SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FAR REACH HOLDINGS, LTD.
(Name of small business issuer in its charter)
NEVADA 4813 33-0885763
(State of Incorporation) (Primary Standard Industrial IRS Employer ID
Classification Code Number)
44489 TOWN CENTER WAY, SUITE D415
PALM DESERT, CA 92260-2723
(760) 773-9227 (PHONE)
(Address and telephone number of principal executive offices)
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44489 TOWN CENTER WAY, SUITE D415
PALM DESERT, CA 92260-2723
(760) 773-9227 (PHONE)
(760) 340-6629 (TELECOPY)
Address of principal place of business or intended principal place of business)
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CORPORATE SERVICE CENTER, INC.
1475 Terminal Way, Suite E
RENO, NEVADA 89502
(775)329-7721
(Name, address and telephone number of agent for service)
--------------------------
COPIES TO:
KENNETH G. EADE
Attorney at Law
827 State Street, Suite 26
Santa Barbara, CA 93101
(805)560-9828 (PHONE)
(805) 560-3608 (TELECOPY)
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APPROXIMATE DATE 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. / /
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If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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DATED MARCH 10, 2000
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.
PROSPECTUS
FAR REACH HOLDINGS, LTD.
10,000 SHARES OF COMMON STOCK
Up to 10,000 of the shares of Common Stock offered hereby (the "Offering") are
being sold by FAR REACH HOLDINGS, LTD. ("Far Reach " or the "Company").
There
is no minimum contingency and no escrow or impound, and the proceeds may be
utilized by the Company in its discretion. The Company's Common Stock is not
currently listed or quoted on any quotation medium. There can be no
assurance
that the Company's common stock will ever be quoted on any quotation medium
or
that any market for the Company's stock will ever develop.
- ------------------------
THE COMMON STOCK OFFERED HEREBY IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF
RISK AND SUBSTANTIAL DILUTION. SEE "RISK FACTORS" AND "DILUTION."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRICE UNDERWRITING PROCEEDS
TO DISCOUNTS AND TO
PUBLIC COMMISSIONS(2)
COMPANY(1)
Per Share................$ 1.00 $0 $ 1.00
Total (Minimum)......... $ 10,000 $0 $10,000
Total (Maximum)......... $ 10,000 $0 $10,000
(1) Before deducting expenses payable by the Company, estimated at
approximately
$4,000. This offering is self-underwritten, so the Company is not obligated to
pay commissions or fees on the sales of any of the shares. This offering is
for
up to 10,000 common shares. There is no minimum contingency, and the proceeds
may be used in the Company's discretion.
(2)The shares of Common Stock are being offered by the Company through its
officers and directors on a best efforts basis subject to prior sale, when, as,
and if delivered to and accepted by the Company and subject to the approval of
certain legal matters by counsel and certain other conditions. The Company
reserves the right to withdraw, cancel or modify the Offering and to reject any
order in whole or in part.
MARCH 10, 2000
- --------------
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") under Section 12 of the
Act. In accordance therewith, the Company will file reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information filed by the Company can be
inspected and copied at the principal office of the Commission, Public
Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies can be
obtained from the Commission at prescribed rates by writing to the Commission
at
450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of such Web site is http://www.sec.gov.
The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to sales of the shares of Common Stock offered
hereby. This Prospectus omits certain information contained in the Registration
Statement. For further information, reference is made to the Registration
Statement, the exhibits and financial statements filed as a part thereof, which
may be examined without charge at the office of the Commission, and photocopies
of which, or any portion thereof, may be obtained upon payment of the
prescribed
fee.
Statements contained in this Prospectus as to the contents of any agreement or
other document referred to are not complete, and where such agreement or other
document is an exhibit to the Registration Statement, each statement is deemed
to be qualified and amplified in all respects by the provisions of the exhibit.
PROSPECTUS SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND
CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS, INCLUDING THE INFORMATION SET FORTH UNDER "RISK
FACTORS." CERTAIN STATEMENTS CONTAINED IN THE PROSPECTUS SUMMARY AND ELSEWHERE
IN THIS PROSPECTUS REGARDING MATTERS THAT ARE NOT HISTORICAL FACTS, SUCH AS
STATEMENTS REGARDING GROWTH TRENDS IN THE INDUSTRY AND THE COMPANY'S GROWTH
STRATEGY AND PLANS TO INTRODUCE ADDITIONAL PRODUCTS OR SERVICES, ARE
FORWARD-LOOKING STATEMENTS (AS SUCH TERM IS DEFINED IN THE SECURITIES ACT).
SINCE SUCH FORWARD-LOOKING STATEMENTS INCLUDE RISKS AND UNCERTAINTIES, ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCHs
STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED HEREIN UNDER "RISK FACTORS,"
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" AND "BUSINESS," AS WELL AS THOSE DISCUSSED ELSEWHERE IN THIS
PROSPECTUS.
EXCEPT AS OTHERWISE SPECIFIED, ALL SHARE, PER SHARE AND FINANCIAL INFORMATION
SET FORTH HEREIN GIVES EFFECT TO A ONE THOUSAND-TO-ONE FORWARD STOCK SPLIT
EFFECTED IN JANUARY, 2000. UNLESS THE CONTEXT OTHERWISE REQUIRES, REFERENCES
HEREIN TO THE "COMPANY" OR "FAR REACH " REFER TO FAR REACH HOLDINGS, LTD., AND
ITS SUBSIDIARIES.
THE COMPANY
Far Reach Holdings, Ltd. is a development stage company, organized under the
laws of the state of Nevada on May 23, 1996. The Company is not engaged in
any operations other than organizational matters. It was formed specifically
to be a blank check or shell corporation, for the purpose of either merging
with or acquiring an operating company with operating history and assets.
The primary activity of the Company will involve seeking merger or
acquisition candidates with whom it can either merge or acquire. The
Company has not selected any company for acquisition or merger and does
not intend to limit potential acquisition candidates to any particular field
or industry, but does retain the right to limit acquisition or merger
candidates, if it so chooses, to a particular field or industry. The
Company's plans are in the conceptual stage only.
CORPORATE BACKGROUND
The Company was organized on May 23, 1996, and has never commenced
operations.
The Company is a "blank check" or "shell corporation", in the development
stage, whose plan of operations is limited to locating a merger or
acquisition
candidate. The Company's common stock is not listed on any recognized
exchange or quoted on any quotation medium. There can be no assurance that
the Company will ever acquire a suitable merger or acquisition candidate or
that its common stock will ever develop a market.
THE OFFERING
Common Stock Offered......................... Up to 10,000 shares
Common Stock Outstanding after the
Offering................................... 1,010,000 shares(1)
Use of Proceeds.............................. Working capital
Symbol....................................... None
Risk Factors................................. The shares of Common Stock
offered hereby involve a high degree of risk and immediate substantial
dilution. See "Risk Factors" and "Dilution"
------------------------
(1) Figures are based on the current outstanding shares of 1,000,000.
SUMMARY FINANCIAL DATA
The following summary financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements, including the Notes
thereto, included elsewhere in this Prospectus. The statement of operations
data for the years ended 1998 and 1999 and the consolidated balance sheet
data
at December 31, 1999 are derived from the Company's audited Consolidated
Financial Statements included elsewhere in this Prospectus. The consolidated
statement of operations data for the years ended 1998 and 1999 are derived
from the Company's audited financial statements for those years, which are
included in this Prospectus. These statements include all adjustments that
the
Company considers necessary for a fair presentation of the financial position
and results of operations at that date and for such periods. The operating
results for the year ended 1999 are not necessarily indicative of the results
to be expected for the full year or for any future period.
BALANCE SHEET DATA:
December 31,
---------------------
1999 1998
------- -------
Assets: ............................................$ -- $ --
======= =======
Liabilities - Accounts Payable .....................$ -- $ 200
------- -------
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 1,000,000 shares at December 31,
1999 and 1998 .................................. 1,000 1,000
Paid-In Capital ............................... 440 --
Retained Deficit ............................... (1,200)(1,200)
Deficit Accumulated During the
Development Stage .............................. (240) --
- ------- -------
Total Stockholders' Equity .................... -- (1,200)
------- -------
Total Liabilities and
Stockholders' Equity ........................ $ -- $ --
======= =======
STATEMENT OF OPERATIONS DATA:
Cumulative
For year ended Since
Inception
December 31, of Development
-------------- Stage
1999 1998
----- ----- -----
Revenues: ............................... $ -- $ -- $ --
Expenses: .................................. 240 100 240
----- ----- -----
Net Loss .............................. $(240) $ (100) $ (240)
----- ----- -----
Basic & Diluted loss per share ............$ -- $ --
===== =====
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RISK FACTORS
PROSPECTIVE INVESTORS IN THE SHARES OFFERED HEREBY SHOULD CAREFULLY CONSIDER
THE FOLLOWING RISK FACTORS, IN ADDITION TO THE OTHER INFORMATION APPEARING IN
THIS PROSPECTUS.
LIMITED OPERATING HISTORY; HISTORY OF LOSSES; SIGNIFICANT ACCUMULATED AND
WORKING CAPITAL DEFICITS
The Company is a development stage company which has no operating history upon
which an evaluation of its future performance and prospects can be made. The
Company's prospects must be considered in light of the risks, expenses, delays
and difficulties frequently encountered in establishing a new business in an
emerging and evolving industry characterized by intense competition. Since
inception, the Company has incurred significant losses.
BLANK CHECK COMPANY
The Company is a blank check company whose only plan of operations is to seek
to acquire an operating company with income and/or assets with which to merge
or acquire. There can be no assurance that the Company will be successful in
finding such a merger or acquisition candidate, and the investor should be
prepared to lose his or her entire investment.
INTENSE COMPETITION
It is unknown what industry the Company's potential merger/acquisition
candidate will be from. However, most industries are generally intensely
competitive, rapidly evolving and subject to constant technological change.
Competitors with greater financial resources than the Company are more
equipped to compete with the Company in any industry. There can be no
assurance that the Company will be able to compete successfully in any
chosen.
