corporation. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting:
(i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the
annual meeting,
(ii) the name and address, as they appear on the corporation's
books, of the stockholder proposing such business,
(iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder,
(iv) any material interest of the stockholder in such business and
(v) any other information that is required to be provided by the
stockholder pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (the "1934 Act"), in his capacity as a proponent to a
stockholder proposal.
Notwithstanding the foregoing, in order to include information
with respect to a stockholder proposal in the proxy statement and form of
proxy for a stockholder's meeting, stockholders must provide notice as
required by the regulations promulgated under the 1934 Act. Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted
at any annual meeting except in accordance with the procedures set forth
in this paragraph (b). The chairman of the annual meeting shall, if the
facts warrant, determine and declare at the meeting that business was not
properly brought before the meeting and in accordance with the provisions
of this paragraph (b), and, if he should so determine, he shall so declare
at the meeting that any such business not properly brought before the
meeting shall not be transacted.
(c) Only persons who are confirmed in accordance with the procedures
set forth in this paragraph (c) shall be eligible for election as
directors. Nominations of persons for election to the Board of Directors
of the corporation may be made at a meeting of stockholders by or at the
direction of the Board of Directors or by any stockholder or stockholders
of the corporation holding not less than 10% of all votes entitled to vote
in the election of directors at the meeting who complies with the notice
procedures set forth in this paragraph (c). Such nominations, other than
those made by or at the direction of the Board of Directors, shall be made
pursuant to timely notice in writing to the Secretary of the corporation
in accordance with the provisions of paragraph (b) of this Section 3.02.
Such stockholder's notice shall set forth:
(i) as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director:
(A) the name, age, business address and residence address of such
person,
(B) the principal occupation or employment of such person,
(C) the class and number of shares of the corporation which
are beneficially owned by such person,
(D) a description of all arrangements or understandings
between the stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nominations are to
be made by the stockholder, and
(E) any other information relating to such person that is
required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation
14A under the 1934 Act (including without limitation such person's written
consent to being named in the proxy statement, if any, as a nominee and
to serving as a director if elected); and
(ii) as to such stockholder giving notice, the information
required to be provided pursuant to paragraph (b) of this Section 3.02.
At the request of the Board of Directors, any person nominated
by a stockholder for election as a director shall furnish to the Secretary
of the corporation that information required to be set forth in the
stockholder's notice of nomination which pertains to the nominee. No
person shall be eligible for election as a director of the corporation
unless nominated in accordance with the procedures set forth in this
paragraph (c). The chairman of the meeting shall, if the facts warrant,
determine and declare at the meeting that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, and if he should
so determine, he shall so declare at the meeting, and the defective
nomination shall be disregarded.
(d) For purposes of this Section 3.02, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document
publicly filed by the corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
Section 3.03 Special Meetings.
(a) Special meetings of the stockholders of the corporation may be
called, for any purpose or purposes, by
(i) the Chairman of the Board of Directors,
(ii) the Chief Executive Officer,
(iii) the Board of Directors pursuant to a resolution adopted
by a majority of the total number of authorized directors (whether or not
there exist any vacancies in previously authorized directorships
at the time any such resolution is presented to the Board of Directors
for adoption),
(iv) holders of not less than 10% of all votes entitled to be
cast on any issue proposed to be considered at the proposed special
meeting, and shall be held at such place, on such date, and at such time
as the Board of Directors, shall determine.
(b) If a special meeting is called by any person or persons other
than the Board of Directors, the request shall be in writing,
specifying the general nature of the business proposed to be transacted,
and shall be delivered personally or sent by registered mail or by
telegraphic or other facsimile transmission to the Chairman of the Board
of Directors, the Chief Executive Officer, or the Secretary of the
corporation. No business may be transacted at such special meeting
otherwise than specified in such notice. The Board of Directors shall
determine the time and place of such special meeting, which shall be held
not less than thirty-five (35) nor more than one hundred twenty (120)
days after the date of the receipt of the request. Upon determination
of the time and place of the meeting, the officer receiving the request
shall cause notice to be given to the stockholders entitled to vote, in
accordance with the provisions of Section 3.04 of these Bylaws. If the
notice is not given within sixty (60) days after the receipt of the request,
the person or persons requesting the meeting may set the time and place of
the meeting and give the notice. Nothing contained in this paragraph (b)
shall be construed as limiting, fixing, or affecting the time when a
meeting of stockholders called by action of the Board of Directors may
be held.
Section 3.04 Notice of Meetings. Except as otherwise provided by law
or the Articles of Incorporation, written notice of each meeting of
stockholders shall be given not less than ten (10) nor more than sixty
(60) days before the date of the meeting to each stockholder entitled to
vote at such meeting, such notice to specify the place, date and hour and
purpose or purposes of the meeting. Notice of the time, place and purpose
of any meeting of stockholders may be waived in writing, signed by the
person entitled to notice thereof, either before or after such meeting,
and will be waived by any stockholder by his attendance thereat in person
or by proxy, except when the stockholder attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or convened.
Any stockholder so waiving notice of such meeting shall be bound by the
proceedings of any such meeting in all respects as if due notice thereof
had been given.
Section 3.05 Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Articles of Incorporation,
or by these Bylaws, the presence, in person or by proxy duly authorized,
of the holder or holders of not less than one percent (1%) of the
outstanding shares of stock entitled to vote shall constitute a quorum
for the transaction of business. In the absence of a quorum, any meeting
of stockholders may be adjourned, from time to time, either by the chairman
of the meeting or by vote of the holders of a majority of the shares
represented thereat, but no other business shall be transacted at such
meeting. The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to
leave less than a quorum. Except as otherwise provided by law, the Articles
of Incorporation or these Bylaws, all action taken by the holders of a
majority of the votes cast, excluding abstentions, at any meeting at which
a quorum is present shall be valid and binding upon the corporation;
provided, however, that directors shall be elected by a plurality of the
votes of the shares present in person or represented by proxy at the meeting
and entitled to vote on the election of directors. Where a separate vote by
a class or classes or series is required, except where otherwise provided
by the statute or by the Articles of Incorporation or these Bylaws, a
majority of the outstanding shares of such class or classes or series,
present in person or represented by proxy, shall constitute a quorum
entitled to take action with respect to that vote on that matter and,
except where otherwise provided by the statute or by the Articles of
Incorporation or these Bylaws, the affirmative vote of the majority
(plurality, in the case of the election of directors) of the votes cast,
including abstentions, by the holders of shares of such class or classes
or series shall be the act of such class or classes or series.
Section 3.06 Adjournment and Notice of Adjourned Meetings. Any
meeting of stockholders, whether annual or special, may be adjourned from
time to time either by the chairman of the meeting or by the vote of a
majority of the shares casting votes, excluding abstentions. When a 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 at the meeting
at which the adjournment is taken. At the adjourned meeting, the corporation
may transact any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days or if after
the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
Section 3.07 Voting Rights. For the purpose of determining those
stockholders entitled to vote at any meeting of the stockholders, except
as otherwise provided by law, only persons in whose names shares stand on
the stock records of the corporation on the record date, as provided in
Section 3.09 of these Bylaws, shall be entitled to vote at any meeting of
stockholders. Every person entitled to vote shall have the right to do so
either in person or by an agent or agents authorized by a proxy granted in
accordance with Nevada law. An agent so appointed need not be a stockholder.
No proxy shall be voted after six (6) months from its date of creation unless
the proxy specifies a length of time for which it is to continue in force,
not exceeding seven (7) years from the date of creation.
Section 3.08 Joint Owners of Stock. If shares or other securities
having voting power stand of record in the names of two (2) or more
persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety, or otherwise, or if two (2)
or more persons have the same fiduciary relationship respecting the same
shares, unless the Secretary is given written notice to the contrary and is
furnished with a copy of the instrument or order appointing them or creating
the relationship wherein it is so provided, their acts with respect to voting
shall have the following effect: (a) if only one (1) votes, his act binds all;
(b) if more than one (1) votes, the act of the majority so voting binds all;
(c) if more than one (1) votes, but the vote is evenly split on any
particular matter, each faction may vote the securities in question
proportionally, or may apply to the Nevada Court of Chancery for relief as
provided in the General Corporation Law of Nevada, Section 217(b). If the
instrument filed with the secretary shows that any such tenancy is held in
unequal interests, a majority or even-split for the purpose of subsection
(c) shall be a majority or even-split in interest.
Section 3.09 List of Stockholders. The Secretary shall prepare and make,
at least ten (10) days before every meeting of stockholders, a complete list
of the stockholders entitled to vote at said meeting, arranged in
alphabetical order, showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not
specified, at the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole time
thereof and may be inspected by any stockholder who is present.
Section 3.10 Action Without Meeting. No action shall be taken by the
stockholders except at an annual or special meeting of stockholders
called in accordance with these Bylaws, or by the written consent of the
holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take action at such meeting.
Section 3.11 Organization.
(a) At every meeting of stockholders, the Chairman of the Board of
Directors, or, if a Chairman has not been appointed or is absent, the
President, or, if the President is absent, a chairman of the meeting chosen
by a majority in interest of the stockholders entitled to vote, present in
person or by proxy, shall act as chairman. The Secretary, or, in his
absence, an Assistant Secretary directed to do so by the President, shall
act as secretary of the meeting.
