UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.1)
Filed by the Registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AKID CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
AKID CORPORATION
43 West 33rd Street
New York, NY 10001
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
A special meeting of the stockholders of Akid Corporation ("Akid") will be held
on October 31, 2005, at 10:00 a.m., at the offices of Akid, located at 43 West
33rd Street, New York, NY 10001, for the following purposes:
1. To act on a proposal to change Akid's state of incorporation from
Colorado to Nevada by the merger of Akid with and into a newly
incorporated subsidiary.
2. To authorize a change in the name of Akid to Mazal Plant
Pharmaceuticals, Inc., a Nevada corporation.
3. To authorize an increase in authorized common stock from 20,000,000
shares to 100,000,000 shares.
4. To authorize a class of 1,000,000 shares of preferred stock.
5. To transact such other business as may properly be brought before a
special meeting of the stockholders of Akid or any adjournment
thereof.
Only stockholders of record at the close of business on September 16, 2005 are
entitled to notice of and to vote at the meeting or any adjournments thereof.
Your attention is called to the Proxy Statement on the following pages. Please
review it carefully. We hope you will attend the meeting. If you do not plan to
attend, please sign, date and mail the enclosed proxy in the enclosed envelope,
which requires no postage if mailed in the United States.
By Order of the Board of Directors,
Mechael Kanovsky
Chief Executive Officer
September 22, 2005
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON ARE URGED
TO DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENVELOPE
PROVIDED WHICH REQUIRES NO POSTAGE.
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PROXY STATEMENT
GENERAL
Solicitation of Proxies. This Proxy Statement and the accompanying proxy card
are being mailed to holders of shares of common stock, no par value (the "Common
Stock"), of Akid, a Colorado corporation ("Akid"), commencing on or about
September 22, 2005, in connection with the solicitation of proxies by the Board
of Directors of Akid (the "Board") for use at the special meeting of the
stockholders of Akid (the "Meeting") to be held at the offices of the offices of
Akid, located at 43 West 33rd Street, New York, NY 10001, on October 31, 2005 at
10:00 A.M.
Vote Required for Approval. The holders of a majority of the shares of Common
Stock issued and outstanding and entitled to vote at the Meeting, present in
person or represented by proxy, will constitute a quorum at the Meeting. Under
Colorado Law, any stockholder who abstains from voting on any particular matter
described herein will be counted for purposes of determining a quorum. A
majority of the shares of Common Stock outstanding and entitled to vote at the
Meeting is required to approve each proposal. Any shares not voted at the
Special Meeting, whether due to abstentions or broker non-votes, will have the
same effect as a vote against each proposal.
Voting Your Proxy. Proxies in the form enclosed are solicited by the Board for
use at the Meeting. Each such share is entitled to one vote on each matter
submitted to a vote at the Meeting. All properly executed proxies received prior
to or at the Meeting will be voted. If a proxy specifies how it is to be voted,
it will be so voted. If no specification is made, it will be voted (1) for the
change of Akid's state of incorporation from Colorado to Nevada, (2) to
authorize a change in the name of Akid to Mazal Plant Pharmaceuticals, Inc., (3)
to authorize an increase in authorized common stock from 20,000,000 shares to
100,000,000 shares, and (4) to authorize a class of 1,000,000 shares of
preferred stock. The proxy may be revoked by a properly executed writing of the
stockholder delivered to Akid's Chief Executive Officer before the Meeting or by
the stockholders at the Meeting before it is voted, by submitting a later-dated
proxy or by attending the special meeting and voting your shares in person.
Record Date. The Board fixed the close of business on September 16, 2005 as the
record date for determining the stockholders of Akid entitled to notice of and
to vote at the Meeting.
Outstanding Shares. On the record date, there were 20,000,000 shares of Common
Stock outstanding and entitled to vote.
Cost of Solicitation. We will bear the costs of soliciting proxies. In addition
to the use of the mails, certain directors or officers of our company may
solicit proxies by telephone, facsimile or personal contact. Upon request, we
will reimburse brokers, dealers, banks and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to beneficial
owners of shares of Common Stock.
Dissenter's Right. Stockholders are entitled to dissenter's rights as to the
proposal to change Akid's state of incorporation from Colorado to Nevada.
PROPOSAL NO. 1
APPROVAL OF REINCORPORATION OF THE COMPANY
QUESTIONS AND ANSWERS
The following questions and answers are intended to respond to frequently asked
questions concerning the reincorporation of Akid in Nevada ("Reincorporation").
These questions do not, and are not intended to, address all the questions that
may be important to you. You should carefully read the entire Proxy Statement,
as well as its appendices and the documents incorporated by reference in this
Proxy Statement.
Q: Why is Akid reincorporating in Nevada?
A: We believe that the Reincorporation in Nevada will give us more flexibility
and simplicity in various corporate transactions. Nevada has adopted a General
Corporation Law that includes by statute many concepts created by judicial
rulings in other jurisdictions and provides additional rights in connection with
the issuance and redemption of stock. Nevada has developed a flexible body of
corporate law that is responsive to the needs of modern business. Nevada has
taken affirmative steps to encourage corporations to establish themselves in the
state of Nevada, including reduced filing fees and corporate taxes, expedited
filing procedures and flexible policies. The Board believes that the advantages
offered by the corporate laws of Nevada will make Akid a more manageable
corporation for accomplishing its business activities.
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Q: What are the principal features of the Reincorporation?
A: The Reincorporation will be accomplished by a merger of Akid with and into
our wholly owned subsidiary which will be called Mazal Plant Pharmaceuticals,
Inc., a Nevada corporation (the "Nevada Mazal"). One new share of the Nevada
Mazal common stock will be issued for each share of our Common Stock held by our
stockholders on the record date for the Reincorporation. The shares of Akid will
cease to trade on the Over-The-Counter Bulletin Board market. The shares of the
Nevada Mazal will begin trading in their place beginning on or about the
effective date of the Reincorporation under a new CUSIP number and a new trading
symbol which has not yet been assigned. Options and warrants to purchase Common
Stock of Akid will also be exchanged or exchangeable for similar securities
issued by the Nevada Mazal without adjustment as to the number of shares
issuable or the exercise price.
Q: How will the Reincorporation affect my ownership of Akid?
A: After the effective date of the Reincorporation and the exchange of your
stock certificates, you will own the same number of shares and the same class as
you held immediately before the Reincorporation.
Q: How will the Reincorporation affect the owners, officers, directors and
employees of Akid?
A: Our officers, directors and employees will become the officers, directors and
employees of the Nevada Mazal after the effective date of the Reincorporation.
Q: How will the Reincorporation affect the business of Akid?
A: Akid will cease to exist on the effective date of the merger of Akid into the
Nevada Mazal; following the merger, the assets and liabilities of the Nevada
Mazal will consist solely of the assets and liabilities of Akid. The Nevada
subsidiary has no assets or liabilities and no previous operating history - it
has been formed for the sole purpose of changing the domicile of Akid. If the
Reincorporation is not approved, Akid will continue to exist and will continue
to have its current assets and liabilities.
Q: How do I exchange certificates of Akid for certificates of the Nevada Mazal?
A: If the Reincorporation is approved by the stockholders, promptly after the
effective date of the Reincorporation, you should receive a letter of
transmittal and instructions for use in surrendering certificates representing
your shares. Upon the surrender of each certificate formerly representing Common
Stock, together with a properly completed letter of transmittal, such stock
certificate shall be cancelled; upon such cancellation, each shareholder
participating in the exchange will receive shares of Mazal common stock in
exchange for their shares of common stock of Akid. We will issue new share
certificates representing the shares in the Nevada Mazal. Until so surrendered
and exchanged, each Akid stock certificate shall represent solely the right to
receive shares in the Nevada Mazal, the Nevada company established for purposes
of effectuating the merger. The newly formed Nevada company has no prior
operating history, and, therefore, no prior trading market; however, we expect
that the the Nevada Mazal common shares will be able to trade on the OTCBB at or
about the effective date of the Reincorporation.
Q: What happens if I do not surrender my certificates of Akid?
A: You are not required to surrender certificates representing shares of Akid to
receive shares of the Nevada Mazal. All shares of Akid outstanding after the
effective date of the Reincorporation continue to be valid. Until you receive
shares of the Nevada Mazal you are entitled to receive notice of or vote at
stockholder meetings or receive dividends or other distributions on the shares
of Akid. However, if the Reincorporation is approved by the shareholders, the
merger certificate will be filed and Akid, the Colorado corporation, will cease
to exist. In such event, Akid will cease to trade on the OTCBB and there will be
no trading market for the Akid stock certificates.
Even if you do not surrender your Akid certificates, you still have appraisal
rights if you do not vote for the Reincorporation provided you follow properly
your dissenter and appraisal rights as described below under "Dissenters'
Rights".
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Q: What if I have lost Akid certificates?
A: If you have lost your Akid certificates, you should contact our transfer
agent as soon as possible to have a new certificate issued. You may be required
to post a bond or other security to reimburse us for any damages or costs if the
certificate is later delivered for conversion. Our transfer agent may be reached
at:
Manhattan Transfer Registrar Company
P.O. Box 756
Miller Place, NY 11764
Telephone: (631) 928-7655
Facsimile: (631) 928-6171
Q: Can I require Akid to purchase my stock?
A: Yes. Under the Colorado Business Corporation Act, you are entitled to
appraisal and purchase of your stock as a result of the Reincorporation if you
dissent to the Reincorporation.
Q: Who will pay the costs of Reincorporation?
A: Akid will pay all of the costs of Reincorporation in Nevada, including
distributing this Proxy Statement. We may also pay brokerage firms and other
custodians for their reasonable expenses for forwarding information materials to
the beneficial owners of our Common Stock. We do not anticipate contracting for
other services in connection with the Reincorporation. Each stockholder must pay
the costs of exchanging their certificates for new certificates.
Q: Will I have to pay taxes on the new certificates?
A: We believe that the Reincorporation is not a taxable event and that you will
be entitled to the same basis in the shares of the Nevada Mazal that you had in
our Common Stock. No gain or loss will be recognized to the holders of capital
stock of Akid upon receipt of the Nevada Mazal stock pursuant to the
reincorporation, and no gain or loss will be recognized by the company. Akid has
not obtained a ruling from the Internal Revenue Service or an opinion of legal
or tax counsel with respect to the consequences of the reincorporation.
EVERYONE'S TAX SITUATION IS DIFFERENT AND YOU SHOULD CONSULT WITH YOUR PERSONAL
TAX ADVISOR REGARDING THE TAX EFFECT OF THE REINCORPORATION.
Q: What effect does the Reincorporation have on the price volatility and
liquidity of the shares of Akid?
A: We cannot predict what effect the Reincorporation will have on our market
price prevailing from time to time or the liquidity of our shares.
Q: What happens if the shareholders vote for the Reincorporation but do not vote
to approve the proposed changes to the Articles of Incorporation of Akid?
A: If the shareholders vote for the merger but do not vote to approve the change
in the name of the company, the increase in the authorized share capital or the
authorization of the preferred shares, then Akid will become a Nevada
corporation with the Articles which are currently in effect.
Q: What happens if the shareholders do not vote for the Reincorporation but
approve the proposed changes to the Articles of Akid?
A: If the shareholders do not vote to reincorporate the company in Nevada but
desire to maintain the existence of the company in Colorado, the Board will file
the applicable amendments to the Articles of Akid in Colorado to approve the
specific change(s) approved by the shareholders. For example, if the
shareholders vote to change the name of Akid to "Mazal Plant Pharmaceuticals,
Inc.", then an amendment will be filed to the Articles of Akid in Colorado to
change the name of the company to such name.
BACKGROUND
Akid was organized under the laws of the State of Colorado on April 9, 1998.
Akid's only activity prior to June 6, 2005 had been attempts to locate and
negotiate with a business entity for the merger of that target company into our
Company. Its operations consisted solely of seeking merger or acquisition
candidates, and Akid had no business operations or revenues.
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Akid was an insignificant participant among the firms which engaged in the
acquisition of business opportunities. There were many established venture
capital and financial concerns which had significantly greater financial and
personnel resources and technical expertise than Akid. In view of Akid's limited
financial resources and limited management availability, Akid may have been at a
competitive disadvantage compared to Akid's competitors.
On June 6, 2005, Akid underwent a change in control and substantially shifted
the focus of its business. On June 6, 2005, a majority of Akid's common stock
was acquired by Advanced Plant Pharmaceuticals, Inc., a Delaware corporation,
pursuant to the Share Exchange Agreement, dated May 2005, among Advanced Plant
Pharmaceuticals, Inc., Akid, and James B. Wiegand, who was a principal of Akid
at the time (the "Share Exchange Agreement"). Pursuant to the Share Exchange
Agreement, Akid agreed to issue to Advanced Plant Pharmaceuticals, Inc.
20,000,000 shares of Akid's common stock. In exchange, Advanced Plant
Pharmaceuticals, Inc. transferred to Akid its 7,000,000 shares of the common
stock of Mazal Plant Pharmaceuticals, Inc., a Delaware corporation (the
"Delaware Mazal"), which represented 68.5% of the issued and outstanding shares
of the Delaware Mazal. For accounting purposes, such transaction is
characterized as a reverse merger between Akid and the Delaware Mazal.
Because Akid's authorized common stock was not sufficient for it to issue
20,000,000 shares to Advanced Plant Pharmaceuticals, Inc., Akid agreed to amend
its Articles of Incorporation after the closing of the Share Exchange Agreement
for the purpose of increasing its authorized common stock. Akid issued to
Advanced Plant Pharmaceuticals, Inc. 10,500,000 shares following the closing of
the Share Exchange Agreement, and it will issue the remaining 9,500,000 shares
immediately after the effective date of the amendment to its Articles of
Incorporation. Following the closing of the Share Exchange Agreement, Advanced
Plant Pharmaceuticals, Inc. holds a majority of the issued and outstanding
common shares of Akid, and Akid holds a majority of the issued and outstanding
common shares of the Delaware Mazal.
James B. Wiegand, who had been serving as the sole director and officer of Akid
prior to June 6, 2005, resigned from his positions with Akid on such date. On
June 6, 2005, Mechael Kanovsky was elected to serve as director and as Chief
Executive Officer and Sam Berkowitz was elected to serve as Secretary.
Since such change in control, Akid, through the Delaware Mazal, engages in the
development, manufacture, and distribution of plant-based pharmaceutical drugs
for the treatment of various human illnesses.
Principal Products and their Markets
Akid's only product currently under development is MAHDL, a plant based drug
whose purpose is the reduction of levels of cholesterol in the bloodstream and
the prevention of cardiovascular diseases associated with high cholesterol
levels. Akid is also considering developing plant-based drugs for the treatment
of diabetes and Alzheimer's disease. In addition, Akid intends to develop the
capabilities necessary to become a world supplier of pharmaceutical-grade
medicinal plants for the neutraceutical, homeopathic, and plant pharmaceutical
markets.
MAHDL is a drug consisting of caplets containing various combinations of herbs.