DEVELOPMENT STAGE COMPANY
The Company is still in the development stage and has not commenced
operations. Its operations are subject to all of the risks inherent in
establishing a new business enterprise. The Company's potential for success
must be considered in light of the problem, expenses, difficulties,
complications and delays frequently encountered in connection with a new
business. No assurance can be given that the Company Post will be
successful.
LIMITED CAPITAL AND NEED FOR SIGNIFICANT ADDITIONAL FINANCING
The Company anticipates that the net proceeds of this offering will satisfy
its operating cash requirements for at least 12 months after this offering is
consummated. However, no assurance can be given that The Company will not
require additional financing sooner than currently anticipated. In order to
continue with its planned operations, the Company is dependent upon additional
equity financing. There can be no assurance that additional equity financing
can be obtained.
NO PUBLIC MARKET AND POSSIBLE VOLATILITY OF COMMON STOCK PRICES
Prior to this offering, the Company's common shares have never been freely
traded and there is no public market for its stock. No assurance can be given
that an active public market will develop or be sustained after the offering.
There also can be no assurance that the Company's securities will be quoted on
any recognized quotation medium. The initial public offering price of the
shares has been arbitrarily determined by the Company. The trading price of
the
securities could be subject to wide fluctuations in response to quarter-to-
quarter variations in operating results, announcements, and other events or
factors. In addition, the stock market has from time to time experienced
extreme price and volume fluctuations which have particularly affected the
market price for many companies and which often have been unrelated to the
operating performance of these companies. These broad market fluctuations may
adversely affect the market price of the securities.
PENNY STOCK RESTRICTIONS
The Company's securities are not currently quoted on any recognized quotation
medium. While there can be no assurance that any public market will ever
develop for the Company's common stock, if such a market should develop, trading
the Company's Common Stock would be subject to the requirements of certain rules
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), which require additional disclosure by broker-dealers in connection with
any trades involving a stock defined as a penny stock (generally, any non-Nasdaq
equity security that has a market price of less than $5.00 per share, subject to
certain exceptions). Such rules require the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith, and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors (generally institutions). For these types of
transactions, the broker-dealer must make a special suitability determination
for the purchaser and have received the purchaser's written consent to the
transaction prior to sale. The additional burdens imposed upon broker-dealers by
such requirements may discourage them from effecting transactions in the
Company's securities, which could severely limit the liquidity of the Company's
securities and the ability of purchasers in this Offering to sell such
securities in the secondary market.
BROAD DISCRETION IN APPLICATION OF NET PROCEEDS BY MANAGEMENT
The estimated net proceeds of the Offering has been allocated to working
capital and general corporate purposes. Accordingly, the Company's management
will have broad discretion as to the application of these proceeds. A portion of
the proceeds allocated to working capital may be used by the Company to pay
salaries, including salaries of its executive officers, and for acquisitions.
Although the Company currently has no agreement, arrangement or understanding
with respect to any acquisition, should an acquisition opportunity be identified
by the Company, the Board of Directors may have the ability to approve such
acquisition without seeking stockholder approval.
RELATED PARTY TRANSACTIONS; POSSIBLE CONFLICTS OF INTEREST
The Company has engaged in transactions with certain of its officers,
directors and principal stockholders. The terms of such transactions were
determined without arms' length negotiations and could create, or appear to
create, potential conflicts of interest which may not necessarily be resolved in
the Company's favor. See "Certain Transactions."
DILUTION
The public offering price is substantially higher than the net tangible book
value per share of the currently outstanding Common Stock. Investors purchasing
shares of Common Stock in the Offering will therefore experience immediate
dilution in net tangible book value, assuming a $1.00 per share offering price.
See "Dilution."
POTENTIAL ACQUISITION TO BE LIMITED TO ONE BUSINESS VENTURE
Management anticipates that it will only participate in one potential
business venture. This lack of diversification should be considered a
substantial risk in investing in the Company because it will not permit
the Company to offset potential losses from one venture against gains from
another.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby are estimated to be approximately $10,000. The Company intends to
use these proceeds for working capital and general corporate purposes. The
allocation of the net proceeds of the Offering set forth above represents the
Company's best estimates based upon its current plans and certain assumptions
regarding industry and general economic conditions and the Company's future
revenues and expenditures. If any of these factors change, the Company may
find it necessary or advisable to reallocate some of the proceeds within the
above-described categories.
Proceeds not immediately required for the purposes described above will be
invested temporarily, pending their application as described above, in
short-term United States government securities, short-term bank certificates of
deposit, money market funds or other investment grade, short-term, interest-
bearing instruments.
The Company anticipates, based on currently proposed plans and assumptions
relating to its operations (including the costs associated with its growth
strategy), that the proceeds of the Offering, if at least the minimum number of
shares are sold, together with its existing financial resources and cash flow
from operations, should be sufficient to satisfy its anticipated cash
requirements for the next twelve months; however, there can be no assurance that
this will be the case. The Company's actual cash requirements may vary
materially from those now planned and will depend upon numerous factors,
including the general market acceptance of the Company's new and existing
products and services, the growth of the Company's distribution channels, the
technological advances and activities of competitors, and other factors. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
DIVIDEND POLICY
The Company has never declared or paid cash dividends on its capital stock.
The Company currently intends to retain earnings, if any, to finance the growth
and development of its business and does not anticipate paying any cash
dividends in the foreseeable future.
PRICE RANGE OF SECURITIES
The Company's common stock is not listed or quoted at the present time, and
there is no present public market for the Company's common stock. The Company
has obtained a market maker who has filed an application for the Company's
securities to be quoted on the NASD OTC Bulletin Board, but there can be no
assurance that the Company's stock will be quoted on the NASD OTC Bulletin
Board. The Company has already filed a Form 10SB with the S.E.C., which has
become effective with no pending comments by the S.E.C. There can be no
assurance that the NASD will accept the Company's market maker's application on
Form 211. Thus, there can be no assurance that a public market for the
Company's common stock will ever develop.
CAPITALIZATION
The following table sets forth the short-term debt and capitalization of the
Company as of December 31, 1999, and the pro forma capitalization of the Company
as of May 31, 2000, giving effect to the sale of the of 10,000 shares at the
price of $1.00 share, after deducting estimated offering expenses. The table
should be read in conjunction with the Consolidated Financial Statements,
including the Notes thereto, appearing elsewhere in this Prospectus.
[CAPTION]
BALANCE SHEET DATA:
---------------------
12/31/99 5/31/2000
-------- ---------
Assets: $ -- $ 10,000
======= =======
Liabilities - Accounts Payable $ -- $ --
------- -------
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 1,000,000 shares at December 31,
1999 1,000 1,050
Paid-In Capital 440 48,950
Retained Deficit (1,200) (1,200)
Deficit Accumulated During the
Development Stage (240) (248)
------- -------
Total Stockholders' Equity -- (200)
------- -------
Total Liabilities and
Stockholders' Equity $ -- $ 8,552
======= =======
DILUTION
As of December 31, 1999, the Company's net tangible book value was $0, or $0 per
share of common stock. Net tangible book value is the aggregate amount of The
Company's tangible assets less its total liabilities. Net tangible book value
per share represents the Company's total tangible assets less its total
liabilities, divided by the number of shares of common stock outstanding. After
giving effect to the sale of 10,000 shares at an offering price of $1.00 per
share of Common Stock, application of the estimated net sale proceeds (after
deducting offering expenses), The Company's net tangible book value as of the
closing of this offering would increase from $0 to $.008. This represents an
immediate increase in the net tangible book value of $.008 per share to current
shareholders, and immediate dilution of $.992 per share to new investors, as
illustrated in the following table:
Public offering price per
share of common stock $1.00
Net tangible book value per share before offering................ $0
Increase per share attributable to new investors................... $.008
Net tangible book value per share after offering................... $.008
Dilution per share to new investors................................ $0.992
Percentage dilution................................................ 99.2%
SELECTED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements, including
the Notes thereto, included elsewhere in this Prospectus. The statement of
operations data for the years ended 1998 and 1999 and the balance sheet data at
1998 and 1999 are derived from the Company's Consolidated Financial
Statements, which have been audited by the Company's independent auditors,
included elsewhere in this Prospectus, and include all adjustments that the
Company considers necessary for a fair presentation of the financial position
and results of operations at that date and for such periods.
[CAPTION]
BALANCE SHEET DATA:
---------------------
12/31/99 12/31/98
------- -------
Assets: ......................................$ -- $ --
======= =======
Liabilities - Accounts Payable .............. $ -- $ 200
------- -------
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 1,000,000 shares at December 31,
1999 and 1,000 at Dec. 31,1998 1,000 100
Paid-In Capital 440 --
Retained Deficit (1,200) (1,200)
Deficit Accumulated During the
Development Stage (240) --
------- -------
Total Stockholders' Equity -- (1,000)
------- -------
Total Liabilities and
Stockholders' Equity $ -- $ --
======= =======
[CAPTION]
STATEMENT OF OPERATIONS DATA: Cumulative
since
inception
For the year ended of
December 31, development
----------------- stage
1999 1998
----- ----- -----
Revenues: $ - $ -- $ --
Expenses: 240 100 240
----- ----- -----
Net Loss ........... $ (240) $(100) $ (240)
----- ----- -----
Basic & Diluted loss per share ........$ -- $ --
===== =====
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements, including the Notes thereto, appearing
elsewhere in this Prospectus.
COMPANY OVERVIEW
The Company was organized on May 23, 1996, and has never commenced operations.
The Company is a "blank check" or "shell corporation", in the development
stage, whose plan of operations is limited to locating a merger or acquisition
candidate. The Company's common stock is not listed on any recognized
exchange or quoted on any quotation medium. There can be no assurance that
the Company will ever acquire a suitable merger or acquisition candidate or
that its common stock will ever develop a market.
PLAN OF OPERATIONS-IN GENERAL
The Company was organized for the purpose of creating a corporate vehicle
to seek, investigate and, if such investigation warrants, acquire an interest
in one or more business opportunities presented to it by persons or firms who
or which desire to seek perceived advantages of a publicly held corporation.