(b) The Board of Directors of the corporation shall be entitled to
make such rules or regulations for the conduct of meetings of stockholders
as it shall deem necessary, appropriate or convenient. Subject to such rules
and regulations of the Board of Directors, if any, the chairman of the
meeting shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of
such chairman, are necessary, appropriate or convenient for theproper
conduct of the meeting, including, without limitation, establishing an
agenda or order of business for the meeting, rules and procedures for
maintaining order at the meeting and the safety of those present,
limitations on participation in such meeting to stockholders of record of
the corporation and their duly authorized and constituted proxies and such
other persons as the chairman shall permit, restrictions on entry to the
meeting after the time fixed for the commencement thereof, limitations on
the time allotted to questions or comments by participants and regulation
of the opening and closing of the polls for balloting on matters which are
to be voted on by ballot. Unless and to the extent determined by the
Board of Directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with rules of parliamentary
procedure.
ARTICLE IV
DIRECTORS
Section 4.01 Number and Qualification. The authorized number of directors
of the corporation shall be not less than one (1) nor more than twelve (12)
as fixed from time to time by resolution of the Board of Directors; provided
that no decrease in the number of directors shall shorten the term of any
incumbent directors. Directors need not be stockholders unless so required by
the Articles of Incorporation. If for any cause, the directors shall not have
been elected at an annual meeting, they may be elected as soon thereafter as
convenient at a special meeting of the stockholders called for that purpose in
the manner provided in these Bylaws.
Section 4.02 Powers. The powers of the corporation shall be exercised,
its business conducted and its property controlled by the Board of
Directors, except as may be otherwise provided by statute or by the Articles
of Incorporation.
Section 4.03 Election and Term of Office of Directors. Members of the
Board of Directors shall hold office for the terms specified in the Articles
of Incorporation, as it may be amended from time to time, and until their
successors have been elected as provided in the Articles of Incorporation.
Section 4.04 Vacancies. Unless otherwise provided in the Articles of
Incorporation, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes and any newly created
directorships resulting from any increase in the number of directors, shall
unless the Board of Directors determines by resolution that any such
vacancies or newly created directorships shall be filled by stockholder vote,
be filled only by the affirmative vote of a majority of the directors then in
office, even though less than a quorum of the Board of Directors. Any director
elected in accordance with the preceding sentence shall hold office for
the remainder of the full term of the director for which the vacancy was
created or occurred and until such director's successor shall have been
elected and qualified. A vacancy in the Board of Directors shall be deemed
to exist under this Bylaw in the case of the death, removal or resignation
of any director.
Section 4.05 Resignation. Any director may resign at any time by
delivering his written resignation to the Secretary, such resignation to
specify whether it will be effective at a particular time, upon receipt
by the Secretary or at the pleasure of the Board of Directors. If no such
specification is made, it shall be deemed effective at the pleasure of the
Board of Directors. When one or more directors shall resign from the Board
of Directors, effective at a future date, a majority of the directors then
in office, including those who have so resigned, shall have power to fill
such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each director
so chosen shall hold office for the unexpired portion of the term of the
director whose place shall be vacated and until his successor shall have been
duly elected and qualified.
Section 4.06 Removal. Subject to the Articles of Incorporation, any
director may be removed by:
(a) the affirmative vote of the holders of a majority of the
outstanding shares of the Corporation then entitled to vote, with or
without cause; or
(b) the affirmative and unanimous vote of a majority of the
directors of the Corporation, with the exception of the vote of the
directors to be removed, with or without cause.
Section 4.07 Meetings.
(a) Annual Meetings. The annual meeting of the Board of Directors
shall be held immediately after the annual meeting of stockholders and at
the place where such meeting is held. No notice of an annual meeting of
the Board of Directors shall be necessary and such meeting shall be held
for the purpose of electing officers and transacting such other business
as may lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise provided,
regular meetings of the Board of Directors shall be held in the office of
the corporation required to be maintained pursuant to Section 1.02 hereof.
Unless otherwise restricted by the Articles of Incorporation, regular
meetings of the Board of Directors may also be held at any place within or
without the state of Nevada which has been designated by resolution of the
Board of Directors or the written consent of all directors.
(c) Special Meetings. Unless otherwise restricted by the Articles of
Incorporation, special meetings of the Board of Directors may be held at
any time and place within or without the State of Nevada whenever called
by the Chairman of the Board, the President or any two of the directors.
(d) Telephone Meetings. Any member of the Board of directors, or of
any committee thereof, may participate in a meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting by such means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the time and place of all special
meetings of the Board of Directors shall be orally or in writing, by
telephone, facsimile, telegraph or telex, during normal business hours, at
least twenty-four (24) hours before the date and time of the meeting, or
sent in writing to each director by first class mail, charges prepaid, at
least three (3) days before the date of the meeting. Notice of any
meeting may be waived in writing at any time before or after the meeting and
will be waived by any director by attendance thereat, except when the
director attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
(f) Waiver of Notice. The transaction of all business at any
meeting of the Board of Directors, or any committee thereof,however
called or noticed, or wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present and
if, either before or after the meeting, each of the directors not present
shall sign a written waiver of notice. All such waivers shall be filed with
the corporate records or made a part of the minutes of the meeting.
Section 4.08 Quorum and Voting.
(a) Unless the Articles of Incorporation requires a greater number and
except with respect to indemnification questions arising under Section
10.01 hereof, for which a quorum shall be one-third of the number of
directors then in office from time to time in accordance with the Articles
of Incorporation, a quorum of the Board of Directors shall consist of a
majority of the directors then in office in accordance with the Articles of
Incorporation and these Bylaws provided, however, at any meeting whether a
quorum be present or otherwise, a majority of the directors present may
adjourn from time to time until the time fixed for the next regular meeting
of the Board of Directors, without notice other than by announcement at
the meeting.
(b) At each meeting of the Board of Directors at which a quorum is
present, all questions and business shall be determined by the affirmative
vote of a majority of the directors present, unless a different
vote be required by law, the Articles of Incorporation or these Bylaws.
Section 4.09 Action Without Meeting. Unless otherwise restricted by
the Articles of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the
Board of Directors or committee, as the case may be, consent thereto in
writing, and such writing or writings are filed with the minutesof
proceedings of the Board of Directors or committee.
Section 4.10 Fees and Compensation. Directors shall be entitled to
such compensation for their services as may be approved by the Board of
Directors, including, if so approved, by resolution of the Board of
Directors, a fixed sum and expenses of attendance, if any, for attendance
at each regular or special meeting of the Board of Directors and at any
meeting of a committee of the Board of Directors. Nothing herein contained
shall be construed to preclude any director from serving the corporation in
any other capacity as an officer, agent, employee, or otherwise and
receiving compensation therefor.
Section 4.11 Committees.
(a) Executive Committee. The Board of Directors may by resolution passed
by a majority of the whole Board of Directors appoint an Executive Committee
to consist of one (1) or more members of the Board of Directors. The
Executive Committee, to the extent permitted by law and provided in the
resolution of the Board of Directors shall have and may exercise all the
powers and authority of the Board of Directors in the management of the
business and affairs of the corporation, including without limitation the
power or authority to declare a dividend, to authorize the issuance of stock
and to adopt a certificate of ownership and merger, and may authorize the
seal of the corporation to be affixed to all papers which may require it; but
no such committee shall have the power or authority in reference to amending
the Articles of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of
shares of stock adopted by the Board of Directors fix the designations and
any of the preferences or rights of such shares relating to dividends,
redemption, dissolution, any distribution of assets of the corporation or
the conversion into, or the exchange of such shares for, shares of any other
class or classes or any other series of the same or any other class or
classes of stock of the corporation or fix the number of shares of any series
of stock or authorize the increase or decrease of the shares of any series),
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or
amending the bylaws of the corporation.
(b) Other Committees. The Board of Directors may, by resolution passed by a
majority of the whole Board of Directors, from time to time appoint such other
committees as may be permitted by law. Such other committees appointed by the
Board of Directors shall consist of one (1) or more members of the Board of
Directors and shall have such powers and perform such duties as may be
prescribed by the resolution or resolutions creating such committees, but
in no event shall such committee have the powers denied to the Executive
Committee in these Bylaws.
(c) Term. Each member of a committee of the Board of Directors shall serve
a term on the committee coexistent with such member's term on the board of
Directors. The Board of Directors, subject to the provisions of subsections
(a) or (b) of this Bylaw may at any time increase or decrease the number of
members of a committee or terminate the existence of a committee. The
membership of a committee member shall terminate on the date of his death or
voluntary resignation from the committee or from the Board of Directors.
The Board of Directors may at any time for any reason remove any individual
committee member and the Board of Directors may fill any committee vacancy
created by death, resignation, removal or increase in the number of members
of the committee. The Board of Directors may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee, and, in addition, in
the absence or disqualification of any member of a committee, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place
of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise provide,
regular meetings of the Executive Committee or any other committee
appointed pursuant to this Section 4.11 shall be held at such times and
places as are determined by the Board of Directors, or by any such committee,
and when notice thereof has been given to each member of such committee,
no further notice of such regular meetings need be given thereafter.