In order to understand how MAHDL works, it is important to understand that
cholesterol levels can be improved by either directly lowering bloodstream
levels of low-density lipoprotein, also known as "LDL" or "bad" cholesterol, or
by raising bloodstream levels of high-density lipoprotein, also known as "HDL"
or "good" cholesterol. HDL extracts cholesterol particles from the cholesterol
deposits attached to arterial walls and transports them to the liver, where they
are disposed of by the body. HDL also interferes with the accumulation of LDL
cholesterol deposits on the arterial walls. The risk of atherosclerosis and
heart attacks in both men and women is strongly related to HDL levels. High HDL
levels are associated with a lower risk. The lowering of levels of triglycerides
in the bloodstream also has a positive effect on cholesterol levels. It is our
hope that our MAHDL drug lowers cholesterol levels by improving the human body's
metabolic processes that naturally lower cholesterol levels by both increasing
HDL cholesterol levels and lowering triglyceride levels in the body.
There is a large potential market for a safe and effective treatment for
elevated cholesterol levels. Cardiovascular diseases are among the leading
causes of death worldwide, and high blood cholesterol (Hypercholesterolemia) is
one of the major risk factors for heart disease. Elevated cholesterol,
especially LDL, in the bloodstream collects on the walls of the arteries and
causes the flow of blood to the heart to be blocked.
Distribution Methods of the Products
Akid is currently searching for opportunities to enter into a joint venture with
a major pharmaceutical distribution company that already has the resources and
capabilities required to distribute our products throughout the United States
and internationally. Specifically, Akid is looking for a joint venturer who will
provide the following services:
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o Complete the development of MAHDL;
o Submit the required documentation to the Food and Drug
Administration and secure approval for MAHDL;
o Support MAHDL with pre-launch, launch and ongoing marketing and
support activities commensurate with the sales potential; and
o Dedicate and manage a sales force of sufficient numbers to maximize
the international market potential for MAHDL
Such joint venturer can be either a branded pharmaceutical company (perhaps one
with a drug whose patent rights are running out shortly) or, alternatively, one
of the major pharmaceutical generic manufacturers looking for its own brand.
Competition
Currently, the most widely used drugs that reduce elevated LDL is a group of
drugs known as Statins. Statins include atorvastatin (Lipitor), rosuvastatin
(Crestor), simvastatin (Zocor), and pravastatin (Pravachol). However, Akid
believes that it may have a competitive advantage over Statins because Statins
have significant side effects, including abdominal pain, muscle inflammation and
liver abnormalities. In addition, although these drugs lower LDL levels
significantly, they do not appreciably affect HDL or triglyceride levels.
Niacin is the most widely used drug that is used for the purpose of raising HDL
levels. However, up to 88% of patients experience flushing or hot flashes as a
side effect of Niacin, and there are other side effects as well. Fibrates such
as Lopid are successful in lowering triglycerides.
In addition, there are legions of natural dietary supplements sold as
nutraceuticals that claim to lower cholesterol. These over-the-counter
supplements range from fish oil (omega-3 fatty acids) to garlic, and from
circumin (turmeric) and guggul (gum resin) to Chlorella (microalgae), cinnamon,
calcium citrate, and pantethine (vitamin B-6), amongst others. The clinical
effects of these dietary supplements are controversial, and for the most part
are undocumented and unproven.
Sources and Availability of Raw Materials; Names of Principal Suppliers
Active pharmaceutical ingredients and other materials and supplies that we use
in our operations are generally available and purchased from many different
foreign and domestic suppliers. Additionally, we maintain sufficient raw
materials inventory and are developing the capability to farm many of the plants
we use as raw materials. However, there is no guarantee that we will always have
timely and sufficient access to a critical raw material or finished product. A
prolonged interruption in the supply of a single-sourced active ingredient or
finished product could cause our financial position and results of operations to
be materially adversely affected.
Intellectual Property
We have secured a U.S. patent in a version of MAHDL known as Drug Formulation 1.
Such patent will expire in 2013. In March 2005, we filed a U.S. patent
application for another version of MAHDL, and such application is still pending.
There can be no assurance that the pending patent application will result in
issued patents, that patents, trademarks or trade names issued to us will not be
challenged or circumvented by competitors, or that such patents, trademarks or
trade names will be found to be valid or sufficiently broad to protect our
proprietary technology or to provide us with a competitive advantage.
Governmental Regulation
Our product is subject to regulation under extensive governmental regulation,
including the Federal Food, Drug, and Cosmetic Act, as amended, the Public
Health Service Act, also as amended, as well as other federal, state, and local
statutes and regulations. These laws, and similar laws outside the U.S., govern
the clinical and non-clinical testing, manufacture, safety, effectiveness,
approval, labeling, distribution, sale, import, export, storage, record keeping,
reporting, advertising and promotion of our products, if approved. Violations of
regulatory requirements at any stage may result in various adverse consequences,
including regulatory delay in approving or refusal to approve a product,
enforcement actions, including withdrawal of approval, labeling restrictions,
seizure of products, fines, injunctions and/or civil or criminal penalties. Any
product that we develop must receive all relevant regulatory approvals or
clearances before it may be marketed.
The regulatory process, which includes extensive pre-clinical testing and
clinical trials of each clinical candidate to study its safety and efficacy, is
uncertain, takes many years and requires the expenditure of substantial
resources. We cannot assure you that the clinical trials of our product
candidates under development will demonstrate the safety and efficacy of those
product candidates to the extent necessary to obtain regulatory approval.
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Food and Drug Administration
Our product is subject to regulation by the Food and Drug Administration (the
"FDA") and other authorities. The activities required by the FDA before a
product such as MAHDL may be marketed in the United States are generally
performed in the following sequential steps:
1. Pre-clinical testing. This includes laboratory testing of our products
in animals to determine safety, efficacy and potential toxicity. Pre-clinical
studies must be conducted by laboratories that comply with FDA regulations
regarding good laboratory practice.
2. Submission to the FDA of an investigational new drug application
("IND"). The results of pre-clinical studies, together with manufacturing
information, analytical data and proposed clinical trial protocols, are
submitted to the FDA as part of an IND, which must become effective before the
clinical trials can begin. Once the IND is filed, the FDA has 30 days to review
it. The IND will automatically become effective 30 days after the FDA receives
it, unless the FDA indicates prior to the end of the 30-day period that the
proposed protocol raises concerns that must be resolved to the FDA's
satisfaction before the trials may proceed. If the FDA raises concerns, we may
be unable to resolve the proposed protocol to the FDA's approval in a timely
fashion, if at all.
3. Completion of clinical trials. Human clinical trials are necessary to
seek approval for a new drug or biologic and typically involve a three-phase
process. In phase I, small clinical trials are generally conducted to determine
the safety of the product. In phase II, clinical trials are generally conducted
to assess safety, acceptable dose, and gain preliminary evidence of the efficacy
of the product. In phase III, clinical trials are generally conducted to provide
sufficient data for the statistically valid proof of safety and efficacy.
Clinical trials must be conducted according to good clinical practices under
protocols that detail the trial's objectives, inclusion and exclusion criteria,
the parameters to be used to monitor safety and the efficacy criteria to be
evaluated, and informed consent must be obtained from all study subjects. Each
protocol must be submitted to the FDA as part of the IND. The FDA may impose a
clinical hold on an ongoing clinical trial if, for example, safety concerns
arise, in which case the study cannot recommence without FDA authorization under
terms sanctioned by the agency. In addition, before a clinical trial can be
initiated, each clinical site or hospital administering the product must have
the protocol reviewed and approved by an independent institutional review board
("IRB"). The independent IRB will consider, among other things, ethical factors
and the safety of human subjects. The independent IRB may require changes in a
protocol, which may delay initiation or completion of a study. Phase I, Phase II
or Phase III clinical trials may not be completed successfully within any
specific period of time, if at all, with respect to any of our potential
products. Furthermore, we, the FDA or an independent IRB may suspend a clinical
trial at any time for various reasons, including a finding that the healthy
individuals or the patients are being exposed to an unacceptable health risk.
4. Submission to the FDA of a New Drug Application ("NDA"). After
completion of clinical studies for a biologics product, a New Drug Application
("NDA") is submitted to the FDA for product marketing approval. No action can be
taken to market any new drug or biologic product in the United States until the
FDA has approved an appropriate marketing application.
5. FDA review and approval of the NDA before the product is commercially
sold or shipped. The results of pre-clinical studies and clinical trials and
manufacturing information are submitted to the FDA in the form of an NDA for
approval of the manufacture, marketing and commercial shipment of the product.
The FDA may take a number of actions after the NDA is filed, including but not
limited to, denying the NDA if applicable regulatory criteria are not satisfied,
requiring additional clinical testing or information; or requiring post-market
testing and surveillance to monitor the safety or efficacy of the product.
Adverse events that are reported after marketing approval can result in
additional limitations being placed on the product's use and, potentially,
withdrawal of the product from the market. Any adverse event, either before or
after marketing approval, can result in product liability claims against us.
An IND filed with the FDA with respect to MAHDL is presently effective. MAHDL
has been approved by the FDA for Phase I and Phase II clinical trials. Akid
estimates that Phase II clinical trials will take about 8 months to complete at
a cost of approximately $1,000,000.
Medicaid and Medicare
Medicaid, Medicare and other reimbursement legislation or programs govern
reimbursement levels and require all pharmaceutical manufacturers to rebate a
percentage of their revenues arising from Medicaid-reimbursed drug sales to
individual states.
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Environment
We believe that our operations comply in all material respects with applicable
laws and regulations concerning the environment. While it is impossible to
predict accurately the future costs associated with environmental compliance and
potential remediation activities, compliance with environmental laws is not
expected to require significant capital expenditures and has not had, and is not
expected to have, a material adverse effect on our earnings or competitive
position.
Product Liability
The sale of pharmaceutical products can expose the manufacturer of such products
to product liability claims by consumers. A product liability claim, if
successful and in excess of our insurance coverage, if any, could have a
material adverse effect on our financial condition.
Employees
Akid has three full-time employees and three part-time employees.
Properties
Akid currently leases office space of approximately 2,500 square feet located at
43 West 33rd Street, New York, NY 10001 at a monthly rate of $750 pursuant to a
one-year sublease from Advanced Plant Pharmaceuticals, Inc., Akid's majority
shareholder. Akid also leases office space of approximately 3,000 feet at Beit
Offer Building, 5 Nahum Hefzadi Street, Jerusalem, Israel pursuant to a one-year
lease having a monthly rate of $1,200. Prior to June 6, 2005, Akid used office
space in the home of its then President.
Legal Proceedings
To date, Akid is not involved in any pending litigation, nor is Akid aware of
any pending or contemplated proceedings against it. Akid knows of no legal
proceedings pending or threatened, or judgments entered against any of its
directors or officers in their capacity as such.
Management's Discussion and Analysis or Plan of Operation
Forward-Looking Statements
This Proxy Statement contains forward-looking information. Forward-looking
information includes statements relating to future actions, prospective
products, future performance or results of current or anticipated products,
sales and marketing efforts, costs and expenses, interest rates, outcome of
contingencies, financial condition, results of operations, liquidity, business
strategies, cost savings, objectives of management of Akid and other matters.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking information to encourage companies to provide prospective
information about themselves without fear of litigation so long as that
information is identified as forward-looking and is accompanied by meaningful
cautionary statements identifying important factors that could cause actual
results to differ materially from those projected in the information.
Forward-looking information may be included in this Proxy Statement or may be
incorporated by reference from other documents filed with the Securities and
Exchange Commission (the "SEC") by Akid. You can find many of these statements
by looking for words including, for example, "believes," "expects,"
"anticipates," "estimates" or similar expressions in this Proxy Statement or in
documents incorporated by reference in this Proxy Statement. Akid undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information or future events.
Akid has based the forward-looking statements relating to Akid's operations on
management's current expectations, estimates and projections about Akid and the
industry in which it operates. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that we cannot
predict. In particular, we have based many of these forward-looking statements
on assumptions about future events that may prove to be inaccurate. Accordingly,
Akid's actual results may differ materially from those contemplated by these
forward-looking statements. Any differences could result from a variety of
factors, including, but not limited to general economic and business conditions,
competition, and other factors.
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Plan of Operation.
From the date of incorporation of the Delaware Mazal, May 18, 2004, through
December 31, 2004, the Delaware Mazal had no operating revenues. Going forward,
the Company intends to engage in the development and sale of plant-based
pharmaceutical drugs through the Delaware Mazal.
Financial Condition and Results of Operation.
The Delaware Mazal had no operating revenues from May 18, 2004 through December
31, 2004. Total expenses during such period were $13,778. Such expenses
consisted primarily of salaries.
Liquidity and Capital Resources
We currently do not have sufficient resources to finance our operations. We need
to raise additional capital, and are currently attempting to raise funds through
the issuance of shares. Although we are confident that we will be able to raise
the capital necessary to fund our operations for the next 12 months, there is no
assurance that we will be able to obtain such financing in sufficient amounts or
on acceptable terms when needed, which could adversely affect our operating
results and prospects.
REASONS FOR THE REINCORPORATION
t 0 0 We believe that Reincorporation in Nevada will give Akid a greater measure
of flexibility and simplicity in corporate governance than is available under
Colorado law. The State of Nevada is recognized for adopting comprehensive
modern and flexible corporate laws which are periodically revised to respond to
the changing legal and business needs of corporations. For this reason, many
major corporations have initially incorporated in Nevada or have changed their
corporate domiciles to Nevada in a manner similar to that proposed by Akid.
Consequently, the Nevada judiciary has become particularly familiar with
corporate law matters and a substantial body of court decisions has developed
construing Nevada Law. Nevada corporate law, accordingly, has been and is likely
to continue to be, interpreted in many significant judicial decisions, a fact
which may provide greater clarity and predictability with respect to Akid's
corporate legal affairs. For these reasons, the Board believes that Akid's
business and affairs can be conducted more advantageously if Akid is able to
operate under Nevada Law.
PRINCIPAL FEATURES OF THE REINCORPORATION
The Reincorporation will be effected by the merger of Akid with and into the
Nevada Mazal, a newly formed Nevada corporation pursuant to an agreement and
plan of merger (the "Plan of Merger"). The Nevada Mazal will be a wholly-owned
subsidiary of Akid, incorporated under the Nevada Revised Statutes (the "Nevada
Law") for the sole purpose of effectuating the Reincorporation. The Nevada Mazal
will have no operations and no assets or liabilities prior to the merger. If the
Plan of Merger is approved, all the assets and liabilities of Akid will become
the assets and liabilities of the Nevada Mazal. The Reincorporation will become
effective upon the filing of the requisite merger documents in Nevada and
Colorado, which filings will occur upon the approval of Akid's stockholders to
the Reincorporation, or as soon as practicable thereafter (the "Effective
Date"). This summary does not include all of the provisions of the Plan of
Merger, a copy of which is attached hereto as Appendix B.
On the Effective Date of the Reincorporation, (i) any fractional shares of the
Nevada Mazal common stock that a holder of shares of Akid Common Stock would
otherwise be entitled to receive upon exchange of such holder's Akid Common
Stock will be canceled with the holder thereof being entitled to receive one
whole share of the Nevada Mazal common stock, and (ii) each outstanding share of
Akid Common Stock held by Akid shall be retired and canceled and shall resume
the status of authorized and unissued Nevada Mazal common stock.