At this time, the Company has no plan, proposal, agreement, understanding
or arrangement to acquire or merge with any specific business or company, and
the Company has not identified any specific business or company for
investigation and evaluation. No member of Management or promoter of the
Company has had any material discussions with any other company with respect
to any acquisition of that company. The Company will not restrict its search to
any specific business, industry or geographical location, and the Company may
participate in a business venture of virtually any kind or nature. The
discussion of the proposed business under this caption and throughout is
purposefully general and is not meant to be restrictive of the Company's
virtually unlimited discretion to search for and enter into potential business
opportunities. The Company's plan of operations over the next 12 months
includes the seeking of acquisition or merger opportunities. During the next
twelve months, the Company plans to satisfy its cash requirements by additional
equity financing. There can be no assurance that the company will be successful
in raising additional equity financing, and, thus, be able to satisfy its cash
requirements, which primarily consist of legal and accounting fees at the
present time. If the company is not able to raise equity capital, and it
presently has no cash with which to satisfy any future cash requirements. The
company will need a minimum of $10,000 to satisfy its cash requirements for the
next 12 months. The company will not be able to operate if it does not obtain
equity financing. The Company has no current material commitments. The Company
depends upon capital to be derived from future financing activities such as
subsequent offerings of its stock. There can be no assurance that the Company
will be successful in raising the capital it requires. The company does not
anticipate any further research and development of any products, nor does it
expect to incur any research and development costs. The company does not expect
the purchase or sale of plant or any significant equipment, and it does not
anticipate any change in the number of its employees. The Company has no
current material commitments. The Company has generated no revenue since its
inception.
The Company is still considered to be a development stage company, with no
significant revenue, and is dependent upon the raising of capital through
placement of its common stock. There can be no assurance that the Company will
be successful in raising the capital it requires through the sale of its common
stock.
The Company intends to utilize the proceeds from this offering or to obtain
funds in one or more private placements to finance the operation of any acquired
business. Persons purchasing securities in these placements and other
shareholders will likely not have the opportunity to participate in the
decision relating to any acquisition. The Company's proposed business is
sometimes referred to as a "blind pool" because any investors will entrust
their investment monies to the Company's management before they have a chance
to analyze any ultimate use to which their money may be put.
Consequently, the Company's potential success is heavily dependent on the
Company's management, which will have virtually unlimited discretion in
searching for and entering into a business opportunity. None of the officers and
directors of the Company has had any experience in the proposed business of the
Company. There can be no assurance that the Company has had any experience in
the proposed business of the Company. There can be no assurance that the Company
will be able to raise any funds in private placement. In any private placement,
management may purchase shares on the same terms as offered in the private
placement.
Management anticipates that it will only participate in one potential business
venture. This lack of diversification should be considered a substantial risk in
investing in the Company because it will not permit the Company to offset
potential losses from one venture against gains from another. The Company may
seek a business opportunity with a firm that only recently commenced
operations, or a developing company in need of additional funds for expansion
into new products or markets, or an established company seeking a public
vehicle. In some instances, a business opportunity may involve the
acquisition or merger with a corporation which does not need substantial
additional cash but which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish wholly owned
subsidiaries in various business or purchase existing businesses as
subsidiaries. The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely risky. Because
of general economic conditions, rapid technological advances being made in some
industries, and shortages of available capital, management believes that
there are numerous firms seeking the benefits of a publicly traded
corporation. Such perceived benefits of a publicly traded corporation may
include facilitating or improving the terms on which additional equity
financing may be sought, providing liquidity for the principals of a
business, creating a means for providing incentive stock options or
similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statues) for all shareholders, and other factors.
Potentially available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. As is customary in the industry, the
Company may pay a finder's fee for locating an acquisition prospect. If
any such fee is paid, it will be approved by the Company's Board of Directors
and will be in accordance with the industry standards. Such fees are
customarily between 1% and 5% of the size of the transaction, based upon a
sliding scale of the amount involved. Such fees are typically in the range of 5%
on a $1,000,000 transaction ratably down to 1% in a $4,000,000 transaction.
Management had adopted a policy that such a finder's fee or real estate
brokerage fee could, in certain circumstances, be paid to any employee, officer,
director or 5% shareholder of the Company, if such person plays a material role
in bringing a transaction to the Company. As part of any transaction, the
acquired company may require that Management or other stockholders of the
Company sell all or a portion of their shares to the acquired company, or to the
principals of the acquired company. It is anticipated that the sales price of
such shares will be lower than the anticipated market price of the Company's
Common Stock at such a time. The Company's funds are not expected to be used
for purposes of any stock purchase from insiders. The Company
shareholders will not be provided the opportunity to approve or consent to such
sale. The opportunity to sell all or a portion of their shares in
connection with an acquisition may influence management's decision to enter
into a specific transaction. However, management believes that since the
anticipated sales price will potentially be less than market value, that the
potential of a stock sale will be a material factor in their decision to
enter a specific transaction. The above description of potential sales of
management stock is not based upon any corporate bylaw, shareholder or board
resolution, or contract or agreement. No other payments of cash or property
are expected to be received by Management in connection with any acquisition.
The Company has not formulated any policy regarding the use of consultants or
outside advisors, but does not anticipate that it will use the services of
such persons.
The Company has, and will continue to have, insufficient capital with which
to provide the owners of business opportunities with any significant cash or
other assets. However, management believes the Company will offer owners of
business opportunities the opportunity to acquire a controlling ownership
interest in a public company at substantially less cost than is required to
conduct an initial public offering. The owners of the business opportunities
will, however, incur significant post-merger or acquisition registration costs
in the event they wish to register a portion of their shares for subsequent
sale. The Company will also incur significant legal and accounting costs in
connection with the acquisition of a business opportunity including the
costs of preparing post-effective amendments, Forms 8-K, agreements and
related reports and documents. However, the officers and directors of the
Company have not conducted market research and are not aware of statistical data
which would support the perceived benefits of a merger or acquisition
transaction for the owners of a business opportunity.
The Company does not intend to make any loans to any prospective merger
or acquisition candidates or unaffiliated third parties.
LIQUIDITY AND CAPITAL RESOURCES
The Company has never previously undertaken an offering of its common stock.
Current expenses of the Company have been contributed by its founder. The
Company has no assets and thus no liquidity and no capital resources.
BUSINESS
THE COMPANY
The Company has not engaged in any operations other than organizational matters.
It was formed in May, 1996, specifically to be a "blank check" or "shell"
corporation, for the purpose of either merging with or acquiring an operating
company with operating history and assets.
The primary activity of the Company will involve seeking merger or acquisition
candidates. The Company has not selected any company as an acquisition or
merger candidate and does not intend to limit any potential acquisition
candidate to any particular field or industry, but does, in its sole discretion,
retain the right to limit said candidates to a particular field or industry.
The Company's plan are in the conceptual stage only.
SOURCES OF OPPORTUNITIES
The Company anticipates that business opportunities for possible acquisition
will be referred by various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists, members
of the financial community, and others who may present unsolicited proposals.
The Company will seek a potential business opportunity from all known sources,
but will rely principally on personal contacts of its officers and directors as
well as indirect associations between them and other business and professional
people. It is not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or reorganizations. The
officers and directors of the Company are currently employed in other positions
and will devote only a portion of their time (not more than a couple hours per
week) to the business affairs of the Company, until such time as an acquisition
has been determined to be highly favorable, at which time they expect to spend
full time in investigating and closing any acquisition. In addition, in the
face of competing demands for their time, the officers and directors may
grant priority to their full-time positions rather than to the Company.
EVALUATION OF OPPORTUNITIES
The analysis of new business opportunities will be undertaken by or under
the supervision of the officers and directors of the Company. Management
intends to concentrate on identifying prospective business opportunities
that may be brought to its attention through present associations with
management.
In analyzing prospective business opportunities, management will consider such
matters as the available technical, financial and managerial resources; working
capital and other financial requirements; history of operation, if any;
prospects for the future; present and expected competition; the quality and
experience of management services which may be available and the depth of that
management; the potential for further research, development or exploration;
specific risk factors not now foreseeable but which then may be anticipated to
impact the proposed activities of the Company; the potential for growth or
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services or trades; name identification; and other
relevant factors. Officers and directors of each Company will meet personally
with management and key personnel of the firm sponsoring the business
opportunity as part of their investigation. To the extent possible, the Company
intends to utilize written reports and personal investigation to evaluate the
above factors. The Company will not acquire or merge with any company for which
audited financial statements cannot be obtained.
It may be anticipated that any opportunity in which the Company
participates will present certain risks. Many of these risks cannot be
adequately identified prior to selection of the specific opportunity, and the
Company's shareholders must, therefore, depend on the ability of management
to identify and evaluate such risk. In the case of some of the opportunities
available to the Company, it may be anticipated that the promoters thereof
have been unable to develop a going concern or that such business is in its
development stage in that it has not generated significant revenues from its
principal business activities prior to the Company's participation. There is
a risk, even after the Company's participation in the activity and the
related expenditure of the Company's funds, that the combined
enterprises will still be unable to become a going concern or advance beyond
the development stage. Many of the opportunities may involve new and untested
products, processes, or market strategies that may not succeed. The Company
and, therefore, its shareholders will assume such risks.
The Company will not restrict its search for any specific kind of business,
but may acquire a venture which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its corporate
life. It is currently impossible to predict the status of any business in which
the Company may become engaged, in that such business may need additional
capital, may merely desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture,
franchise or licensing agreement with another corporation or entity. It may also
purchase stock or assets of an existing business. On the consummation of a
transaction, it is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a majority or all of
the Company's officers and directors may, as part of the terms of the
acquisition transaction, resign and be replaced by new officers and directors
without a vote of the Company's shareholders.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable Federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, the Company may agree to register such securities either at
the time the transaction is consummated, under certain conditions or at
specified time thereafter. The issuance of substantial additional securities and
their potential sale into any trading market in the Company's Common Stock may
have a depressive effect on such market. While the actual terms of a transaction
to which the Company may be a party cannot be predicted, it may be expected that
the parties to the business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the acquisition in a so called
"tax free" reorganization under Sections 368(a)(1) or 351 of the Internal
Revenue Code of 1986, as amended (the "Code"). In order to obtain tax-free
treatment under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company, including past and
current investors, would retain less than 20% of the issued and outstanding
shares of the surviving entity, which could result in significant dilution
in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check reference of management and key personnel,
and take other reasonable investigative measures, to the extent of the
Company's limited financial resources and management expertise. The manner in
which each Company participates in an opportunity will depend on the nature of
the opportunity, the respective needs and desires of the Company and other
parties, the management of the opportunity, and the relative negotiating
strength of the Company and such other management.