Special meetings of any such committee may be held at any place which has
been determined from time to time by such committee, and may be called by
any director who is a member of such committee, upon written notice to
the members of such committee of the time and place of such special meeting
given in the manner provided for the giving of written notice to members of
the Board of Directors of the time and place of special meetings of the
Board of Directors. Notice of any special meeting of any committee may be
waived in writing at any time before or after the meeting and will be waived
by any director by attendance thereat, except when the director attends such
special meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not
lawfully called or convened. A majority of the authorized number of members
of any such committee shall constitute a quorum for the transaction of business,
and the act of a majority of those present at any meeting at which a quorum
is present shall be the act of such committee.
Section 4.12 Organization. At every meeting of the directors, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed
or is absent, the President, or if the President is absent, the most senior
Vice President, or, in the absence of any such officer, a chairman of the
meeting chosen by a majority of the directors present, shall preside over
the meeting. The Secretary, or in his absence, an Assistant Secretary
directed to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 5.01 Officers Designated. The officers of the corporation shall
include, if and when designated by the Board of Directors, the Chairman of
the Board of Directors, the Chief Executive Officer, the President, one or
more Vice Presidents, the Secretary, the Chief Financial Officer, the
Treasurer, the Controller, all of whom shall be elected at the annual
organizational meeting of the Board of Direction. The Board of Directors may
also appoint one or more Assistant Secretaries, Assistant Treasurers,
Assistant Controllers and such other officers and agents with such powers
and duties as it shall deem necessary. The Board of Directors may assign
such additional titles to one or more of the officers as it shall deem
appropriate. Any one person may hold any number of offices of the corporation
at any one time unless specifically prohibited therefrom by law. The salaries
and other compensation of the officers of the corporation shall be fixed by
or in the manner designated by the Board of Directors.
Section 5.02 Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure of the Board
of Directors and until their successors shall have been duly elected and
qualified, unless sooner removed. Any officer elected or appointed by the
Board of Directors may be removed at any time by the Board of Directors.
If the office of any officer becomes vacant for any reason, the vacancy may
be filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The Chairman
of the
Board of Directors, when present, shall preside at all meetings of the
stockholders and the Board of Directors. The Chairman of the Board of
Directors shall perform other duties commonly incident to his office and
shall also perform such other duties and have such other powers as the
Board of Directors shall designate from time to time. If there is no
President, then the Chairman of the Board of Directors shall also serve as
the Chief Executive Officer of the corporation and shall have the powers and
duties prescribed in paragraph (c) of this Section 5.02.
(c) Duties of President. The President shall preside at all meetings of
the stockholders and at all meetings of the Board of Directors, unless the
Chairman of the Board of Directors has been appointed and is present.
Unless some other officer has been elected Chief Executive Officer of the
corporation, the President shall be the chief executive officer of the
corporation and shall, subject to the control of the Board of Directors,
have general supervision, direction and control of the business and officers
of the corporation. The President shall perform other duties commonly
incident to his office and shall also perform such other duties and have
such other powers as the Board of Directors shall designate from time to
time.
(d) Duties of Vice Presidents. The Vice Presidents may assume and perform
the duties of the President in the absence or disability of the President
or whenever the office of President is vacant. The Vice Presidents shall
perform other duties commonly incident to their office and shall also
perform such other duties and have such other powers as the Board of
Directors or the President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all meetings of the
stockholders and of the Board of Directors and shall record all acts and
proceedings thereof in the minute book of the corporation. The Secretary
shall give notice in conformity with these Bylaws of all meetings of the
stockholders and of all meetings of the Board of Directors and any committee
thereof requiring notice. The Secretary shall perform all other duties given
him in these Bylaws and other duties commonly incident to his office and
shall also perform such other duties and have such other powers as the Board
of Directors shall designate from time to time. The President may direct any
Assistant Secretary to assume and perform the duties of the Secretary in the
absence or disability of the Secretary, and each Assistant Secretary shall
perform other duties commonly incident to his office and shall also perform
such other duties and have such other powers as the Board of Directors or the
President shall designate from time to time.
(f) Duties of Chief Financial Officer.The Chief Financial Officer shall
keep or cause to be kept the books of account of the corporation in a
thorough and proper manner and shall render statements of the financial
affairs of the corporation in such form and as often as required by the
Board of Directors or the President. The Chief Financial Officer,subject to
the order of the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Chief Financial Officer shall perform
other duties commonly incident to his office and shall also perform such
other duties and have such other powers as the Board of Directors or the
President shall designate from time to time. The President may direct the
Treasurer or any Assistant Treasurer, or the Controller or any Assistant
Controller to assume and perform the duties of the Chief Financial Officer
in the absence or disability of the Chief Financial Officer, and each
Treasurer and Assistant Treasurer and each Controller and Assistant
Controller shall perform other duties commonly incident to his office and
shall also perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time.
Section 5.03 Delegation of Authority. The Board of Directors may from time
to time delegate the powers or duties of any officer to any other officer or
agent, notwithstanding any provision hereof.
Section 5.04 Resignations. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall be effective when received by the
person or persons to whom such notice is given, unless a later time is
specified therein, in which event the resignation shall become effective at
such later time. Unless otherwise specified in such notice, the acceptance
of any such resignation shall not be necessary to make it effective. Any
resignation shall be without prejudice to the rights, if any, of the
corporation under any contract with the resigning officer.
Section 5.05 Removal. Any officer may be removed from office at any time,
either with or without cause, by the affirmative vote of a majority of the
directors in office at the time, or by the unanimous written consent of the
directors in office at the time, or by any committee or superior officers
upon whom such power of removal may have been conferred by the Board of
Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 6.01 Execution of Corporate Instrument. The Board of Directors may,
in its discretion, determine the method and designate the signatory officer or
officers, or other person or persons, to execute on behalf of the corporation
any corporate instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts on behalf of
the corporation, except where otherwise provided by law or these Bylaws, and
such execution or signature shall be binding upon the corporation.
Unless otherwise specifically determined by the Board of Directors or
otherwise required by law, promissory notes, deeds of trust, mortgages and
other evidences of indebtedness of the corporation, and other corporate
instruments or documents requiring the corporate seal, and certificates of
shares of stock owned by the corporation, shall be executed, signed or
endorsed by the Chairman of the Board of Directors, or the President or any
Vice President, and by the Secretary or Treasurer or any Assistant Secretary
or Assistant Treasurer. All other instruments and documents requiting the
corporate signature, but not requiring the corporate seal, may be executed as
aforesaid or in such other manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on funds to the
credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so
to do.
Unless authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount.
Section 6.02 Voting of Securities Owned by the Corporation. All stock and
other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such authorization,
by the Chairman of the Board of Directors, the Chief Executive Officer, the
President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 7.01 Form and Execution of Certificates. Certificates for the shares
of stock of the corporation shall be in such form as is consistent with the
Articles of Incorporation and applicable law. Every holder of stock in the
corporation shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board of Directors, or the President
or any Vice President and by the Treasurer or Assistant Treasurer or the
Secretary or Assistant Secretary, certifying the number of shares owned by
him in the corporation. Any or all of the signatures on the certificate may
be facsimiles. In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue. Each
certificate shall state upon the face or back thereof, in full or in summary,
all of the powers, designations, preferences, and rights, and the limitations
or restrictions of the shares authorized to be issued or shall, except as
otherwise required by law, set forth on the face or back a statement that the
corporation will furnish without charge to each stockholder who so requests
the powers, designations, preferences and relative, participating, optional,
or other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
Within a reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof a written
notice containing the information required to be set forth or stated on
certificates pursuant to this section or otherwise required by law or with
respect to this section a statement that the corporation will furnish without
charge to each stockholder who so requests the powers, designations,
preferences and relative participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Except as otherwise expressly
provided by law, the rights and obligations of the holders of certificates
representing stock of the same class and series shall be identical.
Section 7.02 Lost Certificates. A new certificate or certificates shall
be issued in place of any certificate or certificates theretofore issued by
the corporation alleged to have been lost, stolen, or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or certificates,
the owner of such lost, stolen, or destroyed certificate or certificates, or
his legal representative, to advertise the same in such manner as it shall
require or to give the corporation a surety bond in such form and amount as
it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen,
or destroyed.
Section 7.03 Transfers.
(a) Transfers of record of shares of stock of the corporation shall be made
only upon its books by the holders thereof, in person or by attorney duly
authorized, and upon the surrender of a properly endorsed certificate or
certificates for a like number of shares.
(b) The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of
stock of the corporation to restrict the transfer of shares of stock of the
corporation of any one or more classes owned by such stockholders in any
manner not prohibited by the General Corporation Law of Nevada.
Section 7.04 Fixing Record Dates.
(a) In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix, in advance, a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting. If no record date is fixed by the Board of Directors, 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 day next preceding the
day on which notice is given, or if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A determination
of stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted, and which record date shall be not more than
sixty (60) days prior to such action. If no record date is filed, the record
date for determining stockholders for any such purpose shall be at the close
of business on the day on which the Board of Directors adopts the resolution
relating thereto.
Section 7.05 Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Nevada.
Section 7.08 Share Options.
(a) Unless the Articles of Incorporation provide otherwise, the
corporation may issue rights, options, or warrants for the purchase of
shares of the corporation. The Board of Directors shall determine the terms
upon which the rights, options, or warrants are issued, their form and content,
and the consideration for which the shares are to be issued.