The Articles of Incorporation of the Nevada Mazal will be different from the
Articles of Incorporation of Akid. Accordingly, an affirmative vote for the Plan
of Merger does not necessarily represent a vote for the adoption by the
shareholders of the Articles and the Nevada Mazal. Since the adoption of the
Articles of the Nevada Mazal are separate actions distinct from the vote on the
Plan of Merger, each of these differences between the Articles of Akid from the
Articles of the Nevada Mazal are presented as separate proposals to be voted on
at the Special Meeting. The vote for the Reincorporation is separate from the
vote for the amendments to the Articles of Incorporation. Because of the
differences between the Articles of Incorporation of Akid and the laws of the
State of Colorado which govern Akid, and the Articles of Incorporation of the
Nevada Mazal and the laws of the State of Nevada which govern the Nevada Mazal,
your rights as stockholders will be affected by the Reincorporation. See the
information under "Significant Changes in Akid's Charter" and "Comparative
Rights of Stockholders under Colorado and Nevada Law" for a summary of the
differences between the Articles of Incorporation of Akid and the laws of the
State of Colorado and the Articles of Incorporation of the Nevada Mazal and the
laws of the State of Nevada.
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The new board of directors will consist of those persons presently serving on
the board of directors of Akid. The individuals who will serve as executive
officers of the Nevada Mazal are those who currently serve as executive officers
of Akid. Such persons and their respective terms of office are set forth below
under the caption "Reincorporation in Nevada - Officers and Directors."
Akid's business operations will continue at the offices located at 43 West 33rd
Street, New York, NY 10001.
ABANDONMENT
Pursuant to the terms of the Plan of Merger, the merger may be abandoned by the
boards of directors of Akid and the Nevada Mazal at any time prior to the
Effective Date. In addition, the Board of Akid may amend the Plan of Merger at
any time prior to the Effective Date provided that any amendment made may not,
without approval by the stockholders of Akid, alter or change the amount or kind
of the Nevada Mazal common stock to be received in exchange for or on conversion
of all or any of Akid Common Stock, alter or change any term of the Articles of
Incorporation of the Nevada Mazal (the "Mazal Articles") or alter or change any
of the terms and conditions of the Plan of Merger if such alteration or change
would adversely affect the holders of Akid Common Stock. The Board has made no
determination as to any circumstances which may prompt a decision to abandon the
Reincorporation. Approval by stockholders of the Reincorporation will constitute
approval of the Plan of Merger, but not necessarily the adoption of the Articles
of Incorporation of the Nevada Mazal. Each of the differences between the
Articles of Akid and those of the Nevada Mazal must be affirmatively adopted by
the shareholders at the Special Meeting.
CORPORATE NAME
Immediately following the merger, the Nevada Mazal will be the surviving
corporation and its name will be Mazal Plant Pharmaceuticals, Inc.
MATERIAL TAX CONSEQUENCES FOR STOCKHOLDERS
The following description of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended (the "Code"), and applicable Treasury
regulations promulgated thereunder. This summary does not address the tax
treatment of special classes of stockholders, such as banks, insurance
companies, tax-exempt entities and foreign persons. Stockholders desiring to
know their individual federal, state, local and foreign tax consequences should
consult their own tax advisors.
The Reincorporation is intended to qualify as a tax-free reorganization under
Section 368(a)(1)(F) or 368(a)(1)(A) of the Code. Assuming such tax treatment,
no taxable income, gain, or loss will be recognized by Akid or the stockholders
as a result of the exchange of shares of Akid Common Stock for shares of the
Nevada Mazal common stock upon consummation of the transaction. The
Reincorporation and change of each share of Akid's Common Stock into one share
of the Nevada Mazal common stock will be a tax-free transaction, and the holding
period and tax basis of Common Stock will be carried over to the the Nevada
Mazal common stock received in exchange therefor.
Because of the complexity of the capital gains and loss provisions of the Code
and because of the uniqueness of each individual's capital gain or loss
situation, stockholders contemplating exercising statutory appraisal rights
should consult their own tax advisor regarding the federal income tax
consequences of exercising such rights. State, local or foreign income tax
consequences to stockholders may vary from the federal income tax consequences
described above. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISOR AS TO
THE CONSEQUENCES TO THEM OF THE REINCORPORATION UNDER ALL APPLICABLE TAX LAWS.
ACCOUNTING TREATMENT OF THE REINCORPORATION
For U.S. accounting purposes, the Reincorporation of our company from a Colorado
corporation to a Nevada corporation represents a transaction between entities
under common control. Assets and liabilities transferred between entities under
common control are accounted for at historical cost, in accordance with the
guidance for transactions between entities under common control in Statement of
Financial Accounting Standards No. 141, Business Combinations. The historical
comparative figures of Akid will be those of the Nevada Mazal.
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PRICE VOLATILITY
We cannot predict what effect the Reincorporation will have on our market price
prevailing from time to time or the liquidity of our shares.
SECURITIES ACT CONSEQUENCES
Pursuant to Rule 145(a)(2) under the Securities Act of 1933, as amended, a
merger which has the sole purpose of changing an issuer's domicile within the
United States does not involve a sale of securities for the purposes of the
Securities Act. Accordingly, separate registration of shares of common stock of
the Nevada Mazal will not be required.
APPRAISAL RIGHTS
Stockholders are entitled to dissenter's rights of appraisal as to the
Reincorporation if they dissent thereto. See "Dissenters' Rights."
SIGNIFICANT CHANGES IN AKID'S CHARTER TO BE IMPLEMENTED IF THE SHAREHOLDERS
APPROVE THE CHANGES TO THE ARTICLES
Akid was incorporated under the laws of the State of Colorado and the Nevada
Mazal was incorporated under the laws of the State of Nevada. Upon the
Reincorporation, the stockholders of Akid will become stockholders of the Nevada
Mazal. Their rights as stockholders will be governed by Title 7, Chapter 78 of
the Nevada Law.
If the shareholders approve the changes described in this proxy regarding the
Articles of Incorporation of the Nevada Mazal, the Articles of Incorporation of
Akid will no longer be applicable. There are significant differences between
some of the provisions of the Articles of Akid as compared to some of the
provisions of the Articles of the Nevada Mazal. The other proposals to be voted
upon at the Special Meeting relate to these differences and are further
explained in the other proposals contained in this Proxy.
COMPARATIVE RIGHTS OF STOCKHOLDERS UNDER COLORADO AND NEVADA LAW
The Nevada General Corporation Law (the "Nevada Code") differs from the Colorado
Business Corporation Act (the "Colorado Code") in certain respects. It is
impractical to describe all such differences, but the following is a summary
description of the more significant differences. This summary description is
qualified in its entirety by reference to the Nevada Code and the Colorado Code.
Voting Rights With Respect To Extraordinary Corporate Transactions
Nevada. Approval of mergers and consolidations and sales, leases or
exchanges of all or substantially all of the property or assets of a
corporation, requires the affirmative vote or consent of the holders of a
majority of the outstanding shares entitled to vote, except that, no vote of
shareholders of the corporation surviving a merger is necessary if: (i) the
merger does not amend or alter, in any way the articles of incorporation of the
corporation; (ii) each outstanding share immediately prior to the merger is to
be an identical share after the merger; (iii) no common stock of the corporation
and no securities or obligations convertible into common stock are to be issued
in the merger, or the common stock to be issued in the merger along with the
conversion of other securities issued in the merger does not exceed 20% of the
common stock of the corporation outstanding immediately before the merger; and,
(iv) the number of participating shares outstanding immediately before the
merger, plus the number of participating shares issuable as a result of the
merger, either by conversion of securities issued pursuant to the merger or the
exercise of rights and warrants issued pursuant to the merger, will not exceed
by more than 20% the total number of participating shares outstanding
immediately before the merger.
Colorado. Approval of mergers and consolidations and sales, leases or
exchanges of all or substantially all of the property or assets of a corporation
requires the approval of a majority of shareholders (unless the articles of
incorporation, the bylaws or a resolution of the board of directors requires a
greater number) holding issued shares of the corporation. No vote of the
shareholders of the surviving corporation in a merger is required if: (i) the
articles of incorporation of the surviving corporation will not be changed; (ii)
each shareholder of the surviving corporation whose shares were outstanding
immediately before the effective date of the merger will hold the same number of
shares, with identical designations, preferences, limitations and relative
rights, immediately after the merger; (iii) none of the entities is a nonprofit
corporation; and, (iv) the shareholders of the surviving corporation immediately
prior to the merger own at least 80% of the of the value of all interest of the
surviving entity immediately after the merger; and are entitled to cast votes or
right to consent equal to 80% of all shareholder votes immediately after the
merger.
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Shareholders Consent Without A Meeting
Nevada. Unless otherwise provided in the articles of incorporation, action
requiring the vote of shareholders, may be taken without a meeting, without
prior notice and without a vote, by the written consent of shareholders having
not less than the minimum number of votes that would be necessary to take such
action at a meeting at which all shares entitled to vote thereon were present
and acted.
Colorado. Unless otherwise provided in the articles of incorporation,
action requiring the vote of the shareholders may be taken without a meeting if
all the shareholders entitled to vote consent to take the action in writing.
However, no action taken shall become effective until the corporation receives
writings that describe and consent to the action being taken. Any such action
taken shall have the same effect of any action taken at a meeting of
shareholders.
Dividends
Nevada. Distributions under the Nevada Code mean (1) the direct or
indirect transfer of corporate property or cash to shareholders, or (2) the
incurrence of indebtedness by the corporation to or for the benefit of its
shareholders. A distribution may be made in the form of a declaration or payment
of a dividend, a purchase, redemption or other acquisition of shares. However,
no distribution shall be made if following said distribution: (i) the
corporation would be unable to pay its debts; (ii) the distribution would leave
the corporation with assets less than the sum of total liabilities.
Colorado. A corporation is prohibited from making a distribution to its
shareholders if, after giving effect to the distribution, the corporation would
not be able to pay its debts as they become due in the usual, course of business
or the corporation's total assets would be less than its total liabilities (plus
any amounts necessary to satisfy any preferential rights).
Anti-Takeover Statutes
Nevada. Except under certain circumstances, Nevada law prohibits a
"combination" between corporations and "interested shareholder" within three
years of the shareholder becoming an "interested shareholder." An "interested
shareholder," as defined under the Nevada Code is a person that directly or
indirectly, controls 10% or more of the outstanding voting stock, or is an
affiliate or associate of the corporation and was the owner of 10% or more of
such voting stock at any time within the previous three years. A "combination"
includes a merger, consolidation, sale or other disposition of assets having an
aggregate value in excess of 5% of the aggregate market value of the
consolidated assets of the corporation or its outstanding stock, disposition of
assets having an aggregate market value equal to 5% or more of the market value
of all the outstanding shares of the corporation, or said assets represent 10%
or more of the earning power or net income of the corporation. Additionally,
certain other transactions that would increase the interested shareholders'
proportionate share under the Nevada Code, such business combinations between a
corporation and an interested shareholder are prohibited.
The following are considered to be authorized combinations, generally
corporations may not engage in any combination with an interested shareholder of
the resident domestic corporation after the expiration of 3 years after his date
of acquiring shares, unless (1) a the combination is approved by the board of
directors of the corporation before the interested shareholder's date of
acquiring shares, the purchase of shares made by the interested stockholder on
that date had been approved by the board of directors before that date, or (2) a
combination approved by vote of the holders of stock representing a majority of
the outstanding shares, not beneficially owned by the interested shareholder
proposing the combination, or any affiliate or associate of the interested
shareholder proposing the combination, at a meeting called for that purpose no
earlier than three years after the interested shareholder's date of acquiring
shares.
Colorado. The Colorado Code does not provide guidance regarding
anti-takeover provisions.
Quorum of Directors
Nevada. Unless a greater or lesser number is required for a quorum by the
articles of incorporation or bylaws a majority of the directors then in office,
at a meeting duly assembled shall constitute a quorum.
Colorado. A quorum of the board of directors consists of a majority of the
fixed number of directors if the corporation has a fixed board size, or if the
corporation's bylaws provide for a variable board size, a majority of the number
of directors prescribed, or if no number is prescribed, the number in office.
The corporations bylaws may authorize quorum to consist of a majority of the
number of directors fixed, or no fewer than a majority of the number of
directors fixed, or if no fixed number than no fewer than a majority of the
number of directors in office immediately prior to the beginning of the meeting.
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Derivative Suits
Nevada. A person may not commence a derivative action unless the person
was a shareholder of the corporation at the time when the transactions
complained of occurred (unless the person became a shareholder through transfer
by operation of law from a person who was a shareholder at the time). The
complaint must be verified and allege with particularity the efforts of the
plaintiff(s) to secure the desired action from the board of directors or from
the shareholders if necessary and the reasons for plaintiff(s) failure to secure
such action or the reasons for not making the effort to secure such action. The
action may not be maintained if the plaintiff(s) do not fairly and adequately
represent the interests of the shareholders similarly situated.
Colorado. A person may not commence a derivative action unless the person
was a shareholder of the corporation at the time when the transactions
complained of occurred (unless the person became a shareholder through transfer
by operation of law from a person who was a shareholder at the time). The
complaint must be verified and allege with particularity (i) the demand made on
the board of directors and that either the demand was refused or ignored by the
board of directors, or (ii) if no demand was made on the board of directors, why
the person did not make the demand. The action may not be maintained if the
plaintiff(s) do not fairly and adequately represent the interests of the
shareholders similarly situated.
Special Meetings of Shareholders
Nevada. Unless otherwise provided in the articles of incorporation or
bylaws only the president or any two or more directors, acting in concert may
call for a special meeting. Unless otherwise specified by the articles of
incorporation or bylaws the special meeting need not be held in the state of
incorporation, and notice of any meeting must be sent to shareholders indicating
the purpose(s) for the meeting, the location the meeting will be held and notice
must be signed by a officer or other person so authorized to sign on behalf of
the corporation within the articles of incorporation or bylaws. Notice of said
meeting must be given no less than 10 days prior to, or no more than 60 days
from the date scheduled for the meeting.
Colorado. A special meeting of shareholders shall be held by the
corporation, if called by the board of directors, the person or persons
authorized by the bylaws to call a special meeting, or written demands from the
holders of shares representing at least 10% of all votes entitled to be cast on
any issue proposed to be considered at the special meeting. The corporation
shall give notice of the date, time and place of the meeting no fewer than 10
and no more than 60 days before the meeting. Notice of a special meeting must
include a description of the purposes for which the special meeting is called,
unless otherwise specified by the articles of incorporation or bylaws the
special meeting need not be held within the state of incorporation, however if
there be no place specified in the articles of incorporation or bylaws the
meeting shall be held at the corporation's principal place of business.
Amendments to Charter
Nevada. Amendments to the articles of incorporation require that the board
of directors adopt a resolution setting forth the proposed amendment and the
purpose(s) of such, declare the amendments advisability, and call for a general
or special meeting, all shareholders are entitled to vote for the consideration
of the proposed amendment. At the meeting held for said purpose and upon a
canvassing of the shareholders, if it appears that the majority will affirm the
amendment the company's secretary shall file the with the secretary of state a
certificate setting forth the amendment. However, if the amendment proposes to
change any preference or any relative or other right given to any class of
security, then the amendment must be approved by the vote of the majority of the
shareholders of each class of shares affected by the amendment regardless of the
limitations or restrictions on the voting power of said classes of stock.