With respect to any mergers or acquisitions, negotiations with target company
management will be expected to focus on the percentage of the Company which
target company shareholders would acquire in exchange for their share holdings
in the target company. Depending upon, among other things, the target
company's assets and liabilities, the Company's shareholders will in all
likelihood hold a lesser percentage ownership interest in the Company
following any merger or acquisition. The percentage ownership may be subject to
significant reduction in the event that the Company acquires a target company
with substantial assets. Any merger or acquisition effected by the Company
can be expected to have a significant dilution effect on the percentage of
shares held by the Company's then shareholders, including past and current
investors.
The Company will not have sufficient funds (unless it is able to raise funds
in a private placement) to undertake any significant development, marketing
and manufacturing of any products which may be acquired. Accordingly, following
the acquisition of any such product, the Company will, in all likelihood,
be required to either seek debt or equity financing or obtain funding from
third parties, in exchange for which the Company would probably be required to
give up a substantial portion of its interest in any acquired product.
There is no assurance that the Company will be able either to obtain additional
financing or interest third parties in providing funding for the further
development, marketing and manufacturing of any products acquired.
It is anticipated that the investigation of specific business opportunities and
the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision were made not to participate in a specific business opportunity the
costs therefore incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the participation in a specific
business opportunity, the failure to consummate that transaction may result in
the loss of the Company of the related costs incurred.
Management believes that the Company may be able to benefit from the use of
"leverage" in the acquisition of a business opportunity. Leveraging a
transaction involves the acquisition of a business through incurring significant
indebtedness for a large percentage of the purchase price for that business.
Through a leveraged transaction, the Company would be required to use less of
its available funds for acquiring the business opportunity and, therefore, could
commit those funds to the operations of the business opportunity, to acquisition
of other business opportunities or to other activities. The borrowing involved
in a leveraged transaction will ordinarily be secured by the assets of the
business opportunity to be acquired. If the business opportunity acquired is not
able to generate sufficient revenues to make payments on the debt incurred by
the Company to acquire that business opportunity, the lender would be able
to exercise the remedies provided by law or by contract. These
leveraging techniques, while reducing the amount of funds that the Company
must commit to acquiring a business opportunity, may correspondingly increase
the risk of loss to the Company. No assurance can be given as to the terms or
the availability of financing for any acquisition by the Company. During periods
when interest rates are relatively high, the benefits of leveraging are
not as great as during periods of lower interest rates because the
investment in the business opportunity held on a leveraged basis will only
be profitable if it generates sufficient revenues to cover the related debt
and other costs of the financing. Lenders from which the Company may obtain
funds for purposes of a leveraged buy-out may impose restrictions on the
future borrowing, distribution, and operating policies of the Company. It
is not possible at this time to predict the restrictions, if any, which lenders
may impose or the impact thereof on the Company.
PROPERTIES
The company has an oral agreement with the Company president for use of office
space, telephones and secretarial services supplied free of charge to the
Company. The Company has no other property.
COMPETITION
The Company is an insignificant participant among firms which engage in business
combinations with, or financing of, development stage enterprises. There are
many established management and financial consulting companies and venture
capital firms which have significantly greater financial and personnel
resources, technical expertise and experience than the Company. In view of the
Company's limited financial resources and management availability, the Company
will continue to be at a significant competitors.
REGULATION AND TAXATION
The Investment Company Act of 1940 defines an "investment company" as an issuer
that is or holds itself out as being engaged primarily in the business of
investing, reinvesting or trading of securities. While the Company does not
intend to engage in such activities, the Company could become subject to
regulation under the Investment Company Act of 1940 in the event the Company
obtains or continues to hold a minority interest in a number of development
stage enterprises. The Company could be expected to incur significant
registration and compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to review the
Company's activities from time to time with a view toward reducing the
likelihood that the Company could be classified as an "investment company."
The Company intends to structure a merger or acquisition in such a manner as
to minimize Federal and state tax consequences to the Company and to any
target company.
PATENTS
The Company owns no patents and no Internet domain names.
EMPLOYEES
The Company's only employees at the present time is its sole officer
and director, who will devote as much time as the Board of Directors
determine is necessary to carry out the affairs of the Company. (See
Directors, Executive Officers, Promoters and Control Persons").
LEGAL PROCEEDINGS
The Company is not subject to any pending litigation, legal proceedings or
claims.
MANAGEMENT
EXECUTIVE OFFICERS, KEY EMPLOYEES AND DIRECTORS
The members of the Board of Directors of the Company serve until the next
annual meeting of stockholders, or until their successors have been
elected. The officers serve at the pleasure of the Board of Directors.
The current executive officers, key employees and directors of the Company
are
as follows:
NAME AGE POSITION
Shirley Bethurum 71 Pres./Sec./Dir.
SHIRLEY BETHURUM. Shirley Bethurum, 71, has been Sole Director, President
and Secretary of the Company since her appointment on May 27, 1996. Ms. Bethurum
has been a principal of several start-up companies. Her experience and
skills include office management, manufacturing design and equipment
purchase, purchase and supply management, direct sales and advertising
implementation, warehouse management and fulfillment, new product introduction
and start-up and financial management. Since 1978, Ms. Bethurum has been the
general manager of Bethurum Research and Development, a pharmaceutical and
laboratory company which develops, manufactures, markets and sells several
environmentally-safe products. including Easy-Ivy (TM), Beach-Aid (TM),
Inter-Fear-On-Magic (TM) and Bushwhacker (TM). Additionally Ms. Bethurum
serves as an officer and director from time to time for other for profit
corporations, some of which maintain a public trading status.
EXECUTIVE COMPENSATION
No compensation is paid or anticipated to be paid by the Company. It is
possible that upon an acquisition some compensation may be paid to
management. On acquisition of a business opportunity, current management
may resign and be replaced by persons associated with the business
opportunity acquired, particularly if the Company participates in a business
opportunity by effecting a reorganization, merger or consolidation. If any
member of current management remains after effecting a business opportunity
acquisition, that member's time commitment will likely be adjusted based
on the nature and method of the acquisition and location of the business
which cannot be predicted. Compensation of management will be determined by the
new board of directors, and shareholders of the Company will not have the
opportunity to vote on or approve such compensation.
Directors currently receive no compensation for their duties as directors.
EMPLOYMENT AGREEMENTS
The Company has not entered into any employment agreements with any of its
employees, and employment arrangements are all subject to the discretion of the
Company's sole director, Shirley Bethurum.
PRINCIPAL STOCKHOLDERS
The following table presents certain information regarding beneficial
ownership of the Company's Common Stock as of December 31, 1999, by (I) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each Named Executive Officer and (iv) all directors and executive officers as a
group. Unless otherwise indicated, each person in the table has sole voting and
investment power as to the shares shown.
Shares Percent Percent
Beneficially Before After
Name and Address of Beneficial Owner Owned Offering Offering
---------------------------------- -------- -------- -------
Shirley Bethurum 800,000 80% 76.19%
CERTAIN TRANSACTIONS
In connection with organizing the Company, on June 10, 1996, persons
consisting of its officers, directors, and other individuals were issued a
total of 1,000 shares of Common Stock without nominal or par value. On
November 11, 1999, the outstanding shares were forward split 100 to 1 and the
par value was changed to $.001, resulting in a total of 1,000,000 shares
outstanding. Under Rule 405 promulgated under the Securities Act of 1933, Ms
Bethurum may be deemed to be a promoter of the Company. No other persons are
known to Management that would be deemed to be promoters.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 100,000,000 shares of
Common Stock, $.001 par value per share. Upon consummation of this Offering,
there will be outstanding 1,010,000 shares of Common Stock.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders, including the election of
directors.
Holders of common stock do not have subscription, redemption or conversion
rights, nor do they have any preemptive rights. Holders of common stock do not
have cumulative coting rights, which means that the holders of more than half of
all voting rights with respect to common stock and Preferred Stock can elect all
of the Company's directors. The Board of Directors is empowered to fill any
vacancies on the Board of Directors created by resignations, subject to quorum
requirements.
Holders of Common Stock will be entitled to receive such dividends, if any, as
may be declared from time to time by the Board of Directors out of funds legally
available therefor, and will be entitled to receive, pro rata, all assets of the
Company available for distribution to such holders upon liquidation.
All outstanding shares of Common Stock are, and the Common Stock offered hereby,
upon issuance and sale, will be, fully paid and nonassessable.
TRANSFER AGENT, WARRANT AGENT AND REGISTRAR
The transfer agent, warrant agent and registrar for the Common Stock is Alexis
Stock Transfer, P.O. Box 1405, Rancho Mirage, CA 92270.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this Offering, the Company will have 1,010,000 shares of
Common Stock outstanding. All shares sold in this offering will be freely
transferable without restriction or further registration under the Securities
Act of 1933, as amended. However, any share purchased by an affiliate (in
general, a person who is in a control relationship with the Company), will be
subject to the limitations of Rule 144 promulgated under the Securities Act.
Under Rule 144 as currently in effect, a person (or persons whose shares are
aggregated with those of others) whose restricted shares have been fully paid
for and meet the rule's one year holding provisions, including persons who
may
be deemed affiliates of the Company, may sell restricted securities in
broker's transactions or directly to market makers, provided the number of
shares sold in any three month period is not more than the greater of 1% of
the total shares of common stock then outstanding or the average weekly
trading volume for the four calendar week period immediately prior to each
such sale. After restricted securities have been fully paid for and held for
two years, restricted securities may be sold by persons who are not
affiliates
of the Company without regard to volume limitations. Restricted securities
held by affiliates must continue, even after the two year holding period, to
be sold in brokers' transactions or directly to market makers subject to the
limitations described above.