(b) The terms and conditions of stock rights and options which are created
and issued by the corporation, or its successor, and which entitle the holders
thereof to purchase from the corporation shares of any class or classes,
whether authorized by unissued shares, treasury shares, or shares to be
purchased or acquired by the corporation, may include, without limitation,
restrictions, or conditions that preclude or limit the exercise, transfer,
receipt, or holding of such rights or options by any person or persons,
including any person or persons owning or offering to acquire a specified
number or percentage of the outstanding common shares or other securities of
the corporation, or any transferee or transferees of any such person or
persons, or that invalidate or void such rights or options held by any such
person or persons or any such transferee or transferees.
Section 7.07 Terms and Conditions of Stock Rights and Options. The terms
and conditions of the stock rights and options which are created and issued
by the corporation [or its successor], and which entitle the holders thereof
to purchase from the corporation shares of any class or classes, whether
authorized but unissued shares, treasury shares, or shares to be purchased
or acquired by the corporation, may include, without limitation, restrictions
or conditions that preclude or limit the exercise, transfer, receipt or
holding of such rights or options by any person or persons, including any
person or persons owning or offering to acquire a specified number or
percentage of the outstanding common shares or other securities of the
corporation, or any transferee or transferees of any such person or persons,
or that invalidate or void such rights or options held by any such person or
persons or any such transferee or transferees.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 8.01 Execution of Other Securities. All bonds,debentures and
other corporate Seurities of the corporation, other than stock certificates
(covered in Section 34), may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may
be authorized by the Board of Directors, and the corporate seal impressed
thereon or a facsimile of such seal imprinted thereon and attested by the
signature of the Secretary or an Assistant Secretary, or the Chief Financial
Officer or Treasurer or an Assistant Treasurer; provided, however, that
where any such bond, debenture or other corporate security shall be
authenticated by the manual signature, or where permissible facsimile
signature, of a trustee under an indenture pursuant to which such bond,
debenture or other corporate security shall be issued,the signatures of
the persons signing and attesting the corporate seal on such bond,
debenture or other corporate security may be the imprinted facsimile of the
signatures of such persons. Interest coupons appertaining to any such bond,
debenture or other corporate security, authenticated by a trustee as aforesaid,
shall be signed by the Treasurer or an Assistant Treasurer of the corporation
or such other person as may be authorized by the Board of Directors, or bear
imprinted thereon the facsimile signature of such person. In case any officer
who shall have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on any such
interest coupon, shall have ceased to be such officer before the bond,
debenture or other corporate security so signed or attested shall have been
delivered, such bond, debenture or other corporate security nevertheless may
be adopted by the corporation and issued and delivered as though the person
who signed the same or whose facsimile signature shall have been used thereon
had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
Section 9.01 Declaration of Dividends. Dividends upon the capital stock
of the corporation, subject to the provisions of the Articles of Incorporation,
if any, may be declared by the Board of Directors pursuant to law at any
regular or special meeting. Dividends may be paid in cash, in property, or
in shares of the capital stock, subject to the provisions of the Articles
of Incorporation. Section 9.02 Dividend Reserve Before payment of any dividend,
there may be set aside out of any funds of the corporation available for
dividends such sum or sums as the Board of Directors from time to time, in
their absolute discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the corporation, or for such other purpose as the Board of
Directors shall think conducive to the interests of the corporation, and the
Board of Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE X
INDEMNIFICATION
Section 10.01 Indemnification of Directors, Executive Officers, Other
Officers, Employees and Other Agents.
(a) Directors and Officers. The corporation shall indemnify its
directors and officers to the fullest extent not prohibited by the Nevada
General Corporation Law; provided, however, that the corporation may modify
the extent of such indemnification by individual contracts with its directors
and officers; and, provided, further, that the corporation shall not be
required to indemnify any director or officer in connection with any
proceeding (or part thereof) initiated by such person unless:
(i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board of Directors
of the corporation,
(iii) such indemnification is provided by the corporation, in its
sole discretion, pursuant to the powers vested in the corporation under the
Nevada General Corporation Law or
(iv) such indemnification is required to be made under subsection(d).
(b) Employees and Other Agents. The corporation shall have power to
indemnify its employees and other agents as set forth in the Nevada General
Corporation Law.
(c) Expense. The corporation shall advance to any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was a director or
officer, of the corporation, or is or was serving at the request of the
corporation as a director or executive officer of another corporation,
partnership, joint venture, trust or other enterprise, prior to the final
disposition of the proceeding, promptly following request therefor, all
expenses incurred by any director or officer in connection with such
proceeding upon receipt of an undertaking by or on behalf of such person
to repay said mounts if it should be determined ultimately that such person
is not entitled to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to
paragraph (e)of this Bylaw, no advance shall be made by the corporation
to an officer of the corporation (except by reason of the fact that such
officer is or was a director of the corporation in which event this paragraph
shall not apply) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and
promptly made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or (ii) if
such quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the
time such determination is made demonstrate clearly and convincingly that
such person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of thecorporation.
(d) Enforcement. Without the necessity of entering into an express
contract, all rights to indemnification and advances to directors and
officers under this Bylaw shall be deemed to be contractual rights and be
effective to the same extent and as if provided for in a contract between
the corporation and the director or officer. Any right to indemnification
or advances granted by this Bylaw to a director or officer shall be
enforceable by or on behalf of the person holding such right in any court
of competent jurisdiction if (i) the claim for indemnification or advances
is denied, in whole or in part, or (ii) no disposition of such claim is made
within ninety (90) days of request therefor. The claimant in such enforcement
action, if successful in whole or in part, shall be entitled to be paid also
the expense of prosecuting his claim. In connection with any claim for
indemnification, the corporation shall be entitled to raise as a defense to
any such action that the claimant has not met the standard of conduct that
make it permissible under the Nevada General Corporation Law for the corporation
to indemnify the claimant for the amount claimed. In connection with any claim
by an officer of the corporation (except in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such officer is or was a director of the corporation) for advances, the
corporation shall be entitled to raise a defense as to any such action clear
and convincing evidence that such person acted in bad faith or in a manner
that such person did not believe to be in or not opposed in the best
interests of the corporation, or with respect to any criminal action or
proceeding that such person acted without reasonable cause to believe that his
conduct was lawful. Neither the failure of the corporation (including its
Board of Directors, independent legal counsel or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he has
met the applicable standard of conduct set forth in the Nevada General
Corporation Law, nor an actual determination by the corporation (including
its Board of Directors, independent legal counsel or its stockholders) that
the claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that claimant has not met the
applicable standard of conduct. In any suit brought by a director or officer
to enforce a right to indemnification or to an advancement of expenseshereunder,
the burden of proving that the director or officer is not entitled to be
indemnified, or to such advancement of expenses, under this Article X or
otherwise shall be on the corporation.
(c) Non-Exclusivity of Rights. The rights conferred on any person by this
Bylaw shall not be exclusive of any other right which such person may have or
hereafter acquire under any statute, provision of the Articles of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The corporation is
specifically authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting indemnification and
advances, to the fullest extent not prohibited by the Nevada General
Corporation Law.
(d) Survival of Rights. The rights conferred on any person by this Bylaw
shall continue as to a person who has ceased to be a director, officer,
employee or other agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(g) Insurance. To the fullest extent permitted by the Nevada General
Corporation Law, the corporation, upon approval by the Board of Directors,
may purchase insurance on behalf of any person required or permitted to be
indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw shall only be
prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director and officer to the
full extent not prohibited by any applicable portion of this Bylaw that shall
not have been invalidated, or by any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony
in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and shall include,
without limitation, court costs, attorneys' fees, witness fees, fines, amounts
paid in settlement or judgment and any other costs and expenses of any nature
or kind incurred in connection with any proceeding.
(iii) The term the "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or
was a director, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee or agent or another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position
under the provisions of this Bylaw with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its separate existence had continued.
(iv) References to a "director," "executive officer," "officer,"
"employee," or "agent" of the corporation shall include, with out limitation,
situations where such person is serving at the request of the corporation as,
respectively, a director, executive officer, officer, employee, trustee
or agent of another corporation, partnership, joint venture, trust or other
enterprise.
(v) References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on a
person with respect to an employee benefit plan; and references to "serving
at the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which imposes duties
on, or involves services by, such director, officer, employee, or agent with
respect to an employee benefit plan, its participants, or beneficiaries; and
a person who acted in good faith and in a manner he reasonably believed to be
in the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this Bylaw.
ARTICLE XI
NOTICES
Section 11.01 Notices.
(a) Notice to Stockholders. Whenever, under any provisions of these
Bylaws, notice is required to be given to any stockholder, it shall be given
in writing, timely and duly deposited in the mail, postage prepaid, and
addressed to his last known post office address as shown by the stock
record of the corporation or its transfer agent.
(b) Notice to directors. Any notice required to be given to any
director may be given by the method stated in subsection (a), or by facsimile,
telex or telegram, except that such notice other than one which is delivered
personally shall be sent to such address as such director shall have filed
in writing with the Secretary, or, in the absence of such filing, to the last
known post office address of such director.
(c) Affidavit of Mailing. An affidavit of mailing, executed by a duly
authorized and competent employee of the corporation or its transfer agent
appointed with respect to the class of stock affected, specifying the name
and address or the names and addresses of the stockholder or stockholders,
or director or directors, to whom any such notice or notices was or were given,
and the time and method of giving the same, shall in the absence of fraud, be
prima facie evidence of the facts therein contained.