Colorado. Unless, otherwise provided in the articles of incorporation the
board of directors may, under very limited circumstances, amend the articles
without shareholder approval, otherwise the board of directors or the holders of
shares representing at least 10% of the all votes entitled to be cast may
propose an amendment to the articles of incorporation. The board of directors
shall either recommend to the shareholders the adoption of the board proposed
amendment or recommend against or in favor of any proposed shareholder
amendment, the amendment shall be duly voted upon and adopted by an affirmative
vote by a majority of shareholders.
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Notice, Adjournment and Place of Stockholders' Meetings
Nevada. The Nevada Code requires that notice of shareholders' meetings be
given between 10 and 60 days before a meeting unless the shareholders waive or
reduce the notice period by unanimous consent in writing. If the meeting is to
be postponed for a period of more than 60 days, the corporation shall be
required to fix a new record date and new notice must be sent to all
shareholders of record as of that date.
Colorado. The Colorado Code require that notice of shareholders' meetings
be given between 10 and 60 days before a meeting unless the shareholders waive
or reduce the notice period by unanimous consent in writing. If the meeting is
moved to more than 120 days from the originally scheduled date the corporation
shall be required to fix a new record date and new notice must be sent to all
shareholders of record as of that date.
Directors
Nevada. A majority of the number of directors then in office constitutes a
quorum for the transaction of business. In the absence of a quorum, a majority
of the directors present may adjourn any meeting from time to time until a
quorum is present.
Colorado. A majority of the number of directors constitutes a quorum for
the transaction of business.
Election and Removal of Directors
Nevada. Directors shall hold office for the terms specified in the bylaws
and until their successors have been elected as provided in said bylaws. Any
director, or the entire Board, may be removed at a meeting expressly called for
that purpose, a director may be removed by a vote of a majority of the
outstanding shares of the Company. Vacancies on the board shall be filled only
by a majority of the directors then in office, although less than a quorum.
Colorado. Any director, or the entire Board, may be removed for cause by a
vote of the shareholders or by action of the board, directors may be removed
without cause only by vote of the stockholders. Vacancies on the board occurring
by reason of the removal of director without cause shall be filled only by a
majority of the directors then in office, although less than a quorum. Vacancy
on the board occurring by reason of the removal of a director without cause
shall be filled only by a vote of shareholders.
Transactions With Officers and Directors
Nevada. Under the Nevada Code, contracts or transactions in which a
director or officer is financially interested are not automatically void or
voidable if: (i) financial interest is known to the board of directors or
committee, and the board or committee approves, authorizes or ratifies the
contract in good faith by a majority vote of the remaining directors without
counting the interested director(s) vote; (ii) the material facts are disclosed
to the shareholders, and they approve or ratify the transaction in good faith by
a majority vote of all shareholders eligible to vote, including the interested
directors or officers votes; or (iii) the contract is fair to the corporation at
the time it is entered into. Board or committee approval must be by a majority
of the disinterested directors, but interested directors may be counted for
purposes of establishing the presence or absence of a quorum.
Colorado. Under the Colorado Code, contracts or transactions in which a
director or officer is financially interested are not automatically void or
voidable if: (i) material facts are known to the board of directors or
committee, and the board or committee approves, authorizes or ratifies the
contract in good faith by a sufficient vote without counting the interested
director(s) vote; (ii) the financial interest is known to the shareholders, and
they approve or ratify the transaction in good faith by a majority vote of all
shareholders eligible to vote, including the interested directors or officers
votes; (iii) the fact that the financial interest is unknown to the interested
officer or director at the time of approval: or (iv) the contract is fair to the
corporation at the time it is entered into. Board or committee approval must be
by a majority of the disinterested directors, but interested directors may be
counted for purposes of establishing the presence or absence of a quorum.
Limitation on Liability of Directors; Indemnification of Officers and Directors
Nevada. Nevada law provides that a corporation may adopt in its bylaws
provisions eliminating or limiting the personal liability of an officer or
director from any threatened civil, criminal, administrative or investigative
action if adjudicated not liable for a knowing breach of fiduciary duty, fraud
or other intentional misconduct or acted in good faith in the best interest of
the corporation, or that, with respect to a criminal action had no reasonable
cause to believe that the conduct was unlawful.
15
Colorado. The Colorado Code provides the authority to limit liability
against any director of the corporation made party to a proceeding because of
their status as a director if: (i) the person acted in good faith; (ii) the
person reasonably believed they were acting in their official capacity in the
best interest of the corporation, or if not in their official capacity the
conduct was not opposed to the best interest of the corporation and in the case
of any criminal proceeding the person had no cause to believe the conduct was
wrongful. However, a corporation may not limit liability under the following
situations: (i) wherein a director is adjudicated liable to the corporation;
(ii) wherein a director is found to have derived an improper personal benefit
form the course of action, whether or not acting in within their official
capacity or not. Colorado Code provides that the indemnification provided must
be limited to reasonable expenses incurred in connection with the proceedings.
The Colorado Code requires that, unless limited by the articles of
incorporation, a corporation shall indemnify any director, who because of his or
her position as director became a party to a proceeding wherein they prevailed
on the merits or otherwise, against reasonable expenses incurred in connection
with the proceedings.
DISSENTERS' RIGHTS AS A RESULT OF THE REINCORPORATION
Stockholders of Akid will have dissenters' rights under Colorado law as a result
of the proposed Reincorporation. Stockholders who oppose the Reincorporation
will have the right to receive payment for the value of their shares as set
forth in Sections 17-113-101 et seq. of the Colorado Code. A copy of these
sections is attached hereto as Appendix C to this Proxy Statement. The material
requirements for a stockholder to properly exercise his or her rights are
summarized below. However, these provisions are very technical in nature, and
the following summary is qualified in its entirety by the actual statutory
provisions that should be carefully reviewed by any stockholder wishing to
assert such rights.
We have furnished to shareholders in this Proxy Statement information with
respect to the Reincorporation Proposal in order to enable shareholders to
evaluate the Reincorporation Proposal and to determine whether or not to
exercise dissenter's rights. A shareholder may assert these rights only if the
shareholder (a) sends, before the vote is taken, written notice of the
shareholder's intention to demand payment for the shareholder's shares if the
proposed corporate action is effectuated; and (b) not vote his or her shares in
favor of the proposed corporate action. A shareholder who demands payment in
accordance with this method retains all rights of a shareholder, except the
right to transfer the shares, until the effective date of the proposed merger
and has only the right to receive payment for the shares after the effective
date of such corporate action.
Within ten days after the merger under the reincorporation is accomplished, we
will send a dissenters' notice to all shareholders who are entitled to demand
payment, notifying them that:
(a) The corporate action was authorized and stating the effective date or
proposed effective date of the corporate action;
(b) An address at which the corporation will receive payment demands and
the address of a place where certificates for certificated shares must be
deposited;
(c) Information to holders of un-certificated shares to what extent
transfer of the shares will be restricted after the payment demand is received;
(d) Supplying a form for demanding payment, which shall request an address
for payment; and
(e) Set the date by which we must receive the payment demand and
certificates for certificated shares.
Dissenting shareholders must respond to our notice and comply with the Colorado
Business Corporation Act as describe above in order to receive payment for their
shares.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING DISSENTER'S RIGHTS
The following is a summary of important U.S. tax considerations of exercising
dissenter's rights. It addresses only Stockholders who exercise dissenter's
rights. It does not purport to be complete and does not address Stockholders
subject to special rules, such as financial institutions, tax-exempt
organizations, insurance companies, dealers in securities, mutual funds, foreign
stockholders, stockholders who hold the our common stock as part of a straddle,
hedge, or conversion transaction, stockholders who hold our common stock as
qualified small business stock within the meaning of Section 1202 of the
Internal Revenue Code of 1986, as amended (the "Code"), stockholders who are
subject to the alternative minimum tax provisions of the Code, and stockholders
who acquired their common stock pursuant to the exercise of employee stock
options or otherwise as compensation. This summary is based upon current law,
which may change, possibly even retroactively. It does not address tax
considerations under state, local, foreign, and other laws. Furthermore, we have
not obtained a ruling from the Internal Revenue Service or an opinion of legal
or tax counsel with respect to the consequences of exercising dissenter's
rights.
16
This discussion of certain material U.S. federal income tax considerations is
not tax advice. You are urged to consult your own tax advisor with respect to
the particular U.S. federal income tax consequences to you of exercising
dissenter's rights, including any special considerations related to your
particular situation, as well as the applicability and effect of any state,
local, foreign or other tax laws and changes in any applicable tax laws.
For U.S. stockholders, exercising dissenter's rights will result in capital gain
or loss with respect to our capital stock, measured by the difference between
the U.S. stockholder's tax basis in our capital stock exchanged and the amount
of cash received in the merger. If a U.S. stockholder acquired our capital stock
by purchase, the U.S. stockholder's adjusted tax basis in our capital stock will
generally equal the amount the U.S. stockholder paid for the stock, less any
returns of capital that the U.S. stockholder might have received with regard to
the stock. In the case of a U.S. stockholder that holds multiple blocks of our
capital stock (i.e., our capital stock acquired separately at different times
and/or prices), gain or loss must be calculated and accounted for separately for
each block.
OUR RECOMMENDATION TO SHAREHOLDERS
Taking into consideration all of the factors and reasons for the Reincorporation
set forth above and elsewhere in this Proxy Statement, the Board has approved
the Reincorporation and recommends that stockholders of Akid vote FOR approval
of the Reincorporation and Plan of Merger. IN THE EVENT THAT THIS PROPOSAL NO. 1
IS APPROVED BUT PROPOSALS NUMBERED 2 THROUGH 4 REGARDING THE CHANGES IN THE
COMPANY'S ARTICLES ARE NOT APPROVED, THE BOARD OF AKID WILL NOT CONTINUE WITH
THE PLAN OF MERGER AND AKID WILL REMAIN A COLORADO CORPORATION.
PROPOSAL NO. 2
CHANGE IN THE COMPANY'S NAME FROM "AKID CORPORATION" TO
"MAZAL PLANT PHARMACEUTICALS, INC."
The Board is asking the shareholders to authorize a change in the name of the
company from its current name to "Mazal Plant Pharmaceuticals, Inc." As
previously reported on Akid's Form 8-K filed with the Securities and Exchange
Commission on June 9, 2005, Akid consummated a Share Exchange Agreement (the
"Share Exchange Agreement") with Advanced Plant Pharmaceutical, Inc., a Delaware
corporation ("APPI"), on June 6, 2005. Pursuant to the Share Exchange Agreement,
among other things, Akid acquired the majority of the common stock of Mazal
Plant Pharmaceuticals, Inc., a Delaware corporation (the "Delaware Mazal").
Since it is the intention of Akid to engage in and conduct the business
operations of the Delaware Mazal, the Board has determined that the name of the
company should be changed to reflect such operations.
OUR RECOMMENDATION TO SHAREHOLDERS
The Board has approved the change in the name of Akid to "Mazal Plant
Pharmaceuticals, Inc." and recommends that stockholders of Akid vote FOR
approval of the change in the name of Akid. IN THE EVENT THAT THIS PROPOSAL NO.
2 IS APPROVED BUT PROPOSAL NUMBER 1 REGARDING THE REINCORPORATION OF AKID FROM
COLORADO TO NEVADA IS NOT APPROVED, THE BOARD OF AKID WILL FILE AN AMENDMENT TO
THE ARTICLES OF AKID IN COLORADO SIMILAR TO THE ATTACHED APPENDIX D TO CHANGE
THE NAME OF THE COMPANY.
PROPOSAL NO. 3
INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
As of the record date, the authorized capital of Akid, on the record date,
consisted of 20,000,000 shares of Common Stock, no par value. Akid has reserved
for issuance a total of 32,950,000 shares of Common Stock. Although the issuance
of such shares has been authorized by Akid, not all of them have been issued
because Akid does not have sufficient authorized shares to enable their
issuance. The authorized capital of the Nevada Mazal, which will be the
authorized capital of Akid if so approved by the shareholders, consists of
100,000,000 shares of common stock, no par value and 1,000,000 shares of
preferred stock, no par value (the "Mazal Preferred Stock"). The increase in the
number of authorized shares of common stock is necessary for Akid to fulfill its
obligations to investors and employees entitled to shares of Akid's common
stock. The approval of this proposal will not affect total stockholder equity
but will increase the authorized capitalization of Akid.
17
Pursuant to the Share Exchange Agreement, Akid acquired from APPI its entire
ownership interest in 7,000,000 shares of the common stock of the Delaware
Mazal, which represents 68.5% of the issued and outstanding shares of the
Delaware Mazal. In exchange, Akid agreed to issue to APPI 20,000,000 shares (the
"Exchange Shares") of Akid's common stock. Following the consummation of such
share exchange, APPI holds a majority of the issued and outstanding common
shares of Akid, and Akid holds a majority of the issued and outstanding common
shares of the Delaware Mazal. Because Akid's authorized common stock is not
sufficient for it to issue the Exchange Shares, Akid agreed to amend its
Articles of Incorporation after the closing, for the purpose of increasing its
authorized common stock. Akid agreed to issue to APPI 17,500,000 of the Exchange
Shares at the closing, and to issue the remaining 2,500,000 of the Exchange
Shares immediately after the effective date of the increase in its authorized
common stock. As of the date hereof, Akid has issued only 10,500,000 of the
Exchange Shares. Accordingly, Akid will be required to issue additional shares
of stock to enable it to meet its obligations under the Share Exchange
Agreement. You are encouraged to review our report on Form 8-K filed with the
Securities and Exchange Commission on June 9, 2005, which discusses more
thoroughly the terms of the Share Exchange Agreement, which report is available
through EDGAR at www.sec.gov and is incorporated herein by reference.
On August 1, 2005, Akid authorized the issuance of 600,000 shares of its common
stock to Dr. Mechael Kanovsky, the Chief Executive Officer and a director of
Akid, in consideration for his services rendered to the Delaware Mazal, a
subsidiary of Akid.
On August 1, 2005, Akid authorized the issuance of 1,800,000 shares of its
common stock to Sam Berkowitz, the Secretary of Akid, in consideration for his
services rendered to the Delaware Mazal, a subsidiary of Akid.
On August 1, 2005, Akid authorized the issuance to Chaim J. Lieberman of
1,800,000 shares of its common stock in consideration for his services rendered
to the Delaware Mazal, a subsidiary of Akid.
On August 1, 2005, Akid authorized the issuance to David Lieberman of 1,800,000
shares of its common stock in consideration for his services rendered to the
Delaware Mazal, a subsidiary of Akid.
Other than as described above, Akid has no present arrangements, agreements or
understandings for the use of the additional shares proposed to be authorized.
The additional shares of Common Stock for which authorization is sought would be
a part of the existing class of the Nevada Mazal common stock and, if and when
issued, would have the same rights and privileges as the currently outstanding
shares of Common Stock. Current stockholders do not have preemptive rights under
Akid's Certificate of Incorporation, and will not have such rights with respect
to these additional authorized shares of Common Stock. When the Board elects to
issue additional shares of Common Stock, such issuance will have a dilutive
effect on the voting power and percentage ownership of Akid, and an adverse
effect on the market price of the common stock and the continuation of the
current management of Akid.
The Board further believes that it is in Akid's best interests to increase the
number of authorized shares of Common Stock in order to provide Akid with the
flexibility to issue Common Stock without further action by Akid's stockholders
(unless required by law or regulation) for such other corporate purposes as the
Board may deem advisable. These purposes may include, among other things, the
sale of shares to obtain additional capital funds, the purchase of property, the
use of additional shares for various equity compensation and other employee
benefit plans of Akid or of acquired companies, the acquisition of other
companies, and other bona fide purposes.