Prior to this offering, no public market has existed for the Company's shares of
common stock. However, the Company's market maker, National Capital, has filed
an application for a quotation with the National Quotation Bureau's "pink
sheets," which application is still pending. No predictions can be made as to
the effect, if any, that market shares or the availability of shares for sale
will have on the market price prevailing from time to time. The sale, or
availability for sale, of substantial amounts of common stock in the public
market could adversely affect prevailing market prices.
UNDERWRITING
This offering is self underwritten by the Company through its officers and
directors on a best efforts basis. Therefore, there is no underwriter or broker
compensation involved, and the Company is acting as its own underwriter.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Kenneth G. Eade, Santa Barbara, California.
EXPERTS
The Financial Statements and schedules of the Company as of December 31, 1999
and 1998 included in this Prospectus and elsewhere in the Registration
Statement have been audited by Robinson, Hill & Co., independent public
accountants for the Company, as set forth in its reports thereon appearing
elsewhere herein, and are included in reliance upon such reports, given upon the
authority of such firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission ("SEC") a
registration statement on Form SB-2 under Securities Act of 1933, as amended,
with respect to the securities. This prospectus, which forms a part of the
registration statements, does not contain all of the information set forth in
the registration statement as permitted by applicable SEC rules and regulations.
Statements in this prospectus about any contract, agreement or other document
are not necessarily complete. With respect to each such contract, agreement, or
document filed as an exhibit to the registration statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement is qualified in its entirety by this reference.
The registration statement may be inspected without charge and copies may be
obtained at prescribed rates at the SEC's public reference facilities at
Judiciary Plaza, 450 Fifth Street NW, Room 1024, Washington, DC 20549, or on the
Internet at http://www.sec.gov.
The Company will furnish to its shareholders annual reports containing audited
financial statements reported on by independent public accountants for each
fiscal year and make available quarterly reports containing unaudited financial
information for the first three quarters of each fiscal year.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FAR REACH HOLDINGS, LTD.
Independent Auditor's Report F-1
Balance Sheets F-2
Statements of Operations
For the Years Ended December 31, 1999 and 1998 .................... F-3
Statements of Changes in Stockholders' Equity
For the Years Ended December 31, 1999 and 1998 .................... F-4
Statements of Cash Flows
For the Years Ended December 31, 1999 and 1998 ................... F-5
Notes to Consolidated Financial Statements ....................... F-6
[CAPTION]
INDEPENDENT AUDITORS' REPORT
FAR REACH HOLDINGS, LTD.
(A Development Stage Company)
We have audited the accompanying balance sheets of Far Reach Holdings,
Ltd. (a development stage company) as of December 31, 1999 and 1998, and the
related statements of operations, stockholders' equity, and cash flows for
the two years ended December 31, 1999. These financial statements are
the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly,
in all material respects, the financial position of Far Reach Holdings,
Ltd. (a development stage company) as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for the two years ended
December 31, 1999 in conformity with generally accepted accounting principles.
Respectfully submitted
/s/ ROBISON, HILL & CO.
Certified Public Accountants
Salt Lake City, Utah
January 7, 2000
[CAPTION]
FAR REACH HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31,
---------------------
1999 1998
------- -------
Assets: ............................................$ -- $ --
======= =======
Liabilities - Accounts Payable .....................$ -- $ 200
------- -------
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 1,000,000 shares at December 31,
1999 and 1998 .................................. 1,000 1,000
Paid-In Capital .................................. 440 --
Retained Deficit ................................(1,200) (1,200)
Deficit Accumulated During the
Development Stage .............................. (240) --
------- -------
Total Stockholders' Equity .................... -- (200)
------- -------
Total Liabilities and
Stockholders' Equity ........................ $ -- $ --
======= =======
[CAPTION]
FAR REACH HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Cumulative
For year ended Since
Inception
December 31, of Development
-------------- Stage
1999 1998
----- ----- -----
Revenues: ........................ $ -- $ -- $ --
Expenses: ..................... 240 100 240
----- ----- -----
Net Loss $ (240) $(100) $(240)
----- ----- -----
Basic & Diluted loss per share ..... $ -- $
===== =====
[CAPTION]
FAR REACH HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
Deficit
Accumulated
During
Common Stock Paid-In Retained Development
Shares Par Value Capital Deficit Stage
------ ---------- ------- --------- --------
Balance at May 23, 1996 (inception) $ -- $ -- $ -- $ -- $ --
June 10, 1996 Issuance of Stock for
Services and payment
of Accounts Payable 1,000 1,000 -- -- --
Net Loss -- -- -- (1,000) --
--------- --------- --------- --------- ---------
Balance at December 31, 1996 -- -- -- (1,000) --
Net Loss -- -- -- 100 --
--------- --------- --------- --------- ---------
Balance at December 31, 1997
As Originally Reported 1,000 1,000 -- (1,100) --
Retroactive adjustment for 1,000
to 1 stock split 11/11, 1999 999,000 -- -- -- --
--------- --------- --------- --------- ---------
Restated balance January 1, 1998 1,000,000 1,000 -- (1,100) --
Net Loss -- -- -- (100) --
--------- --------- --------- --------- ---------
Balance at December 31, 1998 1,000,000 1,000 -- (1,200) --
Capital contributed by Shareholder -- -- 440
Net Loss -- -- -- -- (240)
--------- --------- --------- --------- ---------
Balance at December 31, 1999 1,000,000 $ 1,000 $ 440 $ (1,200) $ (240)
========= ========= ========= ========= =========
[CAPTION]
FAR REACH HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Cumulative
For year ended Since
Inception
December 31, of Development
-------------- Stage
1999 1998
----- ----- -----
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss ............................ $(240) $(100) $(240)
Increase (Decrease) in Accounts Payable (200) 100 (200)
----- ----- -----
Net Cash Used in operating activities ...... (440) -- (440)
----- ----- -----
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by
investing activities ............... -- -- --
----- ----- -----
CASH FLOWS FROM FINANCING
ACTIVITIES:
Capital contributed by shareholder ........ 440 -- 440
----- ----- -----
Net Cash Provided by
Financing Activities .................. 440 -- 440
----- ----- -----
Net (Decrease) Increase in
Cash and Cash Equivalents .......... -- -- --
Cash and Cash Equivalent
at Beginning of Period ............ -- -- --
----- ----- -----
Cash and Cash Equivalents
at End of Period ........... $ -- $ -- $ --
===== ===== =====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ -- $ -- $ --
Franchise and income taxes $ 300 $ -- 300
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES: None
[CAPTION]
FAR REACH HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for FAR REACH HOLDINGS, LTD. is
presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
ORGANIZATION AND BASIS OF PRESENTATION
The Company was incorporated under the laws of the State of Nevada on May 23,
1996. The Company ceased all operating activities during the period from May
23, 1996 to June 5, 1999 and was considered dormant. Since June 5, 1999, the
Company is in the development stage, and has not commenced planned principal
operations.
NATURE OF BUSINESS
The Company has no products or services as of December 31, 1999. The Company
was organized as a vehicle to seek merger or acquisition candidates. The
Company intends to acquire interests in various business opportunities, which in
the opinion of management will provide a profit to the Company.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents to the extent the funds are not being held for
investment purposes.
PERVASIVENESS OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
LOSS PER SHARE
The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
Per-Share
INCOME SHARES AMOUNT
(Numerator) (Denominator)
FOR THE YEAR ENDED DECEMBER 31, 1999
Basic Loss per Share
Loss to common shareholders ........... $ (240) 1,000,000 $ --
========= ========= =========
FOR THE YEAR ENDED DECEMBER 31, 1998
Basic Loss per Share
Loss to common shareholders ............ $ (100) 1,000,000 $ --
========= ========= =========
The effect of outstanding common stock equivalents would be
anti-dilution for December 31, 1999 and 1998 and are thus not considered.
NOTE 2 - INCOME TAXES
As of December 31, 1999, the Company had a net operating loss carry
forward for income tax reporting purposes of approximately $1,000 that may be
offset against future taxable income through 2011. Current tax laws limit the
amount of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available
to offset future taxable income may be limited. No tax benefit has been
reported in the financial statements, because the Company believes there is a
50% or greater chance the carry forwards will expire unused. Accordingly,
the potential tax benefits of the loss carry forwards are offset by a
valuation allowance of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS
As of December 31, 1999 all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use
of these facilities and there are no commitments for future use of the
facilities.
NOTE 5 - STOCK SPLIT
On November 11, 1999 the Board of Directors authorized 1,000 to 1 stock
split, changed the authorized number of shares to 100,000,000 shares and the
par value to $.001 for the Company's common stock. As a result of the split,
999,000 shares were issued. All references in the accompanying financial
statements to the number of common shares and per-share amounts for 1999
and 1998 have been restated to reflect the stock split.
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE SECURITIES OFFERED BY THIS PROSPECTUS, OR AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES BY ANY PERSON IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IS UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS.
TABLE OF CONTENTS
PAGE
---------
Available Information...........................
Prospectus Summary..............................
Risk Factors....................................
Use of Proceeds.................................
Dividend Policy.................................
Price Range of Securities.......................
Capitalization..................................
Dilution........................................
Selected Consolidated Financial Data............
Management's Discussion and Analysis of
Financial Condition and Results of
Operations....................................
Business........................................
Management......................................
Certain Transactions............................
Principal Stockholders..........................
Description of Securities.......................
Shares Eligible for Future Sale.................
Underwriting....................................
Legal Matters...................................
Experts.........................................
Index to Financial Statements...................
[CAPTION]
FAR REACH HOLDINGS, LTD.