(d) Time Notices Deemed Given. All notices given by mail, as above
provided, shall be deemed to have been given as at the time of mailing, and
all notices given by facsimile, telex or telegram shall be deemed to have been
given as of the sending time recorded at time of transmission.
(e) Methods of Notice. It shall not be necessary that the same method
of giving notice be employed in respect of all directors, but one permissible
method may be employed in respect of any one or more, and any other
permissible method or methods may be employed in respect of any other or
others.
(f) Failure to Receive Notice. The period or limitation of time within
which any stockholder may exercise any option or right, or enjoy any
privilege or benefit, or be required to act, or within which any director
may exercise any power or right, or enjoy any privilege, pursuant to any
notice sent him ill the manner above provided, shall not be affected or
extended in any manner by the failure of such stockholder or such director
to receive such notice.
(g) Notice to Person with Whom Communication Is Unlawful. Whenever
notice is required to be given, under any provision of law or of the Articles
of Incorporation or Bylaws of the corporation, to any person with whom
communication is unlawful, the giving of such notice to such person shall
not be require and there shall be no duty to apply to any governmental
authority or agency for a license or permit to give such notice to such
person. Any action or meeting which shall be taken or held without notice to
any such person with whom communication is unlawful shall have the same force
and effect as if such notice had been duly given. In the event that the
action taken by the corporation is such as to require the filing of a
certificate under any provision of the Nevada General Corporation Law, the
certificate shall state, if such is the fact and if notice is required, that
notice was given to all persons entitled to receive notice except such
persons with whom communication is unlawful.
(h) Notice to Person with Undeliverable Address. Whenever notice is
required to be given, under any provision of law or the Articles of
Incorporation or Bylaws of the corporation, to any stockholder to whom (i)
notice of two consecutive annual meetings, and all notices of meetings or of
the taking of action by written consent without a meeting to such person
during the period between such two consecutive annual meetings, or (ii) all,
and at least two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been mailed
addressed to such person at his address as shown on the records of the
corporation and have been returned undeliverable, the giving of such notice
to such person shall not be required. Any action or meeting which shall be
taken or held without notice to such person shall have the same force and
effect as if such notice had been duly given. If any such person shall
deliver to the corporation a written notice setting forth his then current
address, the requirement that notice be given to such person shall be
reinstated. In the event that the action taken by the corporation is such
as to require the filing of a certificate under any provision of the
Nevada General Corporation Law, the certificate need not state that notice
was not given to persons to whom notice was not required to be given pursuant
to this paragraph.
ARTICLE XII
LOANS TO OFFICERS
Section 12.01 Loans to Officers. The corporation may lend money to, or
guarantee any obligation of, or otherwise assist any officer or other employee
of the corporation or of its subsidiaries, including any officer or employee
who is a Director of the corporation or its subsidiaries, whenever, in
the judgment of the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the corporation. The loan, guarantee or other
assistance may be with or without interest and may be unsecured, or secured in
such manner as the Board of Directors shall approve, including, without
limitation, a pledge of shares of stock of the corporation. Nothing in these
Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or
warranty of the corporation at common law or under any statute.
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Amendments. The Board of Directors shall have the power
to adopt, amend, or repeal Bylaws as set forth in the Articles of Incorporation.
Section 13.02 Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
Section 13.03. Conflicts with Articles of Incorporation. In the event
that any provision contained in these bylaws conflicts with any provision
of the corporation's articles of incorporation, as amended from time to time,
the provisions of the Articles of Incorporation shall prevail and be given
full force and effect, to the full extent permissible.
Declared as the Bylaws of Infotec Business Systems, Inc. as of the 30th day
of August,2001
Signature of Officer: ___/s/ROBERT DANVERS_
Name of Officer: ROBERT DANVERS
Position or Office: PRESIDENT AND DIRECTOR
EXHIBIT
5.1 Opinion of Adorno & Yoss, P.A., with consent to use
(to be supplied by amendment)
EXHIBIT
10.1 Purchase Agreement with Danby Technologies Corporation
PURCHASE AGREEMENT
This Agreement made this 3rd day of October, 2001.
BETWEEN:
INFOTEC BUSINESS SYSTEMS, INC., a
Nevada corporation having its registered
office at 50 West Liberty, Suite 880,
Reno Nevada 89501
(hereinafter referred to as the "Purchaser")
OF THE FIRST PART
AND:
DANBY TECHNOLOGIES CORPORATION,
a British Columbia corporation having its
business office at 444 Columbia Street
E., New Westminster, BC V3L 3W9
(hereinafter referred to as the "Vendor")
OF THE SECOND PART
WHEREAS the Vendor has developed a design and plan for a
basic online office system as is described more particularly in
Schedule "A" (the "Basic Online System") including associated methods
and know-how for the implementation and operation of the Basic Online
System and has developed a test implementation of its Basic Online System
and a business plan for the further development and commercialization of
the Basic Online System (collectively known as the "System").
AND WHEREAS the Vendor is unable to fund further development and
commercialization of the Basic Online System and is desirous of seeing the
System in commercial operation.
AND WHEREAS the Vendor wishes to sell and the Purchaser wishes to purchase
the System.
NOW THEREFORE this Agreement witnesses that in consideration of the
premises, and of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged the parties hereto have agreed to and do hereby agree
as follows:
1. PURCHASE AND SALE OF ASSETS
1.01 Upon the terms and subject to the conditions hereof, the Purchaser agrees
to purchase, and the Vendor agrees to sell, assign and transfer to the
Purchaser the System.
1.02 The parties shall, enter into such further agreements and execute any and
all documents as may be necessary and reasonably required to ensure that
ownership of the System vests and remains with the Purchaser.
2. PURCHASE PRICE
2.01 The Vendor agrees to sell and the Purchaser agrees to purchase the System
from the Vendor for the following consideration:
(a) payment of the sum of SIXTY THOUSAND DOLLARS ($60,000) payable on or
before December 31, 2002 without interest thereon; and
(b) royalty of TWO (2%) PERCENT calculated on the Net Sales Revenue (as
defined in Schedule "B" hereto) of any product or service that uses all
or any portion of the System until the amount so paid or payable hereby
totals TWO HUNDRED FIFTY THOUSAND ($250,000) DOLLARS, after which time,
the royalty shall be calculated as ONE (1%) PERCENT (the "Royalty").
2.02 The Royalty shall be paid quarterly in arrears following the first
commercial sale of products or services based on the System.
3. CLOSING
3.01 The closing of the transaction of sale and purchase hereunder will take
place on October 3rd, 2001 at the business offices of Danby Technologies
Corporation at 444 Columbia Street E., New Westminster, British Columbia at
1:00 p.m. (the "Closing Date").
3.02 The parties agree that closing under Section 3.01 hereof shall be
conditional on the receipt by the Vendor of the following documentation:
(a) Certificate of Officer as set out in Schedule "C" hereto;
which shall be fully executed and in force.
4. REPRESENTATIONS AND WARRANTIES
4.01 The Vendor represents and warrants to the Purchaser
(and acknowledges that the Purchaser has relied upon such
representations and warranties in entering into this Agreement)
that
except as disclosed herein:
(a) the Vendor has the power and capacity to own and dispose
of the assets and to enter into this Agreement and to carry out
its terms to the full extent;
(b) there are no actions, suits, judgments, litigation proceedings
or investigations outstanding, pending or to the knowledge of the
Vendor threatened against the System, nor does the Vendor know or
have any reasonable grounds or know of any basis for any such actions,
suits, litigation proceedings or investigations;
(c) the execution and delivery of this Agreement and the completion
of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the Vendor,
and this Agreement constitutes a legal,
2
valid and binding obligation of the Vendor enforceable against the
Vendor in accordance with its terms except as may be limited by laws
of general application effecting the rights of creditors and by general
principals of equity;
(d) the Vendor warrants and represents that the Vendor has good and
marketable title to the System and the System is free and clear of all
liens, mortgages, charges, pledges, security interests, encumbrances or
other claims whatsoever, other than leases and encumbrances disclosed
herein;
(e) neither the execution nor delivery of this Agreement nor the
completion of the transactions contemplated hereby shall violate any of
the terms and provisions of any order, decree, statute, by- law or
regulation agreement, covenant or restriction applicable to the Vendor;
and (f) the Vendor represents and warrants to the Purchaser and
acknowledges that the Purchaser has relied upon same that the Vendor
owns and has full and clear title to the System.
4.02 The Purchaser represents and warrants to the Vendor (and acknowledges
that the Purchaser has relied upon such representations and warranties in
entering into this Agreement) that except as disclosed herein:
(a) the Purchaser is duly organized, existing, in good standing and
has the power, authority, and capacity to enter into this Agreement
and to carry out the transactions contemplated by this Agreement,
all of which have been duly and validly authorized by all requisite
corporate proceedings.
4.03 From the date hereof until the closing the Vendor shall diligently and
in the manner of a prudent businessperson in the ordinary course of business
and will use its best efforts to preserve the System.
4.04 The Purchaser represents and warrants (and acknowledges
that the Purchaser has relied upon such representations and
warranties in entering into this Agreement) that it will use its best
efforts to develop and commercialize the System.