18
OUR RECOMMENDATION TO SHAREHOLDERS
The Board has approved the change in the Articles of Akid from having 20,000,000
shares of common stock authorized to the change in the Articles of the Nevada
Mazal providing for 100,000,000 shares of common stock authorized and recommends
that shareholders of Akid vote FOR approval of the increase in the number of
authorized shares of common stock. IN THE EVENT THAT THIS PROPOSAL NO. 3 IS
APPROVED BUT PROPOSAL NUMBER 1 REGARDING THE REINCORPORATION OF AKID FROM
COLORADO TO NEVADA IS NOT APPROVED, THE BOARD OF AKID WILL FILE AN AMENDMENT TO
THE ARTICLES OF AKID IN COLORADO SIMILAR TO THE ATTACHED APPENDIX D TO INCREASE
THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY.
PROPOSAL NO. 4
ADOPTION OF "BLANK CHECK" PREFERRED STOCK
The current Articles of Akid authorize the company to issue 5,000,000 non-voting
preferred stock. The Board has determined that having "blank check" Preferred
Stock including, without limitation, voting rights, would facilitate corporate
financing and other plans of Akid, which are intended to foster its growth and
flexibility. The Board believes that the Preferred Stock may assist Akid in
achieving its business objectives by making financing easier to obtain. Under
the terms of the Preferred Stock, the Board would be empowered, with no need for
further stockholder approval, to issue Preferred Stock in one or more series,
and with such dividend rates and rights, liquidation preferences, voting rights,
conversion rights, rights and terms of redemption and other rights, preferences,
and privileges as determined by the Board. That is the reason the Preferred
Stock is referred to as "blank check preferred stock". The Board believes that
the complexity of modern business financing and possible future transactions
require greater flexibility in Akid's capital structure than currently exists.
The Board will be permitted to issue Mazal Preferred Stock from time to time for
any proper corporate purpose including acquisitions of other businesses or
properties and the raising of additional capital. Shares of Mazal Preferred
Stock could be issued publicly or privately, in one or more series, and each
series of Mazal Preferred Stock could rank senior to the Common Stock of Akid
with respect to dividends and liquidation rights. There are no present plans,
understandings or agreements for, and Akid is not engaged in any negotiations
that will involve, the issuance of Mazal Preferred Stock.
Even though not intended by the Board, the possible overall effect of the
existence of Mazal Preferred Stock on the holders of Akid Common Stock may
include the dilution of their ownership interests in Akid, the continuation of
the current management of Akid, prevention of mergers with or business
combinations by Akid and the discouragement of possible tender offers for shares
of Common Stock.
Upon the conversion into Common Stock of shares of Mazal Preferred Stock issued
with conversion rights, if any, the Common Stock holders' voting power and
percentage ownership of Akid would be diluted and such issuances could have an
adverse effect on the market price of the Common Stock. Additionally, the
issuance of shares of Mazal Preferred Stock with certain rights, preferences and
privileges senior to those held by the Common Stock could diminish the Common
Stock holders' rights to receive dividends if declared by the Board and to
receive payments upon the liquidation of Akid.
If shares of Mazal Preferred Stock are issued, approval by holders of such
shares, voting as a separate class, could be required prior to certain mergers
with or business combinations by Akid. These factors could discourage attempts
to purchase control of Akid even if such change in control may be beneficial to
the Common Stock holders. Moreover, the issuance of Mazal Preferred Stock having
general voting rights together with the Common Stock to persons friendly to the
Board could make it more difficult to remove incumbent management and directors
from office even if such changes would be favorable to stockholders generally.
If shares of Mazal Preferred Stock are issued with conversion rights, the
attractiveness of Akid to a potential tender offeror for the Common Stock may be
diminished. The purchase of the additional shares of Common Stock or Mazal
Preferred Stock necessary to gain control of Akid may increase the cost to a
potential tender offeror and prevent the tender offer from being made even
though such offer may have been desirable to many of the Common Stock holders.
The ability of the Board, without any additional stockholder approval, to issue
shares of Mazal Preferred Stock with such rights, preferences, privileges and
restrictions as determined by the Board could be employed as an anti-takeover
device. The amendment is not presently intended for that purpose and is not
proposed in response to any specific takeover threat known to the Board.
Furthermore, this proposal is not part of any plan by the Board to adopt
anti-takeover devices and the Board currently has no present intention of
proposing anti-takeover measures in the near future. In addition, any such
issuance of Mazal Preferred Stock in the takeover context would be subject to
compliance by the Board with applicable principles of fiduciary duty.
19
The Board believes that the financial flexibility offered by the Mazal Preferred
Stock outweighs any of its disadvantages. To the extent the proposal may have
anti-takeover effects, the proposal may encourage persons seeking to acquire
Akid to negotiate directly with the Board, enabling the Board to consider the
proposed transaction in a non-disruptive atmosphere and to discharge effectively
its obligation to act on the proposed transaction in a manner that best serves
all the stockholders' interests. It is also the Board's view that the existence
of Mazal Preferred Stock should not discourage anyone from proposing a merger or
other transaction at a price reflective of the true value of Akid and which is
in the interests of its stockholders.
OUR RECOMMENDATION TO SHAREHOLDERS
Taking into consideration all of the factors and reasons set forth above for the
change in the Articles of Akid from having authorization to issue 5,000,000
non-voting preferred shares of common stock to the change in the Articles of the
Nevada Mazal providing for the authorization of blank check preferred shares,
the Board recommends that shareholders of Akid vote FOR approval of the
authorization provided in the Articles of the Nevada Mazal to issue up to
1,000,000 shares of preferred stock. IN THE EVENT THAT THIS PROPOSAL NO. 4 IS
APPROVED BUT PROPOSAL NUMBER 1 REGARDING THE REINCORPORATION OF AKID FROM
COLORADO TO NEVADA IS NOT APPROVED, THE BOARD OF AKID WILL FILE AN AMENDMENT TO
THE ARTICLES OF AKID IN COLORADO SIMILAR TO THE ATTACHED APPENDIX D TO AUTHORIZE
THE COMPANY TO ISSUE PREFERRED STOCK.
OFFICERS AND DIRECTORS
Upon the Effective Date the present officers and directors of Akid will continue
to be the officers and directors of the Nevada Mazal. This will result in the
following persons serving in the following capacities until the first annual
meeting after the specified number of years and until their respective
successors are elected and qualified:
Name Age Positions and Offices
---- --- ---------------------
Dr. Mechael Kanovsky 43 Chief Executive Officer and
Director
Sam Berkowitz 49 Secretary
Each director and executive officer holds office until the next annual meeting
of shareholders or until his successor has been duly elected and qualified. The
following is a brief account of each director's and executive officer's
education and business experience of during the past five years, and any other
directorships held in reporting companies. There are no family relationships
among the persons described below.
Dr. Mechael Kanovsky is the President and a director of Amazon Biotech, Inc. He
obtained his Ph.D. in Molecular Biology from Mount Sinai School of Medicine, New
York. Dr. Kanovsky worked as a research scientist with the Department of
Pathology at the Brooklyn VA Hospital and at State University of New York. Dr.
Kanovsky previously was a consultant for Marantech Corp. assisting in developing
a cancer screening test.
Mr. Sam Berkowitz has been the general and operating manager of Advanced Plant
Pharmaceuticals, Inc., a Delaware corporation, since 1996. Mr. Berkowitz
obtained his Bachelor of Arts Degree from Yeshiva University, New York. He is
not a director or officer in any other reporting company.
Until the change in control of Akid on June 6, 2005, Akid's sole director and
officer was James B. Wiegand. Mr. Wiegand resigned as a result of the change in
control of Akid and not because of any disagreement with Akid.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of September 16, 2005, the number of shares of
Common Stock beneficially owned by (i) each person or entity known to Akid to be
the beneficial owner of more than 5% of the outstanding common stock; (ii) each
officer and director of Akid; and (iii) all officers and directors as a group.
Information relating to beneficial ownership of common stock by our principal
stockholders and management is based upon information furnished by each person
using "beneficial ownership" concepts under the rules of the Securities and
Exchange Commission. Under these rules, a person is deemed to be a beneficial
owner of a security if that person has or shares voting power, which includes
the power to vote or direct the voting of the security, or investment power,
which includes the power to vote or direct the voting of the security. The
person is also deemed to be a beneficial owner of any security of which that
person has a right to acquire beneficial ownership within 60 days. Under the
Securities and Exchange Commission rules, more than one person may be deemed to
be a beneficial owner of the same securities, and a person may be deemed to be a
beneficial owner of securities as to which he or she may not have any pecuniary
beneficial interest. Except as noted below, each person has sole voting and
investment power.
20
The percentages below are calculated based on 32,950,000 shares of Common Stock
which Akid has authorized for issuance. Although the issuance of such shares has
been authorized by Akid, not all of them have been issued because Akid does not
have sufficient authorized shares to enable their issuance. Unless otherwise
indicated in the notes to the table below, the shares marked with an asterisk
below have not been issued. The shares will be issued after Akid files an
amendment to its Certificate of Incorporation sufficiently increasing its
authorized shares of common stock. Unless otherwise indicated, the business
address of each such person is c/o Akid Corporation, 43 West 33rd Street, New
York, NY 10001.
Officers, Directors, 5% Stockholders No. of Shares Beneficial Ownership
- ------------------------------------ ------------- --------------------
Advanced Plant Pharmaceuticals, Inc. 20,000,000(1) 60.7%
Malcolm Jennings 3,800,000 11.5%
Sam Berkowitz 1,800,000(2) 5.5%
Mechael Kanovksy 600,000(3) 1.8%
Chaim J. Lieberman 1,800,000(4) 5.5%
David Lieberman 1,800,000(5) 5.5%
All directors and executive officers as
a group (2 persons) 2,400,000 7.3%
- ----------
(1) Pursuant to the Share Exchange Agreement, dated June 6, 2005, among Akid,
Advanced Plant Pharmaceuticals, Inc., and James Wiegand, Advanced Plant
Pharmaceuticals, Inc. is entitled to a total of 20,000,000 shares of the common
stock of Akid as consideration for its sale to Akid of its 7,000,000 shares of
the Delaware Mazal. Because Akid's authorized common stock was not sufficient
for it to issue the 20,000,000 shares, Akid agreed to amend its Articles of
Incorporation after the closing of the Share Exchange Agreement for the purpose
of increasing its authorized common stock. Akid issued to Advanced Plant
Pharmaceuticals, Inc. 10,500,000 shares on July 6, 2005, and it will issue the
remaining 9,500,000 shares after Akid sufficiently increasing its authorized
shares of common stock.
(2) Mr. Berkowitz is entitled to receive 1,800,000 shares of the common stock of
Akid pursuant to the Employment Agreement, dated December 10, 2004, as amended
on August 1, 2005, among Mr. Berkowitz, Akid, and the Delaware Mazal, a
subsidiary of Akid, as compensation for his services rendered to the Delaware
Mazal.
(3) Dr. Kanovsky is entitled to receive additional shares of the common stock of
Akid pursuant to the Employment Agreement, dated December 10, 2004, as amended
on August 1, 2005, among Dr. Kanovsky, Akid, and the Delaware Mazal, a
subsidiary of Akid. Pursuant to such employment agreement, Dr. Kanovsky is
employed by the Delaware Mazal and is entitled to receive as partial
compensation 200,000 shares of common stock of Akid for each three months he is
employed by the Delaware Mazal, up to a total of 600,000 shares of the common
stock of Akid.
(4) On August 1, 2005, Akid authorized the issuance to Chaim J. Lieberman of
1,800,000 shares of its common stock in consideration for his services rendered
to the Delaware Mazal, a subsidiary of Akid, pursuant to an Employment
Agreement, dated December 10, 2004, as amended on August 1, 2005, among Mr.
Lieberman, Akid, and the Delaware Mazal. Pursuant to such employment agreement,
Mr. Lieberman is also entitled to receive 500,000 shares of the common stock of
Akid each time that the Delaware Mazal receives an IND and 100,000 shares of
Akid each time that the Delaware Mazal receives a patent. Although the issuance
of such shares was authorized by Akid, only 500,000 shares have been issued
because Akid does not have sufficient authorized shares to enable the issuance
of the remaining shares. The shares will be issued after Akid sufficiently
increasing its authorized shares of common stock.
(5) On August 1, 2005, Akid authorized the issuance to David Lieberman of
1,800,000 shares of its common stock in consideration for his services rendered
to the Delaware Mazal, a subsidiary of Akid, pursuant to an Employment
Agreement, dated December 10, 2004, as amended on August 1, 2005, among Mr.
Lieberman, Akid, and the Delaware Mazal. Although the issuance of such shares
was authorized by Akid, they have not been issued because Akid does not have
sufficient authorized shares to enable their issuance. The shares will be issued
after Akid sufficiently increasing its authorized shares of common stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 6, 2005, Akid issued to James B. Wiegand 500,000 shares of its common
stock in consideration for the services he rendered to Akid during his
appointment as Chief Executive Officer of Akid from 2003 to June 6, 2005.
21
On June 6, 2005, Akid issued to Max Gould 500,000 shares of its common stock in
consideration for his prior services to Akid.
Advanced Plant Pharmaceuticals, Inc., Akid's majority shareholder, is subleasing
to Akid office space of approximately 2,500 square feet located at 43 West 33rd
Street, New York, NY 10001 at a monthly rate of $750 pursuant to a one-year
sublease.
On August 1, 2005, Akid authorized the issuance of 600,000 shares of its common
stock to Dr. Mechael Kanovsky, the Chief Executive Officer and a director of
Akid, in consideration for his services rendered to the Delaware Mazal, a
subsidiary of Akid, pursuant to an Employment Agreement, dated December 10,
2004, as amended on August 1, 2005, among Dr. Kanovsky, Akid, and the Delaware
Mazal. Pursuant to such employment agreement, Dr. Kanovsky is employed by the
Delaware Mazal, and is entitled to receive as partial compensation an additional
200,000 shares of common stock of Akid for each three months he is employed by
the Delaware Mazal, up to a total of 600,000 shares of the common stock of Akid.
Dr. Kanovsky is also entitled to receive 100,000 shares of the common stock of
Akid each time that the Delaware Mazal receives an IND or a patent. The shares
were authorized to be issued under Section 4(2) of the Securities Act of 1933,
as amended, and/or Regulation D promulgated by the Securities and Exchange
Commission.
On August 1, 2005, Akid authorized the issuance of 1,800,000 shares of its
common stock to Sam Berkowitz, the Secretary of Akid, in consideration for his
services rendered to the Delaware Mazal, a subsidiary of Akid, pursuant to an
Employment Agreement, dated December 10, 2004, as amended on August 1, 2005,
among Mr. Berkowitz, Akid, and the Delaware Mazal. The shares were authorized to
be issued under Section 4(2) of the Securities Act of 1933, as amended, and/or
Regulation D promulgated by the Securities and Exchange Commission.
CHANGE IN ACCOUNTANTS
Akid recently changed its principal independent accountants. On August 12, 2005,
Akid dismissed Cordovano and Honeck LLP (the "Former Accountant") from serving
as Akid's principal independent accountants. On August 12, 2005, Akid retained
Meyler & Co. (the "New Accountant") as its new principal independent
accountants. The decision to change accountants was recommended and approved by
Akid's Board of Directors. Representatives of such firms will not be present at
the Meeting and are not expected to be available to respond to questions.