10,000 SHARES OF COMMON STOCK
- -------------
PROSPECTUS
- -------------
MARCH 10, 2000
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
NRS 78.751 provides that the Company may provide in its articles of
incorporation, by laws or by agreement, to indemnify the Company's officers
and directors and affects their liability in that capacity, for any and all
costs incurred in defending a civil or criminal action, suit or proceeding
must be paid by the corporation as they are incurred and in advance of the
final disposition of the action, suit or proceeding, upon receipt of
an undertaking by or on behalf of the director or officer to repay the amount
if it is ultimately determined by a court of competent jurisdiction that he is
not entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under
any contract or otherwise by law. The Company's By- Laws and Articles of
Incorporation, as amended, substantively provide that the Company indemnify
its officers, directors, employees and agents to the fullest extent permitted
by NRS 78.751.
ITEM 25. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION.
The Registrant estimates that expenses payable by it in connection with the
Offering described in this Registration Statement (other than the underwriting
discount and commissions and reasonable expense allowance) will be as follows:
SEC registration fee........................................... $
Printing and engraving expenses................................ $500
Accounting fees and expenses................................... $0
Legal fees and expenses (other than Blue Sky).................. $4,000
Blue sky fees and expenses (including legal and filing fees)... $1,000
Miscellaneous.................................................. $0
----------
Total...................................................... $5,500
----------
----------
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
The following securities were issued by the Company within the past three
years and were not registered under the Securities Act.
In connection with organizing the Company, on June 10, 1996, persons
consisting of its officers, directors, and other individuals were issued a
total of 1,000 shares of Common Stock without nominal or par value, pursuant
to the exemption from registration contained within Section 4(2) of the
Securities Act of 1933, to company officers, directors, and individuals with a
relationship to Company officers and directors. On November 11, 1999, the
outstanding shares were forward split 100 to 1 and the par value was changed
to $.001, resulting in a total of 1,000,000 shares outstanding.
ITEM 27. EXHIBITS
(a) The following exhibits are filed as part of this Registration Statement:
EXHIBIT
NUMBER DESCRIPTION
----------- -----------------------------------------
3.1 Articles of Incorporation
3.2 Amendment to Articles of Incorporation
3.4 By-Laws
4.1 Form of Common Stock Certificate
5.1 Opinion of Kenneth G. Eade, Attorney at Law (including
consent)
23.1 Consent of Robinson, Hill & Co.
23.2 Consent of Kenneth G. Eade(filed as part of Exhibit 5.1)
------------------------
ITEM 28. UNDERTAKINGS.
The undersigned Company hereby undertakes to:
(a) (1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(I) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) Include any additional or changed material information on the plan
of distribution. (2) For determining liability under the Securities Act,
treat each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be
the initial bona fide offering. (3) File a post-effective amendment to
remove from registration any of the securities that remain unsold at the end
of the offering.
(e) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions referred to under Item 24 of
this Registration Statement, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a director,
officer or a controlling person of the Company in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of competent jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
(f) (1) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company under Rule 424(b)(1), or (4), or 497(h) under
the Securities Act as part of this Registration Statement as of the time the
Commission declared it effective.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
II-6
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
the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the city of Palm
Desert, state of California, on MARCH 10, 2000.
FAR REACH HOLDINGS, LTD.
BY: /S/ SHIRLEY A. BETHURUM
- -----------------------------------------
Shirley A. Bethurum, Chief Executive
Officer/President/Secretary/Director
In accordance with the requirements of the Securities Act of 1933, as
amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
SIGNATURE TITLE DATE
- --------------------- ---------------- -------------
/s/ SHIRLEY A. BETHURUM Chief Executive Officer MARCH 10, 2000
- --------------------- /Secretary/Director
Shirley A. Bethurum
[CAPTION]
EXHIBIT 1.1
ARTICLES OF INCORPORATION
OF FAR REACH HOLDINGS, LTD.
FIRST. The name of the corporation is:
FAR REACH HOLDINGS, LTD.
SECOND. Its registered office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706 that this Corporation may
maintain an office, or offices, in such other place within or without the
State of Nevada as may be from time to time designated by the Board of
Directors, or by the By-Laws of said Corporation, and that this
Corporation
may conduct all Corporation business of every kind and nature, including
the holding of all meetings of Directors and Stockholders, outside the
State of Nevada as well as within the State of Nevada.
THIRD. The objects for which this Corporation is formed are: To engage in
any lawful activity, including, but not limited to the following: (A)
Shall have such rights, privileges and powers as may be conferred upon
corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers, when
not inconsistent with the purposes and objects for which this
corporation is organized.
C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and when no
period Is limited, perpetually, or until dissolved and its affairs wound up
according to law. Shall have power to sue and be sued in any court of law or
equity.
D) Shall have power to make contracts.
E) Shall have power to hold, purchase and convey real and personal estate and
to mortgage or lease any such real and personal estate with its
franchise.
The power to hold real and personal estate shall include the power to take
the same by devise or bequest in the State of Nevada, or in any other state,
territory or country.
G) Shall have power to appoint such offices and agents as the affairs of
the corporation shall require, and to allow them suitable compensation.
H) Shall have power to make By-Laws not inconsistent with the constitution
or Laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the
transfer of its stock, the transaction of its business, and the calling and
holding of meetings of its stockholders.
I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
J) Shall have power to adopt and use a common seal or stamp, and alter
the same at pleasure. The use of a seal or stamp by the corporation on
any
corporate documents is not necessary. The corporation may use a seal or
stamp, if it desires, but such use or nonuse shall not in any way affect
the
legality of the document.
K) Shall have power to borrow money and contract debts when necessary for
the transaction of its business, or for the exercise of its corporate
rights, privileges or franchises, or for any other lawful purpose of its
incorporation; to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidences of indebtedness, payable at
a
specified time or times, or payable upon the happening of a specified event
or
events, whether secured by mortgage, pledge or otherwise, or unsecured, for
money borrowed, or in payment for property purchased, or acquired, or for any
other lawful object.
L) Shall have power to guarantee, purchase, hold sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the capital
stock of, or any bonds, securities or evidences of the indebtedness
created by, any other corporation or corporations of the State of Nevada,
or any other state or government, and, while owners of such stock, bonds,
securities or evidence of indebtedness, to exercise all the rights, powers
and privileges of ownership, including the right to vote, if any.
M) Shall have power to purchase, hold, sell and transfer shares of its
own capital stock, and use therefore its capital, capital surplus, surplus,
or
other property of fund.
N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State
of
Nevada, and in any one of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any foreign
countries.
O) Shall have power to do all and everything necessary and proper for
the accomplishment of the objects enumerated in its certificate or
articles of incorporation, or any amendment thereof, or necessary or
incidental to the protection and benefit of the corporation, and, in
general, to carry on any lawful business necessary or incidental to the
attainment of the objects of the corporation, whether or not such business
is similar in nature to the objects set forth in the certificate or articles
of the incorporation, or any amendment thereof.
P) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.
Q) Shall have power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities, as may be allowed
by
law.
FOURTH. That the total number of common stock authorized that may be
issued by the Corporation is TWENTY-FIVE THOUSAND (25,000) shares of stock
without nominal or par value and no other class of stock shall be authorized.
Said shares may be issued by the corporation from time to time for such
considerations as may be fixed by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as directors,
and the number of directors may from time to time be increased or decreased
in such manner as shall be provided by the By-Laws of this Corporation,
providing that the number of directors shall not be reduced to fewer than one
(1).
The name and post office address of the first Board of Directors shall be
one (1) in number and listed as follows:
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the
debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing
the Articles of Incorporation is as follows:
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and the registered or statutory address of
this corporation in the State of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the power conferred by
statue, the Board of Directors is expressly authorized, Subject to the
By-Laws, if any, adopted by the Stockholders, to make, alter or amend
the By-Laws of the Corporation. To fix the amount to be reserved as
working
capital over and above its capital stock paid in; to authorize and cause to
be
executed, mortgages and liens upon the real and personal property of this
Corporation. By resolution passed by a majority of the whole Board,
to
designate one (1) or more committees, each committee to consist of one
or more or the Directors of the Corporation, which, to the extent provided
in the resolution, or in the By-Laws of the Corporation, shall have and
may
exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation. Such committee, or committees,
shall have such name, or names, as may be stated in the By-Laws of the
Corporation, or as may be determined from time to time by resolution
adopted by the Board of Directors. When and as authorized by the
affirmative vote of the Stockholders holding stock entitling them to exercise
at
least a majority of the voting power given at a Stockholders meeting called
for that purpose, or when authorized by the written consent of the
holders
of at least a majority of the voting stock issued and outstanding, the
Board of Directors shall have power and authority at any meeting to
sell, lease or exchange all of the property and assets of the Corporation,
including its good will and its corporate franchises, upon such terms and
conditions as its board of Directors deems expedient and for the best
interest
of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of rights to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures
or securities convertible into stock, but such additional shares of stock
or
other securities convertible into stock may be issued or disposed of by the
Board of Directors to such persons and on such terms as in its discretion it
shall deem advisable.
TWELFTH. No director or officer of the Corporation shall be personally liable
to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided, however, that the foregoing provision
shall not eliminate or limit the liability of a director or officer (I ) for
acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the payment of dividends in violation of
section 78.300 of the Nevada Revised Statutes. Any repeal or modification
of this Article by the stockholders of the Corporation shall be prospective
only, and shall not adversely affect any limitation on the personal
liability of a director or officer of the Corporation for acts or omissions
prior to such repeal or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter,
change or repeal any provision contained in the Articles of
Incorporation, in the manner now or hereafter prescribed by statute, or by
the
Articles of Incorporation, and all rights conferred upon Stockholders herein
are granted subject to this reservation.
I, THE UNDERSIGNED, being the Incorporator hereinbefore name for the purpose
of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do ,make and files these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and
accordingly have hereunto set my hand this 22nd day of May, 1996.
/S/ ROBERT SELIGMAN
- ----------------------------------
Robert Seligman
STATE OF NEVADA )
) SS:
CARSON CITY )
On this 22nd day of May, 1996, in Carson City, Nevada before me,
the undersigned, a Notary Public in and for Carson City, State of Nevada,
personally appeared Robert Seligman. Known to me to be the person whose name
is subscribed to the foregoing document and acknowledged to me that he
executed the same.
/s/
- ---------------------------------
Notary Public
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the
previously named Corporation.