5. INDEMNIFICATION CLAUSE
5.01 The Vendor covenants and agrees to indemnify and hold
harmless the Purchaser from and against:
(a) any and all losses, damages or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfilment of any
covenant on the part of the Vendor under this Agreement or from any
misrepresentation or omission from any certificate or other
instrument, furnished or to be furnished from the Purchaser
hereunder; and
(b) all actions, suits, proceedings, demands, assessments, judgments,
costs and legal and other expenses incidental to any of the foregoing,
the cause of action, subject matter, or basis of which arose prior to
the execution of this Agreement, and the Purchaser may, on notice in
writing to the Vendor, settle such claims and make any payment in
relation thereof as the Purchaser sees fit.
5.02 The Purchaser covenants and agrees to indemnify and hold harmless the
Vendor from and against:
(a) any and all losses, damages or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfilment of any covenant on
the part of the Purchaser under this Agreement, or from any
misrepresentation in or omission from any certificate or other
instrument, furnished or to be furnished from the Purchaser
hereunder; and
(b) all actions, suits, proceedings, demands, assessments judgments, costs
and legal and other expenses incidental to any of the foregoing, the cause
of action, subject matter, or basis of which arose after the execution of
this Agreement, and the Vendor may, on notice in writing to the Purchaser,
settle such claims and make any payment in relation thereof as the Vendor
sees fit.
6. FAILURE TO PERFORM
6.01 Where Purchaser fails to pay any amounts due by virtue
of Section 2 of this Agreement, the Purchaser agrees to pay the Vendor
interest thereon at the annual rate of seven (7%) percentum on the
outstanding balance unpaid until such time as such outstanding
balance is fully paid.
7. ASSIGNMENT
7.01 The Purchaser acknowledges and agrees that the Vendor may assign, mortgage,
encumber, sell or otherwise transfer or dispose of its interest or interests
hereunder to others (the "Assignees") without the consent of the Purchaser,
provided however that the Purchaser shall be notified of any such assignment as
is applicable for the Purchaser to discharge its obligations hereunder and the
Purchaser further acknowledges and agrees that it shall not assign, sell,
mortgage or otherwise transfer or dispose of its interest or interests hereunder
without the Vendor's prior written consent.
8. CURRENCY
8.01 For the purposes of this Agreement, all amounts represented herein are
expressed in the functional currency of the United States of America and all
references to dollar or currency amounts shall be read as references to the
currency of the United States of America.
9. NOTICE
9.01 Notice to either party may be made and shall be deemed delivered and
received when sent by first class mail or hand delivered to the following
address:
For the Vendor:
444 Columbia Street E.
New Westminster, BC V3L 3W9
For the Purchaser:
50 West Liberty, Suite 880
Reno, Nevada 89501
10. SURVIVAL
10.01 Notwithstanding any enquiry or investigation by the Purchaser, the
representation and warranties of the Vendor contained in this Agreement
shall survive its closing of the transactions contemplated by this
Agreement and shall continue in full force for the benefit of the Purchaser
thereafter.
11. ENTIRE AGREEMENT
11.01 This Agreement constitutes the entire agreement between the parties
hereto relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties and there are no general or
specific warranties, representations or other agreements by or among the
parties in connection with the entering into of this agreement or the
subject matter thereof except as specifically set forth herein.
12. SEVERABILITY
12.01 If any provisions of this Agreement are held unenforceable or invalid
by a Court of competent jurisdiction, the parties hereto acknowledge and
agree that the enforceability or validity of the remaining provisions shall
not be affected thereby.
13. JURISDICTION
13.01 This Agreement shall be governed by and in construed accordance with
the laws of the Province of British Columbia and the parties hereto hereby
submit to the jurisdiction of the Courts of the Province of British Columbia.
14. TIME OF THE ESSENCE
14.01 Time shall be of the essence in this Agreement.
15. ENUREMENT
15.01 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF THE PARTIES have hereunto set their hands and Corporate
Seals, duly attested to be the hands of their properly authorized officers
in their behalf on the day and year first above written.
Signed for on behalf of
INFOTEC BUSINESS SYSTEMS, INC.
By its authorized signatory
Per:
/s/Robert Danvers
Robert Danvers, President
Signed for on behalf of
DANBY TECHNOLOGIES CORPORATION
By its authorized signatory
Per:
/s/Robert Danvers
Robert Danvers, President
Exhibit 10.2
Debt Settlement Agreement with Danby Technologies Corporation
DEBT SETTLEMENT AGREEMENT
This Agreement made this 13th day of May, 2002.
BETWEEN:
INFOTEC BUSINESS SYSTEMS, INC.,
a Nevada corporation having its registered
office at 50 West Liberty, Suite 880,
Reno Nevada 89501
(hereinafter referred to as the "Debtor")
OF THE FIRST PART
AND:
DANBY TECHNOLOGIES CORPORATION,
a British Columbia corporation having its
business office at 444 Columbia Street E.,
New Westminster, BC V3L 3W9
(hereinafter referred to as the "Creditor")
OF THE SECOND PART
WHEREAS the Debtor is indebted to the Creditor as set out in Appendix I
hereto (the "Debt").
AND WHEREAS the Debtor wishes to reduce its indebtedness and increase its
capital base through the settlement of the Debt through the subscription of
shares of the Debtor's $0.001 par value Common Stock.
AND WHEREAS the Debtor and the Creditor wish to settle the Debt.
NOW THEREFORE this Agreement witnesses that in consideration of the premises,
and of the mutual covenants and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged the parties hereto have agreed to and do hereby agree
as follows:
1. SETTLEMENT OF DEBT
1.01 Upon the terms and subject to the conditions hereof,
(a) The Creditor hereby tenders the Debt (in the amount as is set
out in Appendix I).
(b) The Creditor hereby agrees to execute or cause to be executed
a Security Agreement in the form attached hereto as Appendix III for
each subscriber listed in the Subscriber
1
Listing as set out in Appendix II hereto (hereinafter singularly or
collectively referred to as the "Subscriber").
(c) The Debtor hereby agrees to issue such number of fully paid
nonassessable shares of the Debtor's $0.001 par value Common Stock at
the price or prices as set out in Appendix II hereto (the "Shares").
1.02 The parties shall, enter into such further agreements and execute
any and all documents as may be necessary and reasonably required to ensure
that the Debt is cancelled and the shares are issued as fully paid and
nonassessable.
2. CLOSING
2.01 The closing of the transaction of sale and purchase hereunder will
take place on May 13, 2002 at the business offices of Danby Technologies
Corporation at 444 Columbia Street E., New Westminster, British Columbia
at 1:00 p.m. (the "Closing Date").
2.02 The parties agree that closing under Section 2.01 hereof shall be
conditional on the receipt by the Debtor of the following documentation:
(a) Security Subscription Agreement for each Subscriber, in the
form as set out in Appendix III hereto;
which shall be fully executed and in force.
3. REPRESENTATIONS AND WARRANTIES
3.01 The Creditor represents and warrants to the Debtor (and acknowledges
that the Debtor has relied upon such representations and warranties in
entering into this Agreement) that except as disclosed herein:
(a) the Creditor has the power and capacity to own and dispose of
the Debt, to subscribe for Shares on the terms and conditions
as set out in the Security Subscription Agreement attached as
appendix III hereto and to enter into this Agreement and to
carry out its terms to the fullest extent;
(b) there are no actions, suits, judgments, litigation proceedings or
investigations outstanding, pending or to the knowledge of the
Creditor threatened against the Debt, nor does the Creditor
know or have any reasonable grounds or know of any basis for
any such actions, suits, litigation proceedings or investigations;
(c) the execution and delivery of this Agreement and the completion
of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the
part of the Creditor, and this Agreement constitutes a legal,
valid and binding obligation of the Creditor enforceable against
the Creditor in accordance with its terms except as may be limited
by laws of general application effecting the rights of creditors
and by general principals of equity;
(d) the Creditor warrants and represents that the Creditor has
good and marketable title to the Debt and the Debt is free and
clear of all liens, mortgages, charges, pledges, security interests,
encumbrances or other claims whatsoever, other than such disclosed
herein;
2
(e) neither the execution nor delivery of this Agreement nor the
completion of the transactions contemplated hereby shall violate
any of the terms and provisions of any order, decree, statute,
by-law or regulation agreement, covenant or restriction applicable
to the Creditor; and
(f) the Creditor represents and warrants to the Debtor and acknowledges
that the Debtor has relied upon same that the Creditor owns and has full
and clear title to the Debt.
3.02 The Debtor represents and warrants to the Creditor (and acknowledges that
the Debtor has relied upon such representations and warranties in entering into
this Agreement) that except as disclosed herein:
(a) the Debtor is duly organized, existing, in good standing and has the
power, authority, and capacity to enter into this Agreement and to carry
out the transactions contemplated by this Agreement, all of which have
been duly and validly authorized by all requisite corporate proceedings.
(b) neither the execution nor delivery of this Agreement nor the
completion of the transactions contemplated hereby shall violate any of
the terms and provisions of any order, decree, statute, bylaw or
regulation agreement, covenant or restriction applicable to the Debtor;
and
(c) the Debtor will issue or cause to be issued the Shares as fully
paid, nonassessable and fully registered in the Debtor's Stock
Ledger with all rights and interests of holders of the Debtor's
$0.001 par value Common Stock.
4. INDEMNIFICATION CLAUSE
4.01 The Creditor covenants and agrees to indemnify and hold harmless the Debtor
from and against:
(a) any and all losses, damages or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfilment of any
covenant on the part of the Creditor under this Agreement or
from any misrepresentation or omission from any certificate or
other instrument, furnished or to be furnished from the Debtor
hereunder; and
(b) all actions, suits, proceedings, demands, assessments, judgments,
costs and legal and other expenses incidental to any of the foregoing,
the cause of action, subject matter, or basis of which arose prior to
the execution of this Agreement, and the Debtor may, on notice in
writing to the Creditor, settle such claims and make any payment in
relation thereof as the Debtor sees fit.