Representatives of such firms will have the opportunity to make a statement at
the Meeting should they desire to do so.
The Former Accountant
The reports of the Former Accountant on the financial statements for either of
the past two fiscal years contained no adverse opinion or disclaimer of opinion,
and were not qualified or modified as to uncertainty, audit scope, or accounting
principles. In addition, during Registrant's two most recent fiscal years and
through August 12, 2005, there were no disagreements with the Former Accountant
on any matters of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements, if not
resolved to the satisfaction of the Former Accountant, would have caused it to
make reference to the subject matter of the disagreements in connection with its
reports. None of the reportable events set forth in Item 304(a)(1)(iv)(B) of
Regulation S-B occurred within Akid's two most recent fiscal years nor through
August 12, 2005.
The New Accountant
During Akid's two most recent fiscal years and through August 12, 2005: (1) Akid
did not consult the New Accountant regarding either the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on Registrant's financial
statements; (2) neither a written report nor oral advice was provided to Akid by
the New Accountant that they concluded was an important factor considered by
Akid in reaching a decision as to the accounting, auditing or financial
reporting issue; and (3) Akid did not consult the New Accountant regarding any
matter that was either the subject of a "disagreement" (as defined in Item
304(a)(1)(iv) of Regulation S-B and the related instructions) or any of the
reportable events set forth in Item 304(a)(1)(iv)(B) of Regulation S-B.
STOCKHOLDER PROPOSALS
Shareholders of Akid may submit proposals to be considered for shareholder
action at the Special Meeting of Shareholders if they do so in accordance with
applicable regulations of the SEC and the laws of the State of Colorado. In
order to be considered for inclusion in the Proxy Statement for the meeting, the
Secretary must receive proposals no later than October 5, 2005. Shareholder
proposals should be addressed to the Secretary, Akid Corporation, 43 West 33rd
Street, New York, NY 10001.
22
As of the date of this proxy statement, Akid knows of no business that will be
presented for consideration at the meeting other than the items referred to
above. If any other matter is properly brought before the meeting for action by
stockholders, proxies in the enclosed form returned to Akid will be voted in
accordance with the recommendation of the Board or, in the absence of such a
recommendation, in accordance with the judgment of the proxy holder.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Akid's Current Reports on Form 8-K filed with the Securities and Exchange
Commission on June 9, 2005 and August 12, 2005 and on September 2, 2005 are
incorporated herein by reference. You may request a copy of any of these
filings, at no cost, by writing or telephoning us at the following address:
Akid.com, Inc.
43 West 33rd Street
New York, NY 10001.
(212) 695-3334
By Order of the Board of Directors,
/s/ Mechael Kanovsky
--------------------
September 16, 2005 Mechael Kanovsky, Chief Executive Officer
Appendices
Appendix A Financial Statements
Appendix B Plan and Agreement of Merger
Appendix C Colorado Code
Appendix D Articles of Incorporation of Mazal Plant Pharmaceuticals, Inc.
23
PROXY
AKID CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON
October 31, 2005
The undersigned, a stockholder of Akid Corporation (the "Company"), does
hereby appoint Mechael Kanovsky, as the attorney and proxy of the undersigned,
with power of substitution, for and on behalf of the undersigned, and to attend
the Special Meeting of Stockholders of the Company to be held on October 31,
2005, at 10:00 a.m., at the offices of the Company, located at 43 West 33rd
Street, New York, NY 10001 (the "Special Meeting"), to represent the undersigned
at the Special Meeting, and there to vote all the shares of Common Stock of the
Company which the undersigned is entitled to vote at the Special Meeting, in any
manner and with the same effect as if the undersigned were personally present at
the Special Meeting, and the undersigned hereby authorizes and instructs the
above named proxies to vote as specified below.
The shares represented by this Proxy will be voted only if this Proxy is
properly executed and timely returned. In that event, such shares will be voted
in the manner directed herein. If no direction is made on how you desire your
shares to be voted, the Proxy holder will have complete discretion in voting the
shares on any matter voted on at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE FOLLOWING:
The shares represented by this Proxy shall be voted in the following
manner:
FOR AGAINST WITHHOLD
- ------------------------- --- ------- --------
REINCORPORATION IN NEVADA |_| |_|
CHANGE IN NAME |_| |_|
INCREASE IN AUTHORIZED CAPITAL |_| |_|
AUTHORIZATION OF PREFRRED STOCK |_| |_|
The undersigned does hereby revoke any Proxy previously given with respect
to the shares represented by this Proxy.
NOTE: As to shares held in joint names, each joint owner should sign. If
the signer is a corporation, please sign full corporate name by a duly
authorized officer. If a partnership, please sign in partnership name by an
authorized person. If signing as attorney, executor, administrator, trustee,
guardian, or in other representative capacity, please give full title as such.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROPERLY RETURN IT USING
THE ENCLOSED ENVELOPE.
Number of Shares Owned: _________________________________
Dated:
-------------------- ------------------------------------
Signature
------------------------------------
Name (typed or printed)
------------------------------------
Address
Dated:
-------------------- ------------------------------------
Signature
------------------------------------
Name (typed or printed)
------------------------------------
Address
24
APPENDIX A
FINANCIAL STATEMENTS
AKID CORPORATION
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2004
CONTENTS
- ---------------------------------------------------------------------------
Report of Independent Registered Public Accounting Firm Page F1
Consolidated Balance Sheet F2
Consolidated Statement of Operations F3
Consolidated Statement of Cash Flows F4
Consolidated Statement of Stockholders' Deficit F5
Notes to Consolidated Financial Statements F6
MEYLER & COMPANY, LLC
CERTIFIED PUBLIC ACCOUNTANTS
ONE ARIN PARK
1715 HIGHWAY 35
MIDDLETOWN, NJ 07748
Report of Independent Registered Public Accounting Firm
To the Board of Directors
AKID Corporation
We have audited the accompanying consolidated balance sheet of AKID Corporation
as of December 31, 2004 and the related consolidated statements of operations,
stockholders' deficit, and cash flows for the period May 18, 2004 (Inception) to
December 31, 2004. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 2004 and the results of its operations and its cash flows for the
period May 18, 2004 (inception) to December 31, 2004 in conformity with U.S.
generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note A to the
consolidated financial statements, the Company has incurred net losses of
$15,438 since inception, has no working capital, a stockholders' deficit of
$12,765 at December 31, 2004, and there are existing uncertain conditions the
Company faces relative to its ability to obtain capital and operate
successfully. These conditions raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters are also
described in Note A. The financial statements do not include any adjustments
that might result from the outcome of these uncertainties.
/s/ Meyler & Company, LLC
Middletown, NJ
August 17, 2005
F 1
AKID CORPORATION
CONSOLIDATED BALANCE SHEET
December 31, 2004
ASSETS
INTANGIBLE ASSETS $ 50,700
--------
Total Assets $ 50,700
========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accrued expenses $ 633
Accrued salaries 12,100
--------
Total Current Liabilities 12,733
LONG-TERM DEBT
Due to Advanced Plant Pharmaceutical, Inc. 50,732
STOCKHOLDERS' DEFICIT
Preferred stock, par value $0.001 authorized
10,000,000 shares, none issued and outstanding
Common stock authorized 20,000,000
shares; no par value; issued and outstanding
20,000,000 shares 2,673
Accumulated deficit (15,438)
--------
Total Stockholders' Deficit (12,765)
--------
Total Liabilities and Stockholders' Deficit $ 50,700
========
See accompanying notes to financial statements.
F 2
AKID CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the Period May 18, 2004 (Inception) to December 31, 2004
COSTS AND EXPENSES
Operating expenses $ 13,466
Stock based compensation 312
------------
Total Costs and Expenses 13,778
------------
NET LOSS $ (13,778)
============
NET LOSS PER COMMON SHARE
(BASIC AND DILUTED)
$ (0.01)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 27,410,000
============
See accompanying notes to financial statements.
F 3
AKID CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Period May 18, 2004 (Inception) to December 31, 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(13,778)
Adjustments to reconcile net loss to cash flows used
in operating activities:
Stock based compensation 312
Accrued expenses 633
Accrued salaries 12,100
--------
Net Cash Flows Used in Operating Activities (733)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from Advanced Plant Pharmaceutical, Inc. 733
--------
Net Cash Flows provided by Financing Activities 733
--------
INCREASE (DECREASE) IN CASH
CASH, BEGINNING OF PERIOD
--------
CASH, END OF PERIOD $
========
SUPPLEMENTAL CASH FLOW INFORMATION:
Amount due to Advanced Plant Pharmaceutical, Inc.
for technology rights $ 50,000
========
Issuance of common stock for technology rights $ 700
========
See accompanying notes to financial statements.
F 4
AKID CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
For the Period May 18, 2004 (Inception) to December 31, 2004
Common Stock Additional Total
---------------------------- Paid in Accumulated Stockholders'
Shares Amount Capital Deficit Deficit
------------------------------------------------------------------------------
Mazel Plant Pharmaceuticals, Inc. 10,130,000 $ 1,013 $ 1,013
----------- ----------- -----------
Total Mazel Plant Pharmaceuticals,
Inc. prior to reverse merger 10,130,000 1,013 1,013
Reverse Merger
Merger with AKID Corporation
Cancellation of Mazel Plant
Pharmaceuticals, Inc. common
stock (10,130,000) (1,013) $ 1,013
Equity of AKID Corporation 1,230,000 2,673 25,840 $ (28,513)
Issuance of 20,000,000 shares
in exchange for 7,000,000 shares
of Mazel 20,000,000
Issuance of 6,180,000 shares in
exchange for 3,130,000 shares
of Mazel 6,180,000
Capitalization of AKID net loss (26,853) 26,853
Net loss for the period May 18, 2004
(inception) to December 31, 2004 (13,778) (13,778)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2004 27,410,000 $ 2,673 $ $ (15,438) $ (12,765)
=========== =========== =========== =========== ===========
See accompanying notes to financial statements.
F 5
AKID CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Mazel Plant Pharmaceutical, Inc. (the "Company") has the technology rights
to develop, manufacture and distribute three products, specifically, plant
based compositions designed to treat elevated cholesterol, leukemia and
Alzheimer 's disease.
Reverse Merger
On June 6, 2005, AKID Corporation (hereafter referred to as "AKID")
entered into a stock exchange agreement with Advanced Plant
Pharmaceuticals, Inc. ("APPI") to acquire 7,000,000 shares of the
company's common stock in exchange for 20,000,000 shares of AKID common
stock. AKID also acquired 3,130,000 shares of the company's outstanding
shares in exchange for 6,180,000 shares of its common stock. In connection
with the merger, the company became a wholly owned subsidiary of AKID.
Prior to the merger, AKID was a non-operating "shell" corporation.
Pursuant to Securities and Exchange Commission rules, the merger of a
private operating company Mazel Plant Pharmaceutical, Inc. into a
non-operating public shell corporation, with nominal net assets, is
considered a capital transaction. At the time of the merger, the officers
and directors of AKID resigned and were replaced with the officer and
directors of the Company. For Financial Statement presentation, the merger
has been reflected in the Financial Statements as though it occurred on
December 31, 2004. The historical statements prior to December 31, 2004
are those of Mazel Plant Pharmaceutical, Inc. Since the merger is a
recapitalization and not a business combination, pro forma information is
not presented.
Going Concern
As shown in the accompanying financial statements, the Company has
incurred net losses of $15,438 since inception, has no working capital,
and a stockholders' deficit of $12,765 at December 31, 2004. Management's
plans include the raising of capital through the equity markets to fund
future operations, seeking additional acquisitions, and the generating of
revenue through its business. Failure to raise adequate capital and
generate adequate sales revenues could result in the Company having to
curtail or cease operations. Additionally, even if the Company does raise
sufficient capital to support its operating expenses and generate adequate
revenues, there can be no assurances that the revenue will be sufficient
to enable it to develop business to a level where it will generate profits
and cash flows from operations. These matters raise substantial doubt
about the Company's ability to continue as a going concern. However, the
accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. These financial statements
do not include any adjustments relating to the recovery of the recorded
assets or the classification of the liabilities that might be necessary
should the Company be unable to continue as a going concern.
Cash Equivalents
For purposes of reporting cash flows, cash equivalents include investment
instruments purchased with a maturity of three months or less.
F 6
AKID CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Net Loss Per Common Share
The Company computes per share amounts in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share".
SFAS No. 128 requires presentation of basic and diluted EPS. Basic EPS is
computed by dividing the income (loss) available to common stockholders by
the weighted-average number of common shares outstanding for the period.
Diluted EPS is based on the weighted-average number of shares of common
stock and common stock equivalents outstanding during the period.
Consolidated Financial Statements
The consolidated financial statements include the Company and its wholly
owned subsidiary. All significant intercompany transactions and balances
have been eliminated in consolidation.
Stock-Based Compensation
SFAS No. 123, "Accounting for Stock-Based Compensation" prescribes
accounting and reporting standards for all stock-based compensation plans,
including employee stock options, restricted stock, employee stock
purchase plans and stock appreciation rights. SFAS No. 123 requires
employee compensation expense to be recorded (1) using the fair value
method or (2) using the intrinsic value method as prescribed by accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25") and related interpretations with pro forma
disclosure of what net income and earnings per share would have been if
the Company adopted the fair value method. The Company accounts for
employee stock based compensation in accordance with the provisions of APB
25. For non-employee options and warrants, the company uses the fair value
method as prescribed in SFAS 123.
Business Combinations and Goodwill
In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, "Business Combinations". SFAS No. 141 requires the purchase
method of accounting for business combinations initiated after June 30,
2001 and eliminates the pooling-of-interests method.
In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which the Company adopted during 2004. SFAS No. 142 requires,
among other things, the discontinuance of goodwill amortization. In
addition, the standard includes provisions for the reclassification of
certain existing recognized intangibles as goodwill, reassessment of the
useful lives of existing recognized intangibles, reclassification of
certain intangibles out of previously reported goodwill and the
identification of reporting units for purposes of assessing potential
future impairment of goodwill.
F 7
AKID CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Business Combinations and Goodwill (Continued)
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 changes the
accounting for long-lived assets to be held and used by eliminating the
requirement to allocate goodwill to long-lived assets to be tested for
impairment, by providing a probability weighted cash flow estimation
approach to deal with situations in which alternative courses of action to
recover the carrying amount of possible future cash flows and by
establishing a primary-asset approach to determine the cash flow
estimation period for a group of assets and liabilities that represents
the unit of accounting for long-lived assets to be held and used. SFAS No.
144 changes the accounting for long-lived assets to be disposed of other
than by sale by requiring that the depreciable life of a long-lived asset
to be abandoned be revised to reflect a shortened useful life and by
requiring the impairment loss to be recognized at the date a long-lived
asset is exchanged for a similar productive asset or distributed to owners
in a spin-off if the carrying amount of the asset exceeds its fair value.