MAY 22, 1996________________________________________/S/
Date Executive Vice President
[CAPTION]
CERTIFICATE OF AMENDMENT OF ARTICLES OF INC.
(After Issuance of Stock)
FAR REACH HOLDINGS, LTD.
I, the undersigned, Shirley Bethurum, President and Secretary of
FAR REACH HOLDINGS, LTD., do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 11th day of November 1999, adopted a resolution to
amend
the original Articles of Incorporation as follows;
RESOLVED: That the Corporation declare a 1000 to 1 forward stock split;
RESOLVED: That the number of shares of the corporation issued and
entitled to vote on an amendment to the Articles of Incorporation is 1,000,000;
RESOLVED: That the authorized stock of the Company be and is hereby
amended as follows;
100,000,000 shares of Common Stock with a par value of $.001 share.
RESOLVED: That the said change(s) and amendments have been consented to
and approved by a majority vote of the stockholders holding at least a
majority
of each class of stock outstanding and entitled to vote thereon.
----------------------------------------
President
----------------------------------------
Secretary
[CAPTION]
BYLAWS OF
FAR REACHING HOLDINGS, LTD.
(the "Corporation")
Article I.
Office
The Board of Directors shall designate and the Corporation shall maintain a
principal office. The location of the principal office may be changed by
the
Board of Directors. The Corporation also may have offices in such other
places as the Board may from time to time designate.
Article II.
Shareholders Meetings
1. Annual Meetings
The annual meeting of the shareholders of the Corporation shall be held at
such place within or outside the State of Nevada as shall be set forth
in
compliance with these Bylaws. The meeting shall be held during the month of
June of each year. If such day is a legal holiday, the meeting may be on
the next business day. This meeting shall be for the election of Directors
and for the transaction of such other business as may properly come before
it.
2. Special Meetings
Special meetings of shareholders, other than those regulated by statute,
may be called by the President upon written request of the holders of
fifty
percent or more of the outstanding shares entitled to vote at such
special meeting. Written notice of such meeting stating the place, the date
and hour of the meeting, the purpose or purposes for which it is called, and
the name of the person by whom or at whose direction the meeting is called
shall be given.
3. Notice of Shareholders Meetings
The Secretary shall give written notice stating the place, day, and hour of
the meeting, and in the case of a special meeting, the purpose or purposes
for
which the meeting is called, which shall be delivered not less than ten or
more than fifty days before the date of the meeting, either personally or by
mail to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at his address as it
appears on the books of the Corporation, with postage thereon prepaid.
Attendance at the meeting shall constitute a waiver of notice thereof.
4. Place of Meeting
The Board of Directors may designate any place, either within or without
the State of Nevada, as the place of meeting for any annual meeting or for
any
special meeting called by the Board of Directors. A waiver of notice signed
by all shareholders entitled to vote at a meeting may designate any place,
either within or without the State of Nevada, as the place for the
holding of such meeting. If no designation is made, or if a special meeting
is
otherwise called, the place of meeting shall be the principal office of the
Corporation.
5. Record Date
The Board of Directors may fix a date not less than ten nor more than sixty
days prior to any meeting as the record date for the purpose of
determining
shareholders entitled to notice of and to vote at such meetings of
the shareholders. The transfer books may be closed by the Board of
Directors
for a stated period not to exceed fifty days for the purpose of
determining shareholders entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other purpose.
6. Quorum
A majority of the outstanding shares of the Corporation entitled to vote,
represented in person, telephonically or by proxy, shall constitute a quorum
at
a meeting of shareholders. If less than a majority of the outstanding shares
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. At a meeting
resumed after any such adjournment at which a quorum shall be present or
represented, any business may be transacted, which might have been
transacted at the meeting as originally noticed.
7. Voting
A holder of an outstanding share, entitled to vote at a meeting, may vote
at such meeting in person or by proxy. Except as may otherwise be provided
in
the currently filed Articles of incorporation, every shareholder shall
be entitled to one vote for each share standing in his name on the
record of shareholders. Except as herein or in the currently filed
Articles of Incorporation otherwise provided, all corporate action shall be
determined by a majority of the vote's cast at a meeting of shareholders
by the holders of shares entitled to vote thereon.
8. Proxies
At all meetings of shareholders, a shareholder may vote in person or by
proxy executed in writing by the shareholder or by his duly
authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of
the Corporation before or at the time of the meeting. No proxy shall be
valid
after six months from the date of its execution.
9. Informal Action by Shareholders
Any action required to be taken at a meeting of the shareholders, may be
taken without a meeting if a consent in writing, setting forth the action
so
taken, shall be signed by a majority of the shareholders entitled to vote
with respect to the subject matter thereof.
Article III.
Board Of Directors
1. General Powers
The business and affairs of the Corporation shall be managed by its Board
of Directors. The Board of Directors may adopt such rules and regulations for
he
conduct of their meetings and the management of the Corporation as
they appropriate under the circumstances. The Board shall have authority to
authorize changes in the Corporation's capital structure.
2. Number, Tenure and Qualification
The number of Directors of the Corporation shall be a number between one
and five, as the Directors may by resolution determine from time to time.
Each
of the Directors shall hold office until the next annual meeting of
shareholders and until his successor shall have been elected and qualified.
3. Regular Meetings
A regular meeting of the Board of Directors shall be held without other
notice than by this Bylaw, immediately after and, at the same place as
the
annual meeting of shareholders. The Board of Directors may provide,
by resolution, the time and place for the holding of additional regular
meetings without other notice than this resolution.
4. Special Meetings
Special meetings of the Board of Directors may be called by order of the
Chairman of the Board or the President. The Secretary shall give notice of
the
time, place and purpose or purposes of each special meeting by mailing the
same at least two days before the meeting or by telephone,
telegraphing or telecopying the same at least one day before the meeting
to each Director. Meeting of the Board of Directors may be held by telephone
conference call.
5. Quorum
A majority of the members of the Board of Directors shall constitute a
quorum for the transaction of business, but less than a quorum may adjourn
any
meeting from time to time until a quorum shall be present, whereupon the
meeting may be held, as adjourned, without further notice. At any meeting at
which every Director shall be present, even though without any formal
notice,
any business may be transacted.
6. Manner of Acting
At all meetings of the Board of Directors, each Director shall have one
vote. The act of a majority of Directors present at a meeting shall be the
act
of the full Board of Directors, provided that a quorum is present.
7. Vacancies
A vacancy in the Board of Directors shall be deemed to exist in the case of
death, resignation, or removal of any Director, or if the authorized number
of
Directors is increased, or if the shareholders fail, at any meeting of
the shareholders, at which any Director is to be elected, to elect
the full authorized number of Director to be elected at that meeting.
8. Removals
Directors may be removed, at any time, by a vote of the shareholders
holding a majority of the shares outstanding and entitled to vote. Such
vacancy
shall be filled by the Directors then in office, though less than a quorum,
to hold office until the next annual meeting or until his successor is duly
elected and qualified, except that any directorship to be filled by
election by the shareholders at the meeting at which the Director is
removed. No reduction of the authorized number of Directors shall have
the effect of removing any Director prior to the expiration of his term of
office.
9. Resignation
A Director may resign at any time by delivering written notification
thereof to the President or Secretary of the Corporation. A resignation
shall
become effective upon its acceptance by the Board of Directors;
provided, however, that if the Board of Directors has not acted thereon
within ten days from the date of its delivery, the resignation shall be
deemed
accepted.
10. Presumption of Assent
A Director of the Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken shall be presumed
to
have assented to the action(s) taken unless his dissent shall be placed in
the minutes of the meeting or unless he shall file his written dissent
to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
11. Compensation
By resolution of the Board of Directors, the Directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors
or
a stated salary as Director. No such payment shall preclude any Director
from serving the Corporation in any other capacity and receiving
compensation therefor.
12. Emergency Power
When, due to a national disaster or death, a majority of the Directors are
incapacitated or otherwise unable to attend the meetings and function
as
Directors, the remaining members of the Board of Directors shall have all
the powers necessary to function as a complete Board, and for the purpose
of
doing business and filling vacancies shall constitute a quorum, until such
time as all Directors can attend or vacancies can be filled pursuant to these
Bylaws.
13. Chairman
The Board of Directors may elect from its own number a Chairman of the
Board, who shall preside at all meetings of the Board of Directors, and
shall
perform such other duties as may be prescribed from time to time by the Board
of Directors. The Chairman may by appointment fill any vacancies on the
Board of Directors.
Article IV.
Officers
1. Number
The Officers of the Corporation shall be a President, one or more Vice
Presidents, and a Secretary Treasurer, each of whom shall be elected by
a
majority of the Board of Directors. Such other Officers and assistant
Officers as may be deemed necessary may be elected or appointed by
the
Board of Directors. In its discretion, the Board of Directors may leave
unfilled for any such period as it may determine any office except
those
of President and Secretary. Any two or more offices may be held by the
same
person. Officers may or may not be Directors or shareholders of the
Corporation.
2. Election and Term of Office
The Officers of the Corporation to be elected by the Board of Directors
shall be elected annually by the Board of Directors at the first meeting of
the
Board of Directors held after each annual meeting of the shareholders. If
the election of Officers shall not be held at such meeting, such election
shall be held as soon thereafter as convenient. Each Officer shall hold
office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall have
been removed in the manner hereinafter provided.
3. Resignations
Any Officer may resign at any time by delivering a written resignation
either to the President or to the Secretary. Unless otherwise specified
therein,
such resignation shall take effect upon delivery.
4. Removal
Any Officer or agent may be removed by the Board of Directors whenever in
its judgment the best interests of the Corporation will be served thereby,
but
such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Election or appointment of an Officer or agent shall
not of itself create contract rights. Any such removal shall require a
majority vote of the Board of Directors, exclusive of the Officer in
question if he is also a Director.
5. Vacancies
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, or if a new office shall be created, may
be
filled by the Board of Directors for the un-expired portion of the term.