4.02 The Debtor covenants and agrees to indemnify and hold harmless
the Creditor from and against:
(a) any and all losses, damages or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfilment of any
covenant on the part of the Debtor under this Agreement, or from any
misrepresentation in or omission from any certificate or other
instrument, furnished or to be furnished from the
3
Debtor hereunder; and
(b) all actions, suits, proceedings, demands, assessments,judgments,
costs and legal and other expenses incidental to any of the foregoing,
the cause of action, subject matter, or basis of which arose after the
execution of this Agreement, and the Creditor may, on notice in writing
to the Debtor, settle such claims and make any payment in relation
thereof as the Creditor sees fit.
5. ASSIGNMENT
5.01 The Creditor and Debtor acknowledge and agree that neither party may
assign, sell or otherwise transfer or dispose of its interest or interests
hereunder to others.
6. CURRENCY
6.01 For the purposes of this Agreement, all amounts represented herein are
expressed in the functional currency of the United States of America and all
references to dollar or currency amounts shall be read as references to the
currency of the United States of America.
7. NOTICE
7.01 Notice to either party may be made and shall be deemed delivered
and received when sent by first class mail or hand delivered to the following
address:
For the Creditor:
444 Columbia Street E.
New Westminster, BC V3L 3W9
For the Debtor:
50 West Liberty, Suite 880
Reno, Nevada 89501
8. SURVIVAL
8.01 Notwithstanding any enquiry or investigation by the Debtor, the
representation and warranties of the Creditor contained in this Agreement
shall survive its closing of the transactions contemplated by this Agreement
and shall continue in full force for the benefit of the Debtor thereafter.
9. ENTIRE AGREEMENT
9.01 This Agreement constitutes the entire agreement between the
parties hereto relating to the subject matter hereof and supersedes all prior
and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties and there are no general or
specific warranties, representations or other agreements by or among the
parties in connection with the entering into of this agreement or the subject
matter thereof except as specifically set forth herein.
4
10. SEVERABILITY
10.01 If any provisions of this Agreement are held unenforceable or
invalid by a Court of competent jurisdiction, the parties hereto acknowledge
and agree that the enforceability or validity of the remaining provisions
shall not be affected thereby.
11. JURISDICTION
11.01 This Agreement shall be governed by and in construed accordance
with the laws of the Province of British Columbia and the parties hereto hereby
submit to the jurisdiction of the Courts of the Province of British Columbia.
12. TIME OF THE ESSENCE
12.01 Time shall be of the essence in this Agreement.
13. ENUREMENT
13.01 This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF THE PARTIES have hereunto set their hands and
Corporate Seals, duly attested to be the hands of their properly authorized
officers in their behalf on the day and year first above written.
Signed for on behalf of
INFOTEC BUSINESS SYSTEMS, INC.
By its authorized signatory
Per:
/s/Stephen Jackson
Director
Signed for on behalf of
DANBY TECHNOLOGIES CORPORATION
By its authorized signatory
Per:
/s/Robert Danvers
Robert Danvers, President
5
APPENDIX I
To Settlement Agreement of May 13, 2002
For the purposes of this Settlement Agreement, the Debt referred to therein
shall refer to the indebtedness of Infotec Business Systems,Inc.
to the
Creditor being:
Amount of indebtedness: $60,000 U.S. Dollars
-----------------------------------
Date of indebtedness or period: October 3, 2001
-----------------------------------
Details of indebtedness:
Principal amount of purchase price due December 31, 2001 under
section 2.01 of the Purchase Agreement entered into by and between the
Debtor and Creditor dated October 3, 2001.
6
APPENDIX II
To Settlement Agreement of May 13, 2002
Subscriber Listing
Name and Address Number of Price per
Subscriber Shares Share
Danby Technologies Corporation 1,180,000 $0.05
444 Columbia Street E.
New Westminster B.C.
V3L 3W9 Canada
Tim Sproule 20,000 $0.05
444 Columbia Street E.
New Westminster B.C.
V3L 3W9 Canada ________
Total Shares 1,200,000
---------
7
APPENDIX III
To Settlement Agreement of May 13, 2002
Security Subscription Agreement
8
INFOTEC BUSINESS SYSTEMS, INC.
REGULATION S SECURITIES SUBSCRIPTION AGREEMENT
This Regulation S Securities Subscription Agreement is
executed in reliance upon the transaction exemption afforded
by Regulation S ("Regulation S") as promulgated by
the Securities and Exchange Commission ("SEC") under the
Securities Act of 1933, as amended ("1933 Act").
THE SECURITIES SUBSCRIBED TO HEREBY HAVE NOT BEEN REGISTERED
UNDER THE 1933 ACT AND MAY NOT BE OFFERED OR SOLD IN
THE UNITED STATES OR TO U.S. PERSONS (AS HEREINAFTER DEFINED)
UNLESS THE SECURITIES ARE REGISTERED UNDER THE 1933 ACT, OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
1933 ACT IS AVAILABLE. HEDGING TRANSACTIONS IN THESE SECURITIES
MAY NOT BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE 1933 ACT.
This Agreement has been executed by the undersigned ("Subscriber"),
a non-U.S. person (as hereinafter defined), in connection with the
issuance of an aggregate of 1,200,000 Shares (as hereinafter defined)
of INFOTEC BUSINESS SYSTEMS, INC., a Nevada corporation (the "Issuer")
which is a "Category (3)Issuer" within the meaning of given in
Regulation S.
The Issuer is offering up to 1,200,000 Shares at a purchase price of U.S.
$0.05 per Share (the "Offering") to settle certain indebtedness. Prior
to commencement of the Offering, there were 2,100,000 shares of the Issuer's
Common Stock issued and outstanding.
At the completion of this Offering, assuming the Offering is fully subscribed
for and the Issuer issues 1,200,000 shares of Common Stock for another offering,
there will be 4,500,000 shares of the Issuer's Common Stock issued
and outstanding of which the Offering would comprise 26.67% thereof.
The undersigned Subscriber hereby represents and warrants to and agrees with the
Issuer as follows:
1. Agreement to Subscribe: Purchase Price.
(a) Subscription. The undersigned Subscriber hereby agrees
to purchase from the Issuer ______________ Shares. The Shares are
sometimes hereinafter referred to as the "Securities".
(b) Form of Payment. Subscriber hereby tenders the sum of
U.S.$________, or $0.05 per Share, in full payment of the
purchase price for the Shares.
2. Subscriber Representations; Access to Information;
Independent Investigation.
(a) Offshore Transaction. Subscriber represents and warrants
to Issuer as follows:
(i) Subscriber is not a U.S. person (whenever such term is used
herein, it shall have the meaning given in Regulation S).
(ii) At the time Subscriber's buy order originated, Subscriber
was outside of the United States as of the date of the execution and
delivery of this Agreement.
(iii) Subscriber is acquiring the Shares for its own account and
not on behalf of any U.S. person, and the sale has not been
pre-arranged with a purchaser in the United States.
1
(iv) Each distributor participating in the offering of the Shares,
if any, has agreed in writing that all offers and sales of the Shares prior
to the expiration of a period commencing on the date the Subscriber's
subscription is accepted by the Issuer and ending one year thereafter
(the "Restricted Period"), shall only be made in compliance with the safe
harbor contained in Regulation S,pursuant to registration of Shares under
the 1933 Act or pursuant to an exemption from registration.
(v) Subscriber represents and warrants and hereby agrees that
all offers and sales of any of the Securities prior to the expiration of the
Restricted Period shall only be made in compliance with the safe harbor
contained in Regulation S, pursuant to registration of securities under
the 1933 Act or pursuant to an exemption from registration, and all offers
and sales after the Restricted Period shall be made only pursuant to such
a registration or to such exemption from registration.
(vi) Subscriber represents and warrants and hereby agrees not to
engage in hedging transactions with regard to the Securities unless in
compliance with the 1933 Act.
(vii) All offering documents received by Subscriber include
statements to the effect that the Securities have not been registered under
the 1933 Act and may not be offered or sold in the United States or to or
for the account or benefit of a U.S. person (other than distributors as defined
in Regulation S) during the Restricted Period unless the Securities are
registered under the 1933 Act or an exemption from the registration requirements
is available. The certificate(s) evidencing the Shares will contain a legend
to such effect.
(viii) Subscriber acknowledges that the purchase of the Securities
involves a high degree of risk and affirms that it can bear the economic risk
of acquiring the Shares, including the total loss of its investment.
(ix) Subscriber understands that the Securities are being offered
and sold to it in reliance on specific exemptions from registration
requirements of federal and state securities laws and that the Issuer is
relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgements and undertakings of Subscriber set forth herein
in order to determine the applicability of such exemptions and the
suitability of Subscriber to acquire the Securities.
(x) Subscriber is sufficiently experienced in financial and business
matters to be capable of evaluating the merits and risks of its investment in
the Securities, and to make an informed decision relating thereto.