SFAS No 144 changes the accounting for long-lived assets to be disposed of
by sale by requiring that discontinued operations no longer be recognized
at a net realizable value basis (but at the lower of carrying amount or
fair value less costs to sell), by eliminating the recognition of future
operating losses of discontinued components before they occur, and by
broadening the presentation of discontinued operations in the income
statement to include a component of an entity rather than a segment of a
business. A component of an entity comprises operations and cash flows
that can be clearly distinguished operationally, and for financial
reporting purposes, from the rest of the entity.
NOTE B - TECHNOLOGY RIGHTS
The technology rights include the rights to develop, manufacture, and
distribute plant based compositions designed to treat elevated
cholesterol, leukemia, and Alzheimer's disease. The Company acquired these
rights from Advanced Plant Pharmaceuticals, Inc. (hereafter referred to as
"APPI") for stock and a note payable aggregating $50,700. APPI is deemed
to be an affiliate of the Company.
NOTE C - RELATED PARTY TRANSACTIONS
The Company is indebted to Advanced Plant Pharmaceuticals, Inc. for
$50,732 for the technology rights as discussed in Note B to the Financial
Statements. The advances are non-interest bearing and have no definitive
repayment dates.
NOTE D - INCOME TAXES
The Company has adopted Financial Accounting Statement SFAS No. 109,
Accounting for Income Taxes. Under this method, the Company recognizes a
deferred tax liability or asset for temporary differences between the tax
basis of an asset or liability and the related amount reported on the
financial statements. The principal types of differences, which are
measured at the current tax rates, are net operating loss carry forwards.
At December 31, 2004, these differences resulted in a deferred tax asset
of approximately $2,100. SFAS No. 109 requires the establishment of a
valuation allowance to reflect the likelihood of realization of deferred
tax assets. Since realization is not assured, the Company has recorded a
valuation allowance for the entire deferred tax asset, and the
accompanying financial statements do not reflect any net asset for
deferred taxes at December 31, 2004.
F 8
AKID CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004
NOTE D - INCOME TAXES (CONTINUED)
The Company's net operating loss carry forwards amounted to approximately
$14,000 at December 31, 2004, which will expire through 2024.
NOTE E - COMMITMENTS AND CONTINGENCIES
In December 2004, the Company entered into five different employment
contracts, three of which expire in 2006 and two which expire in 2007 and
2009. The contracts call for minimum salaries of $182,400 with escalations
and issuances of stock for employee achievements.
NOTE F - STOCKHOLDERS' EQUITY
As discussed in the Reverse Merger (see Note A to the Financial
Statements), the exchange of Mazel shares for AKID, caused the Company to
exceed the authorized shares. For Financial Statement purposes, the
Financial Statements have been prepared as though they were issued.
NOTE G - SUBSEQUENT EVENTS
In March 2005, the Company issued 50,000 shares of its common stock to an
employee for achievements reached. The shares were valued at .0001 per
share.
In April 2005, the Company sold 50,000 shares of its common stock under a
private placement at $0.40 per share.
In April 2005, the Company issued 90,000 shares of its common stock to
consultants for services rendered. The shares were valued at $0.065 per
share and will be recorded as stock based compensation.
In June 2005, the Company issued 3,800,000 shares of its common stock
under a private placement. The shares were sold at $0.065 per share.
In June 2005, the Company issued 1,600,000 shares of its common stock to
consultants for services rendered in connection with the reverse merger.
The shares have registration rights. The shares are being valued at $0.065
per share and will be recorded as stock based compensation.
F 9
APPENDIX B
PLAN AND AGREEMENT OF MERGER
OF
AKID CORPORATION
(a Colorado corporation)
AND
MAZAL PLANT PHARMACEUTICALS, INC.
(a Nevada corporation)
PLAN AND AGREEMENT OF MERGER entered into on ______, 2005 by Akid
Corporation, a Colorado corporation ("Akid"), and approved by resolution adopted
by its Board of Directors on said date, and entered into on June ___, 2005, by
Mazal Plant Pharmaceutical, Inc., a Nevada corporation ("Mazal"), and approved
by resolution adopted by its Board of Directors on said date.
WHEREAS, Akid is a business corporation of the State of Colorado;
WHEREAS, Mazal is a business corporation of the State of Nevada;
WHEREAS, Mazal is the wholly-owned subsidiary of Akid:
WHEREAS, the Colorado Business Corporation Act permits a merger of a
business corporation of the State of Colorado with and into a business
corporation of another jurisdiction;
WHEREAS, Akid does not intend to carry on any business except the business
necessary to wind up and liquidate its business and affairs by means of a merger
with and into a business corporation of the State of Nevada; and
WHEREAS, Akid and Mazal and the respective Boards of Directors thereof
declare it advisable and to the advantage, welfare, and best interests of said
corporations and their respective stockholders to merge Akid with and into Mazal
(the "Merger") pursuant to the provisions of the Colorado Business Corporation
Act and pursuant to the provisions of the Nevada Revised Statutes upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement of the parties hereto, being thereunto duly entered into by Akid and
approved by a resolution adopted by its Board of Directors and being thereunto
duly entered into by Mazal and approved by a resolution adopted by its Board of
Directors, the Merger and the terms and conditions thereof and the mode of
carrying the same into effect, are hereby determined and agreed upon as
hereinafter in this Plan and Agreement of Merger set forth.
1. Akid shall, pursuant to the provisions of the Colorado Business
Corporation Act and to the provisions of the Nevada Revised Statutes, be merged
with and into Mazal, which shall be the surviving corporation from and after the
effective time of the Merger and which is sometimes hereinafter referred to as
the "surviving corporation", and which shall continue to exist as said surviving
corporation under the name "Mazal Plant Pharmaceuticals, Inc." pursuant to the
provisions of the Nevada Revised Statutes. The separate existence of Akid, which
is sometimes hereinafter referred to as the "terminating corporation", shall
cease at said effective time in accordance with the provisions of the Colorado
Business Corporation Act.
2. The present Articles of Incorporation of the surviving corporation will
be the Articles of Incorporation of the surviving corporation and will continue
in full force and effect until changed, altered, or amended as therein provided
and in the manner prescribed by the provisions of the Nevada Revised Statutes.
3. The present By-Laws of the surviving corporation will be the By-Laws of
said surviving corporation and will continue in full force and effect until
changed, altered, or amended as therein provided and in the manner prescribed by
the provisions of the Nevada Revised Statutes.
4. The directors and officers in office of the surviving corporation at
the effective time of the Merger shall be the members of the Board of Directors
and the officers of the surviving corporation, all of whom shall hold their
directorships and offices until the election and qualification of their
respective successors or until their tenure is otherwise terminated in
accordance with the by-laws of the surviving corporation.
1
5. Each issued share of the common stock of the terminating corporation
shall, from and after the effective time of the Merger, be converted into one
(1) share of the common stock of the surviving corporation. The surviving
corporation shall not issue any certificate or scrip representing a fractional
share of common stock but shall instead issue one (1) full share for any
fractional interest arising from the Merger.
6. Stockholders of the terminating corporation shall continue to have
rights to notices, distributions or voting with respect to the surviving
corporation, and shall receive certificates representing shares of the surviving
corporation upon tender of certificates representing shares of the terminating
corporation for exchange.
7. Except to the extent otherwise provided in the terms of outstanding
options, warrants or other rights to purchase, or securities convertible into or
exchangeable for common stock of the terminating corporation, each outstanding
option, warrant or other right to purchase, and each outstanding security
convertible into or exchangeable for common stock shall be converted into an
option, warrant or other right to purchase, or security convertible into or
exchangeable for common stock of the surviving corporation on the basis of one
(1) share of the common stock of the surviving corporation for each share of
common stock of the terminating corporation. The exercise price or conversion
ratio set forth in such option, warrant or other right to purchase, or security
convertible into or exchangeable for common stock of the surviving corporation
shall be ratably adjusted so that the total exercise or conversion price shall
be the same as under the option, warrant, or other right to purchase, or
security convertible into or exchangeable for common stock of the terminating
corporation.
8. In the event that this Plan and Agreement of Merger shall have been
fully approved and adopted upon behalf of the terminating corporation in
accordance with the provisions of the Colorado Business Corporation Act and upon
behalf of the surviving corporation in accordance with the provisions of the
Nevada Revised Statutes, the said corporations agree that they will cause to be
executed and filed and recorded any document or documents prescribed by the laws
of the State of Colorado and by the laws of the State of Nevada, and that they
will cause to be performed all necessary acts within the State of Colorado and
the State of Nevada and elsewhere to effectuate the Merger herein provided for.
9. The Board of Directors and the proper officers of the terminating
corporation and of the surviving corporation are hereby authorized, empowered,
and directed to do any and all acts and things, and to make, execute, deliver,
file, and record any and all instruments, papers, and documents which shall be
or become necessary, proper, or convenient to carry out or put into effect any
of the provisions of this Plan and Agreement of Merger or of the Merger herein
provided for.
10. The effective time of this Plan and Agreement of Merger, and the time
at which the Merger herein agreed shall become effective in the State of
Colorado and the State of Nevada, shall be on the last to occur of:
(a) the approval of this Plan and Agreement of Merger by the stockholders
of the terminating corporation in accordance with the Colorado Business
Corporation Act; or
(b) the date this Plan and Agreement of Merger, or a certificate of merger
meeting the requirements of the Nevada Revised Statutes, is filed with the
Secretary of State of the State of Nevada; or
(c) the date this Plan and Agreement of Merger, or a certificate of merger
meeting the requirements of the Colorado Revised Statutes, is filed with the
Secretary of State of the State of Colorado.
11. Notwithstanding the full approval and adoption of this Plan and
Agreement of Merger, the said Plan and Agreement of Merger may be terminated at
any time prior to the filing thereof with the Secretary of State of the State of
Nevada.
12. Notwithstanding the full approval and adoption of this Plan and
Agreement of Merger, the said Plan and Agreement of Merger may be amended at any
time and from time to time prior to the filing thereof with the Secretary of
State of the State of Colorado and at any time and from time to time prior to
the filing of any requisite merger documents with the Secretary of State of the
State of Nevada except that, without the approval of the stockholders of Akid
and the stockholders of Mazal, no such amendment may (a) change the rate of
exchange for any shares of Akid or the types or amounts of consideration that
will be distributed to the holders of the shares of stock of Akid; (b) any term
of the Articles of Incorporation of the surviving corporation; or (c) adversely
affect any of the rights of the stockholders of Akid or Mazal.
2
IN WITNESS WHEREOF, this Plan and Agreement of Merger is hereby executed
upon behalf of each of the constituent corporations parties hereto.
Dated:
---------------------
AKID CORPORATION
a Colorado corporation
By:
-------------------------------------
Mechael Kanovsky, Chief Executive Officer
MAZAL PLANT PHARMACEUTICALS, INC.
a Nevada corporation
By:
-------------------------------------
Mechael Kanovsky, Chief Executive Officer
3
APPENDIX C
7-113-101. Definitions.
For purposes of this article:
(1) "Beneficial shareholder" means the beneficial owner of shares held in
a voting trust or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring domestic or foreign
corporation, by merger or share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 7-113-102 and who exercises that right at the
time and in the manner required by part 2 of this article.
(4) "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action except to the extent that exclusion would
be inequitable.
(5) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at the legal rate as
specified in section 5-12-101, C.R.S.
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
that are registered in the name of a nominee to the extent such owner is
recognized by the corporation as the shareholder as provided in section
7-107-204.
(7) "Shareholder" means either a record shareholder or a beneficial
shareholder.
Source: L. 93: Entire article added, p. 813, ss. 1, effective July 1,
1994.
7-113-102. Right to dissent.
(1) A shareholder, whether or not entitled to vote, is entitled to dissent
and obtain payment of the fair value of the shareholder's shares in the event of
any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a
party if:
(I) Approval by the shareholders of that corporation is
required for the merger by section 7-111-103 or 7-111-104 or by the articles of
incorporation; or
(II) The corporation is a subsidiary that is merged with its
parent corporation under section 7-111-104;
(b) Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be acquired;
(c) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of the corporation for which a
shareholder vote is required under section 7-112-102 (1); and
(d) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of an entity controlled by the
corporation if the shareholders of the corporation were entitled to vote upon
the consent of the corporation to the disposition pursuant to section 7-112-102
(2).
(1.3) A shareholder is not entitled to dissent and obtain payment, under
subsection (1) of this section, of the fair value of the shares of any class or
series of shares which either were listed on a national securities exchange
registered under the federal "Securities Exchange Act of 1934", as amended, or
on the national market system of the national association of securities dealers
automated quotation system, or were held of record by more than two thousand
shareholders, at the time of:
4
(a) The record date fixed under section 7-107-107 to determine the
shareholders entitled to receive notice of the shareholders' meeting at which
the corporate action is submitted to a vote;
(b) The record date fixed under section 7-107-104 to determine
shareholders entitled to sign writings consenting to the corporate action; or
(c) The effective date of the corporate action if the corporate
action is authorized other than by a vote of shareholders.
(1.8) The limitation set forth in subsection (1.3) of this section shall
not apply if the shareholder will receive for the shareholder's shares, pursuant
to the corporate action, anything except:
(a) Shares of the corporation surviving the consummation of the plan
of merger or share exchange;
(b) Shares of any other corporation which at the effective date of
the plan of merger or share exchange either will be listed on a national
securities exchange registered under the federal "Securities Exchange Act of
1934", as amended, or on the national market system of the national association
of securities dealers automated quotation system, or will be held of record by
more than two thousand shareholders;
(c) Cash in lieu of fractional shares; or
(d) Any combination of the foregoing described shares or cash in
lieu of fractional shares.
(2) (Deleted by amendment, L. 96, p. 1321, ss. 30, effective June 1,
1996.)
(2.5) A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares in the
event of a reverse split that reduces the number of shares owned by the
shareholder to a fraction of a share or to scrip if the fractional share or
scrip so created is to be acquired for cash or the scrip is to be voided under
section 7-106-104.
(3) A shareholder is entitled to dissent and obtain payment of the fair
value of the shareholder's shares in the event of any corporate action to the
extent provided by the bylaws or a resolution of the board of directors.
(4) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this article may not challenge the corporate action
creating such entitlement unless the action is unlawful or fraudulent with
respect to the shareholder or the corporation.
Source: L. 93: Entire article added, p. 814, ss. 1, effective July 1,
1994. L. 96: Entire section amended, p. 1321, ss. 30, effective June 1.
7-113-103. Dissent by nominees and beneficial owners.
(1) A record shareholder may assert dissenters' rights as to fewer than
all the shares registered in the record shareholder's name only if the record
shareholder dissents with respect to all shares beneficially owned by any one
person and causes the corporation to receive written notice which states such
dissent and the name, address, and federal taxpayer identification number, if
any, of each person on whose behalf the record shareholder asserts dissenters'
rights. The rights of a record shareholder under this subsection (1) are
determined as if the shares as to which the record shareholder dissents and the
other shares of the record shareholder were registered in the names of different
shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to the
shares held on the beneficial shareholder's behalf only if:
5
(a) The beneficial shareholder causes the corporation to receive the
record shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.
(3) The corporation may require that, when a record shareholder dissents
with respect to the shares held by any one or more beneficial shareholders, each
such beneficial shareholder must certify to the corporation that the beneficial
shareholder and the record shareholder or record shareholders of all shares
owned beneficially by the beneficial shareholder have asserted, or will timely
assert, dissenters' rights as to all such shares as to which there is no
limitation on the ability to exercise dissenters' rights. Any such requirement
shall be stated in the dissenters' notice given pursuant to section 7-113-203.