6. President
The President shall be the chief executive and administrative Officer of
the Corporation. He shall preside at all meetings of the stockholders and,
in
the absence of the Chairman of the Board, at meetings of the Board of
Directors. He shall exercise such duties as customarily pertain to the
office
of President and shall have general and active supervision over the property,
business, and affairs of the Corporation and over its several Officers,
agents, or employees other than those appointed by the Board of Directors.
He
may sign, execute and deliver in the name of the Corporation powers of
attorney, contracts, bonds and other obligations, and shall perform such
other duties as may be prescribed from time to time by the Board of Directors
or by the Bylaws.
7. Vice President
The Vice President shall have such powers and perform such duties as may be
assigned to him by the Board of Directors or the President. In the absence
or
disability of the President, the Vice President designated by the Board or
the President shall perform the duties and exercise the powers of the
President. A Vice President may sign and execute contracts and other
obligations pertaining to the regular course of his duties.
8. Secretary
The Secretary shall keep the minutes of all meetings of the stockholders
and of the Board of Directors and, to the extent ordered by the Board
of
Directors or the President, the minutes of meetings of all committees. He
shall cause notice to be given of meetings of stockholders, of the Board of
Directors, and of any committee appointed by the Board. He shall have
custody of the corporate seal and general charge of the records, documents
and papers of the Corporation not pertaining to the performance of the
duties vested in other Officers, which shall at all reasonable times be open
to the examination of any Directors. He may sign or execute contracts
with the President or a Vice President thereunto authorized in the name of
the Corporation and affix the seal of the Corporation thereto. He shall
perform such other duties as may be prescribed from time to time by the
Board of Directors or by the Bylaws.
9. Treasurer
The Treasurer shall have general custody of the collection and disbursement
of funds of the Corporation. He shall endorse on behalf of the Corporation
for
collection checks, notes and other obligations, and shall deposit the same
to the credit accounts to any Director of the Corporation upon application
at the office of the Corporation during business hours; and, whenever
required by the Board of Directors or the President, shall render a
statement of his accounts. He shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the Bylaws.
10. Other Officers
Other Officers shall perform such duties and shall have such powers as may
be assigned to them by the Board of Directors.
11. Salaries
The salaries or other compensation of the Officers of the Corporation shall
be fixed from time to time by the Board of Directors, except that the Board
of
Directors may delegate to any person or group of persons the power to fix
the salaries or other compensation of any subordinate Officers or agents. No
Officer shall be prevented from receiving any such salary or compensation
by
reason of the fact that he is also a Director of the Corporation.
12. Surety Bonds
In case the Board of Directors shall so require, any Officer or agent of
the Corporation shall execute to the Corporation a bond in such sums and
with
such surety or sureties as the Board of Directors may direct, conditioned
upon the faithful performance of his duties to the Corporation,
including responsibility for negligence and for the accounting for all
property, moneys or securities of the Corporation, which may come into his
hands.
Article V.
Contracts, Loans, Checks And Deposits
1. Contracts
The Board of Directors may authorize any Officer or Officers, agent or
agents, to enter into any contract or execute and deliver any instrument in
the
name of and on behalf of the Corporation and such authority may be general
or confined to specific instances.
2. Loans
No loan or advance shall be contracted on behalf of the Corporation, no
negotiable paper or other evidence of its obligation under any loan or
advance
shall be issued in its name, and no property of the Corporation shall
be mortgaged, pledged, hypothecated or transferred as security for the
payment of any loan, advance, indebtedness or liability of the
Corporation unless and except as authorized by the Board of Directors. Any
such authorization may be general or confined to specific instances.
3. Deposits
All funds of the Corporation not otherwise employed shall be deposited from
time to time to the credit of the Corporation in such banks, trust companies
or
other depositories as the Board of Directors may select, or as may be
selected by an Officer or agent of the Corporation authorized to do so by
the Board of Directors.
4. Checks and Drafts
All notes, drafts, acceptances, checks, endorsements and evidence of
indebtedness of the Corporation shall be signed by such Officer or Officers
or
such agent or agents of the Corporation and in such manner as the Board
of Directors from time to time may determine. Endorsements for deposits
to the credit of the Corporation in any of its duly authorized depositories
shall be made in such manner as the Board of Directors may from time to time
determine.
5. Bonds and Debentures
Every bond or debenture issued by the Corporation shall be in the form of
an appropriate legal writing, which shall be signed by the President or
Vice
President and by the Treasurer or by the Secretary, and sealed with the seal
of the Corporation. The seal may be facsimile, engraved or printed. Where
such
bond or debenture is authenticated with the manual signature of an authorized
Officer of the Corporation or other trustee designated by the indenture
of trust or other agreement under which such security is issued, the
signature
of any of the Corporation's Officers named thereon may be facsimile. In
case
any Officer who signed, or whose facsimile signature has been used on
any such bond or debenture, shall cease to be an Officer of the Corporation
for any reason before the same has been delivered by the Corporation,
such
bond or debenture may nevertheless be adopted by the Corporation and
issued and delivered as though the person who signed it or whose facsimile
signature has been used thereon had not ceased to be such Officer.
Article VI
Capital Stock
1. Certificate of Share
The shares of the Corporation shall be represented by certificates prepared
by the Board of Directors and signed by the President. The signatures of
such
Officers upon a certificate may be facsimiles if the certificate
is countersigned by a transfer agent or registered by a registrar other
than the Corporation itself or one of its employees. All certificates for
shares shall be consecutively numbered or otherwise identified. The name
and address of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on
the
stock transfer books of the Corporation. All certificates surrendered to
the Corporation for transfer shall be canceled except that in case of a lost,
destroyed or mutilated certificate, a new one may be issued therefor upon
such terms and indemnity to the Corporation as the Board of Directors may
prescribe.
2. Transfer of Shares
Transfer of shares of the Corporation shall be made only on the stock
transfer books of the Corporation by the holder of record thereof or by
his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power
of attorney duly executed and filed with the Secretary of the Corporation,
and on surrender for cancellation of the certificate for such shares. The
corporation authorizes the transfer of shares without medallion
guarantee, such transfers will be guaranteed by the Corporation. The
person in whose name shares stand on the books of the Corporation shall
be
deemed by the Corporation to be the owner thereof for all purposes.
3. Transfer Agent and Registrar
The Board of Directors of shall have the power to appoint one or more
transfer agents and registrars for the transfer and registration of
certificates
of stock of any class, and may require that stock certificates shall
be countersigned and registered by one or more of such transfer
agents
and registrars.
4. Lost or Destroyed Certificates
The Corporation may issue a new certificate to replace any certificate
theretofore issued by it alleged to have been lost or destroyed. The Board
of
Directors may require the owner of such a certificate or his
legal representative to give the Corporation a bond in such sum and with such
sureties as the Board of Directors may direct to indemnify the Corporation
as transfer agents and registrars, if any, against claims that may be made on
account of the issuance of such new certificates. A new certificate may
be issued without requiring any bond.
5. Consideration for Shares
The capital stock of the Corporation shall be issued for such consideration
as shall be fixed from time to time by the Board of Directors. In the absence
of
fraud, the determination of the Board of Directors as to the value of
any property or services received in full or partial payment of shares
shall be conclusive.
6. Registered Shareholders
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder thereof, in fact, and shall not be
bound
to recognize any equitable or other claim to or on behalf of this Corporation
to any and all of the rights and powers incident to the ownership of such
stock at any such meeting, and shall have power and authority to execute
and deliver proxies and consents on behalf of this Corporation in
connection with the exercise by this Corporation of the rights and powers
incident to the ownership of such stock. The Board of Directors, from time to
time, may confer like powers upon any other person or persons.
Article VII.
Indemnification
No Officer or Director shall be personally liable for any obligations of
the Corporation or for any duties or obligations arising out of any acts
or
conduct of said Officer or Director performed for or on behalf of
the Corporation. The Corporation shall and does hereby indemnify and hold
harmless each person and his heirs and administrators who shall serve
at any time hereafter as a Director or Officer of the Corporation from and
against any and all claims, judgments and liabilities to which such persons
shall become subject by reason of his having heretofore or hereafter been
a
Director or Officer of the Corporation, or by reason of any action
alleged
to have heretofore or hereafter taken or omitted to have been taken
by
him as such Director or Officer, and shall reimburse each such person for
all legal and other expenses reasonably incurred by him in connection
with
any such claim or liability, including power to defend such persons from
all suits or claims as provided for under the provisions of the Nevada
Revised
Statutes; provided, however, that no such persons shall be indemnified
against, or be reimbursed for, any expense incurred in connection with
any claim or liability arising out of his own negligence or willful
misconduct. The rights accruing to any person under the foregoing
provisions of this section shall not exclude any other right to which he may
lawfully be entitled, nor shall anything herein contained restrict the
right of the Corporation to indemnify or reimburse such person in any
proper
case, even though not specifically herein provided for. The Corporation,
its Directors, Officers, employees and agents shall be fully protected in
taking any action or making any payment, or in refusing so to do in
reliance upon the advice of counsel.
Article VIII.
Notice
Whenever any notice is required to be given to any shareholder or Director
of the Corporation under the provisions of the Articles of Incorporation,
or
under the provisions of the Nevada Statutes, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to the giving of
such notice. Attendance at any meeting shall constitute a waiver of notice
of
such meetings, except where attendance is for the express purpose of
objecting to the holding of that meeting.
Article IX.
Amendments
These Bylaws may be altered, amended, repealed, or new Bylaws adopted by a
majority of the entire Board of Directors at any regular or special meeting.
Any
Bylaw adopted by the Board may be repealed or changed by the action of
the shareholders.
Article X.
Fiscal Year
The fiscal year of the Corporation shall be fixed and may be varied by
resolution of the Board of Directors.
Article XI.
Dividends
The Board of Directors may at any regular or special meeting, as they
deem advisable, declare dividends payable out of the surplus of the
Corporation.
Article XII.
Corporate Seal
The seal of the Corporation shall be in the form of a circle and shall
bear the name of the Corporation and the year of incorporation. Such seal is
not
mandatory that it be affixed to the corporate documents.
June 10, 1996
/s/SHIRLEY BERTHURUM
----------------------------
Secretary