(xi) In evaluating this investment, Subscriber has consulted its
own investment and/or legal and/or tax advisors and has satisfied himself or
herself as to the full observance of the laws of his or her jurisdiction in
connection with any invitation to subscribe for the Shares and/or any
use of this Agreement, including the legal requirements within his/her
jurisdiction for the purchase of the Shares; any foreign exchange restrictions
applicable to such purchase; any governmental or other consents that may need
to be obtained; and the income tax and other tax consequences, if any, that may
be relevant to the purchase, holding, redemption, sale, or transfer of
the Shares.
(xii) Subscriber acknowledges that, in the view of the SEC, the
statutory exemption claimed for this transaction would not be present if the
offering of Shares, although in technical compliance with Regulation S, is
part of a plan or scheme to evade the registration provisions of the 1933
Act. Subscriber is acquiring the Shares for investment purposes and has no
present intention to sell any of the Securities in the United States or to
a U.S. person or for the account or benefit of a U.S. person, either now or
promptly after the expiration of the
2
Restricted Period.
(xiii) Subscriber is not an underwriter of, or dealer in, the
Securities; and Subscriber is not participating, pursuant to contractual
agreement, in the distribution of the Securities.
(xiv) If Subscriber is purchasing the Shares subscribed for hereby
in representative or fiducuiary capacity, the representations and warranties
of this Regulation S Securities Subscription Agreement shall be deemed to
have been made on behalf of the person or persons for whom Subscriber is so
purchasing.
(xv) The foregoing representations and warranties are true and
accurate as of the date hereof, shall be true and accurate as of the date of
the acceptance by the Issuer of Subscriber's subscription and shall survive
thereafter. If Subscriber has knowledge, prior to the acceptance of its
Regulation S Securities Subscription Agreement that any such representations
and warranties shall not be true and accurate in any respect, the Subscriber,
prior to such acceptance, will give written notice of such fact specifying
which representations and warranties are not true and accurate and the reasons
therefor.
(b) Registration Under the Securities Exchange Act of 1934. Subscriber
acknowledges that none of the Issuer's securities are registered under Section
12(g) of the Securities Exchange Act of 1934 (the "1934 Act") and, accordingly,
it is not obligated to file periodic reports with the Securities and
Exchange Commission pursuant to the 1934 Act. Subscriber understands that the
Issuer intends to file an appropriate Registration Statement with the Securities
and Exchange Commission under Section 12(g) of the 1934 Act and, thereafter,
it is anticipated that the Issuer will become a reporting company.
(c) Independent Investigation Access. Subscriber acknowledges that
Subscriber, in making the decision to purchase the Shares subscribed for, has
relied upon independent investigations made by it and Subscriber's
representatives, if any, and Subscriber and such representatives, if any,
have been given access and the opportunity, prior to any sale to it, to
examine all material books and records of the Issuer, all material
contracts and documents relating to this offering and an opportunity
to ask questions of, and to receive answers from Issuer or any
person acting on its behalf concerning the terms and conditions of
this offering. Subscriber and its advisors, if any, have been furnished
with access to all publicly available materials relating to the business,
finances and operations of the Issuer and materials relating to the offer
and sale of the Shares which have been requested. Subscriber and its
advisors, if any, have received complete and satisfactory answers
to any such inquiries.
(d) No Government Recommendation or Approval. Subscriber understands
that no federal or state agency has made or will make any finding or
determination relating to the fairness of an investment in the Securities, or
has passed or made, or will pass on or make, any recommendation or endorsement
of the Securities.
(e) Entity Purchases. If Subscriber is a partnership, corporation or
trust, the person executing this Regulation S Securities Subscription Agreement
on its behalf represents and warrants that:
(i) He, she or it has made due inquiry to determine the
truthfulness of the representations and warranties made pursuant to this
Regulation S Securities Subscription Agreement; and that
(ii) He, she or it is duly authorized (if the undersigned is
a trust,by the Trust Agreement) to make this investment and to enter
into and execute this Regulation S Securities Subscription Agreement
on behalf of such entity.
(f) Market for Securities. Subscriber acknowledges that
no market
3
for the Shares presently exists and none may develop in the future and
accordingly Subscriber may not be able to liquidate its investment.
3. Issuer Representations.
(a) Reporting Company Status. The Issuer is a non- reporting issuer as
defined by Rule 902 of Regulation S.
(b) Offshore Transaction. The Issuer has not offered these Securities
to any person in the United States or to any U.S. person or for the account or
benefit of any U.S. person.
(c) No Directed Selling Efforts. In regard to this transaction, the
Issuer has not conducted any "directed selling efforts" as that term is
defined in Rule 902 of Regulation S, nor has the Issuer conducted any general
solicitation relating to the offer and the sale of the Securities to persons
resident with the Unites States or elsewhere.
4. Expiration of Restricted Period. The transaction restriction in
connection with this offshore offer and sale restrict the Subscriber from
offering and selling to U.S. persons or for the account or benefit of a
U.S. person for a one-year period. In the event that multiple subscriptions
are accepted by the Issuer, each separate subscription agreement shall be
deemed to be a separate offering under Regulation S, and the restrictive
period shall begin for each transaction separately on the date payment is
made for that specific transaction.
5. Exemption: Reliance on Representations. Subscriber understands that
the issuance of the Shares is not being registered under the 1933 Act, and
that the Issuer is relying on the rules governing offers and sales made
outside the United States pursuant to Regulation S. Rules 901 through 903 of
Regulation S govern this transaction.
6. Terms of Subscription and Stock Delivery Instructions. Subscriber
acknowledges and agrees with the Issuer that:
(a) No Minimum for Offering. this Offering is not subject to any
minimum subscription;
(b) Use of Proceeds. that pending acceptance of this Regulation
S Securities Subscription Agreement by the Issuer, all funds paid hereunder
shall be deposited by the Issuer and immediately available to the Issuer
and that in the event this Regulation S Securities Subscription Agreement
is not accepted or is accepted only in part, the amounts so paid in excess
of the accepted amount shall constitute a non- interest bearing demand loan
of Subscriber to the Issuer; and
(c) Issuance of Certificates. certificates evidencing the Shares
shall be delivered to the Subscriber when practical following acceptance of
this Agreement by the Issuer and clearance of the funds evidencing the
purchase price for the Shares.
7. Conditions to the Issuer's Obligation to Sell. Subscriber
understands that Issuer's obligation to deliver the Shares is conditioned
upon (a) the receipt and acceptance by the Issuer of this Regulation S
Securities Subscription Agreement for all of the Shares subscribed to and
(b) the Issuer's receipt of the purchase price in cleared United States
Dollars. The Issuer reserves the right in its complete discretion to reject
this Regulation S Securities Subscription Agreement.
8. Entire Agreement. This Regulation S Securities Subscription
Agreement constitutes the entire Agreement among the parties hereof with
respect to the subject matter hereof and supersedes any and all prior or
contemporaneous representations, warranties, agreements and understandings
in connection therewith. This Regulation S Securities Subscription Agreement
may be amended only by a writing executed by all parties hereto.
4
9. Representations by British Columbia Residents. If Subscriber
is a resident of Canada, Subscriber represents to the Company that
Subscriber is a resident of the Province of British Columbia and Subscriber
is (Residents of British Columbia must circle one, as appropriate, and add
the name of the senior officer or director of the Issuer):
(a) a spouse, parent, brother, sister or child of __________________,
a senior officer or director of the Issuer;
(b) a close friend or business associate of______________________,
a senior officer or director of the Issuer; or
(c) a company, all of the voting securities of which are beneficially
owned by one or more of a spouse, parent, brother, sister, child or close
personal friend or business associate of ____________________, a senior
officer or director of the Issuer.
Dated this ______ day of ________________
___________________________________
Subscriber Signature
___________________________________
Subscriber Name
___________________________________
Address
___________________________________
City, Province, Postal Code
The share certificate(s) should be made out and entered into
the corporate records, as follows (if different than above):
___________________________________
Registered Name
___________________________________
Address
___________________________________
City, Province, Postal Code
THE FOREGOING REGULATION S SECURITIES SUBSCRIPTION IS HEREBY
ACCEPTED:
( ) In Full; ( ) Partial allocation:
_____________________________ Shares, on this ______ day of
______________, 2002.
INFOTEC BUSINESS SYSTEMS, INC.
By:
________________________________
Name:______________________________
Its:_________________________________
5
Exhibit 21 Subsidiaries of the Issuer
INFOTEC BUSINESS SYSTEMS, INC.
FORM SB-2
List of Subsidiaries
Jurisdiction of
Subsidiary Incorporation %
Ownership
Infotec Business Strategies, Inc. Canada 100.0%
Exhibit 23.1 Consent of Morgan and Company, Chartered Accountants
INDEPENDENT AUDITORS' CONSENT
We consent to the use in the Registration Statement of Infotec
Business Systems, Inc. on Form SB-2 of our Auditors' Report, dated
May 27, 2002, on the consolidated balance sheet of Infotec
Business Systems, Inc. as at April 30, 2002, and the related
consolidated statement of operations, consolidated statement of
cash flows and consolidated statement of stockholders' deficiency
for the period from inception on August 30, 2001 to April 30,
2002.
In addition, we consent to the reference to us under the heading
"Interests Of Named Experts And Counsel" in the Registration
Statement.
Vancouver, Canada "Morgan & Company"
June 14, 2002 Chartered
Accountants
Exhibit 23.2 Consent of Adorno & Yoss, P.A. (See Exhibit 5.1)