Source: L. 93: Entire article added, p. 815, ss. 1, effective July 1,
1994.
7-113-201. Notice of dissenters' rights.
(1) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is submitted to a vote at a shareholders' meeting, the notice
of the meeting shall be given to all shareholders, whether or not entitled to
vote. The notice shall state that shareholders are or may be entitled to assert
dissenters' rights under this article and shall be accompanied by a copy of this
article and the materials, if any, that, under articles 101 to 117 of this
title, are required to be given to shareholders entitled to vote on the proposed
action at the meeting. Failure to give notice as provided by this subsection (1)
shall not affect any action taken at the shareholders' meeting for which the
notice was to have been given, but any shareholder who was entitled to dissent
but who was not given such notice shall not be precluded from demanding payment
for the shareholder's shares under this article by reason of the shareholder's
failure to comply with the provisions of section 7-113-202 (1).
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104, any written or oral solicitation of a shareholder to execute
a writing consenting to such action contemplated in section 7-107-104 shall be
accompanied or preceded by a written notice stating that shareholders are or may
be entitled to assert dissenters' rights under this article, by a copy of this
article, and by the materials, if any, that, under articles 101 to 117 of this
title, would have been required to be given to shareholders entitled to vote on
the proposed action if the proposed action were submitted to a vote at a
shareholders' meeting. Failure to give notice as provided by this subsection (2)
shall not affect any action taken pursuant to section 7-107-104 for which the
notice was to have been given, but any shareholder who was entitled to dissent
but who was not given such notice shall not be precluded from demanding payment
for the shareholder's shares under this article by reason of the shareholder's
failure to comply with the provisions of section 7-113-202 (2).
Source: L. 93: Entire article added, p. 816, ss. 1, effective July 1,
1994. L. 96: Entire section amended, p. 1323, ss. 31, effective June 1.
7-113-202. Notice of intent to demand payment.
(1) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is submitted to a vote at a shareholders' meeting and if
notice of dissenters' rights has been given to such shareholder in connection
with the action pursuant to section 7-113-201 (1), a shareholder who wishes to
assert dissenters' rights shall:
(a) Cause the corporation to receive, before the vote is taken,
written notice of the shareholder's intention to demand payment for the
shareholder's shares if the proposed corporate action is effectuated; and
(b) Not vote the shares in favor of the proposed corporate action.
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-107-104 and if notice of dissenters' rights has been given to such
shareholder in connection with the action pursuant to section 7-113-201 (2), a
shareholder who wishes to assert dissenters' rights shall not execute a writing
consenting to the proposed corporate action.
6
(3) A shareholder who does not satisfy the requirements of subsection (1)
or (2) of this section is not entitled to demand payment for the shareholder's
shares under this article.
Source: L. 93: Entire article added, p. 816, ss. 1, effective July 1,
1994. L. 96: IP(1) and (2) amended, p. 1323, ss. 32, effective June 1.
7-113-203. Dissenters' notice.
(1) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized, the corporation shall give a written
dissenters' notice to all shareholders who are entitled to demand payment for
their shares under this article.
(2) The dissenters' notice required by subsection (1) of this section
shall be given no later than ten days after the effective date of the corporate
action creating dissenters' rights under section 7-113-102 and shall:
(a) State that the corporate action was authorized and state the
effective date or proposed effective date of the corporate action;
(b) State an address at which the corporation will receive payment
demands and the address of a place where certificates for certificated shares
must be deposited;
(c) Inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand is received;
(d) Supply a form for demanding payment, which form shall request a
dissenter to state an address to which payment is to be made;
(e) Set the date by which the corporation must receive the payment
demand and certificates for certificated shares, which date shall not be less
than thirty days after the date the notice required by subsection (1) of this
section is given;
(f) State the requirement contemplated in section 7-113-103 (3), if
such requirement is imposed; and
(g) Be accompanied by a copy of this article.
Source: L. 93: Entire article added, p. 817, ss. 1, effective July 1,
1994.
7-113-204. Procedure to demand payment.
(1) A shareholder who is given a dissenters' notice pursuant to section
7-113-203 and who wishes to assert dissenters' rights shall, in accordance with
the terms of the dissenters' notice:
(a) Cause the corporation to receive a payment demand, which may be
the payment demand form contemplated in section 7-113-203 (2) (d), duly
completed, or may be stated in another writing; and
(b) Deposit the shareholder's certificates for certificated shares.
(2) A shareholder who demands payment in accordance with subsection (1) of
this section retains all rights of a shareholder, except the right to transfer
the shares, until the effective date of the proposed corporate action giving
rise to the shareholder's exercise of dissenters' rights and has only the right
to receive payment for the shares after the effective date of such corporate
action.
(3) Except as provided in section 7-113-207 or 7-113-209 (1) (b), the
demand for payment and deposit of certificates are irrevocable.
(4) A shareholder who does not demand payment and deposit the
shareholder's share certificates as required by the date or dates set in the
dissenters' notice is not entitled to payment for the shares under this article.
7
Source: L. 93: Entire article added, p. 817, ss. 1, effective July 1,
1994.
7-113-205. Uncertificated shares.
(1) Upon receipt of a demand for payment under section 7-113-204 from a
shareholder holding uncertificated shares, and in lieu of the deposit of
certificates representing the shares, the corporation may restrict the transfer
thereof.
(2) In all other respects, the provisions of section 7-113-204 shall be
applicable to shareholders who own uncertificated shares.
Source: L. 93: Entire article added, p. 818, ss. 1, effective July 1,
1994.
7-113-206. Payment.
(1) Except as provided in section 7-113-208, upon the effective date of
the corporate action creating dissenters' rights under section 7-113-102 or upon
receipt of a payment demand pursuant to section 7-113-204, whichever is later,
the corporation shall pay each dissenter who complied with section 7-113-204, at
the address stated in the payment demand, or if no such address is stated in the
payment demand, at the address shown on the corporation's current record of
shareholders for the record shareholder holding the dissenter's shares, the
amount the corporation estimates to be the fair value of the dissenter's shares,
plus accrued interest.
(2) The payment made pursuant to subsection (1) of this section shall be
accompanied by:
(a) The corporation's balance sheet as of the end of its most recent
fiscal year or, if that is not available, the corporation's balance sheet as of
the end of a fiscal year ending not more than sixteen months before the date of
payment, an income statement for that year, and, if the corporation customarily
provides such statements to shareholders, a statement of changes in
shareholders' equity for that year and a statement of cash flow for that year,
which balance sheet and statements shall have been audited if the corporation
customarily provides audited financial statements to shareholders, as well as
the latest available financial statements, if any, for the interim or full-year
period, which financial statements need not be audited;
(b) A statement of the corporation's estimate of the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under
section 7-113-209; and
(e) A copy of this article.
Source: L. 93: Entire article added, p. 818, ss. 1, effective July 1,
1994.
7-113-207. Failure to take action.
(1) If the effective date of the corporate action creating dissenters'
rights under section 7-113-102 does not occur within sixty days after the date
set by the corporation by which the corporation must receive the payment demand
as provided in section 7-113-203, the corporation shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated
shares.
(2) If the effective date of the corporate action creating dissenters'
rights under section 7-113-102 occurs more than sixty days after the date set by
the corporation by which the corporation must receive the payment demand as
provided in section 7-113-203, then the corporation shall send a new dissenters'
notice, as provided in section 7-113-203, and the provisions of sections
7-113-204 to 7-113-209 shall again be applicable.
Source: L. 93: Entire article added, p. 819, ss. 1, effective July 1,
1994.
7-113-208. Special provisions relating to shares acquired after
announcement of proposed corporate action.
8
(1) The corporation may, in or with the dissenters' notice given pursuant
to section 7-113-203, state the date of the first announcement to news media or
to shareholders of the terms of the proposed corporate action creating
dissenters' rights under section 7-113-102 and state that the dissenter shall
certify in writing, in or with the dissenter's payment demand under section
7-113-204, whether or not the dissenter (or the person on whose behalf
dissenters' rights are asserted) acquired beneficial ownership of the shares
before that date. With respect to any dissenter who does not so certify in
writing, in or with the payment demand, that the dissenter or the person on
whose behalf the dissenter asserts dissenters' rights acquired beneficial
ownership of the shares before such date, the corporation may, in lieu of making
the payment provided in section 7-113-206, offer to make such payment if the
dissenter agrees to accept it in full satisfaction of the demand.
(2) An offer to make payment under subsection (1) of this section shall
include or be accompanied by the information required by section 7-113-206 (2).
Source: L. 93: Entire article added, p. 819, ss. 1, effective July 1,
1994.
7-113-209. Procedure if dissenter is dissatisfied with payment or offer.
(1) A dissenter may give notice to the corporation in writing of the
dissenter's estimate of the fair value of the dissenter's shares and of the
amount of interest due and may demand payment of such estimate, less any payment
made under section 7-113-206, or reject the corporation's offer under section
7-113-208 and demand payment of the fair value of the shares and interest due,
if:
(a) The dissenter believes that the amount paid under section
7-113-206 or offered under section 7-113-208 is less than the fair value of the
shares or that the interest due was incorrectly calculated;
(b) The corporation fails to make payment under section 7-113-206
within sixty days after the date set by the corporation by which the corporation
must receive the payment demand; or
(c) The corporation does not return the deposited certificates or
release the transfer restrictions imposed on uncertificated shares as required
by section 7-113-207 (1).
(2) A dissenter waives the right to demand payment under this section
unless the dissenter causes the corporation to receive the notice required by
subsection (1) of this section within thirty days after the corporation made or
offered payment for the dissenter's shares.
Source: L. 93: Entire article added, p. 820, ss. 1, effective July
1, 1994.
9
APPENDIX D
ARTICLES OF INCORPORATION OF
MAZAL PLANT PHARMACEUTICALS, INC.
I, the person hereinafter named as incorporator, for the purpose of
associating to establish a corporation, under the provisions and subject to the
requirements of Title 7, Chapter 78 of Nevada Revised Statutes, and the acts
amendatory thereof, and hereinafter sometimes referred to as the General
Corporation Law of the State of Nevada, do hereby adopt and make the following
Articles of Incorporation:
FIRST: The name of the corporation (hereinafter called the corporation) is
Mazal Plant Pharmaceuticals, Inc.
SECOND: The name of the corporation's resident agent in the State of
Nevada is CSC Services of Nevada, Inc., and the street address of the said
resident agent where process may be served on the corporation is 502 East John
Street, Carson City 89706. The mailing address and the street address of the
said resident agent are identical.
THIRD:
(a) The total number of shares of stock which the Corporation shall have
authority to issue is One Hundred One Million (101,000,000) which shall consist
of (i) One Hundred Million (100,000,000) shares of common stock, no par value
per share (the "Common Stock"), and (ii) One Million (1,000,000) shares of
preferred stock, no par value per share (the "Preferred Stock").
(b) The Preferred Stock may be issued in one or more series, from time to
time, with each such series to have such designation, relative rights,
preferences or limitations, as shall be stated and expressed in the resolution
or resolutions providing for the issue of such series adopted by the Board of
Directors of the Corporation (the "Board"), subject to the limitations
prescribed by law and in accordance with the provisions hereof, the Board being
hereby expressly vested with authority to adopt any such resolution or
resolutions. The authority of the Board with respect to each series of Preferred
Stock shall include, but not be limited to, the determination or fixing of the
following:
(i) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board
increasing such series) be increased or decreased (but not below the number of
shares then outstanding) from time to time by like action of the Board;
(ii) The dividend rate of such series, the conditions and time upon which
such dividends shall be payable, the relation which such dividends shall bear to
the dividends payable on any other class or classes of Stock or series thereof,
or any other series of the same class, and whether such dividends shall be
cumulative or non-cumulative;
(iii) The conditions upon which the shares of such series shall be subject
to redemption by the Corporation and the times, prices and other terms and
provisions upon which the shares of the series may be redeemed;
(iv) Whether or not the shares of the series shall be subject to the
operation of a retirement or sinking fund to be applied to the purchase or
redemption of such shares and, if such retirement or sinking fund be
established, the annual amount thereof and the terms and provisions relative to
the operation thereof;
(v) Whether or not the shares of the series shall be convertible into or
exchangeable for shares of any other class or classes, with or without par
value, or of any other series of the same class, and, if provision is made for
conversion or exchange, the times, prices, rates, adjustments and other terms
and conditions of such conversion or exchange;
(vi) Whether or not the shares of the series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the terms of such
voting rights;
(vii) The rights of the shares of the series in the event of voluntary or
involuntary liquidation, dissolution or upon the distribution of assets of the
Corporation; and
(viii) Any other powers, preferences and relative participating, optional
or other special rights, and qualifications, limitations or restrictions
thereof, of the shares of such series, as the Board may deem advisable and as
shall not be inconsistent with the provisions of this Articles of Incorporation.
1
(c) The holders of shares of the Preferred Stock of each series shall be
entitled to receive, when and as declared by the Board, out of funds legally
available for the payment of dividends, dividends (if any) at the rates fixed by
the Board for such series before any cash dividends shall be declared and paid
or set apart for payment, on the Common Stock with respect to the same dividend
period.
(d) The holders of shares of the Preferred Stock of each series shall be
entitled, upon liquidation or dissolution or upon the distribution of the assets
of the Corporation, to such preferences as provided in the resolution or
resolutions creating such series of Preferred Stock, and no more, before any
distribution of the assets of the Corporation shall be made to the holders of
shares of the Common Stock. Whenever the holders of shares of the Preferred
Stock shall have been paid the full amounts to which they shall be entitled, the
holders of shares of the Common Stock shall be entitled to share ratably in all
remaining assets of the Corporation.
FOURTH: The governing board of the corporation shall be styled as a "Board
of Directors", and any member of said Board shall be styled as a "Director."
The number of members constituting the first Board of Directors of the
corporation is two; and the name and the post office box or street address,
either residence or business, of each of said members are as follows:
NAME ADDRESS
Mechael Kanovsky 43 West 33 Street, NY, NY 10001
Sam Berkowitz 43 West 33 Street, NY, NY 10001
The number of directors of the corporation may be increased or decreased
in the manner provided in the Bylaws of the corporation; provided, that the
number of directors shall never be less than one. In the interim between
elections of directors by stockholders entitled to vote, all vacancies,
including vacancies caused by an increase in the number of directors and
including vacancies resulting from the removal of directors by the stockholders
entitled to vote which are not filled by said stockholders, may be filled by the
remaining directors, though less than a quorum.
FIFTH: The name and the post office box or street address, either
residence or business, of the incorporator signing these Articles of
Incorporation are as follows:
NAME ADDRESS
Corporate Services Carson City, Nevada
SIXTH: The corporation shall have perpetual existence.
SEVENTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by the General Corporation Law
of the State of Nevada, as the same may be amended and supplemented. Any repeal
or amendment of this Article by the stockholders of the Corporation shall be
prospective.
EIGHTH: The corporation shall, to the fullest extent permitted by the
General Corporation Law of the State of Nevada, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said Law from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said Law, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
NINTH: The nature of the business of the corporation and the objects or
the purposes to be transacted, promoted, or carried on by it are to engage in
any lawful activity.
TENTH: The corporation reserves the right to amend, alter, change, or
repeal any provision contained in these Articles of Incorporation in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
2